There are two major events that have etched the name of Sany deeply in people's minds: one is the equity classification reform, and the other is the bid to acquire XCMG. But Sany has not merely relied on hype to become a focal point of attention; it has also emerged as a shining example among domestic enterprises. In 2005, Sany Group achieved sales revenue of 5.8 billion yuan, profit and tax of 760 million yuan, and net assets of 3.3 billion yuan, spanning multiple fields with seven subsidiaries including Sany Heavy Industry under its umbrella, while also extending its reach overseas. People can't help but wonder, why has Sany been able to grow to such a scale? How far can Sany go in the face of aggressive moves by foreign giants?
Sany's Grand Strategy
Like many large enterprises, Sany has also followed a diversified development path, venturing into industries such as construction machinery, engineering vehicles, leasing, finance, real estate, etc., achieving rapid expansion.
The Heavy Industry That Made It Famous
Whenever Sany is mentioned, heavy industry undoubtedly comes to mind first. However, Sany's development in the heavy industry sector hasn't been entirely smooth sailing. Before Sany entered the market, the heavy industry was dominated by large state-owned enterprises and foreign giants. Sany chose to start with drag pumps, which required relatively lower investment, and quickly expanded its product line after initial success. Facing stronger competitors, many problems were exposed, such as cost pressures brought by low profits, talent shortages, and supply chain control issues. Due to the highly centralized management style adopted previously, the company was heavily burdened by management crises. Sany decisively restructured the enterprise, establishing five business units and decentralizing power, allowing the company to smoothly overcome the crisis.
In developing its heavy industry, Sany broke people's habitual thinking, courageously entering industries monopolized by large enterprises, a spirit that commands respect. Beyond just demonstrating courage, Sany also exhibited great wisdom. They didn't simply leverage the advantages of small enterprises like quick response and low cost; they also significantly improved service quality. By setting up 38 service outlets and 56 spare parts supply points nationwide, establishing a call center to provide 24-hour customer support, and forming rapid response teams to shorten repair times, practice has proven that it is precisely the high-quality after-sales service that gives Sany an advantage over its competitors.
Grand Layout
Sany began its ambitious pursuit of diversification in 2001. In that year, Sany invested more than 1 billion yuan to establish Sany Communications, primarily focusing on high-end switches, and repositioned itself in data communication in 2004, setting a revenue target as high as 1.2 billion yuan. Despite being in a loss-making state, Sany Communications had always been one of Sany's two main businesses until it gradually faded out of the core business.
Sany's industrial expansion reached its peak in 2003. Within eight months, Sany successively established bus, automobile, and heavy machinery companies, with revenue targets of 300 million yuan, 700 million yuan, and 1.2 billion yuan respectively. According to Sany's plan, the group's sales revenue would exceed 10 billion yuan in 2004, with Sany Heavy Industry's share dropping to 50-60%. Sany's grand blueprint was beginning to take shape.
Market Turbulence
In 2006, Carlyle successfully acquired XCMG, the leader in China's construction machinery industry, triggering a major upheaval in the industry. This "decapitation action" shook the construction machinery industry because prior to this, the world's largest construction machinery manufacturer Caterpillar had acquired Shantui Construction Machinery in Shandong and maintained close contact with leading companies in the industry such as XCMG, LiuGong, and Sany Heavy Industry, revealing its clear intentions towards China's construction machinery industry. There were even rumors pointing directly at Caterpillar as the mastermind behind Carlyle's actions, suggesting ominous prospects for China's construction machinery industry if true.
Before the acquisition of XCMG, China's construction machinery industry was divided into three camps: large state-owned enterprises led by XCMG, private enterprises represented by Sany Heavy Industry, and foreign giants like Caterpillar and Volvo, all vying for market share. After Carlyle's acquisition of XCMG, the existing market structure was bound to be disrupted. Before the establishment of a new market order, it might present an opportunity for domestic construction machinery enterprises to seize market shares and secure advantageous positions in the new order.
However, the acquisition pace of foreign giants would not stop, and Sany had already come into their sights. A direct confrontation with powerful competitors was inevitable. Faced with opportunities and challenges, Sany could only continue to expand, strengthen its strength, and seek greater development.
Sany's Grand Control
With a grand layout in place, good management mechanisms are essential, or it would all be in vain. The excellent group control of Sany is crucial for maintaining its good expansion momentum. Sany, which pursues technological innovation, also has unique insights in management innovation.
Human Resource Control
For employees, Sany not only adheres to people-oriented principles or operates human capital but stands more from the employees' perspective, helping them succeed. Specifically, managers are responsible for employees and care about their future, thereby fully unleashing their potential. This is one of Sany's three core concepts.
