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Vanguard: retail industry innovation upgrade pioneer

2012/11/27

Vanguard is directly under the central government of state-owned holding enterprise group, China resources (group) co., LTD. Is its outstanding retail chain enterprise brand, is also China's largest retail chain enterprises one of the group.
 
A, the national retail chain industry innovation upgrade leader
 
In recent years, the vanguard through mergers and acquisitions of expansion and multiple formats, such as collaborative innovation of the mode, the management scale and sales continue to grow, become the retail chain industry upgrade innovation leader, accumulated experience is worth reference.
 
First, the coordinated development of the formats of the business model.
 
Multiple is retailing development of a normal, it is a kind of important mode. According to Chinese chain business association, the national top chain only 16 companies is single format operation, and all else is more business formats. At present, the vanguard the company now owns 13 independent brand, its format, the highest in the domestic chains.
 
Vanguard format diversified grasp three subject, namely, independent innovation, m&a and basic management. Retail enterprise independent innovation is a contains format innovation, management innovation, service innovation and brand innovation, and so on a number of strategic dimensions, system engineering, and format innovation is a very important core competitiveness. Format innovation is fundamentally grasps the consumer demand and shopping behavior change, the existing shopping experience design do revise or innovation, and innovation modes behind, but also has many format management ability. At the same time, also want to do a good job in basic management, because no matter what kind of innovation, finally to implement to commodity management, supply chain management, such as the basic work.
 
Vanguard will form to big box for the main, the competitive advantage of combination pattern formats. In the face of different business circle, people and demand and purchasing power, vanguard to large format subdivided, thus more accurately meet the needs of the consumers. Such as high consumer market positioning of Ole 'supermarket, meet young consumers fast, comfortable, fashionable experience Vango convenience store, the difference between "Ole high-end supermarket brand" BLT ", and arts, China resources hall, etc.
 
Second, borrows the merger and acquisition of expansion and continuous innovation strategy.
 
Vanguard past development upgrade is borrows the realization mergers and acquisitions. Vanguard is one has the company merger and acquisition of genes. In August 2001, China resources group buy-out shenzhen manka chain business co., LTD. (namely manka department), and in 2003 officially changed its name to vanguard co., LTD. This is China's largest retail at that time in the history of a deal. In subsequent years, vanguard the acquisition of nanjing suguo, ningbo compassion guest lung, tianjin, tianjin 20:30 liu jianhua calls the world's supermarkets several regional leading retail chain enterprises. Vanguard borrows m&a is not a simple propulsion scale and layout of the market expansion, but at the same time to realize the innovation of the formats upgrade.
 
"1025" during vanguard will strongly expansion. Vanguard plan in 2015 reached 155 billion yuan business scale, the total number of stores will reach 6592, covering except Tibet outside of mainland China all provinces, municipalities directly under the central government, to enter the Chinese the first three big retail enterprise ranks. In the next year is expected to open new stores in 500-600, there will be 60-80 for large supermarket, big box is still the future expansion of the main format.
 
Third, build a win-win situation of supply chain system and strategic cooperation relationship.
 
Retail competition among enterprises has become the competition between supply chain and supply chain. That is to say, in the same supply chain of all parties, including manufacturers, suppliers, wholesalers and vendors must be coordinated. Want to be in the market competition in the stands not but actually, optimizing supply chain work is imperative. And the foundation of supply chain optimization is to establish uniform distribution, procurement warehouse base.
 
Nationwide efficient logistics distribution system. Vanguard already in China (including Hong Kong) built more than 20 thousands of square meters of distribution center, and have their own logistics company and development by using the advanced logistics technology, the logistics distribution system can support the national more than three thousand home size shop, the format of the supermarket running. Vanguard logistics not only play the role of goods distribution, but also can realize the merchandise purchase and order monitoring, so as to avoid blind order, reduce unreasonable inventory.
 
