The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

Tech 2024-08-02 11:41:18 Source: Network

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social ValueIn recent years, "Fat East Come" has emerged as a unique force in the supermarket industry, attracting widespread attention for its distinctive "profit-sharing" model and employee benefits system. However, there are diverse opinions on the sustainability of this model and its suitability for listing on the stock market

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

In recent years, "Fat East Come" has emerged as a unique force in the supermarket industry, attracting widespread attention for its distinctive "profit-sharing" model and employee benefits system. However, there are diverse opinions on the sustainability of this model and its suitability for listing on the stock market. Recently, Li Guocheng, the former CEO of Dangdang.com, invited Lan Shili, a prominent Chinese entrepreneur and Chairman and President of China Dongxing Group Co., Ltd., for an in-depth discussion on "Fat East Come," sparking heated debate.

Lan Shili: The "Fat East Come" model is not suitable for listing and is destined to succeed only within a small scope.

Lan Shili candidly stated that after years of studying "Fat East Come," he believes its operational model and structure make it unfit for listing. "Online discussions claim that 'Fat East Come' distributes 95% of its profits to employees, which makes it impossible for the company to go public." Lan Shili explained, "If a listed company only earns minimal profits, such as making only a few cents on a down jacket, it would be unacceptable to the market. The vast majority of public companies cannot emulate this model."

Lan Shili believes that the "Fat East Come" model is overly idealistic and still a distance away from true marketization. He pointed out that this model can only succeed on a small scale and cannot be replicated nationwide. "This model is destined to benefit only a select few employees. However, after listing, it can bring value to more shareholders and, by accumulating more funds, invest in charitable causes, making a greater contribution to society."

Li Guocheng: Corporate culture restricts expansion, and listing is key to achieving sustainable development.

Li Guocheng also sees limitations in the "Fat East Come" model and shared his perspective drawing on his own entrepreneurial experience. "A corporate culture that treats employees as family inevitably hinders expansion." Li Guocheng reminisced, "During Dangdang.com's early days, we had only fifty employees, and I could invite everyone home for a New Year's dinner. But as the company grew, this model became unsustainable."

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

Li Guocheng emphasized that listed companies can incentivize employees through rational mechanisms and leverage capital markets to acquire more resources, achieving greater growth. "If you aim to build a strong, lasting enterprise, listing is indispensable."

The societal value of the "Fat East Come" model: Overly idealistic or a unique approach?

Many netizens believe that "Fat East Come" distributing profits to employees, who then create value, reflects its pursuit of societal value rather than mere commercial gain. However, Lan Shili disagrees. He argues that listing achieves greater social value. "Before listing, you may only benefit a few hundred or thousand employees at 'Fat East Come.' But after listing, you bring value to tens of thousands or hundreds of thousands of shareholders. After listing, you are no longer limited to providing employee benefits but can invest more funds in philanthropic endeavors."

Should "Fat East Come" go public? This discussion sparks contemplation about business development models, social value, and marketization.

Here is a deeper analysis of the "Fat East Come" model:

1. Advantages of the "Fat East Come" model:

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

Employee motivation: Employees receive salaries well above the local average and extended vacations, significantly enhancing their sense of belonging and motivation.

Word-of-mouth effect: The unique model and excellent employee benefits have earned "Fat East Come" a positive reputation, attracting a large customer base.

Sense of social responsibility: "Fat East Come" distributes profits to employees, demonstrating its respect for employees and commitment to social responsibility.

2. Limitations of the "Fat East Come" model:

Scale expansion: This model is difficult to replicate nationwide as it relies on a unique corporate culture and the founder's personal charisma, making large-scale expansion challenging.

Market competition: "Fat East Come's" high-cost operational model may struggle to maintain its advantage in fierce market competition.

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

Funding sources: Not pursuing listing means difficulty in obtaining external funding, limiting growth scale and speed.

3. The future of the "Fat East Come" model:

Focus on regional markets: "Fat East Come" can continue focusing on its existing regional market, continuously optimizing its model to maintain competitive advantage.

Exploring hybrid models: "Fat East Come" can explore hybrid models that combine corporate culture with capital markets, preserving its distinctive character while gaining stronger development momentum.

Social responsibility: "Fat East Come" can integrate social responsibility into its business development strategy and actively engage in charitable endeavors, creating greater societal value.

Conclusion:

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

The success of the "Fat East Come" model ultimately depends on its ability to find a balance maintaining its unique character while adapting to market changes and meeting societal needs.

Here are some further reflections related to the "Fat East Come" model:

Chinese business development models: Can the "Fat East Come" model serve as a model for Chinese business development?

Social responsibility: How can businesses better assume social responsibility while pursuing profitability?

Capital markets and corporate culture: How to balance the relationship between capital markets and corporate culture?

Employee motivation: How to establish effective employee motivation mechanisms to inspire employee enthusiasm and creativity?

The Limitations of the "Fat East Come" Model: Lan Shili and Li Guocheng Discuss Business Development and Social Value

This discussion about "Fat East Come" is not just a debate about business development models but also a contemplation of social value and marketization. The future of the "Fat East Come" model remains to be seen.

Furthermore, we can further analyze the specific circumstances of "Fat East Come," such as:

The operational model of "Fat East Come": "Fat East Come" primarily relies on low prices and high-quality goods to attract consumers. Its supply chain management and inventory control capabilities deserve attention.

Employee benefits at "Fat East Come": What specific benefits does "Fat East Come" provide to its employees? What is the actual impact of these benefits on employees?

Social impact of "Fat East Come": What impact has the "Fat East Come" model had on local economic and social development?

In conclusion, the "Fat East Come" model is a case worth studying and discussing, prompting deeper reflection on business development models, social value, and marketization. As time goes on, the development of "Fat East Come" will undoubtedly provide us with further insights.

Please note: The above content is for reference only and does not constitute a final evaluation of the "Fat East Come" model. For more information on "Fat East Come," please refer to its official website and related reports.

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