I. Decision-making based on facts
1. Adidas' fiasco
On the fierce competition stage of sports brands, Adidas was once a shining superstar. It was founded in 1949 and quickly stood out in its early days with its excellent products. The 1954 FIFA World Cup became the glorious highlight for Adidas. The plastic studs on the soles of the sneakers it produced were like magic. They could significantly help athletes increase their speed and enhance their stability during sports. For a time, more than 85% of athletes around the world chose to wear Adidas products. Its iconic three - leaf logo became a symbol of success and Adidas almost dominated the global sports product market.
However, the business world is like a battlefield, with ever - changing and unpredictable circumstances. In 1972, Nike Inc. was quietly established, like a newly rising star, and began to grow rapidly. However, the decision - makers at Adidas were blinded by past glories. They were immersed in the dream of the once 85% high market share, thinking that even if competitors emerged and even if some market share was snatched away by the opponents, they would still be in a secure position and still firmly hold the majority of the market. As a result, they turned a blind eye to Nike's rise and did not take any practical and effective countermeasures to contain this potentially powerful threat.
As time goes by, the current market landscape is completely different. Adidas' sports equipment only holds a 12% market share in the global market for similar products. In contrast, Nike, with its sharp market insight and proactive development strategies, has captured 30% of the market, leading Adidas by 18 percentage points and dominating the sports apparel market. Adidas can only watch helplessly as its past glory fades away. This is undoubtedly a regrettable business lesson.
2. The market decline of Motorola
In the fierce competition of the global mobile phone market, Motorola and Nokia were once dominant giants. However, currently, their market shares stand at 30% and 33% respectively, and Motorola is even in a difficult situation. In the first quarter of 2001, Motorola suffered an operating loss of over 400 million US dollars. It should be noted that in the same period of the previous year, it still made a profit of 53 million US dollars. Such a huge gap is truly astonishing.
After in - depth analysis, the authoritative management institutions in the United States pointed out that Motorola's current dismal situation is entirely self - inflicted. On the eve of the U.S. economic recession, consumers' demands had quietly changed. Many people were eager to buy mobile phones with new concepts and new images to replace their existing products. At this critical moment, Nokia from Finland demonstrated a sharp market sense and strong R & D capabilities. It took the lead in developing various types of alternative products and quickly won the favor of a large number of consumers.
However, Motorola was slow to react. By the time they realized the severity of the problem and painstakingly developed a new - style mobile phone, the market environment had changed dramatically. Affected by the economic recession, consumers gave up their plans to replace their mobile phones one after another. In this way, Motorola missed the market opportunity, which led to large - scale losses. Its market share gradually shrank, and its former glory was gone.
3. The bitter lessons of state-owned enterprises
There is a state-owned enterprise in the Chinese mainland that once initialled an ostensibly attractive supply and sales contract with a foreign businessman. According to the contract, the foreign businessman would provide production equipment worth 3 million RMB to the enterprise to enhance its production capacity. The contract term was three years, and after three years, the enterprise would own the equipment free of charge.Meanwhile, the contract stipulated that within the three - year contract period, the enterprise was required to supply 10,000 pieces of a certain product to the foreign businessman each year at the price agreed upon by both parties. Moreover, to ensure the performance of the contract, strict penalty clauses were set in the contract: if the enterprise delivered one piece less in the first year, it would have to pay a compensation of 1,000 yuan per piece; if it delivered one piece less in the second year, the compensation would be 2,000 yuan per piece; and in the third year, the compensation would be 3,000 yuan per piece.
After consultations among several major leaders of the enterprise, they only saw the potential benefits in the contract and thought it was profitable. So, they hastily signed a formal contract with foreign businessmen. After the equipment worth 3 million yuan arrived, the enterprise immediately organized production. However, due to the enterprise's insufficient production capacity, even though all the employees worked together with all their might, only 8,000 products were produced in the first year. According to the contract, the penalty the enterprise had to pay was as high as 2,000 pieces × 1,000 yuan = 2 million yuan.
In the following year, the enterprise adjusted its production organization mode and was ready to make a big effort to recover the economic losses. However, contrary to expectations, only 8,500 products were produced that year. As a result, a fine of 1,500 pieces × 2,000 yuan = 3,000,000 yuan was imposed. In the third year, the situation still didn't improve. Only 7,000 products were delivered, and a fine of 3,000 pieces × 3,000 yuan = 9,000,000 yuan was imposed. After three years of hard - work operation, the enterprise's losses exceeded 14,000,000 yuan. Undoubtedly, this is a painful lesson, warning enterprises that they must fully consider their own actual situations and make scientific and reasonable decisions based on facts when making decisions.
