Guo Benheng: Optimizing product clusters to be high-end brand leaders

Nearly half of the chess games in 2012, Guangming Dairy (600597, stocks) once again adjusted its strategic objectives: to be a leader in the high-end brands of China's dairy industry. If you want to add a deadline, Guo Guangheng, the president of Bright Dairy, hopes: three to five years.

A year and a half ago, Guo Benheng sat in front of this reporter and looked forward to the prospect of the “10 billion-era era” bright dairy industry. With confidence, today, he led the company into the “later 10 billion” era, but he was more calm and indifferent. In his view, upgrading strategic goals is purely a necessity.

Five fingers snap. Looking back at the strategic development of Bright Dairy, Guo Benheng took over at the time of the company’s distress and changed the strategic position of the original “focus on the fresh” to “focus on the dairy industry, develop newness, and break the normal temperature” in the beginning of the company's reform. For the first time in 2009, it seized the opportunity to increase. "Shoot milk powder"; 2011 strategic goals once again upgraded to "focus on the dairy industry, leading the fresh, strong normal temperature, breakthrough milk powder", and the corporate image is positioned in the "Chinese milk industry intellectuals." From mid-2012, Guo Benheng judged the situation and made a judgment: The timing of the third strategic upgrade of Guangming Dairy has matured, and both corporate image and brand image are "locked up to the high end."

"The strategic development path is actually continuous in the same line and continues to be upgraded. It does not change its connotation and always insists on "pursuing excellence in dedication and quality." Guo Benheng explained in an exclusive interview with this reporter that before this, he first made a strategic change, and then later developed the company. The process is gradually escalating and running steadily.

“This kind of upgrade is a spiraling process. During the process, the unique advantages of Bright Dairy have become increasingly clear.” In particular, he mentioned that, for example, the company’s overseas layout, high-tech advantages, and precise management advantages are all High-end products of the category provide full support for the competitiveness of the market terminal. “From this perspective, Bright Dairy's strategy of “locking up high-end” stems from “experiencing authentic knowledge” and is also a result of the company’s “strategic growth and self-development” strategic thinking.”

In this return visit, such as acquaintances, Guo Benheng continued his straightforward and patient style. He shared with us his experience in reshaping Guangming Dairy, the experience of Chinese food companies in overseas M&A, and building a number of high-end product groups. dream.

How did the star product be made into the "21st Century": From the last visit to this year, I heard that there are some new changes and upgrades in the company's strategy?

Guo Benheng: In the past one or two years, we have gradually adjusted to: Freshness must lead, strong should be done at room temperature, and milk powder must be broken. In fact, the path is basically a train of thought. In some large categories, it must occupy a place.

Another one, from the beginning of this year and the end of last year, we proposed that the gradual establishment of the “China's dairy premium brand leader” is such a position, in fact, is the same strain, but only to strengthen the characteristics of the category. Whether it is in yogurt, fresh milk, room temperature, milk powder and cheese, we all have to be leaders in high-end brands.

The tactics are practical, not relying on foreign guns and cannons. They are a combination of land and ocean, and practicality is the most important. In this whole appeal, it is to be high-end, and then to find out prominent points in the marketing, such as the normal temperature yogurt variety "Mossian", in addition to this shape, our most important concept of longevity, but our story It can't be a compilation story. This strain really came from the longevity village in Bulgaria, and then we industrialized it scientifically.

"21st Century": The company's gross profit margin increased to 41% in 2011, which contributed to the high-end star product group. It is not easy to create a high-end star product. What are the patterns and advantages of creating a star product?

Guo Benheng: Actually, we were originally a leading company in R&D. Basically, R&D took the market to do it. However, this model is lacking, because the best model is consumption-oriented and the second is market-oriented. Type, then there is a difference between production-oriented and R&D-oriented. In the past few years, we have gradually transitioned from R&D-oriented to market-oriented and consumer-oriented.

How do you do it every year? It is also very simple. For example, this month we will open a new product recommendation conference next year. The R&D department will introduce their new research and development concepts, as well as actual samples for tasting; the marketing department will pick out some new products from it, and will also raise some of them but have consumer demand. The concept of new products, finally weighed down, set new products to be next year. It can be said that Bright Dairy has gradually transitioned to a market-oriented one, but it has not yet risen completely to consumption-oriented ones.

Mosleyan’s story is a little interesting. The earliest we did was a small cup. At that time, I had an idea that the feeling was to make a breakthrough in the overall positioning. Then there was a category map in each category, not a variety map. For example, if you are always making strawberry flavor and not making papaya, you may never do it forever. At the time, what I wanted to do was yogurt. I went to Spain and Russia to see the category of yogurt at room temperature. So I bought related equipment and it was quite expensive. Followed by the normal temperature division and the research and development department, the leaders will travel to Longevity Village in Mosilien, Bulgaria, not only to bring back the mysterious L99 strain, but also to bring back a lot of photos, videos, and Nobel Prize winners and longevity. Village story.

