The newspaper's special contributor, Chen Jun, Managing Director of Zhongshan Yihe Jiye Lighting Co., Ltd. Recently, the rising prices of raw materials such as iron, steel, aluminum and copper in the lighting industry caused widespread and substantial increase in production costs. The price increase of products, as well as the rise and fall of enterprises and changes in the pattern that will be triggered by this, have become the focus of industry colleagues. Looking at the entire lighting industry, commercial lighting is the first to bear the brunt of this wave of ups and downs. In the face of the surging tide, how can the majority of industry colleagues highlight the encirclement? At the invitation of "Guzhen Lighting", I wrote this article and would like to share with you the pressure and motivation from price increases.
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The rising price of raw materials does not diminish the core point of view: The price increase caused by the cost of raw materials will continue to be generally said. Under the conditions of the market economy, the reasons for product price increase are basically the following three categories: The first category is Production cost factors, the second category is the supply and demand relationship, and the third category is the speculative behavior. Or because the two types of these three types work together, or even the three are combined, the primary and secondary are different.
In recent years, the raw materials of the lighting and lighting industry have continued to increase substantially, which is a well-known fact. Behind this fact, there are profound and complicated reasons. Tracing back to the source, the author believes that the overall situation is mainly caused by two factors: production cost factors and speculation.
Production cost factors mainly include material cost factors, especially bulk raw materials such as iron, steel, aluminum and copper; for example, the price of steel has increased by 2/3 compared with the same period of last year, and it has also shown a continuous upward trend, rising The direct reason is that the international long-term iron ore trading price has reached a one-time increase of 65% this year.
Such a large increase in costs is not possible for the steel company to digest internally. In other words, it can only be dealt with by means of price increases as the main means. In fact, a regular economic conclusion is that in the three major categories of product price increases, the relationship between supply and demand and the speculative behavior can be triggered by financial, administrative and other means, in a relatively short period of time. Solved within, or basically solved. However, the price increase caused by the production cost factor often has no effective solution, and it is even less likely to be resolved in the short term.
We know that the Chinese government, the top leaders of the country and related enterprises in China have made positive, unremitting efforts and great efforts to solve the problem of high price and excessive increase in the long-term iron ore trading in China. The results are not satisfactory. The reason is that the Western world saw the rapid rise of China's economy and became jealous, so its government and capital united to monopolize and control the upstream mines, and then through the price increase to cruelly deprive Chinese companies of profits, to suppress the international competition of Chinese companies. Forces - In other words, they are using such means to snatch the profits of China's huge economic machine, which is equivalent to taking a pipe into the heart of China's economic machine to suck blood. In particular, after the US subprime mortgage crisis, there was a large amount of international hot money from the real estate market flooding into the bulk raw materials market, hyping up and making waves, fueling the price of raw materials that were already on the rise.
From this one, it can be seen that the general trend of rising prices of raw materials such as upstream will not stop in the short term, and the prices that have risen will not fall back to the original level in the short term.
"Two highs" is bound to replace "two lows"
Core point of view: Today's domestic lighting industry is completely in the market economy environment, in the industry under the conditions of free competition, "two high" instead of "two lows" is the norm.
In addition to the above factors, the reasons for the increase in costs include political and economic reasons at home and abroad, such as the increase in labor costs directly caused by the new Labor Contract Law, and including international crude oil prices and domestic agricultural and sideline products. Other cost factors such as prices have risen sharply, and the costs of direct and indirect expenses such as freight rates have risen sharply, continuously, and inevitably.
In addition, there is such an economic law is also a reason that must not be ignored: in the market economy environment, under the conditions of free competition, products often exhibit a "two high" change law. The first is that the price of the category is generally on the rise. The higher, the second is that the quality of the category is generally higher and higher. That is to say, in the short term, the price of a certain variety will be lower due to the lower competition, and the price will be reduced to a considerable extent, which may also lead to a different degree of quality degradation. However, "two low" (low price, low quality) products will soon be eliminated by the market, or the company feels unprofitable and give up. In short, the result is that the "two low" products have been replaced by the new "two high" products, so the cycle has risen.
In today's domestic lighting and lighting industry, it is entirely in the market economy environment, in the industry under the conditions of free competition, "two high" instead of "two lows" is the norm. However, some people don't pay much attention or don't know it.