2. Customer-centricitycustomer-centric customer-centricity 、 Putting customers at the center
1. The business opportunities brought by Holyfield's ear
At the end of the 20th century, a much - watched farce in the history of world boxing took place between Mike Tyson and Evander Holyfield. Tyson's so - called "Bite of the Century" caused Holyfield to lose part of his ear. This astonishing incident instantly became the global focus.
The day after the fight, in major supermarkets across the United States, a chocolate named "Holyfield's Ear" quietly appeared. What makes this chocolate unique is that its shape vividly mimics that of an ear. For the curious and humorous American citizens, this is undoubtedly a novel experience. They were all attracted to this chocolate and rushed to buy it, eager to take "Holyfield's ear" home and take a bite.
The producer of this chocolate can be regarded as a genius in the marketing field. They skillfully took advantage of the sensational news effect that emerged during the competition and conducted in - depth analyses of customers' psychological needs. In the eyes of most people, such an apparently absurd event was transformed by them into a business opportunity. They promptly developed products with novel appearances, precisely grasping customers' curiosity and purchasing desires, and thus made a fortune from customers' pockets. This fully demonstrates that in the business operation process, as long as an enterprise can keenly capture customers' psychological needs and carry out product innovation centered around customers, it can achieve great success in the market.
2. The secret of Sanyo's success
The Japanese Sanyo Electric Co., which ranks 107th among the world's 500 largest industrial companies, has a unique business philosophy. They believe that to create highly successful products, five key points must be strictly followed, and the order of these five points cannot be reversed.
First of all, is the product convenient for customers to use? In today's fast - paced society, consumers are paying more and more attention to the convenience of products. A product that is easy to use can save consumers' time and energy, enhance their usage experience, and thus is more likely to be favored by consumers.
Secondly, can customers afford the product? Price is one of the important factors that consumers consider when purchasing products. If the price of a product is too high and beyond the consumers' affordability, it will be difficult to open up the market even if the product is excellent. Therefore, enterprises must fully consider the consumption ability of their target customer groups when setting prices.
Thirdly, for distributors, is the product easy to sell? Distributors are an important channel for product sales, and their sales enthusiasm directly affects the market promotion of products. A product that is easy to sell can enable distributors to earn considerable profits, which in turn makes them more willing to actively promote the product.
Fourth, in case of a malfunction, is it easy to repair, that is, easy to get warranty service? It's inevitable that a product may malfunction during use. Good after - sales service can make consumers more confident when purchasing products. If the product can be repaired and get warranty service in a timely manner after a malfunction, consumers' satisfaction with the product will also be greatly improved.
Finally, is the product easy for the factory to produce? This is related to the production cost and efficiency of the product. A product that is easy to produce can reduce the production cost of the enterprise and improve production efficiency, thus gaining an advantage in the market competition. It is precisely by strictly controlling these five key points and conducting product R & D and production centered around customers that Sanyo has achieved excellent results in the fierce market competition.
III. Continuous Improvement
1. The competition between WPS and OFFICE in the Chinese market
In the business world, there are no eternal powerhouses. Even well - established enterprises will eventually be eliminated by the market if they fail to make continuous and effective improvements to their work. Just like the proud and complacent rabbit in the well - known story "The Tortoise and the Hare Race", it will be caught up with and even overtaken by an opponent who originally seemed weak.
Step by Step's slogan "We've always been striving", and Haier Electric's slogan "There is no best, only better". These resounding slogans all convey an important concept: it's not that we've done something wrong, but that we can do better. Continuous improvement is the key for enterprises to survive and develop in the market competition.
WPS was once the most familiar word processing software among Chinese people. The DOS-based version of WPS first launched by Kingsoft Corporation quickly captured a large share in the market due to its user - friendly nature and became a leader in the field of word processing.However, with the development of the times, Microsoft in the United States launched the WINDOWS operating system, which was an epoch - making change. Unfortunately, Kingsoft failed to keep up with the development trend in a timely manner. It didn't make necessary improvements to its WPS and didn't release a version based on the Windows system.
Meanwhile, Microsoft's office software was not only Chinese - localized but also featured the remarkable "what you see is what you get" characteristic. This gave it a far better user experience than WPS, enabling it to quickly capture most of the Chinese market. Although Kingsoft later launched WPS 2000, by then the market structure had basically stabilized. WPS's market share had been severely eroded, and there was little that could be done to reverse the situation.This case serves as a profound warning to enterprises. They must always maintain a keen market insight and continuously innovate and improve their products to remain invincible in the fierce market competition.
