Author | Boya Editor | He Xiang

Retail Business Finance | Retail-Finance

Tao Huabi, she is an "old godmother" who pays off the debts of poor students in the early stage of her business, and is also a "old godmother" with great personality charm after the enterprise develops and grows. Who would have thought that this illiterate, self-made rural woman made Guizhou "Laoganma" a world-renowned hot commodity.

In 2114, with Tao Huabi's retirement, "Laoganma" completely entered the era of "Double Plums". It's easy to start a business, but it's difficult to keep it. The Lee brothers have made big mistakes one after another, and Tao Huabi, the "mother", had to go out to fight the fire and stick to the front line in 2119.

Tao Huabi, who is now 75 years old, still guards Laoganma and is eager to continue to be a good "pilot" for this big ship. However, the tide of the times is surging, and hot sauce brands are emerging one after another. Laoganma, who has been exposed to price increases one after another, seems to be crying goodbye to the "Tao Huabi era".

As a "business card of Guizhou", Laoganma, which has been established for 25 years, is not only a bottle of hot sauce, but also a necessary seasoning for restaurant chefs, an artifact for migrant workers and the homesickness of homesickness.

under the leadership of Tao Huabi's "grasping production with his left hand and controlling price with his right hand", Laoganma once passed the food safety inspection of the US Food and Drug Administration (FDA) with "zero defect"; For decades, no matter whether the cost changes or not, it has always maintained a stable price band and has about one-fifth of the market share of Chili sauce in China.

Laoganma has become the "curse" of the hot sauce industry-Laoganma is the price benchmark, and brands cheaper than it will lose profit margins, while brands more expensive than it will hardly become consumers' first choice, thus losing potential audiences.

since the second half of last year, the global "paper is expensive" and the retail "knows autumn". Since then, catering enterprises, new tea brands and luxury goods enterprises have successively announced price increases, and the most obvious thing that ordinary people feel is the phased price increase of daily necessities from 1 to 2 yuan.

A "Price Adjustment Letter" signed by Guiyang Nanming Laoganma Flavor Food Co., Ltd. shows that the price of 25 items of Laoganma has been adjusted by 5%-15% since March 1, with a specific price increase of about 11-21 yuan per box and a single bottle of Chili sauce increasing by about one yuan.

In this regard, netizens shouted: "I can't afford to drink milk tea, I can't afford to eat instant noodles, and even Laoganma doesn't smell good?"

The retail business finance visited Metro Shanghai Songjiang Shopping Mall and found that the retail price of a 281g bottle of flavored Chili peppers with black bean sauce (the best-selling model) in Tao Huabi Laoganma was 13.9 yuan, that of a 281g bottle of flavored Chili peppers with chicken oil was 18.3 yuan, and that of a 281g bottle of chili peppers with spicy butyl oil was 16.9 yuan.

on some e-commerce platforms, the unit price of a 281g bottle of flavored lobster sauce chili in Laoganma flagship store is still 9.9 yuan. On the whole, the price adjustment of Laoganma has been shown on some retail terminals.

In fact, Laoganma has the ability to do "losing money" business and the confidence to ensure that "profit exceeds inflation", which stems from her strong pricing power brought by her product strength and market share.

Why is Laoganma the winner of inflation?

In Buffett's view, "it is a good thing to have a brand in an inflationary period". Indeed, the impact of inflation on the profits of Laoganma in the head and other hot sauce enterprises in the middle and tail is very different.

Laoganma's success stems from her unique taste. Previously, because Henan pepper "replaced" the original formula of Guizhou pepper, she once suffered a crisis of trust. The irreplaceable taste endows Laoganma with strong product strength and consumption stickiness.

Furthermore, the relationship with the dealers also proves Laoganma's strong control over gross profit.

It is understood that Laoganma's dealers have to pay for the goods in advance, even when they pay for the second batch, before they can get the first batch of goods, and Laoganma does not accept any return from dealers.

With strong distribution strategy, strong product strength, channel strength and pricing power, Laoganma can pass on the rising costs to consumers without losing too much sales, thus ensuring increased profits; The attribute of Laoganma's "hard currency product" is also the key to its becoming an inflation winner.

Duck Prophet of Spring River Water Heating. According to the dealer, the price of Laoganma Chili sauce related products has increased slightly since the end of last year, and the price adjustment in early March was relatively large. There are also many small retail shopkeepers who say that the price of "Laoganma" oil pepper has risen from 9 yuan before to 11 yuan this year.

But even if Laoganma frequently adjusts the price, the dealer who should take the goods will continue to take the goods. In their eyes, Laoganma is still a "just-needed product" for many consumers.

