The leadership enterprises in my country - Lenovo Group - I have encountered "growing troubles" in the past three years, according to Lenovo's three-year planning, by 2003, business scale should reach 60 billion yuan, and the actual situation is Only 20 billion yuan, the turnover increased by 26%, the profit increased by 50%. Although this growth rate is higher than the vast majority of companies in the industry, it has not reached the goal of planning in 2000. At the same time, in 2003, the sales volume of the main business PC in 2003 was only 16.4%, while Dell has more than 40%, and the growth rate is more than twice. Lenovo how to resist the impact of Dell direct sales, is a big topic in front of Lenovo. 1. The four levels of linkage of Lenovo's channels have achieved current scale and quality after more than 10 years of continuous efforts. In the past few years, Lenovo has not stopped the improvement channel once, and there will be some small improvements almost every year, and there will be a big improvement every 3-5 years. The history of the growth of Lenovo channels can be represented by the following figure: 1. Before 1994, Lenovo channel was in the first level, the channel capabilities were only simple, and the final flow of the product has little understanding. The demand for consumers lacks grasp, the channel is placed, low-functional primary status. 2. In 1994-1998, the Lenovo channel reached the second level. At this stage, Lenovo gives up the direct sales and transfer to distribution. With the concept of "Da Lenovo", continuously optimize channel structure, dedicated to channel flatness, closely associate with business links and mutual benefits between dealers, and form "interest community" to avoid malignant channel conflicts. During this period, since the PC market capacity increased at an average of 40-50% per year, the external situation was very good, "Da Lenovo" has achieved a sharp development. 3. From 1998 to 2001, Lenovo channel reached the third level. The biggest feature in this stage is the "channel information level" greatly improved. Although Lenovo did not have a direct transaction with the secondary agent, it also began to exchange information exchange. Lenovo has begun to have more subsequent awareness of customer needs; while Lenovo has begun to directly provide technical, training and market promotion for distributors at all levels. Surface support. This period of the iconic event is ERP implementation. ERP not only greatly reduces channel cost, but also enhances the number, quality and efficiency of information exchange between channel members, and after Lenovo implementation of ERP, the total cost is 600 million yuan. The following table is some financial data comparisons before and after implementing ERP:
Before the implementation of financial data (1995) (2001) Inventory turnover 72 days 22 days level pressure loss 2% 0.19% Accounts turnover 12 days 14 days should pay bad debts 0.3% 0.05% Office supplies cost reduction 10 % 4. Since 2002, with the technical transformation of Lenovo, the channel development of Lenovo has entered the fourth level. The connotation of channel integration is more abundant, and the cooperation between Lenovo and the dealer continues to deepen. In order to dig more customers, Lenovo strive to improve the technical content of channels, so that the channels are "hard" "soft" to provide customers with more system integration and value-added services. Lenovo strives to get out of the strange circle of the product homogeneous competition in the sales channel, and embark on the road to value the collaboration. At this stage, Lenovo has begun Dell as the most subverted competitor, so the channel improvement measures for Lenovo have considerable targeted. 2. The impact of Dell Direct Market The world's most famous direct sales model is Dell's direct sales. According to data from the 2002 fourth quarter PC retail list, the 2002 fourth quarter of IDC, 2002, PC, with a 15.8% market share in the desktop market, ranking first, this is Dell's first season than competitors HP, becoming the leader of the desktop computer. Dell's success has benefited from its direct sales. Dell's gold three principles are "compressed inventory, listening to customer opinions and direct sales". The essence of Dell Direct Market is "customization on demand", and respond quickly after clarifying customer needs, and shipping directly to customers. The competitiveness of Dell costs comes from three aspects. First, there is no dealer this intermediate link; second, Dell Global supply chain management; third, Dell's refinement management, make Dell's inventory remains within 4 days. Therefore, Dell is very competitive in the price, and the price of this weapon has always been the killer of Lenovo company to deal with foreign PC enterprises, but in Dell's first invalid. The other power of Dell Direphory is: Dell deeds directly with each customer, so master all customer information, thus making Dell to maximize consumer demand, capture any minor changes, and put on consumption The understanding of the company is now in the product strategy, which always maintains the sensitivity and rapid response to the market. When Dell is just entering China, its direct sales model has been considered to be in line with China's national conditions and will not succeed. But so far, Dell's market share of Dell is still very low, by the end of 2003, it is about 7%, but the development of the development is very rapid, China's local company-including Lenovo Company-including Lenovo Company Composition is increasingly threat. No one is suspect that Dell model is in China. 3. Dell mode limitations and Lenovo's channel change direction, how should I improve their channel quality and resolve Dell's direct impact? By analyzing Dell direct sales, we can find that it is very similar to the fourth level of the "four-level" model in the previous distribution channel, if we put the fourth level of the manufacturer and the agent as a whole as a whole Look, then Dell Direct Site is almost the same. That is, in the reproduction state, the distribution mode is very close to the direct sales mode as long as the manufacturer has implemented "integration" between the manufacturer and the dealer. The following will compare the pros and cons of the fourth level of Dell Direct and Lenovo from more details:
