Ding Wei, President of China and Global Senior Vice President of A.O. Smith (China) Water Heater Co., Ltd. Joined A.O. Smith (China) Water Heater Co., Ltd. in March 1997 as the Materials Department Manager, and was later promoted to Deputy General Manager of Production in July 1998. Before joining A.O. Smith, Ding Wei worked in the United States for 6 years, holding senior materials and project management positions. He received a Master of Engineering's degree in materials engineering from Beijing University of Science and Technology in 1987, a bachelor's degree in engineering from Beijing University of Science and Technology in 1984, and a Master of Engineering's degree in metal materials engineering from Nevada in 1990.

A. O. Smith Company is an established American company with a history of 130 years. In the 1950s, A.O. Smith became one of the largest manufacturers in the American water heater industry. After such an American evergreen tree arrived in China, it went through a period of "acclimatization" and suffered losses year after year. Ding Wei, a Chinese American, was appointed as the President of A.O. Smith's China region at this moment, paving the way for A.O. Smith, an evergreen tree in the United States.

Sell wholesale in the United States and retail in China

Ding Wei found that the sales model of water heaters in China and the United States is completely different. In the United States, over 95% of water heaters are sold through wholesale sales, and consumers buy them together as equipment when buying a house. Therefore, the biggest customers of American water heater manufacturers are suppliers who provide bulk procurement of water heaters for real estate developers. For such a large customer, the annual procurement volume is 100 million US dollars.

Chinese consumers choose water heaters one by one as household appliances. In Chinese shopping malls, A.O. Smith's products are placed for retail in the home appliance sales area. After taking over the entire retail system, Ding Wei, who had a background in production management, examined it from the perspective of production management and believed that the losses in marketing in the previous years were due to extensive management. He moved his ideas on production management to marketing management. Firstly, establish the concept of eliminating waste and introduce quantitative indicators for improvement. In addition, Ding Wei saw the shortcomings of the performance oriented model, and his personnel assessment model was profit oriented. It is not simply a matter of how many products have been sold, but rather a joint assessment of the effectiveness of cost utilization, inventory management, and sales.

Relying on word-of-mouth in the United States and advertising in China

With Ding Wei's experience in production management, A.O. Smith China has changed its situation of consecutive losses and stood out from 400 water heater brands, ranking second in the market in 2004. Despite this, the brand A.O. Smith still has little reputation in the Chinese market. As a household appliance consumer brand, A.O. Smith's market awareness and market share ranking do not match.

A. O. Smith never does advertising in the United States. A classic saying in the United States is' the best advertisement is a product '. If users like your product, they will naturally help you spread it; If users feel cheated and deceived when using your product, they will also speak ill of you everywhere.

In order to meet the needs of the Chinese market, A.O. Smith began producing the first television advertisement in history in 2003. According to the market situation in China, Dingwei wants to advertise more, but the head office believes it is a waste. After several years of trial and error, the advertising expenses approved by the company have become more generous, which has also brought pressure to Dingwei. Because the advertising budget has increased, performance must also increase year-on-year.

Competing for market share in the United States and becoming high-end in China

In the US market, A.O. Smith's strategic positioning is to become the leader and expand its share. After years of effort, we have maintained a market share of 35% to 40% in the United States. In China, A.O. Smith has a clear strategic positioning to become an industry leader since the establishment of his factory. According to data, the annual demand for water heaters in China has reached tens of millions and is maintaining an annual growth rate of 8.5%. The market space is quite attractive. In China, the most common way to engage in marketing in the field of home appliances is to engage in price wars. Ding Wei did not consider price wars. He focuses on high-end products.

Ding Wei believes that the Chinese market is very large, even though it currently only accounts for 6% of the market, production is already saturated and factories need to be expanded. So in China, it's impossible to achieve just high-end products. Selling a water heater, even at the same profit margin, is better for business operations and profitability. We cannot treat China as a whole market, but rather as a European market, doing a good job in regional markets one by one. Ding Wei said, "The number of water heater households in China is constantly increasing, and there are unlimited business opportunities. My long-term goal is to hope that the Chinese market is not inferior to the United States.