Vanguard also actively create a win-win cooperation of retailer-supplier relationship. At present, the vanguard has more than 1 tens of thousands of suppliers, 90% of the is commodity trading relationship, rather than the current domestic retail popular counter lease relation, vanguard every year and supply business autograph a cooperation agreement, some signed a long-term cooperation agreement. In order to effectively solve the high speed road transport vehicles high empty loading rate, vanguard and transport companies and suppliers developed "return transportation project", the vanguard for guarantee, at the same time for shipping company and supplier cost saving.
 
Fourth, to improve the value of the brand strategy.
 
Vanguard directly facing the vast number of consumers, can accurately grasp the market demand, and according to the characteristics of consumer demand independent research and development products put on the market, and extending the industrial value chain. At present, the vanguard supermarket own brand including "embellish the home", "contracted combination", "IF", etc., mainly involves food, life daily necessities and apparels. Own brand commodity prices similar leading brand low price 10-20%, and profits have more than a 10% or so. The independent brand development, not only benefit to the vast number of consumers, but also makes the vanguard of the industrial chain and value chain to production and marketing links extensions, enriched their own business scope.
 
Fifth, the whole process of information management and network platform to explore.
 
Vanguard is China's earliest a group enterprise operation in the introduction of information management of the large retail enterprises. In 2010 "China top 500 enterprise informatization" selection, vanguard ranked 80th, in China's retail industry in the first.
 
As the scale of the enterprise in the national scope expansion, and 2004 vanguard namely and friendly cooperation, the introduction of the new financial system. In 2010, start HR information system upgrade project, the introduction of row leading PeopleSoft system. With online shopping group expanded rapidly, vanguard also test the waters shopping site, to make up for the retail the traditional industry in the lack of business change on, at the same time also on entity shop effectively supplement.
 
Sixth, the high efficiency product quality management and food safety control system.
 
Strictly the quality pass. Vanguard made the commodity quality and safety management system ", and set up a company product quality safety management committee, to strengthen the management of suppliers, for their products quality are strictly controlled. 2009 years of guangzhou "pork fine" incident, vanguard pork sales but realize nearly 20% of growth.
 
Straight mining make agricultural product circulation cost decrease forty percent. Agricultural products to enter the supermarket the traditional mode is, farmers, local wholesale market - "two way trafficker" - the local market and supplier and supermarket, and then to citizens in the basket, the price at least doubled. And the implementation of "agriculture super butt", agricultural products, through the vegetable grower or professional cooperatives directly into the supermarket, can reduce forty percent of intermediate circulation cost. Vanguard in the country has 16 provinces, more than 210 cities and counties, the establishment of "agriculture super butt" base more than 60, involving more than 100 kinds of fruit and vegetable. Gradually over time will be a tradesman procurement mode into peddling purchase, the purchase goods from agricultural products will also be extended to cosmetic products, beverages, small articles of daily use, etc more kinds.
 
Vanguard won the HACCP international food safety management system and green market double system authentication. Vanguard is shenzhen first a through the double system authentication of retail chain enterprises. HACCP is a international food safety management system certification. Green authentication is the market by the ministry of commerce and jointly launched by state certification and accreditation of national certification system. Through the double system certification, promoting the vanguard supermarket hardware facilities construction, to enhance the quality control, improve the control food safety standards, and improve the credibility of the vanguard.
 
Seventh, the pursuit of excellence and build a better life of enterprise culture.
 
Vanguard of the enterprise values are the "good faith, respect, care, team, efficient, innovation". At the beginning of 2011, vanguard to national 180000 employees issued a "create harmonious employee relations declaration. The declaration is not only the retail employee relationship management model, but also retail first systematically and comprehensively to employee relationship management to carry on the thorough and detailed explanation.
 
