China Food

Hongzhang capital Weng Yinuo: the business world has entered the era of weak links, how can brand chains find the right “degree”?

the future direction of business evolution is not strong control, but cooperation, individual, platform and weak control.

The popularity of new brand chains, whether they are snacks, bakeries, coffee or noodle shops, has increased several levels recently. However, the influx of capital does not mean that offline businesses can quickly turn over. On the contrary, because of the complexity and barriers, these businesses can stand the push and knock.


Whether it’s a new brand with high-speed growth offline or an entrepreneur who wants to cut into this area, the current node needs to understand what kind of underlying changes are being produced in the whole business world for brands, internal and external enterprises? How to control the core elements of different dimensions of brand chain operation, and dig out those basic unchanging laws more deeply.

At the recent “new brand offline Development Summit” jointly sponsored by China chain operation association and Inspur new consumption, Weng Yinuo, the founding partner of Hongzhang capital, based on his long-term industry investment experience and thinking, shared his thinking on the operation of new brand chain.


As he said, business top-level design is to create a powerful cooperation system. Once entrepreneurs understand the rules and principles of the cooperation system, they have the ability to understand and control it. In the field of new brand chain, some wonderful changes and principles need to be clarified.

New chain brand is a direction I have focused on. In recent years, Hongzhang has invested in many companies in this area and accumulated some thoughts. So, let’s take this scene to chat with you: thinking about the operation of new chain brands.

The business world is entering the era of weak links

1. The business world is entering the era of weak links


First, the business world is entering an era of weak links.

When we look at the development process of the whole chain format, it is mainly divided into two parts: one is the flow operation at the scene end; At the other end is the supply chain.

In the past, the mode of top-down, strong management and control, direct marketing and high operating costs, when it develops to a certain scale, will actually encounter a phased ceiling. Of course, it also depends on the size of the model, which determines your strategy.

However, in today’s evolution path of Chinese society and commerce, on the one hand, entrepreneurs’ individual operation ability is becoming stronger and stronger; On the other hand, the infrastructure of China’s business environment is getting better and better. Everyone is self driving, self motivation and development, which makes the strong control more difficult.

Therefore, we put forward a new macro concept: business has entered the era of “weak links”.

How to understand weak links? We are divided into internal and external aspects.


Internally, the partnership system, amoeba miniaturized organization and management mode, and project system, which are often mentioned in the past five or six years, all belong to the category of weak links.


On the external level, take community group buying as an example. In essence, it is a weak link. This business model is nothing new. In essence, it is to supply small store models. This is a large wholesale business that has been done for countless years.


So why did this model suddenly run today? The first is the digital drive of the flow end; The second is that at the end of the model, you have to empower others and sell categories that it didn’t have before. This creates a weak link relationship.


On the whole, we can see that in many models that are out of scale today, their commercial cores, as well as internal and external models, have actually entered a weak link state.


For example, why do we all think about partnership. In short, we are not good at managing, so we all become partners.


In essence, business top-level design is to create a powerful collaboration system, and those excellent companies can grow and grow in this process. Once entrepreneurs understand the rules and principles of cooperation system, they have the ability to understand it and control it.


Therefore, we believe that the future direction of business evolution is not strong management and control, but collaboration, individual, platform and weak management and control.


2. The business world enters the era of weak brand


Second, the business world has entered the era of weak brand.


In recent years, we have seen the continuous emergence of many new brands. Whether it is a new format or a new product brand.


Everyone is doing it, which shows that it is relatively easy to get started, rather than difficult. Since it is a state of emergence, it means that the barriers to brand building are actually reduced.


In fact, there are several reasons behind this: first, the supply chain system under the overall precipitation of China has solved the problem of product end.


Second, the operation of e-commerce traffic terminal has become a traffic form with high efficiency and high starting point. When brands were looking for traffic dividends in the early days, e-commerce operations helped the rise of many new brands.


Third, today’s many high potential shopping centers provide the physical basis for chain brands to create the net red effect and super traffic.


On the whole, we can see that more and more consumers are willing to try new products and new categories, and their loyalty to the brand is declining.


From this point of view, consumers are more and more easily driven by face value, and more and more dependent on network evaluation.

Therefore, we can see that many of today’s food and beverage delivery and traffic operations are in the area of comments, such as brushing public praise, cultivating a sense of topic, community operation, etc.


In the brand era, the effect of strong cognition is getting worse and worse. In the past, the state of the three major commercial elements was that media and traffic were very concentrated, and the supply chain was very decentralized.

Today, the media and traffic are very fragmented, but the high-quality supply chain is becoming more and more centralized, and the operation mode of the brand depends more on the traffic operation, integrating the quality and efficiency.


Therefore, as a new brand, you should also create your own “product design”, and grasp the overall brand tonality.

Finally, to sum up a good brand with one sentence is that it is more expensive than focusing, more successful than products, more beautiful than differences, easier to spread, and finally good reputation.


3. The business world is weakly linked both internally and externally


On the whole, the business world is in a weak link to the internal and external, and the growth process of enterprises is a process of value exchange, as well as to the internal and external.


