Taiwan Cheng Lin: The Brand Name Of The Powerful Brand

The small traders who started from four tables and two phones today have many brands in mainland China, Europe and the United States. They have been listed in Taiwan and Shenzhen, and deserve to be the biggest manufacturers of faucets in Asia.

But in the first 11 months of 2009, Ouyang Ming took charge. Cheng Lin The cumulative revenue of the group was NT $19 billion 174 million (about 4 billion 50 million yuan), a 9.14% decline compared with 2008. For such a large enterprise, this is not optimistic.

But Ouyang Ming did not look at it this way.

"After the financial crisis, the sharp reduction in consumption capacity in Europe and the United States has hit a lot in the high-end retail market, but we have pretty digital support." Ouyang Ming introduced to Chinese and foreign management: in November 2009, Cheng Lin Group's revenue was 1 billion 849 million NT dollars, of which the annual growth rate of ODM customer orders was 20%. And its Shenzhen listed company Cheng Lin shares (002047), the first three quarters of 2009 showed that the company's net profit increased by 70% to 100%. "Isn't that enough to inspire people?" Ouyang Ming laughed confidently.

OEM transformation

Compared with 34 years ago, the 1 million year old Taiwan dollar (250 thousand yuan) was founded, and Ouyang Ming's achievements are indeed worth his pride.

In 1975, Ouyang Ming, who just graduated from University, embarked on the business journey. He started the grocery trade with his 1 million old Taiwan dollars, and founded Lin Cheng. In just a few years, export trade Ouyang Ming was made up in the wind, with an annual turnover of 240 million NT dollars, which accumulated the first barrel of gold.

But then comes frustration. The rapid growth of wealth did not bring him joy. Ouyang Ming increasingly felt that he was only an intermediary. "At that time, it was very persistent and recognized that manufacturing is fundamental." Ouyang Ming said to "Chinese and foreign management". "I want to be an enterprise rather than a businessman." He explained further.

After thorough market research, Ouyang Ming finally selected the faucet as a breakthrough point. "First, the market space is very large, and there are no high-end brands in the local market. Second, I have done some similar products agents from foreign manufacturers to understand the development trend of this product; third, I can recruit some skilled workers to produce in the shortest possible time." Ouyang Ming has a clear understanding of his own advantages.

In 1986, Ouyang Ming owned a factory solely. When he told the news to his former clients, he had some desperate intentions. Sure enough, due to the transformation of Cheng Lin, most of the customers were lost and their performance fell by 50% - Ouyang Ming began to support them.

Although Ouyang Ming was determined to make a contribution in the manufacturing field, Ouyang Ming did not rush to face the market frontier confrontation at the beginning of the transformation. Instead, he concentrated on hiding behind the scenes, positioning himself on the supply chain of the big brand seller or manufacturer, and began his own OEM road. He knows that Cheng Lin is just an apprenticeship for the faucet industry, and is still a stage to learn and accumulate manufacturing experience. While the requirements of suppliers for large brands are strict, they will bring cutting-edge technology and management, and the profit margins will be protected.

"The sharp decline in profits and the sharp increase in manufacturing costs are actually a new entrepreneurial process." Ouyang Ming was fresh in his memory of the hardships of that year. "At that time, we had no technology and no experience, and the industry thought we could not do it." Zhuang Xianyu, deputy general manager of Cheng Lin group, told Chinese and foreign management. Today, Cheng Lin can be the first in the industry, which is a miracle.

Relying on OEM, Cheng Lin has established a good supply relationship with famous buyers such as Homedept, so that it can steadily expand its influence in the OEM market, absorb advanced management and technology, and pave the way for the future. {page_break}

Two transformation of M & A

In these years of intensive grinding, Ouyang Ming's idea of building an international brand enterprise has been completed and clarified step by step.

In 1995, chairman Ouyang Ming adjusted the business strategy through Cheng Lin's analysis of the supply of the US and Canadian markets: "we must not only set the role of OEM manufacturers, but communicate and serve", and formally take the first step in building brand from OEM.

In the days that followed, Cheng Lin began a nearly frenzied acquisition in the eyes of outsiders. In 2002, Cheng Lin bought the GERBER brand with a 80 year long cultural history in the United States, and stabilized its market share in the US. In April 2007, the company's annual turnover amounted to 10 billion 500 million yuan, ranking the first PJH company in the whole British kitchen and bathroom brand distributors. It was purchased by Lin Lin for 36 million 840 thousand pounds and about NT $2 billion 395 million, causing the industry to exclaim: "Ouyang Ming's appetite is too big."

In fact, Ouyang Ming chose an unusual way of OEM transformation. " OEM It can be imagined that the independent brand of an enterprise must enter a mature market, but we have found a way to solve the big problem with "small money". Ouyang Ming said frankly. Through mergers and acquisitions in the European and American markets, Cheng Lin quickly occupied the market that originally belonged to competitors. Meanwhile, the retention of the acquired product brand could reduce the running in cost between the local market and the product.

In Cheng Lin, M & A is not a noun, but a verb in progress. It has to go through three stages: acquisition and evaluation, on-the-spot checking and integration. Every acquisition has been calculated in a precise and rigorous way. "I never considered whether the scale could be expanded during the M & A. I only wanted to maximize profits." Ouyang Ming explained that blind pursuit of scale may be a drag on enterprises. Only when scale expansion in the process of maximizing profits can enterprises develop healthily.

Be an entrepreneur, not a businessman.

Taking a look at the development history of Cheng Lin: by using OEM to accumulate manufacturing experience and take over the European and American markets through mergers and acquisitions, the mainland market has been opened successfully through the successful listing of cross-strait exchanges in the Shenzhen A share market. A "borrowed" word may be able to glimpse its success. There is no doubt that knowing how to lend strength will greatly reduce the cost of expansion for enterprises.

Cheng Lin Group has become a benchmark NO.1 unexpectedly. It is the smart business of Taiwan businessmen to force the expansion of enterprises to avoid risks in a transformation.

After more than 30 years of entrepreneurship, Ouyang Ming has a clear understanding of his NO.1 today: "the first priority of any industry is to strive for the first. Closing doors or making use of external force is just the way to achieve goals. But without this determination, it can not be regarded as an entrepreneur, but a businessman.

From trade to manufacturing, from OEM to independent brands, like the vast majority of Taiwan enterprises, Ouyang Ming's Cheng Lin group seems to have nothing special. But when bicycles, notebooks, sanitary bathrooms, and mainland enterprises have been proud of the toy manufacturing industry, when Taiwan enterprises are scrambling to become world class NO.1 or NO.2, why can't they see mainland enterprises?

As for how to build a world-class leader brand, Ouyang Ming's words may give some inspiration to mainland manufacturing industry: "encourage ourselves with firm goals, standardize production with strict management, and attract talents by open culture, and the three must be neglected."