2. The battle in the personal computer market among IBM, Intel, and Microsoft
IBM, once an undisputed giant in the computer industry, reached the peak of its profits in 1984, with a staggering $6.58 billion. However, by 1992, IBM faced an unprecedented crisis. It had to announce a loss of $5.46 billion, and its annual profit stood at -$4.97 billion. What followed was a wave of frantic lay - offs. In the short span of two years from 1992 to 1993, IBM carried out five rounds of staff cuts, resulting in 100,000 people losing their jobs. IBM's stock also took a nosedive. In just a few months from the summer to the end of 1992, it tumbled from over $100 to $48.375, the lowest level in 11 years.
Looking back at the development history of IBM, it once achieved remarkable success in the computer industry. In the 1950s, IBM began to enter the computer industry. With its strong technological strength and market competitiveness, it quickly surpassed the pioneer Remington Rand and captured the electronic computer market in the business world.In the 1960s, IBM successfully developed the 360 mainframe computer, which was self - compatible but incompatible with those of other manufacturers and previous machines. This innovation brought a huge impact to other competitors in the computer industry and also promoted the rapid expansion of the computer markets in the United States and the world. In 1969, with an operating income of $7.2 billion and a net profit of $900 million, IBM rightfully became the leader in the industry, monopolizing 70% of the large - scale computer market in the United States.In 1985, IBM personal computers accounted for 80% of the business market.
However, after achieving great success, the top decision-makers at IBM fell into the trap of success. They were indulged in their past achievements and turned a blind eye to the new and highly attractive industry segment - personal computers. In 1965, Data General, a company targeting the scientific computer market, changed its development direction and was the first to launch minicomputers into the market. The up - and - coming Apple Inc. was not willing to lag behind either. In 1977, it developed products with low memory, no database, slow speed, and poor computing power but at a very low price, which was the lowest in 17 years.
When Data Equipment Company and Apple successively entered the personal computer market and held equal shares, IBM only focused on short - term capital recovery rate and return on investment. It failed to recognize the immeasurable benefits of opening up and dominating the personal computer market for the company's future development. They were blindly indulged in the success achieved in the mainframe computer market and turned a blind eye to the actions of Data Equipment Company and Apple entering the personal computer market.It wasn't until 1986 that Frank Cary, the soon - to - retire chairman, formed a research team of innovative personal computer experts, and IBM finally started to enter the personal computer field. One year later, IBM launched the IBM - PC, which had much better memory and performance than Apple computers. However, it was already too late. No matter how hard IBM tried to make up for the situation, it could only rank third, and the myth that "IBM is always number one" was shattered.
What's even more regrettable is that in 1986, in order to make up for its long - standing mistake of ignoring the development of personal computers, IBM decided to launch high - quality and leading personal computers in the short term. It entrusted Intel with the production of the central processing unit (CPU) chips and gave Microsoft the task of developing the DOS operating system. This decision seemed like a helpless move at that time, but it unknowingly nurtured its future rivals. The young people at Intel and Microsoft were full of aggressiveness and creativity. They firmly believed that personal computers would become the dominant products in the future. However, IBM, as the so - called "master", didn't take them seriously at all and just went its own way.
Intel and Microsoft continued to step up their offensive and gradually replaced IBM's dominant position in the personal computer world. Meanwhile, Compaq was the first to develop portable computers using Intel's newly - invented Pentium 386 chips. Subsequently, Dell significantly reduced the price of personal computers through its unique mail - order sales model. IBM faced unprecedented and huge challenges. In 1982, the combined stock value of Intel and Microsoft was only one - tenth of that of IBM. However, by October 1992, their combined stock value had exceeded that of IBM. By the end of 1992, it was 50% higher than IBM's market value. In 1991, IBM suffered a loss of $2.86 billion, and the situation worsened in 1992, resulting in the highest corporate loss record in U.S. history - $4.97 billion. This case fully demonstrates that enterprises must continuously make improvements, pay attention to market changes and technological innovation to maintain a leading position in the fierce market competition.
IV. Leadership
1. Ford Motor: Between rise and fall, leadership decisions determine the outcome
Ford Motor Company is a well - known giant in the international automotive industry. However, its development history is like a tempestuous ocean, full of twists and turns and uncertainties.
