Imitating Jack Ma's way of opening remarks: Tell everyone the bad news: industry restructuring will cause a large number of enterprises to disappear; then tell everyone the good news: redoing every industry will give birth to a batch of new enterprises.

This topic originates from marketing expert Mr. Jin Huanmin, who wrote: Most Chinese products can be redone; from another perspective, most Chinese products have room for innovation.

He Zuqi, who is restructuring the aquatic industry, elaborated from personal experience: Almost all industries are worth redoing. In other words, almost all industries can be restructured.

Now there is much talk about product upgrades, the Internet, and e-commerce; these are all discussing single factors. If we combine these factors, what do we get? I think it is industry restructuring, thorough restructuring.

For example, five years ago, we absolutely could not have imagined the mobile phone industry as it is now, including products, brands, sales channels, and promotion methods. If we could have imagined it, Nokia phones would not have disappeared; similarly, it is hard to imagine what the mobile phone industry will look like in five years, but restructuring is inevitable.

Not long ago, at an internal corporate training session, several people asked me which industry is least affected by the Internet. I said I don't know, but I know this way of thinking is harmful. It is now difficult to find a "Shangri-La" that is unaffected. Even agriculture, which I am currently studying, is being restructured, and it is a thorough transformation. Which industries will not be restructured?

After restructuring, industries will no longer be simple extensions of the original; they are the rebirth of industries from the industrial civilization era in the information civilization era.

The biggest problem traditional enterprises face is that when their industry is restructured, no matter how successful they were before, they have no place after the restructuring. So, we rarely hear the phrase "bigger and stronger" now; during industry restructuring, the past "scale advantage" may become a "scale burden." Industry restructuring means all enterprises are searching for their new positions amid uncertainty. Product Restructuring

Products change for roughly two reasons: one is technology-driven; the other is consumer-driven. The current situation is dual-driven. The driving force now is not gradual change but drastic change, even qualitative change.

Technology-driven, mainly IT technology cross-border restructuring of products. According to the degree of correlation between products and IT technology, the strength of influence roughly follows: Internet industry, IT products, electronics-related products, non-electronics-related products.

IT technology's cross-border restructuring of products mainly involves product intelligence and miniaturization, such as wearable devices, which were originally unrelated or weakly related to IT technology but are now strongly related.

I studied microelectronics, and I know how powerful IT technology is. IT technology transformation can create incredible power; truly, there is nothing you can't do if you can imagine it. Google even set up an "X Lab" specifically to develop those incredible products.

IT technology is still in an unpredictable explosive period, and its ability to transform other industries across borders is strong. Just as no one knows what future phones will look like, everyone knows they will be vastly different from now.

It is certain that fields strongly related to electronics will be restructured, but will those seemingly unrelated to electronics not be restructured? I hope everyone remembers KK's words: Disruption comes from the edge. Your opponents are outside your field of vision.

In product restructuring led by IT technology, consumers are invisible. Just as before smartphones came out, consumers could not articulate the concept of smartphones. At this time, sensitivity to new technology and insight into consumers are crucial.

In technology-driven product restructuring, the power of professionals weakens, and cross-disciplinary and geeks are very important. The original R&D model gives way to the demand chain model.

In consumer-driven product restructuring, there are currently two major influencing factors. One is consumption upgrade; the other is that physical functions give way to psychological needs.

The first factor is the upgrade of Chinese consumers, the shift of mainstream products. I raised this issue with Mr. Shi Xianlong in 2014, but enterprises seemed insensitive; this year it has become hot. In recent years, mainstream products in every industry will be replaced. China's consumption upgrade can create a huge market and will produce an upgraded wave of consumption. This topic has been discussed a lot, so I won't elaborate here.

Another factor driving consumer-driven restructuring originates from developed countries but is also reflected in China. The West entered an affluent society long ago, and mainstream products in many industries have been popular for decades. The original packaging and brand value have become dull, consumers are indifferent, and they cannot gain psychological satisfaction from them. At this time, it is necessary to redefine the industry and the psychological value of products. Consumption values have changed, and the original brand connotations are no longer suitable, so brands face a crisis. Currently, the world's top brands from ten years ago are all experiencing brand crises of varying degrees, partly due to this reason.

Restructuring products is easier said than done. It can be said that the Internet era has pulled enterprises back to the era of productism. I think enterprises restructuring products must start from the following aspects.

First, the boss becomes CPO (Chief Product Officer). If the boss is responsible for strategy, product restructuring is now the most important strategy; only the boss has the ability to mobilize overall resources.

Second, introduce cross-disciplinary product R&D personnel. If they are still those professionals with limited expertise, restructuring is impossible.

Third, build a geek system around product R&D; they are the source of wisdom for product restructuring. Channel Restructuring

In the past, China only had distribution channels, and later KA was added, forming two types of channels. The combination of the Internet and commerce formed e-commerce, enriching the marketing channel system.

To illustrate emerging channels, let's make a symbolic convention: F—Factory, B—Distributor, R—Retailer, C—Consumer.

After the rise of e-commerce, C-end e-commerce became a new channel (F2C, B2C, C2C), such as Alibaba and JD.com. Initially, traditional enterprises rejected it, but now they have realized that C-end e-commerce is one of the emerging channels.