Sany's emphasis on talent manifests in many aspects. For technical personnel, for instance, there is first the evaluation of technical titles, where title levels correspond to managerial positions — for example, chief scientists enjoy the benefits of vice presidents of the group, and fourth-level senior engineers receive ministerial treatment. Secondly, project contracting — Sany puts research projects out for bidding, and whoever takes on the project is fully responsible, ensuring both project quality and progress while cultivating talent. Additionally, there is respect and value recognition — within Sany, there is a prevailing culture of respecting talent. As Xiang Wenbo said, Sany has never laid off technical personnel. Sany has also established research institutes in several major cities across the country, attracting a large number of high-level talents.
Corporate Culture Control
"Quality Changes the World" is the primary concept emphasized by Sany. In Sany's corporate culture, quality undoubtedly holds a central position. Simply put, it means "allowing mistakes but not repeated ones," which not only encourages innovation but also demands strict quality standards. Chairman Liang Wen Gen clearly stated that quality activities should be established in a form similar to religious activities.
Through strict quality management, Sany has improved product and service quality and reduced costs. Just recently, Sany invested 2 million yuan to form a national inspection team to check each sold product individually, showcasing Sany's pursuit of high quality.
The nearly obsessive quality culture has become a cultural concept, permeating every level of Sany. The high regard for quality matches Sany's state of rapid change, enhancing Sany's cohesion and reducing concerns about product quality.
Sany's Grand Transformation
Sany's pursuit of high-speed growth means it must develop through transformation. The market Sany operates in is rapidly changing, and facing aggressive attacks from domestic and international competitors, only adapting to changes, utilizing changes, and creating changes can Sany maintain its leading position.
Sany's Psychological Framework
Besides physical structures, enterprises also have psychological frameworks. Sany has built a healthy and stable enterprise psychological framework with five "winning mindsets." First is the entrepreneurial mindset. Enterprises should shoulder more social responsibilities and pursue harmonious development between the enterprise and society. With such intrinsic motivation, enterprises have the potential to grow larger and achieve sustainable development.
Second is the mindset of corporate image building, which includes three contents: integrity towards society, reversing the public's perception of private enterprises; integrity towards customers, introducing advanced service concepts, providing quality services, and cultivating customer loyalty; integrity towards employees, enhancing employees' sense of identity and belonging.
Third is the management mindset. The core is innovation. Technological innovation reduces product costs and greatly improves quality, avoiding being constrained by foreign enterprises' intellectual property rights. Management innovation is about adaptability, constantly adjusting management models according to internal and external environmental changes, and improving management levels.
Fourth is the competitive mindset. Sany believes that industry competitiveness is greater than enterprise competitiveness, and industry interests are the most fundamental and long-term interests of enterprises. Based on the concept of win-win, maintaining a good market order. Lastly is the customer mindset. Everything centers around the customer, standing from the customer's perspective, grasping customer needs, and insisting on market research to bridge the gap between the company and the market.
Diversification Requires Caution
Sany has taken many detours in its diversified development. The Sany Communications founded in 2001 and the Sany Automobile founded in 2003 have yet to achieve success, leading Chairman Liang Wen Gen to make the decision in 2004, after Sany Heavy Industry went public, that "there will be no related diversification within three years."
Not putting all eggs in one basket, Sany perhaps based its multi-front approach on such considerations. However, continuously entering unfamiliar industries carries significant risks, lacking relevant technology, talent, and management experience, while dispersing the company's strengths. The simultaneous expansion without hierarchy is the main reason for the lack of success.
Looking back at Sany's development history, although it spans numerous fields, heavy industry has always been the foundation of the company and the source of its competitiveness. If the company solely pursues size and spreads itself too thin, it may not yield fruitful results everywhere, and spreading too wide easily leads to a broken capital chain, which would be regrettable.
Sany Overseas
Sany's vision extends beyond domestic markets; it has also extended its expansion steps overseas. Sany invested $67 million to build a production base in India and has gradually established a foothold there.
The success in India is first due to product differentiation. Unlike many multinational companies that adopt a unified global component production and supply system, Sany excels at finding market gaps and capturing customer needs, conducting specialized designs accordingly. Practice has shown that products performing well in the Indian market are those customized for local conditions.
Secondly, it is service differentiation. Many large companies consider service as an important profit point, emphasizing clear responsibility during the service process and following procedures strictly. Sany, however, takes a different approach, treating service as a marketing tool, often offering free repairs to customers, increasing customer satisfaction, and winning reputation.
Lastly, implementing localization strategies. Cultural barriers are an important cause of failure for many multinational companies. Instead of expending great effort on cultural communication and integration, direct localization is better. Turning Sany India into a truly Indian company is Sany's goal.