Lang: the very unfortunate CHANGHONG this story is true

We come now to the case of CHANGHONG. CHANGHONG is "five" period of 156 key project of net assets from the rapid expansion into 3950 $ 133 billion, is the "King" China color TV, he's stock price had reached $ 66, is the Shanghai A-share market "Mixer", but in 2004 it CHANGHONG expected loss of 37 million.

In 1997, NI runfeng devoted public, CHANGHONG's operating net profit is good. 20 May 2005, I call on the Shenzhen SEG Manager Sun Yulin to Shanghai to attend my financial programmes, he said a Word to me impressed, he said, as long as there are State-owned Enterprise Manager, did not conscience!

CHANGHONG lose leadership, overall decline, why not the product quality is not good, not the service is not good, is not a brand, then what? I study found that is CHANGHONG management policy-making and top management of selfish reasons.

CHANGHONG policy-making: the defeat of the diversification strategy. National average color TV industry ROA (total return on assets) is 2.46%, air-conditioning industry average ROA is 3.30% CHANGHONG diversification consolidated ROA is 0.68%, there is no synergy. CHANGHONG years of diversification on the business income no contribution or to TV, air conditioning, diversification is not a success. According to my research, the success rate of State-owned diversified only 5 per cent as at the end of 2004, the State-owned diversified wasted money far in excess of Bank debts!

CHANGHONG decision mistake 2: resources management error. NI runfeng once said: "3 to 5 years after the Chinese market real survival of color at the enterprise there are 3 to 5. "This sentence is correct. We all know that CPT is the core of color TVs, which accounted for 70 per cent of the cost of color TV. 1998 NI runfeng provoke CPT wars, he hoped that through monopoly CPT, let other TV production firms. NI runfeng knew color TV industry is oligopolistic rather exclusive monopoly, why he monopolistic? he can do? result is CHANGHONG accumulation of CPT, the stock has risen dramatically, the victimized.

CHANGHONG decision mistake 3: marketing mechanism. Such as CHANGHONG, not big business to the agent. CHANGHONG to 30 per cent of the Agency gave zhengbaiwen because excessive reliance on zhengbaiwen, CHANGHONG marketing risk too centralized. 1997 CHANGHONG management decision-making mistakes CHANGHONG stepped down from the glorious God. The NI runfeng selfishness, but let the quagmire, CHANGHONG fall so hard.