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System Force Activating a Hundred-Year Tsingtao Brewery

06-14-2012 16:58 BJT

Wang Jixin

  Tsingtao Brewery Co., Ltd. is located at the junction of Yan’an Road and Dengzhou Road. The junction is the birthplace of Tsingtao Brewery, a hundred-year brand, and the place where Tsingtao Brewery is currently situated. The well-preserved German-style building, as Qingdao Beer Museum, has already become a must for tourists who visit Qingdao.

  In the plant area, fragrance from fermented barley blending with wine aroma is floating in the air; on the exterior wall of the workshops, a line of big green characters are visible: “using our passion to brew the best beer favored by consumers, for creating happiness for the life”. If the word “beer” is hidden from this sentence, it’s hard to image that such an expression is made by a light manufacturing enterprise because manufacturing enterprises seldom mark its relations with consumers in such a clear way. More importantly, they don’t think they are producing and selling beer, but brewing passion and creating happiness.

  Retaining Freshness, Igniting a Hundred-Year Brand’s Tension with Sports Passion

  Since the year of 2005, Tsingtao Brewery has put forward the brand allegation of “Passion, dreams & success” and become the Olympic sponsor through signing contracts. Data shows that after Beijing Olympics, consumers willing to buy Tsingtao Brewery increase by 74 percent and young consumers take up 14 percent among them.

  Tsingtao Brewery has passionately and constantly increased its sales along the sports marketing road. After the completion of 2008 Olympics, Tsingtao Brewery took a lead in cooperating with NBA. In November 2011, Tsingtao Brewery signed contracts with 2012 Sports Champion Team led by Liu Xiang, Yi Jianlian, Chen Yibing, He Zi and shot a series of TV slips, embodying “Olympic passion for vigorous pursuit of dreams”. The clips express these sportsmen’s motivation and tension and are strongly broadcasted in the prime time of CCTV; later Tsingtao Brewery signed agreements with Miami Heat, thus members of cheerleading team of Dazzling Dance & Passion of Tsingtao Brewery can officially become “Heat girl”. In March this year, competition of cheerleading team of Dazzling Dance & Passion of Tsingtao Brewery officially kicked off.

  Transformation “Three Changes” for Jumping Across the Scale Trap

  In 1993, before the shareholding reform, annual output of Tsingtao Brewery had always been 100,000 kiloliters reached in 1986 and its market share decreased to 1.3 percent of 1993 from 13.6 in 1980. 40 percent of products were exported and 60 percent were sold domestically. The products for selling domestically were sold by means of special supply, a typical minority product of the market back then.

  After 1993 in which shareholding reform took place, Tsingtao Brewery became China’s first company listed simultaneously in Shanghai and Hong Kong. Foreign-owned beer enterprises entered Chinese market rapidly through purchasing Chinese enterprises. Tsingtao Brewery quickly met the challenges. In the second half of 2001, after smoothly conducting the first round of expansion, the number of plants of Tsingtao Brewery soared to more than 40 with categories of products exceeding 300. Rapid expansion results in a situation of “largeness but not mightiness”. In 2001, Jin Zhiguo, president of Tsingtao Brewery Company Limited back then, was elected to adjust the development strategy from “becoming large and strong” to “becoming strong and large”.

  In May 2005, the frame for Tsingtao Brewery’s organizing reform was finally determined, which fundamentally defined the transformation from a “beer brewer” to a “brand operator”, bravely adjusting its organizational structure. Later, Tsingtao Brewery slowed down its pace of purchasing and focused on the company’s internal operation management. With elevated competition level in global beer industry markets, Tsingtao Brewery once again put forward connotative development for comprehensively improving its systematic competitiveness.”

  Collaboration for Ensuring Implementation of Strategies

  By means of integrating system force for bringing dispersive resources together, the company adopts the integrated operation mode. As a result, the internal management and control and operational ability have been remarkably improved in terms of various levels, modules as well as systems, laying a sound foundation for the next round of competition at a higher level and rapider expansion of the enterprise.

  It’s just based on breaking all structures, mechanisms, systems and processes inappropriate for realizing the targets and building new value-creating model hereupon that enable Tsingtao Brewery to maintain stable and rapid performance growth for ten successive years. Data shows that in 2011 Tsingtao Brewery had realized beer sales of 7,150,000 kiloliters in the whole year, registered a year-on-year increase of 12.6 percent; realizing operational revenues of RMB 23.158 billion, up 16.38 year on year; realizing net profits of RMB 1.738 billion attributable to shareholders, an increase of 14.3 percent over the same period last year. In 2011, the company sold its main brand Tsingtao Brewery of 3,990,000 kiloliters, a year-on-year increase of 15 percent, of which sales of high-end products such as Tsingtao Brewery filled in small bottles, canned, and draft beer reached 1,200,000 kiloliters, up 23 percent year on year.

  Brand value of Tsingtao Brewery also soared to RMB 50.258 billion in 2011 from RMB 6.71 billion in 2001. During the past decade, its brand value has rapidly increased RMB 40-plus billion.

  Internationalization, the Only Way Out for Chinese Enterprises

  Tsingtao Brewery is quite aware of that although it takes a lead in Chinese beer industry, it falls far behind international beer giants in terms of capital, profitability, innovation capability and international level.

  As for internationalization, top management of Tsingtao Brewery has reached consensus that China remains the strategic focus of Tsingtao Brewery. Tsingtao Brewery adopts the mode of developing in foreign countries that following the route “driven by brand and led by products, starting from exports and overseas basic market so as to expand the influence of the brand”. In October 2011, Tsingtao Brewery established China’s first overseas plant in beer industry in Thailand. In Tsingtao Brewery’s opinion, selecting to establish the plant in Thailand is a strategic choice made with the support of Tsingtao Brewery’s view of becoming an internationalized company boasting global influence; besides, it’s also an exploration and trial of overseas development mode.

Editor:肖斐 |Source: CNTV

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