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How to wire and cable companies to find profit in the era of meager profit?

Information Source:Henan Huadong Cable Co., Ltd  Release date:2014-03-24

If the wire and cable manufacturing industry profit crisis unavoidably a bit alarmist, but has entered the low profit era is an indisputable fact that cable manufacturing industry. Recently, some cases reflected from the cable industry's point of view, now cable manufacturing industry and other industries, competition is becoming increasingly fierce, the enterprise profit has entered a perplexing inflexion time: one is the road more and more difficult to walk; the two is more and more difficult; the three is the cost more and more high; four is the profit more and the more difficult to obtain.

In response, many industry agrees: "the more difficult now cable industry more to do, Chinese cable manufacturing enterprises profit margins high growth era has gone for ever, may become the mainstream cable manufacturing enterprises operating profit in a long time."

Undoubtedly, low profit era has gradually wash away the domestic cable industry. Then, a low profit era, wire and cable manufacturing industry will show some characteristics of what? In this regard, relevant personage points out, a cable is the product price does not put up, corporate profits increasingly tight; two is for the interaction between the enterprise and the enterprise shopping profit, market competition is becoming increasingly intensified; three is the enterprise main depression, some wait, some keep rats at both ends, the lack of enterprising and pioneering spirit. Then the profit is how to form? In the interview, most cable companies are considered, the high cost of growing is the main reason leading to the enterprise profit. As in recent years the rise in raw materials, personnel costs rise, plant rent rising, energy prices rose...... In this circumstance, the enterprise can break even or low profit operation has been good, if you expect to get high profits may be Arabian Nights. And another personage says, behind the cost fluctuation of government macro-control of the market, so the low profit era is the inevitable result of market regulation. In addition to the above point of view, some cable companies also think, not standardized, disorderly competition in the market, is also a key factor driving the cable manufacturing industry operating profit. Manufacturing industry access threshold of the cable is very low, the person outside the door always put profit virtual cable manufacturing industry, one-sided that the cable industry technical content is not high, and less investment, high profit, quick, and rush, blind investment, wantonly expansion, causes the market fully saturated. Once the market saturated, will the cable industry into a disorderly competition state. Therefore, in order to grab the limited market, we go shopping price, low price competition route, resulting in the loss of the whole cable industry interests. In addition, there are also many according to the insiders, Chinese cable products brand does not see more, most cable companies go is cheap way, so the brand value is not high, the profit space is relatively small, the enterprise was also is only marginal. In addition, at present a large number of foreign brands (such as Biriley, Alcatel, Sumitomo etc.) to enter the domestic cable market, the domestic wire and cable products is also a huge impact, but also aggravate the domestic cable market, affect the distribution pattern of interests.

Therefore, the profit is the result of economic laws, but also comprehensive factors of architecture, it is not the people's will, is a normal.

First of all, "profit" is the inevitable result of an industry entered the mature period. The financial crisis on China's cable companies, such as a baptism of ice and fire, eliminated many cable enterprises disorderly management, lack of competitiveness and dealership, make the market mechanism is more perfect, perfect. Can foreknow, cable companies after the financial crisis, the maturity of the pace will accelerate, the original high profits era has come to an end, rational, balanced, low profit market will gradually formed.

Secondly, the cable industry reshuffle speed will lead to low profit era. Wire and cable industry competition like a marathon, in front of the road, the threshold is low, the contestants innumerable; but to the back, distance away, ran to be not moved gradually from the arena, continue to adhere to the excellent athletes run gradually reduce. China cable industry crisis, run no more players than usual, such as after a big reshuffle. After the crisis, as the market more fully, more competition, shuffle will continue. But after several rounds of shuffling, wire and cable industry is also bound to such as home appliances industry in general, profit more humble. Therefore, in a low profit era, in the face of cable the fierce market competition, enterprises should be how to act and "kill a blood road"?