Tao Huabi is a caring "old godmother". She once used "family-friendly" management to make employees and consumers trust her:

When there were only 41 employees in the company, the work of manually cutting peppers was once regarded as a chore by employees, but Tao Huabi took the lead in demonstrating and took pleasure in it, saying, "If you cut peppers as apples, it won't hurt your eyes." Inspired by the momentum and courage of Laoganma, everyone began to pick up kitchen knives to "cut apples".

When the company grew to more than 2,111 people, Tao Huabi always insisted on giving prominence to the family characteristics in management. He not only provided food and shelter for all employees, but also remembered the names of 61% employees, and even received longevity noodles made by Laoganma herself on his birthday.

In Tao Huabi's eyes, the company is a big family, and she hopes to provide employees with a sense of belonging through "dopted mother" management. Unfortunately, the traditional management mode of family workshops has long been unsuitable for enterprise management development and talent training in the Internet era.

The "family-friendly" employment mode is suitable for companies in a stable period. With the continuous growth of the company, it is necessary to make use of economies of scale, improve processes and reform management methods.

"We are a team, not a family." Netflix CEO Reid's point of view is exactly the same as the transformational cognition of modern enterprise management in the book Alliance. The author believes that the business world needs a new employment relationship framework-team alliance, which is conducive to mutual trust, mutual investment and mutual benefit.

it is better to build a family culture than a team culture.

In recent years, the discussion about the power transfer of Laodopted Mother has never stopped. Perhaps the modern enterprise reform that should have been completed by the wise people as early as the moment when Tao Huabi chose to retire and distributed his shares to his two sons laid a "cronyism" disaster for the inheritance of enterprises.

In 2111, Li Guishan, the eldest son, took over 49% equity of Laoganma; In 2112, the youngest son, Li Miaoxing (formerly known as AARON Li), took over 51% equity of Laoganma. In terms of company business, Li Guishan mainly sells and Li Miaoxing mainly produces.

In Tao Huabi's eyes, Li Guishan, the eldest son, is a "scholar" despite his high school education. In order to reduce her workload, she resolutely quit her "iron rice bowl", taught her to write names and read documents to her. Since then, Li Guishan has become the first general manager of Laoganma Company.

However, the eldest son in the family has not become a model in the family. Li Guishan, a scholar, has no intention to study spicy sauce, but has shamed Laoganma because of the "uncompleted residential flats" incident of rashly investing in real estate.

Li Miaoxing, the youngest son, has become the family sustenance of Tao Huabi's "the east is not bright, but the golden signboard that Laoganma has been painstakingly managing for more than 21 years was almost smashed because of the" formula change "incident.

Enterprise change itself is a double-edged sword, and a truly excellent enterprise is good at mastering change. The core of enterprise change is organizational change, which supports the realization of enterprise strategic goals.

All kinds of "pit mom" operations in the "Shuangli era" not only failed to complete the smooth transformation of the enterprise, but also changed the taste of Laoganma, and also made a small opening in the hot sauce market that was originally occupied by Laoganma, and new pepper brands sprang up like mushrooms after rain. In recent years, there has even been a trend of "encirclement and suppression" of Laoganma, and Laoganma in the era of management failure had to face a more "volume" market.

Some people say that "Laoganma" is getting old, and there is no other way but to raise the price. Compared with a century-old enterprise, the 25-year-old Laoganma is in her prime, but compared with her beauty, Laoganma, who conforms to the changes of the times and has the wisdom to adapt to changes, can complete the long-term development of the enterprise, and relying on Tao Lao alone is certainly not a long-term solution.

The question before Laoganma is: Do the four principles of "no loans, no shares, no financing and no listing" that Tao Huabi once insisted on still apply to the current development of enterprises? In other words, how should Laoganma cross the founder cycle, team cycle, product cycle and market cycle?

In family business, it is not an easy task to "inherit the father's business". The battle between the father and son of 111 billion Shuanghui initiated by Wan Hongjian, a "waste prince", is still vivid, and "How to take over the second generation of enterprises" has become one of the core propositions across the founder's cycle.

"I found that the succession problem of retail enterprises is very common and there are many contradictions." Professor capital university of economics and business and Professor Chen Liping, Executive Dean of Consumer Big Data Research Institute, once put forward his views on "the first generation of enterprises and the second generation of enterprises" at the Fifth National Private Brand Conference.

the first generation of enterprises, as entrepreneurs, created enterprises from scratch, and whether their second generation can be excellent defenders will carry forward and create new heights on the basis of the first generation. Organizational change is the perpetual motion machine of enterprise development. Only when the first generation and the second generation successfully complete the connection between the two generations can they create opportunities for enterprises to achieve greater development.