The internal compensation system is a kind of internal value exchange. The external value exchange includes links, interaction, acquisition, payment and so on. The accumulated value has consumption and supplement, which is a process of dynamic balance.


No matter what kind of business you start, cash flow is the core and profit is the second. Whether this thing can be achieved in the end is highly related to its sense of operational rhythm.


Because resources are limited, in the limited resources, what cards you play first and what cards you play later determine your final result. Therefore, enabling type is often a more mainstream path for today’s business success.


How do we look at stores in the business world Stores are a scene for me to communicate with consumers and an important way for us to make brands at low cost.


But in the end, this business can stabilize, in fact, it is often making money from the supply chain. Based on this, in the past year, a large number of catering enterprises have increased investment in the supply chain.


To make a joke, we say that today many catering enterprises have transformed into “condiment” companies.


Because they found that the scene is uncontrollable, and the day when there is no flow, it will be a big loss. What can be more stable and high gross profit is your differentiated supply chain.


Therefore, one of our favorite business models today is to make a scene with a pallet of goods. We like the scene very much. We like the chain with supply chain and replicable, that is, you need to make differentiation at the supply chain end, and let more people do chain expansion with you.


We call this model s2b2c.


Opening more than 1000 stores is a brand, because you are interacting with a large number of consumers. With a thousand stores, I can quickly digest my popular money and sell it again online and offline with brand empowerment.

This is a big business. We pay special attention to the brand-name things that can be run out with chain stores.

Business philosophy of brand chain:

Find the appropriate intermediate state “degree”

We have been thinking about chain operation for many years, and we have also paid great attention to this field. So, next, I will give you some thoughts about brand chain operation from different perspectives.


The whole set of things are basically divided into the following parts: essential thinking, large and small business formats, scale boundary and growth rhythm, chain scene brand and product brand, standardization and non-standard degree, etc. I will pick out a few key points.


On the one hand, the scene needs to be smoke and fire, on the other hand, it needs to be standardized in the operation end. Therefore, for the standard and non-standard, the final thing is to find a phased degree between them.


Including fashion and foundation, you often ask: what kind of business do you like? In fact, we prefer basic categories. If we want to have long-term attributes, we are still a little worried about popular categories.


Finally, we have been thinking about a problem recently


1. What are the characteristics of WanDian gene?


Later, we found some characteristics of them


First, there is no big regional difference.


Some businesses are regional word-of-mouth things, with local characteristics, very stable but not big. What we like is to be able to run business across the country.


Second, heavy taste addiction.


For the product form, if it is food, heavy taste addiction is a main line. For example, the course of Luzhou flavor basically needs to make spicy things. For example, several major companies of Luzhou flavor have their experts in Changsha, Wuhan, Chengdu and other places.


This thing follows human nature. If business wants to have scale, it still has to follow human nature. That’s the case with heavy taste.


Third, high cost performance under the premise of product upgrading.


Quite simply, today’s entrepreneurial opportunities and brand opportunities are upgrading. Because there is no bottom line for a brand to go down, only a more advanced performance is the future.


But at the same time, you have to show your cost performance, that is to make everyone feel that it is worth it. This is also very important, but there is a natural contradiction between the two.


Today we see that VC is throwing beef noodles, which is essentially an upgrade. Beef noodles is a super basic category without any education.


If it’s a catering business, we all have to think about the following question: what is your essential competition? What you are competing for is actually the “price belt”.


Each price band within the range of 10 to 15 yuan is different business. For the same category, 30 yuan and 45 yuan are two businesses.


When you are designing business, you can think about your price band in this difference range, and you will know who you are competing with.


Fourth, the store operation is very simple, the basic anti cycle of category, and the proportion of Street location is high.


Store operation must be minimalist. Can you keep a little smoke and differentiation behind minimalism to show consumers: This is what you make on the spot. But behind this, it must be the supply chain and the work of the system.


What do you want to know about category basis? Business with category basis is big business. Popular and niche businesses are small businesses, and they don’t have the rank of ten thousand stores.


Moreover, although it is difficult to do it on the street, only when the proportion of site selection on the street is relatively high can it be established and it is more likely to reach the level of WanDian.


Because shopping centers are always limited, the location of shopping centers will become very “involute”. We all know how hard it takes to take a position after a fire.


Fifth, there are certain barriers between supply chain and brand.


Product development is a very complex thing. Therefore, your supply chain and brand should have certain barriers and make certain differences in products.


If you can easily do or OEM can solve things, it is very difficult to reach the level of ten thousand stores. You can’t just perform. In the end, you have to focus on supply chain efficiency and product differentiation.


Finally, your single store model should be better, and the payback period should be shorter, so that more people are willing to work with you.


2. Speculation on big business and small business


Just talked about the problem of size, size means the difference of traffic structure. Large scenes tend to attract flow, while small scenes tend to borrow flow.


It is very difficult for consumers to find the way for a certain taste or consumption desire. Generally speaking, it is still a problem of traffic entrance.


