LED lighting companies: market and profits who first?

“Our first strategy at this stage is not to pursue profit. The key is to expand the scale first and occupy the market first. This is more important for the survival of the company.” In an interview with the reporter, an LED lighting company executive who is well-known in the industry So frankly. Perhaps this concept has become more representative in the current stage of industrial development. At the same time, with the fact that in 2012, due to increasingly fierce market competition and homogenization, many LED companies are actually facing scale and revenue. The dilemma of growth but shyness in profits.

How to find a balance between expanding market share and improving corporate profitability? This has obviously become a problem that more and more entrepreneurs have to consider. At present, on the one hand, enterprises must avoid the risk of increasing inventory and capital risks, and on the other hand, they must face the reality that the market demand for products is increasing and the scope of choice is increasing. To market, or to profit? It seems to be a dilemma choice, "Low margins, can only earn a manufacturing fee, and even grab some of the market projects have to 'lose money'; and the pursuit of high gross profit, take the value-added route, and can not afford it In the near future, a company that has won the bidding for a city street lamp replacement project at a price that is less than 20% of all the bid invitation companies has aroused doubts from its peers. This company said that this move can help companies establish a brand image, lay a solid foothold in the industry, and help the company. To strengthen the company's ability to take orders in other regions or provinces in the future.

“Firstly occupying the market with aggressive prices and then digging profits”, more companies have made such choices after making trade-offs, and this choice also means that “price wars” are on the stage and even become lingering and must be addressed. The “universal form” of market competition, especially the “middle and low-end price wars are becoming more intense”, while the medium-to-high end will focus on integrated marketing, and high-end customization will better meet the needs of specific consumer groups, but it is necessary to fight products. Specialized system services.

For domestic companies with more of the former tending to the former, the business concept of “preempting the market” also has its own truth: First, occupy the market, that is, have a customer base, have sales volume, and seek profits or take advantage of the benefits first, All are ways of survival and development. Of course, preemptive and multi-occupy markets must also rely on strength and cannot expand blindly; under the premise that strength allows, people will gradually recognize products, price systems, etc., which means that they have cultivated themselves. The customer base has expanded the market channels, and then on this basis can do some more profit-seeking operations. At the same time, such a strategy also “squeezed” competitors out of the market with aggressive prices, meaning that companies have gained more potential for development.

However, this also means that in choosing this road, companies must have an advantage in capital and scale, and it seems that they are more suitable for some “favorable” people. Further, this is also the product, channel, technology, capital, and industry of enterprises. The comprehensive test of chain integration capabilities and business environment shaping capabilities; cost control is first and foremost, and the technology line must be forward-looking. “What route to take is faster and more crucial than to go.”

There are also veteran industry veterans who have deeper understanding of marketing strategies to suggest that the price war dominated by the concept of “preemptive market” should be a means of competition rather than an end. In fact, it is a strategy to compete with the company’s product portfolio. Who is the sharps product? , Who is the main force, who can best represent the brand image, must have a clear and overall layout, complete the company's overall competitiveness is the winner. At the same time, in the price war, companies must also have the ability to quickly respond to the market. In the current stage of product competition where technological Solutions are rapidly changing, prices are rapidly declining, and performance is rapidly increasing, no one can guarantee that they can lead all the way. Once the cost And if the technical performance is surpassed, it will be at risk. Entrepreneurs must have a clear-headed and decisive sense of market competition. They must also have a more long-term and wise development thinking than the price reduction strategy.

In short, regardless of whether the market is preempted or profits are being pursued, a company that wants to become bigger and stronger and shape long-term brands must take down-to-earth products with higher quality, process technology, and the most competitive products, and must establish its own characteristics. With high-tech product systems and a three-dimensional product strategy, only these products are truly recognized by the market. Only in this way can they achieve rapid growth and eventually gain more market share and enhance their brand strength. Instead of taking advantage of "destructive innovation" such as price cuts, the company will take the market and obtain short-term sales.