LED industry status and sharing of six black holes to eat corporate profits

The LED industry is in a period of steady development. At present, the global LED industry can be divided into four regions. First, the European and American regions, with general lighting as the main direction, the product features high reliability and high brightness. Second, Japan is leading the way in general lighting and backlight display, and takes into account general lighting, automobiles, mobile phones and televisions. The third is Taiwan and South Korea, with backlight display as the main line, including mobile phones, TV, computer backlights, large shipments but low gross margin. The fourth is mainland China, whose main business is outdoor display, advertising screens and lighting.

At present, the LED display industry has been highly concentrated in the industry, the technology is becoming more mature, the prices of raw materials tend to be transparent, and the prices of some raw materials are rising. At the same time, downstream customers are becoming more mature. The purchase of a display screen can basically infer the product materials through the manufacturer's quotation, because low-priced products are difficult to achieve high-profile screens anyway.

Less profit margins have become the bottleneck for development of the entire industry. At the same time, due to the increasingly fierce market, most industries have entered the buyer's market with oversupply, and some companies in the industry chain have miscalculated the market and blindly expanded production, resulting in many capacity cannot be digested, even if the price of raw materials rises again, the terminal products The price increase is also in the foreseeable future.

Of course, with the successful transformation and transformation of some enterprises, they are no longer limited to finding profits from products, but constantly learning to realize profit conversion from various aspects such as brand value, business reputation and industrial chain optimization. However, there are still many companies in the industry that have gone through the process of transformation and upgrading. The profit of the products is low, and they are still consuming their own profits by other "black holes." Let's share with you the six black holes that eat corporate profits. Lets come look:

Pursue performance growth and ignore profit growth

Some manufacturing companies are often very concerned about how many scales, how many technical equipment, how much capacity, and how much sales, but when they understand the core issue of profit, they shake their heads again and again. Some of them did not even have 3% of profits, even arrived. On the verge of loss, this is the case, and it is still blindly expanding the market and pursuing sales growth.

There are some enterprises in the country, holding the infinite pursuit of sales, and slamming advertising investment, the result of the capital chain has been interrupted, and it has died down. This kind of sales, which only look at the rising sales, do not pay attention to profits, and often do a lot of things, but in the end they crash down...

Missing service, taking away profits

The quality service of many enterprises is just a blind person. Once they call to find the service personnel, they immediately reply unclear and don't know. This matter has nothing to do with me. Let you find someone else... such a product, next time you still Will you choose to buy?

Of course, some employees may lack corresponding training and supervision. Some employees even think that doing service work is a low-level job. This kind of mentality and concept leads to a large number of customers losing business due to poor service, turnover and profit. The decline will become inevitable.

Employees are perfunctory and eat profits

The work style of the staff is dragged down and the spirit is sluggish. This is seen in many state-owned enterprises and private enterprises. For example, a famous hosiery enterprise in Yiwu, Zhejiang Province, because it does not pay attention to the construction of the team, the employees of each department are arguing with each other, and the efficiency of the work is very low. The employee signed a ten-year labor contract. This seemingly good contract also added several additional conditions: once resigned, he was not allowed to work in the knitting needle industry for three years, and he was required to pursue legal responsibility.

Some employees have developed a style of muddy, and they have nothing to do with suspicion. The dealers call to replenish the goods. No one is in charge. The salesmen of the investment are not willing to go out to run the business because many of the newspaper’s accommodation travel expenses. Delayed reporting, although the company is in the industry, because of this reason, a large number of franchisees lost, and some regional markets in Shandong and other places have been handed over to the rising star. The boss is busy with listing money and real estate, and may not care about these losses. However, such management is not good, and the losses caused by internal consumption will affect the market and partners, and the impact will hinder the healthy development of the company.

Product defect, give up profit

Many companies have good quality products, but they ignore some easy-to-detect details. For example, a famous juice drink, the various types of juices that occupy the best position of supermarket shelves, but PET packaging products have a common feature, the bottle cap is very difficult Open, especially a 10% orange juice drink, the bottle mouth is very big, but the bottle cap takes a lot of effort to open, and if you accidentally splash the juice on the clothes, I often encounter the brand juice In this case, the purchase of other brands is rare, and may not be an individual phenomenon.

The “small” problem of products like this is not uncommon. If there are suitable substitutes, will the loyal consumers of these brands convert their brands?

Feel free to launch price wars, promotion wars, burn off profits

The market economy launches price wars. Advertising warfare and promotion warfare are commonplace commercial behaviors, but many companies have evolved tactical behavior into daily behaviors, long-term advertising bombing, price diving, and once the frequency of advertising broadcasts is slightly reduced, the terminal The goods are unsalable, and once the promotion period is over, it will be sold for a few months.

So continue the above behaviors, drive sales, the company is caught in such a vicious circle of circles can not extricate themselves, we must know that the company has fallen into blind comparison and imitation follow, lost direction, huge investment, but little effect, every day How long can it last after being exhausted and falling into the homogenized Red Sea?

Inventory backlog, swallowing profits

Many companies have good sales and profit conditions, but because the products have obvious off-season seasons, they bring a lot of inventory, and the indigestible stocks take up a lot of money and cannot be put into re-production.

In this way, the profit is actually only on the book. In order to digest the inventory, the price is discounted and sold. Even so, there are still many backlogs that cannot be digested. In short, whether the production and demand, the product itself is marketable, affects the profitability of the company.

All these kinds of enterprises, the profits of enterprises are getting less and less, the winter is coming, it is even worse, the enterprise faces unprecedented test and suffering, no thick accumulation of winter, how to survive the cold winter, the core of the enterprise is profit, pursue others Putting the cart before the horse is now the core issue of thinking about how we can improve our profitability.