China: "Shanzhai" type of subversion

　　"Cottage" as a "Dragon World" of new trends, so that Western companies are once again a certain panic and anger. "Cottage" manufacturing to low-cost advantages of Chinese-made play to a new height, but also in China has injected new elements, such as the combination of design and functionality, showing the Chinese manufacturers did not have some sort of competitive advantage.
The world's largest mobile phone maker Nokia has certain deep. Nokia 2008 for several consecutive years of growth momentum to be interrupted, as in the past has been its main source of sales and profits of the Chinese market, although it still is the first, but the frustration is obvious: in the second quarter of 2008, China is the only map of its global sales fell in areas occur, then the momentum has not been effectively curbed, but the trend is accelerating. As an example to the fourth quarter, its sales in the region of the ring than the 34.8 percent decline, 36.1 percent year-on-year decline, the year the same period last year increased by only a mere 0.8% over the same period of its growth in the Asia-Pacific region reached 18.7%. All this makes Nokia's share price during the year fell 58 percent, since 1992 the worst performance. For this performance, China's "cottage" mobile phone manufacturers "can not be left unrecognized." "Cottage" origin, but now in high-end development to the Sky Lang Tong, in 2008 sales have exceeded 20 million units, according to Analysys International's data, the third quarter of 2008, Tian Tong Long after the mainland of China Nokia, Samsung and Motorola mobile phone after the fourth-largest manufacturers, market share reached 8.1%, and its motto is "catch up with Nokia." And before 2007, Nokia and other companies will not pay attention to it.
In fact, the mobile phone in China "cottage," to be recognized by the manufacturer and is still the most successful areas of progress, just take a look at a group of figures and you'll understand: According to Gartner's statistics, in the "cottage," emergence of mobile phones in 2007, Global sold a total of 1.15 billion mobile phones, Nokia is one of 435 million, according to the relevant Chinese agencies to statistics, over the same period "cottage" handset manufacturers is as high as the sales volume of 150 million, but the vast majority of 1,000 yuan on the market . But the "cottage" in China, not just limited to mobile phone industry, today thousands "cottage" mobile phone companies, a significant portion of many years ago in the "cottage" CD-ROM, DVD, MP3 accumulated from the first pot of gold . In culture and entertainment, clothing, toys, wine and other necessities of life areas, there is also a large number of "cottage" manufacturers, but their "organization", the scale and impact of traditional manufacturing companies much less than mobile phone industry, as there is no mobile phone industry government indirectly through the way of a license to "participate" in them. More importantly, the cell phone as a fashion high-tech products in China to assume a lot of the general public to live the dream of fashion, so they attract a much higher degree.
Entered after 2008, with the "cottage" mobile phone more and more popular, long-term action to be suppressed and the popular desire to participate in a sudden thaw, from the economic, cultural to the political arena, almost every area of a pan-"cottage" of trend, it is immersed in the "cottage" on the existing standard, or completely self-恶搞changing. Google released in the year 2008 China's Top Search Keywords list in the "new vocabulary annual" A, the "cottage" the highest in the first; in the "largest annual search for 'What'" A, the "cottage machine What is "ranked eighth. Merriam-Webster dictionary in the same period in the rankings, Americans are most concerned about is the "Lifeboat" (bailout) and the "socialist" (socialism).
Perhaps the same surprise you, is that people in the face of "cottage" attitude: everyone is made from our own point of view or the affirmative, or negative, or support, or opposition to the judge, but a judge did not fully above the other on, for example, "is the copying should be punished" or "innovation should be encouraged." Similarly, almost none of the existing management or economic theory can be "cottage," the authority to make the interpretation of the phenomenon. Therefore, under the judge should not try to give it a unique label, but it suddenly popular as a commercial phenomenon of study, it would be more appropriate.
"Cottage" the power of
"Cottage" in China is not a new term. Its literal meaning from the "Modern Chinese Dictionary" has been explained, that is, "with defenders in the mountains where the fence" and "mountain Zhaizi village", but it extended the meaning of the more common in everyday life, and ancient, that is, "the mountain stronghold of bandits." Google will translate the "copycat" (blind imitation), and at the same time be interpreted as "the mountain stronghold of bandits." In order to show that China as a "unique" or the origin of the phenomenon, some people even use "shan zhai" as its English form, while others of their negative attitude of people is the use of "imitated" (copying, counterfeiting) of argument.
