How should the cable companies go into the future of meager profits?

If the profit crisis in the wire and cable manufacturing industry is a bit alarming, it is an indisputable fact that the cable manufacturing industry has entered the era of low profit. Judging from some of the conditions reflected in this year's cable industry, competition in the cable manufacturing industry is now fierce, and corporate profits have entered a complex turning point: First, the road is getting harder and harder, and second, the difficulties are increasing. The bigger, the third is the higher and higher costs, and the fourth is that profits are increasingly difficult to obtain.

In response, many people in the industry stated that the cable industry is getting harder and harder now. The era of high profit growth rate of China's cable manufacturing companies is gone forever, and profit-making operations may become the mainstream of cable manufacturers for a long time. .

The profit of the cable industry is between 2% and 3%. A slight inadvertent loss will result. According to incomplete statistics, at present, there are more than 7000 wire and cable manufacturing enterprises in China. The scale of production in the industry grows in an unordered manner, the utilization rate of equipment is less than half, and the profits of enterprises are falling. Many enterprises maintain capital or profit.

Some people think that the increasing high cost is the main reason for the low profit of enterprises. In recent years, raw materials have been rising, personnel costs are rising, plant rents are rising, and energy prices are rising. Some cable companies believe that the non-standard and disorderly competition in the market is also a key factor leading to low-profit management in the cable manufacturing industry.

The cable manufacturing industry in the era of meager profits shows that the price of cable products cannot be raised and the profit margins of enterprises are shrinking. In order to obtain profits from the mutual competition between companies and enterprises, market competition has become increasingly fierce; business owners are depressed and lack the spirit of pioneering and pioneering. Features.

The phenomenon of counterfeiting in the cable industry is very serious. The poor quality wire and cable is flooded with the market, and non-standard products are still banned. Low value-added products, increasing product homogeneity, intensified low-price competition, lack of brand leadership, extensive marketing management models and other issues are indisputable facts. When selecting a cable product and signing a contract, all layers are set so that the cable company can't escape the whirlpool.

Only a very small number of enterprises in the national cable industry can achieve an annual sales of more than 2 billion yuan, and the number of companies whose brands can be recognized internationally or have high visibility is even more limited. Many cable companies also consider themselves to be processing industries and have no independent brand products. Cable companies do not need or can implement brand strategies. In the era of meager profits, a big price war will only scare the company. In the era of meager profits, how should companies “get out of the road” in the face of increasingly fierce competition in the cable market?

In fact, the profits path in the era of meager profits is nothing more than two. One is to maximize cost reduction within the company; the other is that companies and industries consider cost reduction, added value and resource control from a strategic perspective, and control costs. It is linked to the promotion of corporate and industry competitive advantages.

Innovation is a magic weapon for profit, and the meager profit era is no exception. Most of the low-profit products may be technologically identical, with little difference in quality and performance. However, these do not affect the innovation of the company. They may find new ideas in terms of processes, materials, appearance, production methods, marketing models, and management methods. Profit sources, cost control points, finding new market areas, new profit models, and thus profitability, in short, companies must shift from cost strategies to technology and service strategies, and focus on technological innovation and improved service delivery.

Of course, companies in the low-profit era must win, and maintaining a lower product cost is a must, so companies should adopt various methods to reduce product costs. From the actual situation of low-profit products, the quality of raw materials and the level of prices determine the cost of the company. One of the important factors. One of the characteristics of meager profit products is low product technology threshold, product quality, small difference in performance, and low profitability. Therefore, in such a situation, anyone who wants to break through technical difficulties, use low-cost materials instead of substitution, and rely on a single company to occupy a single market It's hard.

Over 90% of the entire cable industry in China is facing management lag. Management problems are not handled well. On the one hand, it will cause a sharp increase in production costs and squeeze profits. On the other hand, it will also lead to lack of cohesion of enterprises, which will cause serious obstacles to the development of enterprises and the growth of the industry.

The fundamental factors that determine the development of domestic wire and cable industry are not the vicious competition in the market, nor the rising cost of raw materials, but the key lies in the technical and management issues. Technology and management problems cannot be solved, and the advantages of wire and cable manufacturers cannot be reflected. To enter the high-end market, it is tantamount to trying to increase profitability.

Insiders call for not participating in price wars, avoiding vicious competition, maintaining basic wages in the same industry, participating in equal competition in quality and service, and improving the credibility of corporate credit management, so that the industry develops in an orderly, efficient and standardized manner and avoids Disorderly development brings about excessive competition and unfair competition. This is not only conducive to industrial upgrading and the improvement of industry profit levels, but also has far-reaching practical and historical significance for establishing a good image of the Chinese cable industry.

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