The story begins with Henry Ford Sr. Since 1899, driven by his passion for the automotive industry, he twice plunged into the wave of establishing automobile companies. However, due to the lack of professional knowledge in automobile manufacturing and management at that time, both entrepreneurial attempts ended in dismal failure. Nevertheless, Henry Ford Sr. was not defeated by these setbacks. In 1903, he summoned up the courage again and embarked on the entrepreneurial journey. This time, he became wiser and knew to select capable people to support his business. He invited the automotive industry expert James Couzens to the company to serve as the general manager. True to expectations, Couzens demonstrated remarkable management skills as soon as he took office. He applied scientific management methods, conducted in - depth market demand investigations, and carefully established a sales network. After painstaking day - and - night operations, he achieved an epoch - making feat - building the world's first automobile assembly line. The birth of this assembly line was like a bombshell, instantly increasing the automobile production efficiency by more than ten times. With the improvement of production efficiency, the cost and selling price of automobiles dropped significantly. The selling price of each Model T car decreased from the original $780 to $290. This price advantage enabled Ford cars to quickly capture the market. As a result, the Ford Company entered a stage of prosperous development and leaped to become the world's largest automobile manufacturing enterprise. Henry Ford Sr. also won the reputation of the "King of the Automobile Industry".
However, success is sometimes like a glass of intoxicating wine that can easily make people lose themselves. Old Henry Ford was carried away by temporary success and gradually became subjective and arbitrary, starting to implement paternalistic management. In 1915, he made a jaw - dropping decision - firing Kuznets, who had made great contributions to the company's development. Immediately afterwards, a large number of talented people were dismissed by him. Even in 1921, he removed 30 managers in one day. This kind of autocratic and relatively backward management method was like an invisible shackle, quickly plunging Ford Motor Company into operational difficulties. The once - unshakable position as the world's number one was soon taken over by General Motors, which recruited a large number of talents and had advanced management. By 1945, Ford was in an even more desperate situation, losing up to $9 million per month and on the verge of bankruptcy.
At this critical moment of life and death, the elder Ford stepped down and handed the company over to his grandson, Henry Ford II. Henry Ford II learned from his grandfather's failures and was determined to make a comeback. He hired Briggs, the vice - president of General Motors, to take full charge of the company's business. He even went out of the ordinary to hire young people, including Robert McNamara, who would later become the US Secretary of Defense. With the joint efforts of these talented individuals, after several years of hard work, Ford Motor Company finally regained its former prosperity and secured the second position in the US automobile manufacturing industry.
But dramatically, the younger Ford later failed to escape the cycle of fate and followed in his grandfather's footsteps. He became autocratic, acting as if he were the master, and successively fired people like Bridge and Iacocca. This series of wrong decisions prevented the hard - won revitalization of the company from lasting. The company's status kept declining, and its business operations deteriorated day by day. Eventually, he had to resign from the position of chairman.The rise and fall of Ford Motor fully illustrate that leadership decision - making plays a crucial role in the development of an enterprise. A correct decision can lead an enterprise to glory, while a wrong one may push it into the abyss.
2. The Regret of Yaohan: Poor Expansion Strategies Yield Bitter Fruits
September 18, 1997, is a day that Yaohan Japan will always remember. On this day, it announced bankruptcy. The total debt of the company reached a staggering 161.3 billion yen, setting the record for the largest - scale bankruptcy in Japan's distribution industry since World War II.
Looking back on the development history of Yaohan, it was once extremely prosperous. Since Yaohan opened its first overseas branch in 1971, in the following 20 years, its overseas development speed was like a runaway wild horse, outpacing all other companies in the same industry. Even Daiei, the "giant" in the Japanese distribution industry, couldn't compare with it in this regard. Yaohan was composed of four major enterprise groups. It had 389 branches in 16 countries around the world and also formulated a grand plan for development in China - it intended to establish 1,000 supermarkets mainly dealing in food in the middle and upper reaches of the Yangtze River.