Specific to the "cottage" manufacturers may have to explain every aspect of its reasonable: for example, "cottage" in the South (especially the early Hong Kong) refers specifically to the kind of hiding in the bustling city outside the small factories that often also from the distant government supervision, all aspects of the costs are very low, access to large cost advantage, which is "Modern Chinese Dictionary" is very similar to the interpretation; As for the "mountain bandits" who is the group of active or passive drifted away from the people outside of mainstream society, and this with the "cottage" of traditional manufacturing with very destructive; "imitation" is in many emerging markets are hard to shake off the start of the fate, because this is the lowest cost and most fast way to catch up with developed countries, and the "cottage" to create their own grass-roots so that it also has been a reality, but "copying" and "plagiarism, counterfeit," and the essence of the distinction, for the latter, no matter the industry or the Chinese Government hold the position of a clear negative. As for the other situations, we can not generalize the.
No matter who you are does not matter what kind of perspective, really "cottage" have a tremendous impact of those factors will change. Nokia are on the run, "cottage" of mass destruction is the greatest phone in the price of low expectations (such as is generally the same configuration of Nokia products, 1 / 10 to 1 / 3), the price relative to its target the goal of user groups - primarily the purchase of mobile phones is the first time that low-income groups, so that they can ignore the "cottage" Quality and service deficiencies. Secondly, the "cottage" on the new trends and respond to user needs are highly sensitive, they will be able to launch a product within one month, and Nokia may easily more than half a year, which allow "cottage" can be consumer goods to mobile phones as fashion sold, such as Barack Obama formally became the President of the United States, China's "cottage" mobile phone company in his father's birthplace of Kenya Obama introduced a mobile phone, printed on the reverse side there is a significant body of "OBAMA" the words, the bottom also printed on with the Obama campaign slogan "Yes We Can", and the price only about 30 U.S. dollars; another example, the solar company's stock price in the global bullish, they called on the introduction of mobile phones loaded with solar cells; the Beijing Olympic Games to the They also launched a bird's nest, or cell phone model Fuwa.
Personalized with the low-cost, which is long-standing problems plagued many companies: how to enjoy large-scale manufacturing cost and efficiency advantages, a growing customer demand for personalized and always in response to high-performance? To "cottage" on behalf of the Chinese mobile phone for "cottage" manufacturers seem to have found an answer.
In the mobile phone market, "cottage" is daunting, because it is only the initial price of a very destructive, not only over the past large numbers of people using mobile phones can not afford, or even experienced consumers of mobile phone "sex price, "the psychological bottom line was completely broken. With the "cottage" have matured, many of them in the design and innovation with the best talent, while the latter may be more out of Nokia's accident, which makes some of the existing companies such as Nokia users - white-collar workers, have begun to purchase "cottage" handset, because their design and functionality is too attractive, the price can also support them at random to replace it for "cottage" to win a lot of the past as first-line Nokia老巢their urban market.
Demonstrated a remarkable potential in the same time, including more fields, including mobile phones, "cottage" is also controversial. "Cottage" whether the power come from? Is due to "grassroots" in the inherent creativity freely, or as a result of the "opposition" under the state more easily evade those of other enterprises can not avoid the costs and constraints?
"Cottage" where the vitality is rooted in, the answer may still not make it to this new thing under the definition of a simple, but more and more able to help those who face the "cottage" to start inviting the temptation to think about whether the choice of " cottage of "the path of trade barriers in order to subvert the Chinese enterprises, there is a more solid basis for the judge - in what kind of industry conditions, the cottage can become an effective strategic tool? It needs to match what the external factors? It is valid at the time how long?
"Cottage" rules of addition and subtraction
Why in the research and development capabilities and manufacturing scale can not contend with the traditional mobile phone giant's "cottage" handset, can be so incredibly flexible and efficient low-cost and innovative personality?
