2006: Winning by scale


According to official data, in 2006, the annual industrial output value of enterprises above designated size in China's lighting industry was 117 billion yuan. “Enterprises above designated size” refers to enterprises with an annual output value of more than 5 million. Therefore, this statistic is obviously a small-caliber number compared with the overall scale of the Chinese lighting industry. Authorities in the market once had an estimate that the total size of the lighting industry should be at least 200 billion. I believe that many people's estimates are more optimistic than this "estimation". In any case, the Chinese lighting industry has exceeded 100 billion yuan is definitely an indisputable fact. In contrast to the total scale, the scale of enterprises is generally small, even as far as 2006. There are only a few companies in the industry with a scale of nearly 1 billion yuan. According to the data we have, these companies are likely to be in 2006. In the year, its business scale is close to or exceeds RMB 1 billion. They are Fo Zhao, Sunshine, Huaqiang, NVC, Op, Yinyue, Honglian, Tongshida, Yinghui, Xianlin Group, and foreign-funded Philips and Osram. . The size of Sanxiong, Yaming and Huayi is about 800 million to 900 million, and it is close to 1 billion. The overall scale is very large, and the concentration of market share is very low, which reflects that our industry is still far from mature to mature stage. Even the so-called large enterprises have a market share of only about 1%. Big, so the future of the industry has an opportunity for everyone. Just as two thousand years ago, Chen Sheng and Wu Guang shouted that "the princes will be phased, would rather be kind?!" This species began to sprout in 2006, "planting" The name is called: scale!
Opris' development characteristics

In 2006, NVC and Opp both crossed the 1 billion mark and Sanxiong approached 1 billion. This is a landmark event. Under the premise of the positioning of mid-to-high-end brands, NVC and Opp have achieved this breakthrough in China's domestic market. Unlike those export-oriented companies, they are also different from those that are low-cost and large-scale dumping. Therefore, the current size of the two companies may still not be the largest, but it plays a mainstream role.

It took 10 years for Oup to break through 1 billion from entrepreneurship, 200 million in the first five years, and 800 million in the next five years. NVC has completed this breakthrough for seven years, achieving 300 million in the first four years and 900 million in the next three years. Wu Changjiang once said that NVC's profit accumulation has a regularity: the annual profit is basically the sum of profits in previous years. I don't think I can't do this without a rapid scale expansion.

The rapid development characteristics of Opt and NVC have been more manifested in the past two or three years. They have two distinctive features: one is large scale and the other is fast. In fact, the so-called speed is also mainly reflected in the expansion of scale. Compared with some established companies in the industry, these two companies are still recruits, and they can stay in the short time, depending on the scale.

A close look at the growth trajectories of these two companies has its common characteristics. One is to find a good product entry point. Opt started with a ceiling light, and NVC started with commercial lighting (NVC was originally built with a light cup and a transformer). The second is to pay attention to the brand. The two companies have a firm belief in the brand, a firm commitment, and a firm positioning. The third is to pay attention to marketing. Both Opus and NVC are companies that have unique contributions to the marketing concepts and models of the industry. Similarly, they also have the best channel resources in the industry. The fourth is to pay attention to quality. The two companies are able to grow steadily and have a lot to do with maintaining a higher level of product quality. Although there are still some unsatisfactory places, they can face the quality problem with a more positive attitude and get recognition from the channel. From another perspective, the attitude towards quality is also the attitude towards the brand. No company can treat quality with irresponsible attitude and become an excellent brand. The fifth is to attach importance to the integration of resources. Both companies are superior to the "end of Qingping", there is no special background to use, completely "grassroots", but they are good at integrating resources. In the development process, NVC is a good integration of upstream supplier resources and downstream channel resources. This ability to integrate resources has even become the core competitiveness of NVC.
The key to competition is scale

Through the growth trajectory of Opus and NVC, we can see that in the future industry competition, scale competition will increasingly affect the competitive structure and ecological environment of the entire industry. At the same time, market-oriented growth in scale has shaken off the limits of manufacturing capacity. The rapid scale increase has directly changed the orientation and structure of competitive factors such as role positioning, discourse power, product generation organization mode, and quality resource allocation in the industry.

In the five years from 2002 to 2006, one can clearly see the rule that the competition axis of the entire industry has clearly shifted from manufacturing and product-centric competition to market- and channel-based competition. The key to competition is scale. Scale is the last word, and there is no right to speak without scale. In such a context, technology, innovation, quality, and quality, if left out of scale and speed of scale, no matter how refined, may be marginalized. From a broad perspective, China’s reform and opening up has been the main line for nearly three decades. Why is development the last word? Because the core of development is also "scale." With the scale of technology and innovation, it is possible to have a platform and foundation for development. Therefore, the author believes that the pursuit and recognition of scale should become a common sense of industry development at this stage. Under this premise, other competitive factors such as R&D management are viewed in a dialectical manner.
The scale of enterprise

If the scale is identified as the first element of development, then the next step is to choose the path to scale. There are several alternatives: the first is the manufacturing scale advantage, such as Huaqiang or Buddha photos; the second is the channel scale advantage, such as Op, NVC, Sanxiong; the third is the OEM scale advantage, which is The first kind of evolution is more manifested in the specialization and specialization of manufacturing, and does not appeal to its own brand; the fourth is the scale of foreign capital, and the enterprises of the first three models are likely to achieve scale in foreign capital; The five types are capital acquisition and scale, and this model will be very active in the next few years.

The scale of enterprise scale must be the road to systematic improvement of capabilities. No matter which path moves to a larger scale, it will enhance the capabilities of other fields. Opt's current R&D and manufacturing capabilities in the field of ceiling lamps make it far from competitors in this field. When the market resources are accumulated to a certain scale, NVC re-establishes the core competence of manufacturing, and on the platform of capital, it can quickly solve some shortcomings of its products through mergers and acquisitions. In a very short time, it became the strongest in the field of original defect products. When a company expands, the pursuit of scale cannot even be “self-controlled” because the interests of advertisers and suppliers, distributors and even the capital side have been bundled in this vehicle, so when it seeks to expand its scale, it means The market share has a strong desire to occupy. When China does not have too much technical content, this kind of possessive desire is often achieved through cost competition. Therefore, it is very likely that several mainstream companies will have a “price war” on certain product lines, and experience tells us that the final result of this price war may be that the two largest companies are not only dead, but larger. It is. They actually grab the share of those small businesses. Experience also tells us that when the market size of a company reaches a certain critical point, its process of concentrating market share will have “acceleration”. Therefore, we can understand why the scale expansion of Opt and NVC in the next few years is much faster than in previous years, but this "acceleration" may not really start for the two companies. In 2006, 1 billion came to them. It may be just that the chariot is hung from zero to the second gear. What happens when it hangs in the third, fourth and fifth gears? Can we still use the tractor?

We used five periods to review the history of the industry from 2002 to 2006. It is not only a review of the process, but also to explore the development of the industry. We are in a thriving era, and we are in a turbulent industry. There is no reason not to make a difference. On the occasion of the fifth anniversary of the publication of the "Guzhen Lighting" newspaper, we pay our highest respect and deep blessing to all those who are striving for hard work in the lighting and lighting industry.



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