LED 'destructive innovation' means to occupy the market is not desirable

Our strategy at this stage is not to pursue profits. The key is to expand the scale and occupy the market first, which is more important for the survival of enterprises. In an interview with reporters, a well-known LED lighting company executive said so frankly. Perhaps this concept has become more representative in the current stage of industrial development. At the same time, accompanied by the increasingly fierce market competition and serious homogenization in 2012, many LED enterprises are actually facing the dilemma of increasing scale and revenue but shy profits. How to find a balance between expanding market share and improving the profitability of enterprises? This has obviously become a problem that more and more entrepreneurs have to consider. At present, on the one hand, enterprises should avoid the risk of increasing inventory and capital risks, and on the other hand, they should face the reality that the market is demanding more and more products and the selection range is increasing. Do you want a market or a profit? It seems to be a dilemma choice, low gross profit, can only earn a manufacturing fee, and even grab some market projects have to lose money to earn; And the pursuit of high gross profit, take the value-added route, and can not get the amount. Recently, an enterprise that won the bid for a city street lamp replacement project at a price lower than 20 of all invited enterprises has aroused doubts from its peers. The Enterprise said that this move can help the enterprise establish a brand image, establishing the position of the industry will also help to strengthen the company's ability to receive orders in other regions or provinces in the future. First, occupy the market with radical prices, then tap profits. More enterprises make such a choice after weighing, and this choice also means the price war comes on stage, it has even become a common form of market competition that is lingering and must be faced squarely. Especially, the price war in the middle and low end is becoming more intense. The middle and low end will focus on integrated marketing, and customization can better meet the needs of specific consumer groups, however, it is necessary to spell out products and professional system services. For more domestic enterprises that tend to the former, the business philosophy of occupying the market first also has its own reason: occupying the market first means having a customer base and sales volume, seeking profit by quantity or profit after quantity is the way to survival and development. Of course, to occupy the market first and more, we should also rely on our strength and not blindly expand; On the premise that the strength allows, after a large area of the market, people will gradually recognize the company's products, price system, etc. , which means cultivating their own customer base and expanding market channels, then on this basis, we can do some profit-seeking operations. At the same time, such a strategy also pushes competitors out of the market at aggressive prices, which means that enterprises have more potential development space. However, this also means that enterprises must have an advantage in capital and scale when choosing this road, which seems to be more suitable for some people who can afford to play, and go further, this is also a comprehensive test of the enterprise's ability to integrate products, channels, technologies, funds, industrial chains and shape the operating environment; Cost control is the most important thing in the first place. At the same time, the technical route must be forward-looking. What route is more important than how fast it is. There are also senior people in the industry who are more familiar with the marketing strategy. They suggest that the price war under the leading market concept should be a means of competition rather than an end, in fact, it is necessary to compare the product mix strategy of the enterprise, who is the sharp knife product, who is the main force, who can represent the brand image, and have a clear and overall layout, the winner is to complete the overall competition goal of the enterprise. At the same time, enterprises must also have the rapid response capability of the market in the price war. In the product competition stage where the current technical scheme changes rapidly, the price drops rapidly and the performance improves rapidly, no one can guarantee that they can go all the way. Once the cost and technical performance are surpassed, they will be in danger. Entrepreneurs must have a clear and decisive sense of market competition, we must have a more long-term and intelligent development thinking than the price reduction strategy. In a word, whether it is to occupy the market first or to pursue profits, an enterprise that wants to become bigger and stronger and shape a long-term brand must bring products with higher quality, technology and competitiveness to the market on a down-to-earth basis, we must establish a product system with its own characteristics and high technical content, and have a three-dimensional product strategy. Only when these are truly recognized by the market can we realize our own rapid development, eventually win more market share and enhance the brand strength of the enterprise. Instead of occupying the market and obtaining short-term sales by means of destructive innovation such as price reduction.