What Mistakes Did Lining Make After He Lost 2 Billion Of His Peak In 08 Years?

The Chinese people know that

Not only is the Chinese gymnastics prince, but also the sporting goods Li Ning Co.

Lining himself has won many sporting events honor for China, while Li Ning Co has sponsored many sports events.

After losing three consecutive years of losses, the Li Ning Co turned into a profit with the return of founder Lining.

In the first half of this year, Li Ning Co realized revenue of 3 billion 596 million yuan, an increase of 13% over the previous year, a net profit of 113 million yuan, and a loss of 29 million yuan in the same period last year.

The 08 year Olympic Games reached its peak, but the annual loss was nearly 2 billion.

At the 2008 Beijing Olympic Games, Lining launched the "flying Apsaras" and triggered the market against Lining.

Since then, Li Ning Co has been on the top of the road.

But because of a series of improper strategic measures, many problems have been raised.

Lining, whose turnover has always been growing, is in the ascendant.

However, in 2011, there was a lot of backlog in the company. In 2012, there was a large number of layoffs and stores, with an annual loss of nearly 2 billion, and a continuous loss in 2013 and 2014.

1, rapid expansion and huge losses.

In 2008, Lining's sales reached 6 billion 700 million. Two years later, Lining's volume soared to 9 billion 500 million, up 42%; in 2008, the number of Lining stores was only 6245, and in 2011, it increased to 8255, or more than 32%.

In a short span of three years, Lining's volume increased sharply and the annual compound growth was over 30%.

Such a rapid expansion, late store maintenance costs rise, for future huge losses hidden tragedy.

2, the failure of brand positioning

Lining's fatal wound is the failure of image positioning.

In 2010, the company launched an unprecedented brand remolding campaign to cater to young consumers, aiming at creating a cool, stylish and internationalized image.

After the brand was rebuilt, the price of Lining's clothing products increased by 17.9%, and the cost performance advantage disappeared.

Coupled with the advent of new products, the old commodities are reduced to stock items, with a large backlog of stocks.

Brand positioning is a crucial link in consumer goods enterprises.

Lining made a fatal mistake in carrying out the tactics of brand communication. After the slogan of "90's Lining", the products that were familiar with "70 after 80" became overnight products.

The strategic positioning of a brand is the ultimate competitive strategy of an enterprise. Once the brand positioning of an enterprise is determined, it is not easy to make changes.

But Lining's brand positioning is fluctuating and fluctuating.

3, decline in performance, facing a multi-storey crisis

Since 2011, the sporting goods industry has been in the doldrums, and China's local sports brands are facing a crisis.

The local sports brand, which used the Olympic marketing "Dongfeng", squeezed the stock seriously, and the performance declined sharply.

The failure of brand reconstruction, coupled with the massive outbreaks of long-standing dilation caused by extensive expansion over the years, Lining suffered the double blow and the biggest crisis since its establishment: high inventory, Goldman Sachs Goldman Sachs exit, senior executives earthquake, massive layoffs...

4, Anta top, surpass Lining

During the 2011-2013 years of downturn, almost all companies experienced worries about high inventory prices, mainly due to the miscalculation of the growth brought by the Olympic market.

In addition, Li Ning Co has artificially created higher inventories.

In 2012, Li Ning Co lost about 1 billion 980 million yuan, while Anta made a profit of 1 billion 359 million yuan. Anta surpassed Lining's 6 billion 740 million yuan in revenue of 7 billion 620 million yuan.

Since then, Li Ning Co has become the leader of the domestic sports brand in Anta.

As Anta replaced Lining in the leading position of sporting goods, Lining's brand image is declining. Everyone is more inclined to Anta brand, and Lining's sales volume will naturally be affected.

The number of Lining stores decreased from 7303 in 2012 to 5671 in 2014, a net decrease of 1632. The total number of stores and Anta's net difference expanded from -504 in June 2012 to -2030, and the market share declined further.

5, the drawbacks of outlets

In terms of channel layout, Li Ning Co adopts the way of "Direct stores + franchised stores". The advantage of this method is that it can quickly seize the market and seize competitors. The disadvantage lies in the fact that suppliers at all levels are not suppliers at the end.

Lack of insight into the needs of consumers in stores, resulting in slow market reaction and disconnection between brand image and consumer cognition.

Moreover, most shops are out of date, with poor level of operation and sale, resulting in a large backlog of over season products.

A number of erroneous strategies such as vigorously promoting Lining's post-90s, raising the price of products and changing the brand image of China's Nike are seriously divorced from Lining's situation at that time, causing a series of problems.

Lining returned to China, determined to reform and turn losses into profits.

Because of the serious loss and crisis, Lining had to save himself for survival.

After returning, Lining personally adjusted the pformation strategy of the company and stood on the cusp of a severe test and faced challenges in the future.

In reflection, in addition to the whole sports brand industry encountered severe winter problems, Lining also realized that the enterprise's own strategic mistakes.

Lining, who has returned to power, has made vigorous reforms to the Li Ning Co.

The three step strategy has been formulated: the three focuses of "core brand, core business and core market" have been re established.

Leading a series of strategic initiatives: introducing strategic investors, launching a comprehensive change plan for channels, brands and products, and formulating a "channel revival plan".

Sky price signing Star: Despite the financial pressure of huge losses, Lining still signed NBA basketball superstar Dewayne Wade, buying the sponsorship rights of CBA League for five years at a price of 2 billion yuan.

"Internet +" strategy: the strategic direction will shift from traditional sports equipment providers to "Internet + sports life experience" providers.

Force electricity supplier: integrate the electricity supplier into the core business of the company and vigorously develop the online business.

Due to the importance of e-commerce, the sales of e-commerce channels in 2015 increased from 5% in 2014 to 25%~30% in 2015.

Li Ning Co has also launched the "channel revival plan", optimizing offline channels, expanding direct network, re evaluating stores, improving sales and profitability of direct outlets, and creating new products, new channels, new ways of operation and new experiences of Lining.

In the first half of this year, net profit of 113 million yuan, Li Ning Co finally turned the profit and loss, to get rid of the losses in the three fiscal year.

But Lining is still struggling to win the first place.

On the scale of the market, the gap between Lining and famous foreign brands is getting bigger and bigger. Anta, a domestic brand, has pioneered the sales of over 10 billion yuan last year and has become the leader of the domestic sports brand.

If Lining wants to go back to the top and strengthen the innovative ability of fashion design, it is one of the key directions of pformation and upgrading.

In addition, in building brand, we must enrich the brand connotation, pay attention to the inheritance of brand spirit, and focus on building brand and improving quality.