Although Nokia has its own low-end products, but also the lowest, only 500 yuan, but because it is still used in high value-added and the model of the era of excess, that is, in this 500 contains a large number of "cottage" did not provide the things, such as a premium brand, based on the Six Sigma quality, although they have a strong attraction to users, but because of its gross margin will be consumed in space, it will also leave the channel greatly reduced. In the "cottage", where manufacturers retain only 10% ~ 20% of the profits, leaving the remaining channels and end-all store, in order to stimulate sales of their enthusiasm. This has in many stores, terminal sales may be hard to sell to you, "cottage" products, rather than the same price of Nokia products, when you think of more than 150 million "cottage" mobile phone in such a "priority "have been sold, probably to understand the sales of Nokia in China, why the series down.
However, the "cottage" have been able to do so because they have firmly held their own trump card: the consumer is much lower than expected prices. And they all approach this with ZARA, Nano has many similarities, and that is flexibility in the use of addition and subtraction: In October 2007, the Chinese mobile phone license Approval System has been taken, the system allows a "cottage" to enjoy Another dividend policy. Because there is no escape from its own oversight and brands, costs associated with a dramatic compression, including 17% of the value-added tax, enter the test fee (each三四十万million), sales tax, invoices, tax, marketing and after-sales service costs, do not send at the same time as the test also time cost can be reduced substantially, and those big companies but can not be avoided, which is tantamount to the policy for "cottage" to set up a protective barrier. As many "cottage" are imitating and even copying the design of other brands, which it reduced the cost a small fortune. In addition, it is through the upper reaches of the MediaTek chip companies in the past decentralized chip design, software integration and system design, the handset manufacturers to lower the threshold significantly, as long as a few from 1 to 10 million yuan investment to open a mobile phone factory, which makes them significantly reduce the depreciation of fixed assets. In addition, to simplify the development process Another advantage is that the "cottage" can be introduced to new products faster, just in Shenzhen Huaqiang North, almost every day from 3 to 5 new mobile phones out - which is in fact "cottage" to the adder, that is, a large number of personalized design and features of the eye to fight for consumers.
It is this addition and subtraction, so that from 2002 to 2004 created the myth of the market made a license for mobile phone companies suffered drowned. Although their early rise to a large extent is the "cottage" style, for example, and they mostly do not have their own R & D institutions, but the introduction of chips from South Korea and programs, there are many foreign brands to imitate the design, the main take the low road and the second and third line market, but it is "cottage" is not complete. Because a large amount of capital spent on the ads bombed, but not adopted as a result of the integrated chip and software programs, the result is a modification of the software must be working a long time between China and South Korea, which has seriously affected the reaction rate. When the "cottage" of prosperity, they will inevitably decline, the majority of the former star of domestic mobile phones have opted out of the final, and replace them ride in the Chinese market, it is so on Long Sky "cottage" Rising Star camp. However, they remained to the "cottage" has left a precious legacy: a large number of industry experience with rich people.
However, China to produce a large number of "cottage" might also have to take place in China. This is not like a lot of people as that is the product of culture, and more likely to be China, as the capacity of the world's factory, China's dual economy model, as well as China's staggering number of real purchasing power of consumers in the lower level of the three the result of combination of factors. "Cottage" many practitioners are from China's rural areas, where consumer demand for and purchase decision-making are well known to have connections, and their level of education of many people is not high, and there is no venture capital, there are just change the fate of the dream. Therefore, "cottage" in Shenzhen is also the most developed is not surprising that, because here is China's earliest and most intensive way to attract migrant workers.
And China where the economies of scale have been fully reflected: Shenzhen ranked the world's first mobile phone production (about half of China), Li-ion battery production ranks second in the world, the world's largest foundry company employees more than half of Foxconn Here, a large part of it is concentrated in a "barometer of China's electronics market," North of Huaqiang, said the scope of 1.45 square kilometers. Here is a little more than 37 billion yuan annual income of the integration of large-scale mobile phone company, to create a cell phone almost every aspect can be here in 27 e-professional market, nearly 30,000 businesses to find solutions, from program design , software development, chip assembly, printing and packaging, logistics assembly, around the sales, after-sales service and so on, and even illegal for a number of "cottage" unlock Nokia, Apple and other companies products, low prices and to solve the problem very quickly .
