Wire and cable are indispensable basic equipment for transmitting electrical energy, transmitting information and manufacturing various motors, electrical appliances, and instruments. It is a necessary basic product in the future electrification and information society. It can be roughly divided into five categories of products: power cables, bare wires, communication cables and optical cables, winding wires, wires and cables for electrical equipment, etc. In addition, with the rapid development of China's shipbuilding, aerospace and military industries, and new energy sources such as nuclear energy and wind energy The revitalization of the industry, the required special cables have also become an important product category.
Wire and cable industry as China's basic industry, its products are widely used in various fields of the national economy, known as the "vessel" and "nerve" of the national economy. Wire and cable manufacturing has become one of the largest supporting industries in the national economy.
In recent years, the average annual growth rate of China's wire and cable industry has reached more than 15%. In 2007, the total industrial output value of the entire industry exceeded 400 billion yuan, far surpassing the United States and becoming the world's largest wire and cable producer.
However, although China is a large wire and cable manufacturing country, but it is not a strong manufacturing country, many enterprises still mainly produce power wire and cable products or civilian cable products with low technological content and low added value, resulting in low net profit. It's getting harder. According to industry sources, the average profit of ordinary cable companies is currently only 2% -5%, many companies are operating in low-profit, and even capital preservation seems difficult.
Many wire and cable companies quickly seize the market through price wars, and most of the small-scale private cable companies in China often produce fake and shoddy products, and the disorderly competition has been flooding the cable market.
In addition, due to changes in the external environment and market competition, the world's wire and cable industry has formed a monopoly pattern of several major giants. A large number of foreign brands such as Berry and Nexen have been seizing the high-end market with higher profits. In 2008, a global financial tsunami further aggravated the cable companies. Some cable companies that depended on investment income, due to the sharply lower copper prices in the international metal futures market, caused many companies to cash in high positions; some were export-oriented. The main cable manufacturer failed to receive orders or canceled orders, resulting in large-scale downsizing and production suspension.
What should wire and cable companies do? Should they continue to produce blindly with low profits and follow their fate, or should they change their ideas and concepts and accelerate the pace of enterprise transformation?
"We must transform, transformation is imminent." This is the strongest voice we heard when our IMSC Industrial Products Marketing Research Institute visited wire and cable companies or provided consulting training.
Wire and cable enterprise transformation strategy
So, how to transform in the end? IMSC Industrial Products Marketing Research Institute has given the following strategies, which may bring some in-depth thinking and help to enterprises preparing for transformation.
(1) Transformation to key industries. At present, many cable companies mostly produce power cables and civil cables. Due to the large market demand for these products, many companies are involved in this field, and the resulting competition can be imagined. As the saying goes, for enterprises, they would rather be big fish in small ponds than small fish in the ocean. Therefore, our company should take a long-term view, first understand the importance the country attaches to each industry, and then predict the future market capacity, so as to start researching products that meet the national key industries and industrial development needs.
For example, during the "Eleventh Five-Year Plan" period, China puts the development of urban rail transit in an important position. According to preliminary statistics, nearly 30 cities across the country have launched rail transit construction, with a total investment of nearly 600 billion yuan. There is also a huge demand for traction cables as products in the wire and cable industry. At present, although the traction power supply equipment has basically been localized, there are some key equipment that needs to be imported from abroad, such as wires, because rail transit has higher requirements on the wear resistance of wires, and copper wires cannot meet this requirement, so our Cable manufacturers can make sufficient articles on this, and enterprises have a lot of money.
Furthermore, with the release of industry plans such as UHV, smart grid, 3G network and other key national support and development, this is a great opportunity for the cable industry. Therefore, our company must deeply study the downstream industry, combine its own advantages, and march into key industries to reverse the current embarrassing situation.
(2) Product upgrade. Taking power cable manufacturing enterprises as an example, many companies are producing power cable products of 220KV and below. Although this low-voltage wire and cable product has a large market demand, the relative technical requirements are not too high, so the competition for similar products is fierce . Therefore, for some companies with funds and technical support, the transition from low-end products to medium-high-end products is a top priority.
Recently, the construction of UHV and smart grid as a national key project is in full swing, which is a big temptation for cable companies. If an enterprise can improve its production technology and equipment, and transform its original special production of low-voltage and medium-voltage cable products into high-tech, ultra-high voltage, ultra-high voltage and other high-tech content, its future profit space is self-evident.
(3) Compress costs, and ask management for an effect. Profits can be "digged out" of costs. Many wire and cable companies have realized this, but they have never done it. There are two main ways to reduce costs: one is to reduce production costs, and the other is to reduce sales costs.
Many wire and cable companies simply understand cost control as: "Avoid the occurrence of expenses or reduce expenses." These wire and cable companies are content to reduce consumption and reduce redundant staff, and even reduce the wages of first-line workers, thinking that this controls costs. In fact, otherwise, once an enterprise achieves a cost reduction by reducing the treatment of employees, it is likely to result in strong employee dissatisfaction and personnel turmoil; and if an enterprise tightens its money in product development and production, it will also New product development and product quality have stagnated. The most effective way to save costs is to carry out systematic and scientific planning and control. It is not a false statement to manage benefits. Taking the cost of sales as an example, we have to cut every sales process and manage it according to steps and procedures. The money spent must be spent, and no points should be spent.
(4) Technical cooperation or joint-stock cooperation with foreign companies. Well-known foreign companies have strong technical strength and product development experience. However, to survive in the Chinese market, the above two points alone are far from feasible. The key is to rely on channel and sales experience. Some large domestic companies may wish to free up some resources and channels to actively cooperate with foreign companies in all aspects, or jointly invest in research and development of products, or jointly build production lines, or engage in joint-stock cooperation. In short, without affecting the principle, anything can be done Sit down and talk.
Take the well-known cable company Baosheng Group as an example. They took advantage of more than 80 sales companies across the country. As early as the late 1990s, they actively demanded a breakthrough direction: In 1999, Baosheng Group compared with the world's largest cable manufacturer Rayleigh joint venture produces medium-voltage, high-voltage and ultra-high-voltage cross-linked polyethylene insulated cables, and then cooperates with other foreign brand companies to integrate resources and achieve mutual benefits. The previous year, the Baosheng Group and the well-known Italian transformer core company Rova Company jointly invested 8 million euros in a joint venture to build a project. At present, the products have been produced and used by users, and have been recognized by users.
(5) OEM production and processing, saving resource costs. Due to factors such as production lines and personnel costs, many wire and cable companies dare not blindly accept larger and more orders, which has led to a shortage of operating rates in the booming industry. Therefore, enterprises may wish to try to cooperate with OEM manufacturers on behalf of production and processing, provide them with appropriate technology and management, and let them provide production and processing services for enterprises.
In short, only by emancipating their minds, relying on products, technology, management, and seeking all-round cooperation with others, and actively expanding transformation and development channels can cable companies be invincible in the fierce market competition.
