The article is compiled from "The Biography of Moutai").
How Moutai jumps out of the involution: grasp the right to speak in the industry
There is a French proverb: "A good craftsman works his creative talents in strict rules, while a great craftsman tries to create rules." ”
It speaks to the first law of business competition: those who have the right to speak the rules control the world.
Moutai is very expensive, and it has built an unsurpassable "ceiling" for China's liquor industry. But it is not unique from the first day of its birth, Moutai has redefined the rules of the industry through innovation, thereby defining the uniqueness of its own products and creating unprecedented value points.
When Moutai was established, Chinese liquor was mainly divided into two major schools, namely Fen liquor from Xinghua Village in Shanxi Province and Lu type liquor from Luzhou in Sichuan. Because Moutai consumes the most grain and has the longest brewing time, it is the most expensive liquor all year round. But this is not enough to establish a unique market position of Mao**, it is only one of many Lu wines.
If there is no innovation, Moutai will inevitably fall into the homogeneous competition between the same type of liquor and fall into the Red Sea of the first war. At this stage, one of Moutai's most striking feat is that it has changed the criteria for evaluating the quality of baijiu for hundreds of years – from tasting taste to tasting aroma.
In years of blending experience, the winemaker of Moutai discovered the main aroma of Moutai, which was later called the sauce aroma, and its main ** is ethyl hexanoate. Presented in the sensory experience, it is "a smell of soy sauce".
In 1979, at the 3rd National Wine Appraisal Conference, China's liquor industry for the first time distinguished the major famous liquors by their aroma types, and first proposed four major flavor types: sauce aroma, light fragrance, strong aroma and rice aroma.
The fragrance type is proposed, which makes all people in the wine industry refreshing, which is a set of knowledge system that has never been seen before. Prior to this, the "aroma" of wine had its own style, and at most it was a mysterious "wonderful". Now, Moutai has redefined "aroma" as "aroma", and there is a quantitative and qualitative standard for the evaluation of the taste of liquor.
As the initiator of the "fragrance revolution", Moutai is undoubtedly the biggest beneficiary of this industry mutation. It has not only participated in the establishment of new industry evaluation standards, but it is no longer one of the many Shanghainese liquors, but the first and leading sauce liquor.
Not only that, under the leadership of Ji Keliang, Moutai has also established a set of planned and systematic liquor hooking process to ensure that the quality of the liquor can be accurate to 5/10,000.
Five out of 10,000, which is also a surprising statistic. Prior to this, baijiu, like tea, determined whether a batch of products was good or not, all depended on the vintage, soil and craftsmanship of the craftsmen, which was full of all kinds of probabilities. Moutai's approach shows that technology, processes and systems are likely to become the new core. Later, Moutai standardized all the production processes and processes of sauce-flavored liquor, and upgraded the company's production standards to national variety standards.
From aroma theory to national standards, Moutai Distillery has built an incomprehensible moat and wall for the sustainable development of the enterprise.
For any enterprise, from excellent to excellent, from the group to the "self-respect", its possible paths are nothing more than two: the possession of patented technology and the formulation of industry rules. The successful case of Moutai in the second path can give all enterprises the most real reference.
Strategically, it is the first to propose a new product evaluation criterion – aroma – in an extremely traditional industry that has lacked quantitative and standardized production for thousands of years, and then the first to standardize elements in the brewing process.
Focus: Rely on super single products to win the world
Although Moutai has a transcendent position in the liquor industry, it has not always stood at the top of the industry.
From 1994 to 2009, it was the era when Wuliangye ruled the rivers and lakes. It has successively incubated thousands of sub-brands, relying on channels and brand matrix to win. Because Wuliangye's ** matrix is very broad, ranging from thousands of yuan to two or three yuan, the product application is extremely wide, which is conducive to capturing the counter in a short period of time and harvesting performance.
In this dazzling competitive atmosphere, Moutai's decision-makers have also been trying in hesitation. Moutai has tried to "walk on a few more legs", and at the same time developed and brewed Moutai wine and Moutai beer, and also made efforts on low-alcohol wine.
However, due to the comprehensive consideration of its own positioning and the market, Moutai finally admitted that the "real Moutai" that consumers are most willing to accept and in their minds should be 53 degrees Moutai. Moutai quickly adjusted its strategy and implemented a completely different strategy from Wuliangye. Around the 53 degrees Moutai liquor, the main series of products are all laid out on the "Pu Mao". This product layout has formed its own unique product system and matrix, which has kept the bottom line of consumers' minds on the Moutai brand.
