The existence of price wars in the LED light industry is justifiable, enterprises should face up to price wars.
At present, the frequent outbreak of price wars in my country's LED industry is not accidental, such as led floodlights, street lights, highbays ect, but is determined by the current development environment and development stage of the industry, and it is inevitable. The price war in the LED industry, with price reduction as the main feature, is a customary means for LED companies to increase their market share in the pursuit of profit maximization under the current industrial environment with fierce competition. If LED companies want to survive and develop in the cruel market competition environment, it is necessary to seize market share, and price war, as the most effective and most effective means to seize the market, is also reasonable to be favored by LED companies.
The price war in the LED display industry is an inevitable product of the industry's development to a certain stage. The price war is conducive to consumers and can quickly promote market expansion. At the same time, it can eliminate a group of inferior product manufacturers and those seeking short-term benefits, and prevent repeated investment. With the reallocation of social resources and the reallocation of social benefits, many weak and small enterprises will withdraw from market competition or be merged and acquired. In fact, every round of fierce price war has accelerated the process of reshuffling the entire LED industry.
In recent years, my country's LED industry has developed rapidly and its scale has continued to expand. More and more companies have begun to set foot in the LED industry, and industry competition has become more intense. Government financial subsidies promote the rapid development and expansion of the LED industry. The product technology is becoming more mature, scale and specialization have further reduced the production cost of products. Good quality and low price are the kingly way, and the homogeneity of products is serious... These factors all move LED The price trend of the product has caused it to fall all the way, coupled with the large number of companies in the industry, the market competition is very cruel, and it is not difficult to understand that price wars are frequent.
It is precisely because of the emergence of price wars that LED display products have almost cut their prices from sky high, but the decline in prices has further promoted the popularity of LED display products, but why do we now hate price wars so deeply? In fact, it is more of this market. The competitive situation has changed, from the original blue ocean market to the blue ocean market, but the price war model is still the old routine.
Looking at the development of price wars, we can find that most of the price wars in the blue ocean market are accomplished by creating new categories and substantially increasing prices and increasing gross profit. The price war in the Red Sea market is accomplished by drastically reducing prices, increasing sales, and increasing total profits. In addition, Blue Ocean's price war can enhance the company's multi-level strategy and brand, and more importantly, it can surpass competitors, uniquely enjoy the long-term share of this category with high gross profit and an industry leader. The more important thing about the Red Sea price war is that it can directly hit competitors and cause them to die. However, the greater the pressure of competition, the more thankless it is. Therefore, the price war in the LED display industry has developed so far, and the price war has become more taboo, but the price war is not so easy to solve.
The LED industry is maturing and returning to rational value war will coexist with price war
As the LED display industry matures and returns to rationality, major companies in the industry are increasingly looking forward to staying away from price wars. But it can only be said to be anticipation, and it cannot completely break the price war for the time being.
It cannot be denied, although the price is only the appearance of the product and tactics, and the value is based on the strategic level and the key factor that affects the growth of the brand. Looking at past business wars, low-cost competition will inevitably lead to low-level services. With the improvement of people's living standards, consumers will increasingly pursue taste. At this time, brand factors will expand. Therefore, the value war is far more important than the price war. , And the strategy of focusing on value enhancement is the way for LED display companies to gain core competitiveness. This is undoubtedly the truth that the industry understands.
In addition, the price war has also prompted LED companies to start thinking about how to improve their core competitiveness based on their own conditions.
In order to win a place in the cruel market competition, many LED companies are racking their brains. Considering that price competition has always been a common operating method used by LED companies, coupled with the slowdown in China's economic and consumption growth and the tightening of national policies. Although the survival of the fittest is the inevitable law of the development of all walks of life, the industry reshuffle caused by the price war in the LED industry cannot be accomplished overnight. It takes a certain time. Therefore, the price war will continue in the next few years, and it is not ruled out that it will intensify However, it will eventually return to rationality as the LED industry matures.
When the LED industry transitions from the outbreak to the mature stage, the number of companies left in the industry will become suitable, and then LED products will have relatively stable prices and profits. Before this, LED companies learned to face price wars rationally It is necessary.
Use the advantages of innovation and scale to achieve a balance between price and value
The “price war” is not a day’s cold. In order to solve it, in addition to the efforts of the enterprise itself, the entire industry must also respond one after another, put an end to the “price war”, and establish a gradual shift to the “brand war” and “value war”. Consciousness. At present, price wars will continue to remain in the market. Therefore, how to use innovation and scale advantages to reduce costs and improve the cost-effectiveness of products has become the key to seizing the market. Only by reaching an optimal balance between value and price can the value of the product be enhanced.
As all walks of life enter the era of meager profits, low-cost marketing emphasizes stability, pragmatism, and safety. The essence of its behavior is to promptly discover potential and untapped opportunities in the relative relationship between input and output, and Take full advantage of this opportunity flexibly.
At present, many companies have begun to quickly catch up through the "differentiation strategy", and the traditional marketing strategy that relies solely on price competition has appeared to be "powerless". Industry insiders have begun to realize that the LED display industry has passed the low-level stage of large-scale elimination. Price war is no longer the main business method of enterprises, but has transformed to the development of mid-to-high-end products, and upgrades with technology to satisfy consumers New demand is the core of the strategy.
We need to firmly believe that when the profits of many companies decline, the profits of companies supported by technology can become popular. In the future, as an LED display company, it cannot simply provide some splicing modules, but should upgrade to provide customers with a complete set of solutions. This is also the "service" elements that companies need in the future, such as: pre-sale engineering design, Installation, technical guidance, such as providing bidding consultation, marketing and operation training to channel engineering companies, currently some LED display manufacturers have awakened in the "service" elements, but still lack system planning, implementation strategies and Organizational guarantee. From a single product to a complete set of solutions, enhancing product value can effectively increase customer stickiness and loyalty, and break the price theory.
All in all, price wars can accumulate users in a short period of time, but the enhancement of brand value brought about by value wars, as well as enhanced user experience and user trust in the brand are more valuable. From price war to value war, not only is the external competition of LED display companies, but also a booster for industry upgrades. As a company, should it continue to focus on the present and be greedy for the moment, or look to the future and strive to be the industry leader? LED screen companies should have the answer.
