The Problems Behind Lining'S Prosperity And Decline

On the walls of the Chinese gymnastic hall, more than 60 champion gymnasts are on the world champion list. Among them, the most brilliant one is Lining, who was the "Prince of gymnastics".

In 1986, Lining won the Rome gymnastics awards, including 6 individual champions, including the parallel bars.

In 1990, Lining retired after the establishment of Lining sporting goods Co., Ltd.

After the company was founded, it began a strategic cooperation with the national gymnastic team for 23 years. During the period, all kinds of brands at home and abroad could not shake Lining's position in the national gymnastics team.

Lining would not have thought that the cooperation between Li Ning Co and national gymnastic team would be terminated one day.

In August 4, 2014, Anta replaced Lining and the national gymnastics team to renew the contract. 10 days later, Lining released the mid 2014 report.

This is a worsening loss report.

The report shows that Lining's net profit in the first half of 2014 was a huge loss of 586 million yuan, the loss expanded by more than 2 times over the same period, and exceeded the whole year in 2013, and inventory 1 billion 90 million approached the highest point in 10 years.

In terms of institutional rating, except for Goldman's "buy", other institutions are almost always "sell" ratings.

In a habitual seller research market, companies that are generally on the verge of bankruptcy will get the same treatment.

With the closing of Lining's stores in shopping malls or commercial blocks, even the slogan "everything is possible" has been mentioned less and less.

Why did Lining fail to win? Brand positioning is not accurate enough to lose old customers while looking for new customers. Failure of line location not only failed to get a slice of the international market, but even lost its original position.

Question 1:

Brand positioning behind 90% of the root causes

In 2010, Li Ning Co launched the brand remolding plan. The specific contents are: changing the brand name of Lining, positioning the consumer group as "post-90s", positioning the brand as "fashion, cool and global perspective". Then, the advertisement of 90's Lining has been overwhelming.

According to Li Ning Co's market strategy, after positioning for 90 years, the company began to increase sales of products, ranging from 7% to 17.9%.

The market reaction after raising prices is the decline in sales and operating income, followed by the Li Ning Co facing a high inventory crisis, which also made Li Ning Co completely passive.

It is Li Ning Co's position of "post-90s" that puts Lining's brand in an almost unrepertable position. Lining has not solved the problem of choosing Nike for Nike and Adi when young people are confronted with brands such as Nike and ADI.

After the Beijing Olympic Games, Nike and Adi have been expanding year by year in the Chinese market. The consumer group has also extended from white-collar workers to high school students. This part coincides with the 90s of Li Ning Co positioning.

In contrast, Lining spent most of the year on the consumption crowd after 70.

Positioning the "post-90s" can not only help Li Ning Co expand consumer groups, but also let the original customers out of business. Li Ning Co has personally broken its own consumption base for many years.

Sure enough, in 2011, Lining's performance report showed that its revenues and profits both declined, and the total revenue of the company was 8 billion 929 million yuan, down 5.8% compared to the same period last year. Net profit was 386 million yuan, down 65.19% compared with the same period last year. Gross profit was 4 billion 111 million yuan, down 8.2% compared with the same period last year, and the basic earnings per share were 36.7 points, down 65.3% over the same period.

In 2012, the main indicators of Li Ning Co's earnings were still bleak. The group's revenue was 6 billion 739 million yuan, down 24.5% from the same period last year. Gross profit was 2 billion 550 million yuan, a decrease of 36.9% compared to the same period last year.

In 2013, despite the sharp narrowing of the deficit of Li Ning Co, the words "fall", "decline" and "decrease" remained unchanged in the accompanying financial reports.

In 2014, the Li Ning Co closed 519 stores. In November 17th, Jin Zhenjun, CEO of Li Ning Co, left office. The American professional manager, who was called "savior" of Lining since 2012, left in a way that Lining's self redemption seemed to fail.

Question two:

Adhere to the development mode, lack of market awareness

Li Ning Co has been sticking to the development mode of light companies outside the production and sale these years. In fact, this is the development mode of Nike.

However, in this mode, Lining relies on the traditional wholesale way, that is, Li Ning Co directly deals with distributors and wholesalers, rather than the vast number of consumer groups.

To a large extent, this led to the adjustment of Lining's product design ideas based on the feedback of dealers, but the lack of cognition of consumers and the market, resulting in problems such as poor consumption, high inventory and uncontrolled supply chain.

At the same time, as a listed company, performance is an important criterion for its assessment, which also makes Li Ning Co continuous personnel changes, and executives resigned one after another.

Lining spent a lot of money signing Wade to sell limited price shoes, which cost more than 1000 yuan. This move Lining is also very important for the brand bonus besides waiting for a high premium.

But this important Lining was planted in the hands of suppliers.

Unlike Anta and 361 degrees, Lining did not have his own factory, which led to many times being led by the foundries.

Wade's first limited number of shoes, because of the complex production process, can not be mass production, resulting in consumers can not get the goods at the booking time, Lining's wishful thinking has also been wasted.

Question three:

Internal business confusion leads to competition among peers.

After years of development, Li Ning Co has owned and controlled many brands, including Lining, LOTTO, red double happiness, AIGLE, new mobile and Kaisheng.

Red double happiness and Kaisheng are professional table tennis and badminton sports equipment providers in China. AI Gao and lotto belong to sports leisure and sports fashion clothes.

The interior of the Li Ning Co has a strong plot for the Lining brand, and the diversified and multi field business operation under the Lining brand has caused the confusion of the internal brand ownership and the consequence of the competition of the same industry.

Relying on the Lining brand, the company not only set foot in the production of sportswear and clothing, but also provided table tennis sportswear, badminton products and equipment, and reduced its investment in red double happiness and Kaisheng, which restricted the development and growth of the two brands in their professional fields.

In the field of sportswear and entertainment, Lining overlaps with the brand business of Yue Tao and AI, resulting in waste of resources and repeated competition.

Question four:

Electricity providers have no rules to impact dealer network

There are hundreds of large and small formal informal distributors in Lining's whole country. Before Lining's model was sold to the distributors, the product was finished, and no matter what Lining was going to do, the result of this mode was the backlog of a large number of products.

Since 2012, Lining has started a discounted sale across the country overnight.

In addition, the price of Lining brand in the online shopping market is lower than that of the exclusive store, and the dealers under all lines are threatened.

On the Internet, there is an article entitled "confession of Lining dealers".

The article said: at the beginning, I didn't understand why Taobao's price was lower than my purchase price. Finally, I got the reason through my understanding of the channel.

Almost all the sellers in the market do not have stock, and they sell them through superior agents. These superior agents are TOP dealers, who have large quantities of goods and lower purchasing prices.

It is precisely because these prices are lower than our distributors' purchase price, which also brings the chaos of the channel.

These phenomena not only bring management difficulties to the original dealers, but also because of the long absence of all kinds of resources in the company, the store condition and the Japanese drama have brought bad effects to the brand and reduced the reputation of the brand in the local market.

Lining's brand began to get involved in Internet marketing in April 10, 2008, when Lining opened the first direct shop in Taobao mall, and opened online stores through shopping, patting and eBay.

Subsequently, the Li Ning Co began to build its own official mall and launched the official Lining mall in June of that year.

For Lining online shopping mall, dealers think that Lining group can increase the input of network pipeline, they can understand, but the network pipeline should be a sharp weapon for Lining to "clear the stock", instead of damaging the dealer group's "Oolong ball".