As a result, around 2010, when the per capita GDP of Chinese crossed US$10,000, the new middle class drove consumption upgrades, and "price-to-price ratio" replaced "cost performance" as the new core element of competition, Wuliangye's brand value was diluted. Moutai has gained the outbreak of the era of consumption upgrading.
If an enterprise can operate sustainably, it must choose strategic subtraction and focus.
As Jack Trout reveals in his book Positioning, the biggest risk of brand extension is "breaking people's hearts."
I have the impression that you are 'the best product.'" Because, "what really enters people's minds is not the product at all, but the 'name' of the product, that is, the characteristics of the product".
It's not easy to subtract, but time has proven that the rewards of focusing are often longer lasting than those of extensive distribution.
1. Only focus can create the highest quality
Wu Xiaobo once asked Ji Keliang: "Why is it set at 53 degrees, and not at 52 degrees like Wuliangye, Luzhou Laojiao or Fenjiu?"”
He wrote a formula: 5394 ml of alcohol plus 4983 ml of pure water, which adds up to a volume of 10377 ml, but 100 ml. This proves that at an alcohol concentration of 53 degrees, the alcohol molecules and water molecules bond most strongly. Therefore, the 53-degree sauce-flavored liquor is the most soft and soft on the palate, and rarely irritating. One degree of difference, showing the polishing and carving of super single products.
Only focusing can win the minds of users
To some extent, Moutai has become synonymous with the national liquor. The super single product strategy has consolidated consumers' high brand awareness of Moutai, and at the same time created ample and calm marketing and profit margins for channel providers. Among global brands, only the Apple phone in the United States has achieved similar success.
This strategy is also the embodiment of Moutai's business philosophy - no extension, no coverage, no penetration, only focus on the minds of consumers. With the uniqueness of the product, call for the enthusiasm of the market.
Adhere to the strategic determination of long-termism
Professor Qian Jin of Harvard University described in "Blue Ocean Strategy": "Companies with value innovation concepts do not focus on defeating competitors, but on creating value leaps for consumers and themselves, and thus open up new market space and completely get rid of competition." ”
The reason why Moutai always adheres to its own strategic positioning and value point, no matter how competitors make moves, with its own unchanged, should respond to the changes in the market.
Insisting on doing the "difficult but right thing" requires concentration, need, patience, and time will give the answer.
1. One of the strategic determinations: insist on quality first
90 years is the era of the production capacity competition of various distilleries in Guizhou. At that time, the leading ones were Anjiu and Xijiu, which had a production capacity of more than 10,000 tons at that time. Among them, Xijiu is the most radical, and the head Chen Guoxing proposed to build a "Baili Lounge".
Under the pressure of this scale and growth, if Moutai wants to increase its own production, the most direct way is to produce more low-alcohol liquor of not very high quality.
However, between scale and quality, Chairman Ji Keliang unswervingly chose quality: "I think that quality must come first for enterprises that can exist for a long time." That's why I proposed at the time: in the relationship between the speed of development and the quality of development, speed must be subordinated to quality;In the relationship between yield and quality, output must be subordinated to quality;When there is a contradiction between cost-effectiveness and quality, cost must be subordinated to quality;The workload must also be subordinated to the quality. As long as it is ***, the product will not be sold. ”
The "stubbornness" of the Moutai people, in the era of scale priority, is of course considered to be inconsistent with the requirements of the situation. At one time, there were rumors that Chen Guoxing was going to be transferred to Moutai Distillery as the director. Even so, Ji Kelian still adheres to the view that "output must be subordinated to quality" and has never flinched from any pressure.
There is a famous saying in the management world, from Intel founder Andy Grove: "Only paranoia can survive". It is Ji Keliang's almost paranoid stubbornness about quality that gives Moutai an unrivaled high-end value. This almost becomes the best footnote to this sentence.
And even in the turbulent times of extreme harshness, the belief in talent and quality is still in Moutai's genes. During the campaign, the leadership of the distillery was in turmoil several times, but the three technical deputy directors, appointed in 1956, worked safely until their retirement.
"Quality belief" is integrated into the blood of the enterprise, and it is as immutable as genes. This paranoid insistence has allowed Moutai to gain a large number of loyal users. When the company's long-term insistence on quality becomes the mental identity of consumers, it brings the premium dividend and the ability to prevent risks to the enterprise, which is unimaginable. Through the reading of Moutai's history, you will eventually find that it is often the consumers who have helped Moutai Distillery survive crises for decades.