Today, when looking at a business, you have to figure out whether you are borrowing traffic or creating traffic, and then go down to see the whole process. On the whole, there will be two ends going.


At one end is a huge shopping center, eager to be super large. Another development direction is small, single store model is particularly healthy, and can have sustainable profitability.


“Large” aggregation traffic, poor replicability, slow development“ “Small” is aggressive, but it is easy to be shunted. Including many o2o modes, such as meituan and enlaimo, the traffic pattern is further fragmented.

Therefore, the single store model is easy to break. It also depends on the periodicity of the categories. It’s not easy for street stores, and there is a lot of liquidity.


To sum up, large and small businesses have their own advantages, but at the same time, they will also have their own limitations. Therefore, we need to find the degree to design business for the target group.


Including retail, what kind of business, what kind of urban environment and population structure determine its model. Whether it’s convenience store model, or community fresh, standard supermarket, comprehensive supermarket, all have their own suitability.


3. Product brand and scene brand


When it comes to the brand itself, the difference between product brand and scene brand has a lot of connotations.


Generally speaking, many product-based things, such as FMCG, are one-time consumption by consumers, and they can get experience immediately.


But the scene is not. It takes a long time to build the scene cognition, but the degree of trust is very deep.

Once consumers trust this scene, they will have a deep degree of trust, and even give them the opposite product trust according to the trust of this scene.


After the scene brand is strong to a certain stage, it will create its own product brand, enabling the popular products. For example, Starbucks’s product brands also sell well.


One of the driving points of product brand is simple and direct, focusing on consumer product demand for innovation. In positioning theory, a lot of things are about product brand, but in fact, it can not cover many scene brands today.


The positioning of the scene brand is very scattered. There are multiple logics in it, such as convenience, location, and emphasis on service experience. There are still many differences between the scene brand and the product brand.


4. On brand periodicity from the perspective of catering format


In addition, let’s look at the periodicity of brands from the perspective of catering industry. In fact, the more basic things are, the less easy they are to do, and the more difficult they are to do, the more they can make big companies.

Like the WanDian gene just mentioned, it is often something that we usually don’t see but do extremely well.


For example, chicken and duck in food ingredients are big businesses. Whether it’s stewed or Zhengxin chicken chops like chicken chops, it can also be made into super chain.


Including when we started a business, one thing is very important, that is, the upstream stability of the core category you selected.

When you get the single store model right and start to copy it, you will soon find out how important the stability of the upstream price is.


If the upstream price is highly volatile, you will be in a miserable situation, and you may also face problems such as breeding and scale-up.


The same is true for long and short periods. Some forms have not changed, and what has not changed is a big business. For example, steamed stuffed bun is a particularly humble thing, but if the operation is good, it is also a big business.


So catering is often “Wudaokou” business, breakfast, lunch, afternoon tea, dinner, supper. It depends on how much money you can earn from consumers in Wudaokou. This is our thinking about the long and short cycle of categories.


Of course, there is also price competition. QSR is actually fast food, which can be cut into two pieces, one is called fast leisure, the subject is leisure, but faster, the price is between 55-60.


Another is leisure fast, which is a fast food in itself, but has been upgraded to a new price competition. In fact, the whole chain is basically price competition.

The core of franchise model is s2b2c model

Finally, let’s talk about the kernel of franchise model. In fact, it is 2B and 2c, but there must be data dimensions.


Today, we see some people joining the brand saying: I have thousands of stores, but only a few ingredients and ingredients are provided. Why? Because the rules weren’t set in the beginning.


We all tend to do things that are easy to do and want to earn fast money, but the other side of fast money is instability and not long-term. If you want to do control and operation on the original model, the difficulty is very high.


Therefore, at the beginning of your design, the genes like control intensity and data should be determined. Your genes determine what you will eventually look like. In the past, it is impossible to change.


In fact, I have never seen a weak control franchise can be established for a long time. S2b2c is also a strong control franchise, but it can be weakly linked, that is to say, it does not need to be managed like copying the direct business.


1. Three core elements of franchise model


There are three core elements of franchise: the image of franchisee, the complexity of asset management and income distribution. Therefore, to do well in this matter, simply speaking, we should balance the three things.


First of all, how can you attract investment and get customers quickly? In fact, many people have been harmed by improper practices, and leeks in history have been planted one after another.


Second, the complexity of asset management. Some franchisees can’t do it. It’s too difficult for them to complete a complicated action.


The third is how to divide money. When playing this weak link system, the distribution of interests is the core. Your value level must be to let others make money first, and then let yourself make money at last.


A brief summary of our thinking on brand chain. On the whole, we believe that business has begun to evolve into an era of weak links.

And there are multiple factors in chain operation, such as brand dimension, single store model dimension, supply chain dimension, and format selection dimension.


Finally, we think: a brand that can survive for a long time and form brand power, its business model is often weak control and weak link.

Author: Weng Yinuo; Source: Inspur new consumption (ID: lcxinxiaofei), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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