China's LED display enterprise channel battle is at the time

[Source: "High-tech LED - Technology and Applications" April issue Zhuo Zhihua]

Enterprise VS market: ice and fire two days

In every industrial process, the jungle law of survival of the fittest is an eternal theme. Looking back at 2011, China's LED display industry has experienced the most severe baptism in an industrial process. A group of industry pioneers have become martyrs, and a number of LED display companies are still on the verge of survival (reorganization and restructuring is a problem), a group of rookies borrowing capital market has gradually become a leader.

Industry concentration is the most basic and most important factor in determining the market structure. It embodies the competition and monopoly of the market. The most commonly used concentration measurement is the industry concentration rate. The industry concentration ratio (CRn index) refers to the total market share of the top N largest companies in the relevant market in the industry. For example, CR8 means that the eight largest companies have this relevant market share. According to the American economist Bain and the Ministry of International Trade and Industry of Japan, the industrial market structure is roughly divided into two categories: oligopoly (CR8 ≥ 40) and competitive (CR8 < 40%). Among them, the oligopoly type is subdivided into extremely high oligopoly (CR8 ≥ 70%) and low concentration oligopoly (40% ≤ CR8 < 70%); competition is subdivided into low concentration competition (20% ≤ CR8 < 40) %) and dispersion competitive (CR8 <20%).

We expect that the process of China's LED display industry's decentralized competition (CR8<20%) to low concentration competition (20%≤CR8<40%) will be further accelerated, and the process may span only two to three years.

According to the data of the High-tech LED Industry Research Institute: As of the end of 2011, there are about 1,210 LED display manufacturers in China, and the output value of LED display is 21.9 billion yuan. It is expected that the Chinese display market will reach an output value of 45-50 billion in 2015. . With the maturity of display technology and its widespread application, China's second- and third-tier cities will be the new growth engine for LED display market demand in the future.

On the one hand, the cruel survival of the fittest game in the process of accelerating the process of the industry; on the one hand, the feast of market demand growth and the opportunity to regain the position, the enterprise VS market will continue to renew the ice and fire.

Channel battle is at the time

For most companies, the process of growth is to find their core competitiveness in the continuous market division of labor. Allan Leighton, the former chairman of Royal Mail, warned that in times of uncertainty, good companies need to be focused, active and decisive, rather than implementing an ostrich policy or a wait-and-see strategy.

The author once discussed the market competition of LED display in the article "Strategic Thinking of China's LED Display Enterprise" (published in the March 2012 issue of LED Engineering): from the current competition level of the domestic LED display industry, Basically in the early stage of product competition, the key indicators of competition are reflected in: price, quality, delivery, after-sales service, etc. The price elements are particularly prominent at this stage. With the further intensification of market competition, the competitive advantages of the industry leaders at the product factor level (quality, price, delivery, service, etc.) will become more and more consistent, and channel competition will begin to move forward, relying on several sales personnel. The sales model of the single-handed gang will begin to transform into a systematic and specialized channel operation.

How to layout channel battles?

In 2012, with the help of Bona Ruicheng Marketing Consulting, Jiangxi Hantang Gaojing Optoelectronics Channel Optimization Project (“351 Project” and “Tower Light Project”) started to be launched. Economist Wu (King Jing) Mr. Lao said: “Opportunity comes from the correct response to the challenge”. Only by keeping up with the mainstream trend and preempting people can we gain the competitive advantage and how to deploy the channel strategy to gain competitive advantage in the future competition. ?

(1) Market layout: Focus on its own advantages, and have a choice

For many enterprises, the shortage of market resources is the norm. The birth of economics stems from the contradiction between scarcity of resources and unlimited desire of human beings. How to allocate resources rationally and effectively has produced economics. The characteristics of the Chinese market are: “One country, multiple markets”, which means: First, the Chinese market is large, and the second is regional differences. Based on the industrial cluster pattern and the dynamics of competitors, the in-depth study of the characteristics of the Chinese market itself is particularly important for our layout of the national market. Relative to the national market layout, for some enterprises with weak influences, it may be a good choice to build a regional “model market”, focusing on their own advantages, and having a choice and success.

(2) Channel planning: The key point is to find out where the real needs are.

The premise and key to channel planning is to find out where the real needs of the market are (where is the focus? Where can the channel innovations be hidden)? According to the statistics of the High-tech LED Industry Research Institute, China's LED display application market mainly includes: advertising media accounted for 33%, information display accounted for 18%, stage performance accounted for 10%, gymnasium accounted for 19%, other accounted for More than 20%. Based on the above requirements, what are the channel members? What are the core channel members? In the future, those core members may gain a greater competitive advantage? It is very clear that all these channels are planned, and the channel planning will provide a good foundation for future channel management. Each enterprise can design a channel model that meets its own needs and development based on its own resources.

War is always cruel and cold, and for the latter, it may be death; for the brave, it may be a pleasure, marketing war is also true!

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