So many employees together, not only solved the problem of information communication, the process can also be significant savings time, any one person as long as there is a good idea, you can quickly achieve. If you're lucky, this person will be overnight, millions or even tens of millions of wealth, even in the most popular when the stock market, which may also be far less attractive "cottage" handset. It is said that North Huaqiang inside inconspicuous office and many are not known to outsiders during the billionaires on the stealth. But as the most popular gold dream place, dream into a dream is always out overnight, the "cottage" handset from the Gold Rush also had to face strong pressure on their business model doomed to the fate: Since the cell phone as a rapid fashion, consumer goods production, it must accept the reality of the rapidly changing industry, usually a charge for Po products can be a success, but if the market does not accept, can be accumulated before the wealth of all for Ukraine are. This is the "add and subtract" the other side.
In addition, as a result of homogenization of competition, coupled with a low price as a selling point, making the price war here than any place must be relentless. In order to profit, to a part of "cottage" has reduced the bottom line, such as poor quality, fake, etc., which have allowed "cottage" may always be difficult to大雅之堂board. If a "cottage" would like to further develop, with the only draw a line, just like Sky Lang Tong. In some countries, "cottage" has been classified as unwanted products, such as the Government of India by the end of 2008 requires that operators do not have the phone IMEI code on termination of service, in the past "cottage" has been taking a number of mobile phone IMEI code share a way of存在. Unhealthy competition, poor external environment, and Approval System to stop the government licenses the use of mobile phones led to the "dividend policy" of the loss, has led some past "cottage" business down, Zhongtian Communication is an example.
Even so, such as combination of design and function and so on, "cottage" is still great potential. Has been known for leading the design of Apple, was found in the second half of 2008 introduced the new iPod music player, even in some creativity on a year ago with the Chinese "cottage" MP3/MP4 similar.
"Cottage" organization
For many years, management scholars and business executives have been struggling to find a solution method of such problems: how to enjoy large-scale manufacturing cost and efficiency advantage at the same time, customers demand more and more personalized and efficient and always make a response? "Cottage" may become a form of balance between the two.
Shenzhen mobile phone industry practitioners, but also "cottage" is a senior researcher on the nine Pan believes that the entire Shenzhen "cottage" industry is more like a virtual mobile phone companies. "If the whole 'cottage' system as a giant virtual enterprise, then, this enterprise, there is a R & D (MediaTek), has more than a hundred works departments (Mobile Solutions), thousands of products that the project team (" cottage "business machines), each of the engineering department and the project team are independent accounting and competing, of course, there are the lower reaches of the marketing network all over the world." delayed in accordance with the theory of mass customization, the "business" R & D , and other complex aspects of the program in a standardized model of the delay of its success, the project team such as the "cottage" business on consumer demand will be taken on the key gatekeeper into reality, it is not difficult for them, many of them who are selling, and each link has been off-the-shelf modules, simply mix it.
But the real let "cottage" all this into reality is to establish a kind of input and output, risk-benefit balance mechanism. Specifically, MediaTek bear a greater share of R & D work, but the cost could be a year 1 to 200 million "cottage" handset sharing. Cell phone program has been a small number of corporate research and development (board-level hardware design and system integration) and some custom work, we should bear part of preparation and financial risks, but the motherboard can be sold to more than "cottage" machine manufacturers, the costs and risks will be dispersed. "Cottage" businesses only need to drive less capital investment (mainly for shell mold and parts procurement, usually hundreds of thousands to millions, and as a result of MediaTek's program will be a new cell phone from the projects listed time reduced to 2 ~ 3 months and a further reduction in the whole industrial chain occupied the capital), their work is also simplified as for product positioning, as well as to determine the appearance of the whole tracking process management, and these only involve the selected several products. Channels and there is no end brand "cottage" of the first driving force behind sales, and they deserve the most part, the general is responsible for shipping a variety of large-scale wholesale channels are received nearly 50% of the profits, 30% ~ 40% of the space reserved for retail business profits, manufacturers, only to earn 10% ~ 20% of the profits, but companies are occupied by reduced capital risk, because the retail business channels and products must be bought.