Second, the industry leader in difficulties and problems
 
As a leader in the industry, vanguard facing business environment and the national retail industry peer basic same, both opportunities and constant pressure and challenges, further development and upgrade, there are some difficulties and problems:
 
First, upgrade development faced multiple pressure, profit space increasingly narrow. And the entire retail industry, vanguard faces labor costs rise, energy prices, the rent rise, the cost of their finance goes up, the overall business environment to improve the and so on difficult, plus trade and online increasing competition, the profit of enterprise space continuous contraction, the average profit margin is only 1-2%. In Chinese retail chain industry may be repeating the past household electrical appliances and other manufacturing excessive dependence on the pattern of the price competition, disadvantage in the innovation of the industry upgrading.
 
Second, "heavy production, light circulation" concept to sustainable development and innovation to upgrade. As labor-intensive enterprises, the vanguard in the national common staff 180000 people, contact the supplier more than 10000, that a, lowest estimate provide employment of one million people, plus downstream related industry, it is estimated that provide millions of people employment; At the same time, the vanguard is still in butt agriculture, countryside and farmers, organizing production, promote consumption, enliven the circulation, security supply, improve the livelihood of the people and so on plays a positive role. But "heavy production, light circulation" traditional thinking ideas hard to avoid in the policy, system, social atmosphere and media public opinion and so on various aspects expression comes out, interference influence its normal operation and innovation upgrade process.
 
Third, expansion area covers the merger and reorganization encounters barriers. Unified tax, namely the chain headquarters unified to the local competent tax authorities, it will effectively promote the development of chain enterprises across the region. But in the operation, the enterprise each into a new area, to establish a new subsidiary, resulting in the enterprise operation cost rise greatly, especially some new open store period of the cultivation of the loss can not be offset, became bigger and stronger tendency and restrict the biggest obstacle of and bottleneck. In addition, the vanguard in legal form is due to foreign identity, although it is representative of the national retail enterprises, but also be business projects, market access, capital control of restrictions, some mergers and acquisitions meet local block.
 
Three, industry leader in future choice
 
Faced with globalization, informatization and networking of the external environment, commercial and trade circulation into the great change big restructuring period, the vanguard is layout the entire "1025" period of development strategy, to promote format, technology and management comprehensive innovation, foster new differentiation advantage, build core competitiveness, promote the brand and social influence. In the ascent industrial chain value chain status, take the lead in change industry only depend upon the low homogeneous competition pattern, vanguard facing key strategic choices:
 
First, further innovation "format synergy" business model, realize format and technology and management of all-round innovation. "Format synergy" is the vanguard of the biggest advantage, face horizontal competition and a lot of complexity problem, vanguard still need through the creation of a variety of close to the consumer market terminal combination to realize a wide range of formats integration, strengthening the core competitive power, At the same time, we must accelerate strategic thinking, management concept, software and hardware technology and management model of synchronous integration, integration and innovation for formats to provide strong support. This requires, on the one hand, the new trend of the world timely tracking retail new concepts and new mode; On the other hand, strengthen the professional division of labor, speeds up the business and management process reorganization, outsourcing non-core and background business, mining control the cost, improve the efficiency of the new channels, and create innovative upgrade new path.
 
Second, the reorganization of the industrial chain, improve the value chain position, foster new value value-added space and differentiated competitive advantage. One is to consolidate the independent brand advantage, selectively to smile curve high-end creative design links such as expanding upgrade; The second is the study of the abundant and Japanese comprehensive firm practice, expand the extension supporting service chain, participate in and with the advantage of the third party service, further optimize supply chain management, strengthen the commercial industrial organization radiating and driving play, promote and supplier's strategic cooperation level, achieve finally develop a new supporting service, value value-added links and profit space and so on purpose.
 
Third, promote the global resources integration ability, promotes the internationalization management level. Vanguard will continue to play the existing talent internationalization, etc advantages, to speed up the internationalization process, make gathered global advantage elements of the platform, to speed up the pace of open innovation, including the optimization for the global market of electronic business platform, the use of Hong Kong intermediary function to speed up the pace of "going out", have a choice expand zero combination of international trading platform.