First, brand management. Only a short while ago, many cable companies also think of themselves as processing, not own brand products, cable companies don't need and can't implement the brand strategy. In the face of low profit era, big price war will only make enterprise scarred. Therefore the development of the independent brand is actually a strategic direction for enterprises, which in the long run, we have to realize from OEM (origin processing) to ODM (original design manufacturing) to brand marketing upgrade, and gradually enter the market marketing, brand operation of these high profit sectors. However, the actual situation of our brand, product brand internationalization of enterprises based on weak at present, should be to cultivate industry brand, regional brand as a breakthrough, the industry brand and regional brand to brand construction work in the wire and cable industry. Second, with industry financial crisis big reshuffle also can hardly be avoided, the enterprise profit and the desire and not. As everyone knows, the survival of enterprises is the source of profit, no profit market will not be long, if the enterprises evade this reality, delusions through price war blindly pursuing market share, may temporarily can survive, or Huan Laiyi page beautiful market statistics, but in fact it is tantamount to chronic Dutch act. Therefore, the era of meager profit margins road outside notting have two, one is inside the enterprise maximize cost, two is the enterprise and industry from the strategic level to consider cost, improve the added value and resource control, cost control and improve enterprise, industry competitive advantage together. Third, any time, innovation is the magic weapon for profit, profit is no exception. Most low profit products are technically identical, quality, performance difference is small, but it does not affect the enterprise innovation, the innovation of technology, materials, appearance, mode of production, marketing, management methods may find new source of profit, cost control point, find new markets, new profit models in order to gain, win, all enterprises must by the cost strategy steering technology and service strategy, focus on technological innovation and perfect service.

Fourth, strengthen internal management, reduce costs, improve the competitiveness of enterprises. Online cable product prices to rise, only to strengthen internal management, to obtain the desired profit enterprise survival.

Fifth, the construction of production, learning and research, combining the new industry innovation demonstration system, can give full play to their respective advantages, concentrate on solving the common problem of cable industry in technological innovation, the transformation and application of new technologies to accelerate, explore new industry R & D innovation mode.

Sixth, promote the construction of industrial clusters innovation service platform, promote the upgrading of the structure of export products industry cluster. The small and medium-sized enterprise cluster innovation platform services to technology and product development ability is weak, the low level of management, to provide comprehensive service for enterprise innovation, promote the ability of innovation and technology, management, management level, accelerating the export products of the industrial clusters upgrading.

Seventh, based on the supply chain. One of the characteristics of low profit products is the low threshold technology, product quality, performance difference is small, low profit margins, so in such a situation who want to break through the technical difficulty, choose low-cost material substitution, are difficult to rely on a single enterprise to monopolize a market. Of course, the enterprise profit to win, maintain a low product cost is necessary, so the enterprise should adopt various methods to reduce product cost, and from the actual situation of low profit products, raw material quality and the price is an important factor, enterprise cost according to the statistics, the use of the most effective means to reduce the cost of the first eleven, procurement negotiations, procurement, suppliers, early lever joint procurement, in order to facilitate the procurement and design (DFP), the centralized procurement of six and supply chain, so the cable companies need to have good time spirit, efforts to develop supply chain, through the cooperation with suppliers, together to create a solid the industry chain, to compress the respective capital amount, improve the rate of qualified products, to accelerate capital turnover, to ensure that each have an appropriate profit space.

Eighth, to increase the "efforts to implement the strategy of" going out ", encourage and guide the cable companies have the strength of South America, the Middle East, in Eastern Europe, Africa, South Asia, and other regions to establish" Chinese cable Industrial Park "or" production base ", international allocation of resources, open up more markets.
Finally, from the quality management capability of cable industry promotion, enterprise social responsibility construction, industry early warning and other aspects of their work, actively participate in the activities of a trade association, proposed own opinion in the coordination of the price mechanism. Do not participate in price wars, to avoid vicious competition, maintain the basic wages of the same industry competition, equal participation in quality and service, to improve the enterprise good faith management reputation, the industry development and orderly, efficient and standardized, to avoid excessive competition brought about by the development and unfair competition. This is not only conducive to the profit level of industrial upgrading and industry to increase, but also has far-reaching practical and historical significance to establish a good image China cable industry.

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