Five major constraints in the hardware industry surface prosperity inside the "great changes"

In the marketing practice of hardware and electromechanical industry that I have experienced for more than ten years, I found a phenomenon that this industry has always been vibrant on the surface. Every enterprise seems to be in short supply, but behind the surface prosperity, the industry The pattern has been quietly changing. These changes are mainly reflected in three aspects. On the one hand, the concentration of the industry is improving, and in the second aspect, the process of product homogenization is gradually improving. In the third aspect, the level of consumer consumption is gradually increasing.

However, the industry still has a long way to go compared with the high concentration of advanced industries. The enterprises that are temporarily in the forefront have not yet reached the stage of winning and losing. The reason, I think there are the following aspects:

First, the "one low and two high" industry characteristics, resulting in low-level competition in the industry will continue to be intense. Due to the low barriers to entry, both manufacturers and distributors continue to have a large influx of potential entrants. Coupled with the temporary enterprises, due to the limitations of the quality of the boss, lack of talent, lack of innovation, many companies have encountered the ceiling of growth, and finally the boss is exhausted, and the company is in a dilemma. The steady stream of new entrants, holding a "barefoot is not afraid to wear shoes" posture and "a fear of suffering but not afraid of compensation" mentality gradually eroded the predecessors' sites. This drama will be staged in the past, present and future. Just as the ancients said: After the waves of the Yangtze River push the waves, a new generation of old people for the old.

Second, because the big corporate brands are basically divided up, those new generations of sellers must find new brand agents, which objectively creates huge market demand, and at the same time objectively encourages manufacturers to continue to produce new brands, or It seems that new manufacturers can always find agents.

Third, with the progress of the times, the quality of the upstream supporting enterprises of the entire hardware and electromechanical industry is also constantly improving, and the homogenization process is accelerated objectively.

Fourth, the company that is temporarily leading the rankings is a big and comprehensive model, and the cost is high. Taking power tools as an example, the leading companies are basically doing all but copper wires, commutators, bearings, standard parts and raw materials. In the short run, it is beneficial in ensuring product quality, but from the long-term perspective of more and more segmentation of social division of labor, it is not conducive to the sustainable development of enterprises. In addition, the financial costs and human resource costs of large enterprises are incomparable to small enterprises. If a company cannot quickly convert costs into economies of scale, market position will eventually be unprotected. From the point of view of the seller, as the market changes, many sellers expand their projects independently or involuntarily. Today's dealers can't wait to do all the products in the industry, but many of them suffer from indigestion, and they have the meaning of “wide variety and thin harvest”.

Fifth, the industry's sales are prevalent, and it has become a dysentery in the industry. Since retailers in this industry are basically small businesses at the beginning, they can basically rely on upstream support to develop. An indisputable fact is that a seller with annual sales of about 20 million yuan should receive one or two million yuan; a manufacturer with annual sales of about 30 million yuan should basically receive 10 million receivables. As long as the management is slightly careless, the company will be dragged down and dragged down by the receivables, let alone the innovation and development.

Hardware and electromechanical enterprises face many challenges. In the end, where to go, I look forward to discussing them with people of insight.

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