With the equipment, craftsmanship, strains, stories, tastes and tastes that are best in all categories. How to test is the best? The easiest way is to find thousands of people to blindly try.

Products are good, but also creative, but also to promote the means to force. Mossarian is 48 yuan a box, some dealers worry about not sell, want to discount, I said no need, we must allow consumers to try to eat, if you can not sell, I will withdraw, you can give you a new goods. It looks like we have a lot of risk, but we are very confident in this breakthrough new product. Until now, Mossarian’s sales policy is like this, and there is almost no recovery.

"21st Century": Now popular "product manager" concept. Do you have similar ideas in creating star products?

Guo Benheng: Now that it has entered a virtuous cycle, there must be strength on the line, and there is also a lot of power under the line. One was an artillery and the other was an infantryman. After the aerial bombing was over, the ground forces had to keep up to get the hill. The star product also has the advantage that it has a great effect on the basic products. Now Mossian has been able to "feed back" the basic white milk at room temperature.

"21st Century": Products need to continue to improve lean, this one is how do you do?

Guo Benheng: We usually review and summarize our products for three months. There are also experiences and lessons that may be learned. Not only must we listen to the opinions of the first-line shopping guides, the most important thing is to do consumer surveys. Finding the problem through product testing and checking where it needs to be changed is achieved in the shortest possible time. If you find a lack of marketing or channels, it is a similar solution.

Mossian's improvements counted four or five times. For example, straws are very thin at first, feedback is not easy to suck clean, and soon we will change into thick tubes, in short, not miss a little detail, as long as it can benefit consumers.

21st Century: Competitors want to learn from you or plagiarize. How do you control this piece?

Guo Benheng: The biggest difference between imitation and independent innovation is that in science and technology content and concept orientation, Mossian is a breakthrough technology of “keeping at room temperature” plus Bulgarian longevity village concept orientation.

At present, in China, there is no second dairy company that owns the pasteurized yoghurt production process at room temperature, except for Bright Dairy. Mosilian has viable bacteria inside. Normal temperature preservation guarantees the same taste and the same quality. This difficulty is very huge. Technical barriers are on the one hand and, more importantly, they are bound together with the unique concept of longevity.

How does the connotative development come true? In the 21st Century: Through observation, I discovered that your liquid milk at room temperature does not seem as grand as it was originally depicted. It did not realize expectations. What do you think about this one?

Guo Benheng: At room temperature milk, there was not much breakthrough in scale last year, but there was a huge adjustment in the product structure. The ratio of high-end products, Mossian and You+, continued to increase. The progress of this year's normal temperature milk is very good. It is expected that the sales volume will not exceed 4 billion yuan. The sales volume of You+ and Mossarian is expected to reach 2,000 to 3 billion.

Last year, our top five star products made 28 billion yuan. The goal this year is that the increase rate may exceed 50%. From January to May, it is basically no problem to complete this goal, and part of the growth is high gross margin.

The mature operation of high-end celebrity products can bring about a change in corporate image and brand image. We expect to achieve the goal of “China's dairy premium brand leaders” within three to five years. Recently we were on the road show and we had to raise $1.4 billion. Fund managers asked us how much our profits could go up. My answer is that annual profits and sales are 20% year-on-year, which is already good. Sales continue to grow under the premise of 20% profit growth. We have several star products that have graduated from “university”. We can make money in this grade, but to earn more, we have to “master” and “doctoral” levels. Of course, "high school" can make money, but it is very hard.

"21st Century": Does this mean that you will strategically give up mid- to low-end products of normal milk?

Guo Benheng: Will not give up!

"21st Century": Is this not in conflict with the high-end brand image you are now building?

Guo Benheng: The quality of the products does not depend on the absolute quality, the relative quality, and the cost performance. Our basic white milk is also the highest price among similar products, because the corresponding quality is also the highest, and we must continue to maintain this high-end image. We do not take the homogenous low-end competitive path and take the differentiated competition route. Based on the company's base in Shanghai, the science and technology-oriented, fashion-oriented, and consumer groups of the international metropolis have laid the foundation for us to take a differentiated route.

"21st Century": Can you tell us in detail what your concept of "outward vision and center-of-focus" is?

Guo Benheng: “Outward vision” means that our business has reached international advanced level in scale and structure. It is expected that the total sales will reach more than 20 billion in 2014. Through cooperation with international companies, the gap between the company and international companies will be reduced and even exceed them.

One of the meanings of “center-in-focus” is that each team performs its own functions in coordination with its operations. The staff concentrates on doing their own job. The direction of strategic development is that the headquarters functional departments are making decisions, and the leadership will be more humanized. From the point of view, to care for and respect each employee on all fronts and fully release productivity.

21st Century: How Bright Overseas Layouts: Bright Dairy's greatest concern in recent years has been a series of realized or potential overseas acquisitions, of which New Zealand's New Wright project represented in particular. What are the opportunities you see? What are the options for the next step in international deployment? What kind of criteria will you use to select the objects and markets that will be acquired or laid out in the next step?