However, the ideal is plump, but the reality is skinny. According to internal materials of Yaohan, it takes 15 million yen to open a supermarket in China. So, for 1,000 supermarkets, it would be 15 billion yen. In 1996, the annual profit of Yaohan Japan was only 800 million yen. Even if the earnings of all the enterprises under the Yaohan Group were taken into account, the funds would still be far from enough to realize the grand plan of exploring the Chinese market.What's even more incredible is that such a huge commercial empire as Yaohan didn't have the support of a major bank. As early as the early 1990s, due to dissatisfaction with Yaohan's rapid expansion, the then major bank had warned that it would stop lending if the business policy wasn't changed. However, the head of Yaohan, Wada Ikuo, stubbornly said, "We won't rely on banks anymore. We'll do it with our own funds." So, they chose to raise funds by issuing corporate bonds. Without the supervision of banks, the use of funds was as easy to get out of control as a runaway horse. Large - scale borrowing was like a time - bomb, which finally led to serious consequences.By the end of 1996, the corporate bonds that Yaohan needed to repay reached 12 billion yen. The company's finances were in a difficult situation, and it had no choice but to sell 16 key branches of Yaohan Japan to Daiei. The reduction of key branches further affected the earnings, pushing Yaohan into a vicious circle. By 1997, Yaohan's debt had reached 160 billion yen. A person in charge revealed to the outside world that 40% of Yaohan's turnover was used to pay off debts.In 1997, at a creditors' briefing held at the headquarters of Yaohan Japan in Shizuoka Prefecture, Japan, facing more than 1,200 debt collectors, Wada Ikuo, the president of the Yaohan Group, only said one sentence: "I've repaid kindness with ingratitude. I'm really sorry to everyone. I'll spend my whole life repaying your debts." After saying that, Wada Ikuo burst into tears.
A thorough analysis of the reasons for Yaohan's bankruptcy mainly boils down to the following aspects:
Strategic Planning and Strategic Business Management IssuesYaohan adopted an aggressive development strategy of rapid expansion and eager market seizure. Wada Ichiro once said, "There is no gain without risk. The greater the risk, the greater the gain." However, in the real business world, risk and profit are not always directly proportional. Yaohan made judgments that deviated from objective facts and lacked correct decision - making. Any oversight in management would result in huge losses.They made random investments. They built a department store in a small area in Aichi Prefecture and invested 20 billion yen at once, which was twice the investment in the Shanghai New Century Department Store. Such random investments without considering the return on investment led to an ever - expanding investment scale of Yaohan. In Hong Kong, Yaohan opened nine fairly large - scale stores in just over a decade, which was rare in the development of the same industry. But as the business expanded too widely, it ultimately led to the bankruptcy of Yaohan Japan.
- **No clear target customers**: During its operation, Yaohan had a very vague positioning of its target customers. Sometimes it targeted Japanese people for product sales, and at other times, it invested a large amount of capital overseas. Sometimes it focused on overseas Japanese, and then shifted its focus to local people. They were self - conceited, thinking that they knew what customers needed, but in fact, they neither knew themselves nor their customers. They only concentrated on continuously opening new stores without consolidating their existing markets. They kept expanding their investments without establishing a solid foundation, which led to a continuous decline in profits.
- **Lack of scientific and dynamic business management methods**: Yaohan Group adopted a family - style management model. In decision - making, it often relied on momentary human judgment, which made it prone to errors. This obsolete, unscientific and lackluster business management approach was highly incompatible with the development of modern large - scale department stores. Ultimately, it became one of the important factors leading to Yaohan's bankruptcy.
3. Dirolen's Bananas: The Influence of Leadership Behavior
American management expert McCormick told an interesting story in his book *Business Secrets*. Not long after one of his friends became the general manager of the Chevrolet car factory of General Motors, he once went to Dallas to attend a business meeting. After he arrived at the hotel, he found that the company had sent a large basket of fruits to his room. After looking at it, he humorously said, "Hey, why aren't there any bananas?" Such an seemingly casual remark actually caused quite a stir throughout General Motors. From then on, the saying "DeLorean likes bananas" spread within the company. Although he later explained to people that it was just a casual remark, there were always bananas placed in his car, on his chartered plane, in the hotel, and even on the conference table.
From this story, we can deeply feel the huge impact of a single action taken by a corporate leader. Every word and deed of a leader in a company is often magnified and interpreted by employees, which in turn affects the corporate culture and atmosphere. A small gesture from a leader may become the focus of employees' attention and even guide their behavior and work direction. This also serves as a reminder to corporate leaders to always pay attention to their words and deeds, as every single action of theirs may have a profound impact on the company.
Meanwhile, in enterprise management, quality is also a crucial aspect. Emphasizing quality inspection cannot fundamentally improve quality; instead, the entire production system needs to be improved. Products should be produced without errors right from the first attempt, rather than trying to make up for problems after they occur. The standard for quality should be absolute excellence. Any slack in management will prevent the production of world - class products. Moreover, the measurement of quality should be considered from an overall perspective, not just focusing on a single link or aspect. Only in this way can an enterprise remain invincible in the fierce market competition.