From my master's degree to the end of 1998, I have been working in engineering and technology. Since becoming General Manager of A.O. Smith in 1999, I have become a so-called leader. When I first became the leader of a company, Ding Wei felt a bit uncomfortable. "I also have the common faults of engineering and technical personnel such as' thinking I am 'and' not listening to others', The headquarters of A.O. Smith Company in the United States also believes that Ding Wei's "teamwork spirit" is not enough. One day, Ding Wei's overseas supervisor told him, 'There's a problem with your behavior.' Afterwards, Ding Wei was forced to attend a 'closed training'. In this training, Ding Wei's biggest achievement was "understanding that collective decision-making is much less risky than individual decision-making". For example, in a discussion activity, 24 participants in the training were divided into 6 groups of 4 people each. In front of them were a box of matches, a bag of bread, a knife, and other wilderness survival tools, and each group was asked to rank these survival tools in order of importance.

I stubbornly believed that matches must come first, and I had a heated argument with other members of my group about it, "Ding Wei said. The authoritative answers from wilderness survival experts later released indicate that matches are not the first, but rather the latter. Through a series of similar activities, I learned about the personality flaws exposed in management work. "Ding Wei, who returned to his headquarters in Nanjing, China, became much more humble and respected the opinions of superiors and referred to feedback from subordinates when making decisions.

Forcing subordinates to "brainwash"

In the corporate culture of A.O. Smith Company in the United States, there is no superstition of "airborne soldiers", but a tendency to promote talents from within the company. However, after these individuals with outstanding abilities take on leadership positions, the arrogance brought about by their past excellent personal performance can form a barrier in management work.

Ding Wei, who has tasted the sweetness of "brainwashing", has continuously invited A.O. Smith's middle and senior management personnel to participate in similar overseas training for several years, thereby enabling them to achieve excellent management. Since the Nanjing factory of A.O. Smith was put into operation in 1998, in the first two to three years of entering the Chinese water heater market, A.O. Smith encountered serious "acclimatization" in various aspects such as design, production, marketing channels, and the company suffered serious losses. For example, in terms of production design, American consumers' family villas have a larger area, and water heaters can achieve a capacity of hundreds of liters or even more, but Chinese consumers usually only need water heater products with a capacity of tens to about 100 liters. At the beginning, A.O. Smith launched large water heaters designed based on American product prototypes into the Chinese market, but naturally there was no market. Meanwhile, in the United States, over 95% of A.O. Smith's water heaters are sold by major wholesalers through the new real estate market. But China's water heater market is completely a retail market, with various complex sales channels such as regional distributors, large home appliance chain stores, and supermarket hypermarkets.

A. Many foreign management personnel in O. Smith's factory are not very familiar with the specific consumer market situation in China, but often have stubborn opinions. After Ding Wei dispatched executives from various departments such as production, research and development, and sales to participate in brainwashing training overseas, they began to sit calmly together to discuss solutions. After various departments worked together to discuss a complete set of design, production, and marketing promotion plans, in 2000, A.O. Smith vigorously launched the "automatic energy-saving water heater" specifically developed for the Chinese market. With the correct construction of marketing channels, market share continued to rise.

Promote the construction of values

The value of corporate culture is not only limited to slogans, but also needs a series of systems to ensure that it can be truly transformed into action, "Ding Wei said. The current company spends nearly 4 million yuan per year on the construction of corporate culture. There is a series of systems to ensure recruitment, retention, and training of new employees: each person will receive two brochures: "Searching for a Better Way through Research - A.O. Smith Company History" and "A.O. Smith Company Guiding Principles". We entrust third-party supervision, and employees can call the 'Integrity Help Hotline' if they find any violation of the guiding principles. If there is a violation of the company's values, the company can solve the problem in a timely manner. Regardless of which management trainee they are, they must understand the company's historical story and guiding principles in the first three months. After six months, they need to introduce their insights based on the case and practice of their job position; After two years of practical work, many people can directly enter middle management positions. Since 2004, 'Value driven' has become the most influential and popular activity within A.O. Smith.