In traditional business, where Nokia is going the way a contrast: Most links are do-it-yourself, it will be more conducive to link with each other under a decentralized framework of control, thereby increasing the efficiency of learning and collaboration. This model is its continuous efforts to obtain the scale effect, it must strive to at least a low-end handsets sold to hundreds of thousands or even millions to capital preservation, and the "cottage" handset may be able to just tens of thousands of the Department of capital preservation. For this reason, they adopted a brand that can enhance the way the so-called value-added, and in the promotion of a dominant position in trying to enable the brand to maintain consistency, but for this it must be putting in a lot of promotion expenses, which in turn further promote the increased its investment in its pursuit of more value-added, and hoped that consumers pay a premium for such inputs, so the passage of time, the company sank into a kind of "high input, high-yield" business model of the inertia of thinking, and ultimately reflected in its thinking and behavior patterns, that is the pursuit of stability and control, rather than flexible.
Many companies have adopted is called the internal market or internal entrepreneurship as a way of solution, but the company's management company in order to maintain the unity of culture and system and performance evaluation of the degree of difficulty (in fact some of the cost of enterprise-wide level can not be full calculation), have made the final had to give up its search for a completely fair and effective incentive systems.
However, the "cottage" can eventually become a new type of 21st century forms of organization, may depend on its ability in the areas of mobile phone other than the same success. At present, the Chinese chip maker VIA Technologies is more than the Shenzhen joint "cottage" notebook promotion "open ultra-mobile industry strategic alliances", hope that in the ultra-portable notebook (mainly refers to the Internet) and the field of reproduction MediaTek in the field of mobile phones model, is about to chip and pre-integrated software platform together to enable terminal manufacturers to save costs and speed up the market cycle, it was said the alliance was also behind the shadow of Microsoft. VIA Huang, deputy general manager of the Asia-Pacific region is expected at home, in 2009 the 10-inch line down to 2999 yuan from the current 1999 ~ 1499 yuan, the product time to market will be shortened from eight months to two months. While some analysts predict even more boldly, the year 1000 there will be able to access this. If the case, Negroponte "忽悠" 100 U.S. dollars over the years the computer will eventually be adopted by a fully commercial manner, we can do it, but also the scale of profit can be achieved.
In addition, the "cottage" might also have other limitations, such as the current experience shows that only when a mature industry, the "cottage" rule to be effective. Because at this time become a diversified consumer demand trends, and the various segments of industry have also been divided into many specialized modules, between the very standardization. Under such conditions, the technical threshold and the threshold was almost razed funds, financial and technical strength of the weaker companies can easily enter the market. On the one hand, flocked to the capital, on the other hand, the basic components industry for all competitors are not very different. Thus, competitors are crowding in the extension of function and design on these two sites brains, innovation occur repeatedly, this is the "cottage" mobile phone industry a strong source of creativity (see "" cottage "industry chain of the CPU") .
Of the "cottage" of the statute of limitations laws, there are many of the same voices questioned. When a "cottage" in which the success of the enterprise, has finally started to become in the past that it can only imitate and look to challenge the mainstream and the side of enterprises, it is still able to maintain the old grass-roots power of the times? Formed, it is still based on large-scale collaboration to maintain the flexibility and cost advantage? In order to own and other "cottage products" off grid areas, it will inevitably fall back into the brand of "conventional"? How the quality of services used to be a series of "lost" things? Really do not need to carry out technical R & D investment? When those "cottage" of the company through the accumulation of a certain period of time, expectation grew up, we must face the dilemma of a series of choices (see "" to the mountain fastness of "dilemma").
When industries are ripe, "cottage" as a business choice, "the easier part first," growth path, so that grass-roots companies have the opportunity to more rapidly in the industrial chain of large-scale collaboration assigned a share. However, after the enterprises to grow, after the "cottage" lose the identity of the times, all when they grow up to become the "cottage" of the collective confusion manufacturers.