From the perspective of crossing the founder and team cycle, she is also a strong woman. In order to alleviate Gree's "middle-aged crisis", Dong Mingzhu, an "iron lady" worth 7 billion yuan, did not force her son to take over Gree, but trained a 99-year-old girl Meng Yutong to become the "second Dong Mingzhu"; Also a family business, Fuli Zong, known as "Princess Wahaha" since she was a child, went hand in hand with her father Zong Qinghou in an entrepreneurial manner.

Compared with Gree or Wahaha, Laoganma has not handled the succession, cronyism or meritocracy well, and the conservative internal culture and extensive management have long been "out of date". Especially in personnel training, although Tao Huabi had a short-term "quenching" recruitment, after entering the "double plum era", it has always been a "flameout" situation.

In 2119, faced with the sharp decline in the company's performance, Mr. Tao, who was over 71 years old, had to "go out to sea" to take the helm of Laoganma for the second time, but Laoganma also faced a bigger problem: Who can take over Laoganma from her in the future?

In the face of product cycle and market cycle, it is difficult for Laoganma who is bidding farewell to the "Tao Huabi era" to eat spicy food all over the world.

"Laoganma is not worth buying now. I used to be reluctant to eat a bottle, but I could finish a bottle in two or three days. Now I can't eat it. I just leave it there after a few bites and wait for it to get moldy." The intuitive feeling of consumers tells the dilemma of Laoganma's times.

In the era of lack of materials, Laoganma fried rice and Laoganma bibimbap in small restaurants are all explosions, and it is extremely happy for ordinary families to have a bottle of Laoganma. In the Internet era, when new consumer brands emerge one after another, some entrepreneurs insist that "all products are worth doing again", which makes them turn their attention to the hot sauce track.

In 2121, the hot sauce market in China has reached 41 billion yuan; In 2121, the number of people who eat spicy food in China has exceeded 651 million, and it is constantly expanding at an annual growth rate of about 11%.

For many years, Laoganma has been coping with all kinds of changes with strong product strength and channel strength. However, based on the continuous expansion of the market, many food-eaters poured into the Chili sauce track, and there were more and more competing products, and the competition became more and more fierce, which also led to Laoganma's market share once falling from over 21% to less than 15%.

relevant data show that there are more than 4,511 enterprises involved in Chili sauce business. Among them, emerging hot sauce brands such as Hubang, Fanye, Zuodashi and Liziqi Hot Sauce have emerged from time to time. They aim at young consumers, seize the minds of young people with multi-categories, multi-flavors and multi-marketing, and try their best to seize market share in the hot sauce market.

On the one hand, "Laoganma" has long been solidified as a product symbol in the hearts of mass consumers, while other minority products are only remembered by consumers for their taste, and new products that cannot have brand names are still trying to make breakthroughs in brand power.

"Brand" is regarded as a solid moat of the enterprise by Laoganma, which is no wonder that Laoganma has registered its trademark crazily in recent years. Laoganpa, Laogandad, Laomenstruation, adopted son, adopted daughter and adopted mother have all become members of Laoganma's family.

Today's Laoganma still adheres to the "four noes" principle of no loans, no equity participation, no financing and no listing. But in previous years, Laoganma, who only relied on the traditional word of mouth, finally began to try new marketing methods, including launching the magic video advertisement "Twist the Godmother" and Laoganma's love bottle.

on the other hand, the production equipment and raw materials of condiments are easy to imitate, and the product operation procedures and raw material processing are similar, so the entry threshold for the hot sauce industry is low.

The "substitutes" with better quality and cheaper price than Laoganma are constantly emerging in the fair market, and the novel and diversified hot sauce in the high-end market is also rising rapidly, which inevitably makes consumers more and more picky, and even thinks that Laoganma is no longer fragrant.

Zhu Danpeng, a food industry analyst in China, said in an interview with beijing business today that in the field of Chili sauce, Laoganma's advantages are declining at the product end, channel end and terminal end, and enterprises need to lay out from multiple scenes, channels and categories. "Laoganma needs to form a perfect system in terms of innovative consumption scenarios and channel integration in order to usher in a better market development space."

"I'm from China, and I don't make money from China." The reason why there is a "dopted mother" in this world is because there is Tao Huabi.

Tao Huabi is extreme, dedicated, a real person and a real business. The "Laoganma" she created is a model of national enterprises. Young consumer groups still need an innovative Laoganma, but where is the next "Tao Huabi"?

References:

1. beijing business today's "Difficult to meet the cost pressure, Laoganma will also raise prices?"

2. Yangcheng Evening News "Laoganma" suddenly increased its price!

3. Upstream news "Laoganma's price-increasing merchants: from last year to this year"

4. Global business figure "Tao Huabi: the hot Laoganma"