Guo Benheng: First, the status of these acquisition targets in the country or region where they are located is the best, at least the top three, must be a big brand with enough influence.

At the same time, the industrial structure of this target company will certainly interact with Bright Dairy and the Chinese market. The most important thing is the interaction of the product. In the local market, it should allow and support us to enter; its brand or product entering China should be complementary to our products, or it can help our products to be stronger.

In addition, the target company should also be relatively large in terms of scale, and it should also be located in a developed agricultural area. Now is a good time. Most of these target companies have a very low mentality because their entire economic situation does not work.

"21st Century": Will you consider financial leverage in M&A?

Guo Benheng: That must be used.

"21st Century": You still have to do big, swallow those bigger companies, right?

Guo Benheng: Right.

"21st Century": That would not be too risky? Many companies in China have used leverage to go overseas to swallow a much bigger one than themselves, and then they can't digest it and drag itself down.

Guo Benheng: All the companies I buy are profitable and have high profit levels. The experience and resources of Chinese people in overseas M&A are currently very limited. If it is a business loss, how can the Chinese guarantee its profitability? The new Wright is a special case, and the product is single, that is, milk powder.

"21st Century": In addition to the acquisition will use other ways?

Guo Benheng: A joint venture is also a possibility. However, the era of foreigners doing a good job for us has passed. There is almost no such possibility. In contrast to their understanding of China, including the level of management, including the input of technology, in the past we looked up. Now we are heads-up. In another decade or two, we may just look at it.

"21st Century": At other levels of the company, will there be ways to cooperate with overseas strategic investors?

Guo Benheng: We have a single stock right now, and we hope that the equity can be distributed appropriately.

"21st Century": Many Chinese consumer goods companies want to make overseas acquisitions. What experiences do you have to share?

Guo Benheng: The first one, do not buy for buying, must meet your own strategy. What looks good may not be for you, but also focus on the industry.

Another criterion is whether this merger has a synergy effect. Is there 1+1>2? Another is the entry point for timing. There is also a very important factor is the other team: team style and you do not match? I prefer the "bamboo hat type" and don't like the kind of "wholesale westernization".

If you don't meet these conditions, you don't want to talk about it at all. It's not that you don't have a chance to buy it. M&A was very difficult in the past. There was a target where everyone flocked and the information was not transparent enough. Nowadays, it is not difficult to find a suitable home in the United States. It is not possible to find it in Europe in the United States.

The status of M&A targets is usually not particularly good, and the growth expectation is very low. Basically, profit growth can be a good company, and it may be in urgent need of new growth points.

How did I adjust the "21st Century" in six years? After six years in this president, do you feel that you have personal changes?

Guo Benheng: First of all, it is a change in mentality. At the beginning, there was no management experience and we were very eager to make breakthroughs. However, as a whole, it was relatively solid, and it was still very good at listening to opinions. So long as it conforms to the interests of the company, it will soon be adopted. These years have been adjusting, and now basically no matter what you do it can be stable.

The grasp of directional things is much better than before. Also found some ways out, such as product technology innovation in marketing, channel intensive cultivation, overseas development, as well as new breakthroughs at the strategic level.

The style of management did not change much. A relatively balanced approach has also been found between development speed and robustness. In the face of this problem in the past, I must have thought about development first. Now that it has been adjusted, first of all, it is steady, and on this basis, we will seek development.

No matter what the external environment is like, we should try our best to let all bright people stick to the company's values ​​and choose to do the right thing. If 80% of companies go in one direction, the corporate culture is very strong.

The experiences of these years are somewhat complicated. On the one hand, they feel that the industry is in crisis, but at the same time they know that their hearts are safe and they can do things in an orderly manner.

"21st Century": You always put forward "to do the intellectuals of the dairy industry", which must be misunderstood and even questioned by the outside world. How do you see this?

Guo Benheng: My point is that as long as it is done, it is a single-edged sword. If it is not done well, it is a double-edged sword. The image of intellectuals is characterized by more sense of justice, more integrity, corresponding to more high-end brands, and more technological content on products. Of course, the most critical thing depends on what we do.

What we want to say through this image is that China still has a conscience-centered enterprise. I cannot guarantee that Bright Dairy will not be able to make any difference. This person cannot guarantee it. However, we have the conscience of Chinese intellectuals and do our utmost to provide our utmost responsibilities in the event of a problem.

Why should I mention this? This is first and foremost the character and cultural characteristics of Guangming Enterprises, and it is also one of the characteristics of differentiation in Bright Dairy. On the other hand, it feels that China's dairy industry needs “intellectuals” most.

We are doing dairy companies not only to make money, but also to hope that this industry can develop healthily and bring benefits to consumers. This is complementary to corporate development. Waiting for China is not only the world's largest dairy country but also a dairy industry, and the light plays an important role in it. This is a very proud thing in life.