Contrast Parallel Direct Self-selling Mode Distribution Mode Channel Conflict No channel coverage is not as needed and deep product display without a large number of terminals to demonstrate that Forces can use the dealer's customer relationship ads to rely on flat advertising, you need to make a lot of flat advertising to publish product information advertising content and form more flexible to understand customer demand very well, and very small compared, after-sales service is very large. The dealer is provided, which is very convenient for technical support. Small comprehensive support for Dell direct models. The first defect is weak service capability, is the largest defect in Dell direct model, like IBM, HP and other companies are learning Dell direct models, but the more like Dell, the worse service capacity. The second flaw is Dell's customer development comparison monotonous. Due to the channels of contact with customers, Dell's direct sales appeared in China: Dell slave partial distribution. Dell faces the computer, basically strictly implemented Dell direct sales, but in the computer market for commercial users, Dell seems to be "receiving reality." The Dell computer's product barrion policy is: the larger the purchase volume, the greater the discount. Some dealers use Dell's price policy, from Dell's low price, and then batch to the true end customers, and obtain the spreads. Although Dell is against this practice against this approach, it has adopted an acquisition of an agent in actual implementation. Because dealers have more customer information, they can make up for some shortcomings of Dell direct sales. Lenovo, who is looking at Dell is also rich in sales model: after abandoning direct sales in 1994, it is trying to sell. In March 2002, Lenovo officially announced that Lenovo will begin to aggravate the proportion of computer direct sales in the mainland market. In Lenovo's planning, computer direct sales business is mainly based on commercial markets. Lenovo has three thousand dealers in China. This is the key to Lenovo to stabilize the Chinese personal computer leader. In order not to affect the relationship with the dealer, Lenovo's direct sales business is temporarily mainly commercial market. There is an interesting phenomenon: Diren Dell and Distribution Lenovo adhere to its own characteristics in the personal computer market, but in the commercial computer market, direct sales Dell Slee distribution, and distribution Lenovo Attempting to improve the proportion of direct sales. Two distinct companies are in direct distribution in the commercial computer market, and there seems to have a "way to return". Does this include some kind of regularity and is still to be observed. In another aspect, there are two main defects in distribution, and these two flaws are ultimately reflected in cost. A cost source is the cost of competing for customers and competing compaction between dealers, this cost makes the dealer are unprofitable, and finally transfer costs to the manufacturer; the second cost is between manufacturers and dealers The cost of "interface" is not smooth, such as communication costs, the dealer cannot feedback to the manufacturer in a timely manner, and the manufacturer is responsible for the regional, manufacturer's internal sales organization design, personnel assessment and each Improper manager decision-making rights will also cause great cost. If the distribution channel management is not good, these two costs may be very large. 4. Summary Based on the above discussion, we can see the direction of Lenovo channel change should follow: 1. Direct sales: Increase direct sales in the commercial PC field, so that direct sales and distribution are complementary. As early as August 2003, Lenovo has established his own telephone direct team. In less than 2 months, Lenovo Huadong District's telephone direct sales department completed nearly 8 million sales, product involving desktop, notebook, peripherals, servers, digital products, etc., opened up to 1700 growing enterprise customers. Direct sales experiments are not good, so that Lenovo finally decided to upgrade the phone direct sales department, and the distribution department and drive. Lenovo's goal is that more than 80% of sales are completed by distribution, while direct sales achieved nearly 20% sales.
2. Distribution: Increase the channel "integration" efforts, based on existing development customer abilities, improve channel technical content, further increase the ability to tap customer value, especially those who have two purchases, many purchases Big customers. At the same time, minimize the conflict between channels and improve market response speed. Lenovo's several reform measures in 2004 are based on the above two directions. In order to improve the overall operational efficiency of the company, Lenovo adjusts the organizational structure, adjust the previous national seven major districts into 18 partitions, so that the entire organization is more flat, decision-making right is further placed, and the general manager of each partition will enjoy more Resources and decision-making autonomy, on this basis, simplifying the internal processes of all business models, resulting in raising market response speed. In addition, Lenovo also controls business classification, enabling Lenovo to significantly reduce the needs of various businesses on financial resources and management resources, and reduce management costs. Lenovo's change measures, the quality of Lenovo channels is further rich, mature, and more contributes to Lenovo's sales management institutions and dealers. The victory of direct sales and distribution mode is not entirely determined by the future, and is in thought and execution. For example, Dell's inventory is controlled within 4 days, not the inevitable result of direct sales mode, but the result of Dell refinement management. I believe that Lenovo company has effectively improved the quality of the channel, and effectively improve product quality, accelerate market response speed, and will be able to reproduce for the past. Source: "Sales and Market" Lu Qiang