2. Anchoring
Moutai's ultimate success also benefited from its adherence to the best strategy.
Quality is the only basis for a high premium. Although people often focus on technology companies such as Apple and Tesla when they mention the story of occupying the market through high quality and high premium, Moutai is undoubtedly also a classic case that has reached the top of the industry.
Many people say that the ** of Moutai is because "Moutai is not worried about selling". But in fact, this is just the result of anchoring and completely occupying the high-end market. After the reform and opening up, Moutai has suffered three major sales crises, which occurred during the economic depression in 1989, the Asian financial crisis in 1998, and the period after the introduction of the first eight regulations in 2012, each of which forced the company to the brink of collapse. But even in the lowest period, Moutai has never adopted a strategy of price reduction.
Although we can see short-term sales growth, it has ruined the company's ability to make long-term sustainable profits.
Although, for a long time, high pricing has limited Moutai's sales, it has not been the largest liquor company with the largest sales volume and the highest revenue. However, this strategic determination not to seek development scale, but only to develop quality, has allowed Moutai to further widen the gap with other high-end liquors in terms of brand positioning.
When the new stage of economic development arrives and the clarion call for consumption upgrading sounds, Moutai's high-end brand positioning has always been unmatched, and finally ushered in its own era.
3. Accept "slow motion".
Ji Keliang once said: "We are all 'stupid people', and 'stupid people' have stupid strategies." If we look at a problem slowly and think about it slowly, it will take at least ten years to solve it. ”
For many years, the Chinese market belongs to the people who are fast with knives, and the world's martial arts are only fast and undefeated. It is difficult for slow companies and "stupid people" to stand in the martial arts.
The first essence of the stupid man's strategy is not to follow the smart people, so as to respond to all changes. During the period of capacity expansion, China's liquor industry has had a "liquid liquor" movement from the policy level to the industrial circle, and many liquor companies have rapidly increased production through artificial flavors. In this wave, Moutai Distillery has always adhered to the most traditional solid-state fermentation, insisted on "exchanging wine for wine", never added water, and insisted on the natural cultivation of the wine cellar. Although this was once considered a "backward" insistence, in the end, it maintained the consistently high quality of Moutai.
The advantage of stupid people is that they are hard at home, fighting in a stupid battle, step by step, and gaining inch by inch, once they succeed, it is difficult to deprive them. When Zeng Guofan fought the Taiping army, he used this method, he said, "The most clumsy in the world can win the most ingenious ...... in the world."Those who desire a lot will not have the festival of generosity, those who speak a lot will have no heart of substance, and those who are brave will not have the elegance of literature. ”
Moutai Rusi people, few desires, few words, no courage, dull and heavy, so the world can not compete with them.
Four: Conclusion
In Moutai, it reflects the universal growth law of Chinese enterprises.
With the goal of sustainable business strategy, it has become the most high-end liquor brand in China through anchoring, market education and outstanding quality, and its market position among liquor consumers will be difficult to shake for a long time in the future.
The hard work of a bottle of wine can also be applied to any industry. If there is a premise for the sustainable development of an enterprise, product quality is undoubtedly the only option. This truth is as simple as a "correct nonsense", but it may be rare for Chinese companies to be able to stick to it for 70 years.
When it comes to Moutai, people always have a lot of curiosity about it, how can a small burning house from the river valley and tradition grow into a trillion-level giant enterprise?How did Moutai come into existence from nothing?What exactly is the value of Moutai?
Through the perspective of the development history of this enterprise, we find that the value of Moutai worthy of being written is not entirely due to its uniqueness, but more importantly to its universality. How a traditional Chinese enterprise can form an unrivaled competitive advantage through various strategic means such as cultural marketing, anchoring, and quality standards - Moutai is a classic case that should not be missed.
The above article is compiled from Wu Xiaobo's "Biography of Moutai", reviewing the growth logic and value model of Moutai, for the benefit of readers, this book is officially authorized by Moutai, Wu Xiaobo following "Tencent Biography", after a five-year blockbuster new work, in-depth into the mysterious Moutai, a panoramic presentation of Moutai's transformation process, and with Moutai as the axis, looking back at the history of China's commercial and economic system reform, exploring the secrets of China's leading liquor companies that are famous all over the world, and interpreting the growth logic of China's local brands.
This is not only a biography about the enterprise, but also a chronicle that records the reform and changes of China's real economy in recent decades. Now click on the product card below to collect "The Legend of Moutai" with one click