Therefore, the price increase will become the best choice for most companies in the lighting industry. This kind of ending is completely nothing strange, and it will come sooner or later. In a certain sense, it can also be understood that the price increase of this raw material is only a fuse, which objectively played a role in detonating the concentration increase of most enterprises in the industry.
The core view of differentiated management is that the next decade will be the “golden decade†of modern commercial lighting, and in 2008, it will be the golden first year of this next “golden decadeâ€.
The market is like a very cruel teacher. When you enter the door, you will be allowed to take the test directly, but you will not give you the opportunity to preview. It can be said that this price increase is such a teacher.
Obviously, the enterprises that produce the “two low†products with the price of raw materials and no added value of the brand should have much less ability and space to deal with the pressure caused by such price hikes than the mid-to-high-end brand enterprises. many.
In the field of commercial lighting, imitation companies that follow the current leader brand will likely encounter such a dilemma: in the face of such price hikes, followers are under greater pressure to increase prices and weaker in digestion. . More up, the cost-effective advantage of the leader brand is reduced, no, or even the reverse - the price of the leader brand products is better, then the followers will soon lose the market; less, less digesting costs However, the profitability is reduced, it cannot be effectively accumulated, and the distance from the current leader brand is getting bigger and bigger, and there will be no prospects.
In addition, the same product style and category, but also face the rapid growth of the leader brand to the follower market space Taishan top-squeeze squeeze, the market space is getting smaller and smaller, more and more difficult to do, the same business volume of operating costs Higher and higher. It is no exaggeration to say that such a situation is the "Valley of Death" of business operations.
In short, there is only one conclusion - this is also proved by countless enterprise practices at home and abroad. It is also the conclusion that has already been written into textbooks: either as a follower, sooner or later into this "difficult dilemma", it is difficult to extricate itself; The road (as opposed to the current leader brand) is unique and has become the leader brand in the new market.
The modern commercial lighting represented by Yuhe is mainly made of aluminum, which is obviously different from the current leader brand. Although modern business enterprises are also facing the pressure of rising raw materials prices, this pressure cannot suppress many consumptions. The market pulls from the growing demand for such specialty products (segmented commercial lighting market). In 2008, we clearly felt that the spring of modern commercial lighting dominated by aluminum products came quietly.
If 1997-2007 is the "golden decade" for the development of commercial lighting as the symbol of the rise of the current commercial lighting leader brand, then it can be expected that the next decade will be the "golden decade" of modern commercial lighting, and In 2008, it was the golden year of the next Golden Year. (The author’s point of view does not represent the position of this newspaper)
Editor in charge: Lu Zuhui layout design: Liu Wen Art Director: Peng Anjun
The rising price of raw materials does not diminish the core point of view: The price increase caused by the cost of raw materials will continue to be generally said. Under the conditions of the market economy, the reasons for product price increase are basically the following three categories: The first category is Production cost factors, the second category is the supply and demand relationship, and the third category is the speculative behavior. Or because the two types of these three types work together, or even the three are combined, the primary and secondary are different.
In recent years, the raw materials of the lighting and lighting industry have continued to increase substantially, which is a well-known fact. Behind this fact, there are profound and complicated reasons. Tracing back to the source, the author believes that the overall situation is mainly caused by two factors: production cost factors and speculation.
Production cost factors mainly include material cost factors, especially bulk raw materials such as iron, steel, aluminum and copper; for example, the price of steel has increased by 2/3 compared with the same period of last year, and it has also shown a continuous upward trend, rising The direct reason is that the international long-term iron ore trading price has reached a one-time increase of 65% this year.
Such a large increase in costs is not possible for the steel company to digest internally. In other words, it can only be dealt with by means of price increases as the main means. In fact, a regular economic conclusion is that in the three major categories of product price increases, the relationship between supply and demand and the speculative behavior can be triggered by financial, administrative and other means, in a relatively short period of time. Solved within, or basically solved. However, the price increase caused by the production cost factor often has no effective solution, and it is even less likely to be resolved in the short term.
We know that the Chinese government, the top leaders of the country and related enterprises in China have made positive, unremitting efforts and great efforts to solve the problem of high price and excessive increase in the long-term iron ore trading in China. The results are not satisfactory. The reason is that the Western world saw the rapid rise of China's economy and became jealous, so its government and capital united to monopolize and control the upstream mines, and then through the price increase to cruelly deprive Chinese companies of profits, to suppress the international competition of Chinese companies. Forces - In other words, they are using such means to snatch the profits of China's huge economic machine, which is equivalent to taking a pipe into the heart of China's economic machine to suck blood. In particular, after the US subprime mortgage crisis, there was a large amount of international hot money from the real estate market flooding into the bulk raw materials market, hyping up and making waves, fueling the price of raw materials that were already on the rise.