Now, B-end e-commerce is also rising. Although its main body is the e-commerce transformation of traditional channels, it also creates new channel models. B-end roughly has two types of channel models: one is B2R (transformation of traditional channels), which belongs to distributed B-end e-commerce; the other is F2R, such as Alibaba 1688 and JD New Channel, which belongs to centralized B-end e-commerce.

After the bubble of social marketing, it has now settled down and formed new channel models. The social channel model can be summarized as B2C or F2C, C2C.

Although community e-commerce is still weak, as a channel model, it will occupy a place in the future; its channel model can be summarized as R2C.

After the O2O bubble, some excellent players will survive. In the future, traditional businesses doing O2O will make O2O more common.

Let's count: in addition to traditional channels and KA, new channel forms include: F2C, F2B, F2R; B2R, B2C; R2C; C2C; O2O. Anyway, all combinations of F, B, R, C are covered.

After channel restructuring, channel models are diversified, sales are diverted, and traditional channel sales shrink. At this time, if you do not proactively restructure channels, sales decline is inevitable.

Regarding e-commerce, traditional enterprises have gone through several transformations. Initially, they thought it was someone else's business (not participating), then they thought it was the e-commerce department's business (limited participation), and now they must realize it is the whole company's business and everyone must participate. Because the Internet has moved from initial disruption and hijacking to integration and consolidation, the full e-commerce transformation of channels is an inevitable trend. Communication Restructuring

The promotion in the 4P framework is essentially communication; the Internet has changed exactly this aspect.

Let me first share a case.

In 2015, a beer company developed a very good product with good quality and cost-performance, but it didn't sell well. As a new product, this is normal. So the boss thought of advertising, but the advertising cost might be more than sales, indicating it was ineffective and should be reconsidered.

However, the boss increased advertising investment in 2016. Why? Last year, someone told me: Historical experience tells the boss that advertising is effective. Some also suggested using the Internet for promotion at low cost, and the boss was somewhat interested but still didn't trust Internet communication.

Many people confuse the Internet with e-commerce, which is terrible. E-commerce is just one of the business channels, but the Internet changes the entire business.

What does the Internet change? It changes the way information is disseminated.

What is the essence of traditional business? It is information asymmetry; eliminating information asymmetry and creating new information asymmetry.

The Internet has made two basic tools of traditional business lose value: first, economies of scale lose value; second, mass advertising through media to indirectly "brainwash" consumers is no longer effective. In the past, branding experts always believed: Perception is more important than truth. Reinforced "brainwashing" changes perception, but the Internet makes reinforced "brainwashing" extremely difficult. So, the Internet changes business through information dissemination.

In terms of business communication, in the past, communication required media, so advertising was media advertising. In the Internet era, communication can rely on media, such as platforms, or it can be without platforms because the Internet itself is a communication platform. Restructuring Operating Models

In the industrial civilization era, scale operation was the main theme of enterprise operations, so "bigger and stronger" was the goal. In the Internet era, we haven't heard "bigger and stronger" for a long time.

Not long ago, Dudu Nail was acquired at a low price, while Hejia, which also does "mobile nail services," is still operating well. The difference between the two is one is traditional model + Internet, the other is Internet platform + craftsmen.

Many people say the Internet is just a tool, which is true. Electricity and internal combustion engines are also tools, but they are tools that changed the era. I think the Internet is a tool that changes the era; the popularity of mobile Internet means entering the information civilization era from the industrial civilization era.

Many people are now criticizing Haier, but Haier's insistence on transforming into a platform is undoubtedly correct. Perhaps it is difficult for all traditional enterprises to transform into platforms, but startups have no burdens. Under the pressure of startups, traditional enterprises will eventually change their labor models. Who Will Redo It?

All industries can be redone, so who will restructure? What is the pace of restructuring?

During this transition period, most traditional enterprises are "kidnapped" by their existing stock, and they feel it is increasingly difficult. A few of them are restructuring, such as Haier. Some enterprises are not restructuring in their own fields but are restructuring other industries, such as Lenovo. Lenovo is doing nothing in its own field, but Liu Chuanzhi is keen on investing, and the investments often restructure other industries.

Lenovo's approach is very interesting: it is "kidnapped by its own stock" but keen on "moving others." This may be a unique manifestation of the contradictory mentality of traditional enterprises.

The third category is startups. They have no concept of restructuring; they are new from the start. For example, Tesla's disruption of the automotive industry, and Google's disruption of the automotive industry.

The leaders of traditional enterprises used to be the weathervanes of the industry. As long as the leader doesn't move, others moving is useless. Now the situation has changed; the leader's biggest burden is the past scale, so the original scale advantage has become a "scale burden," kidnapped by the existing stock.

Even if the industry is disrupted, it is disrupted slowly, so regarding restructuring, I have five words: active, not anxious. This is about pace. For example, O2O was a bit anxious; they didn't understand the logic but feared falling behind and rushed into it.

I admire Haier's thorough transformation of its operating model, but the risk is enormous. I rather agree with Huawei, which is transforming in its bones but with a rhythmic form. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and useful tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | [Long press QR code to follow] To join QQ/WeChat groups, please click: Read original text