From this one, it can be seen that the general trend of rising prices of raw materials such as upstream will not stop in the short term, and the prices that have risen will not fall back to the original level in the short term.
"Two highs" is bound to replace "two lows"
Core point of view: Today's domestic lighting industry is completely in the market economy environment, in the industry under the conditions of free competition, "two high" instead of "two lows" is the norm.
In addition to the above factors, the reasons for the increase in costs include political and economic reasons at home and abroad, such as the increase in labor costs directly caused by the new Labor Contract Law, and including international crude oil prices and domestic agricultural and sideline products. Other cost factors such as prices have risen sharply, and the costs of direct and indirect expenses such as freight rates have risen sharply, continuously, and inevitably.
In addition, there is such an economic law is also a reason that must not be ignored: in the market economy environment, under the conditions of free competition, products often exhibit a "two high" change law. The first is that the price of the category is generally on the rise. The higher, the second is that the quality of the category is generally higher and higher. That is to say, in the short term, the price of a certain variety will be lower due to the lower competition, and the price will be reduced to a considerable extent, which may also lead to a different degree of quality degradation. However, "two low" (low price, low quality) products will soon be eliminated by the market, or the company feels unprofitable and give up. In short, the result is that the "two low" products have been replaced by the new "two high" products, so the cycle has risen.
In today's domestic lighting and lighting industry, it is entirely in the market economy environment, in the industry under the conditions of free competition, "two high" instead of "two lows" is the norm. However, some people don't pay much attention or don't know it.
Therefore, the price increase will become the best choice for most companies in the lighting industry. This kind of ending is completely nothing strange, and it will come sooner or later. In a certain sense, it can also be understood that the price increase of this raw material is only a fuse, which objectively played a role in detonating the concentration increase of most enterprises in the industry.
The core view of differentiated management is that the next decade will be the “golden decade†of modern commercial lighting, and in 2008, it will be the golden first year of this next “golden decadeâ€.
The market is like a very cruel teacher. When you enter the door, you will be allowed to take the test directly, but you will not give you the opportunity to preview. It can be said that this price increase is such a teacher.
Obviously, the enterprises that produce the “two low†products with the price of raw materials and no added value of the brand should have much less ability and space to deal with the pressure caused by such price hikes than the mid-to-high-end brand enterprises. many.
In the field of commercial lighting, imitation companies that follow the current leader brand will likely encounter such a dilemma: in the face of such price hikes, followers are under greater pressure to increase prices and weaker in digestion. . More up, the cost-effective advantage of the leader brand is reduced, no, or even the reverse - the price of the leader brand products is better, then the followers will soon lose the market; less, less digesting costs However, the profitability is reduced, it cannot be effectively accumulated, and the distance from the current leader brand is getting bigger and bigger, and there will be no prospects.
In addition, the same product style and category, but also face the rapid growth of the leader brand to the follower market space Taishan top-squeeze squeeze, the market space is getting smaller and smaller, more and more difficult to do, the same business volume of operating costs Higher and higher. It is no exaggeration to say that such a situation is the "Valley of Death" of business operations.
In short, there is only one conclusion - this is also proved by countless enterprise practices at home and abroad. It is also the conclusion that has already been written into textbooks: either as a follower, sooner or later into this "difficult dilemma", it is difficult to extricate itself; The road (as opposed to the current leader brand) is unique and has become the leader brand in the new market.
The modern commercial lighting represented by Yuhe is mainly made of aluminum, which is obviously different from the current leader brand. Although modern business enterprises are also facing the pressure of rising raw materials prices, this pressure cannot suppress many consumptions. The market pulls from the growing demand for such specialty products (segmented commercial lighting market). In 2008, we clearly felt that the spring of modern commercial lighting dominated by aluminum products came quietly.
If 1997-2007 is the "golden decade" for the development of commercial lighting as the symbol of the rise of the current commercial lighting leader brand, then it can be expected that the next decade will be the "golden decade" of modern commercial lighting, and In 2008, it was the golden year of the next Golden Year. (The author’s point of view does not represent the position of this newspaper)
Editor in charge: Lu Zuhui layout design: Liu Wen Art Director: Peng Anjun
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