Focus makes you powerful! Under the new situation, accurate positioning of LED companies is the key

For LED companies, the word "positioning" is both familiar and unfamiliar. We are familiar with it because the companies Sunlight Technology and Zhongxiang Innovation, which collapsed one after another due to positioning errors in July last year, have sounded the alarm for us; while we are unfamiliar with them because most companies are just joining in the fun and have not done in-depth research or self-examination. Therefore, in the LED industry, lack of positioning or positioning errors have become commonplace. As a result, many companies have fallen into the embarrassing situation of being "on the verge of bankruptcy" or "riding a tiger with difficulty."

So, what is the essence of positioning? Simply put, the positioning of an enterprise is to use its products and brands to shape its unique personality, culture and good image in the minds of consumers based on customer needs, and to occupy a certain position. Therefore, generally speaking, the process of positioning a company is as follows: conduct market research, analyze market conditions, and gain insights into consumer needs; then understand its own advantages and find the correct market positioning; and finally produce products and build brands to expand market share. However, many of our LED companies first produce products and then consider market positioning, which is obviously putting the cart before the horse.

As we all know, the LED industry is an emerging industry. In the early days, high profits and low barriers to entry attracted a large number of companies to settle in. As the number of companies entering the industry increases, problems such as overcapacity, weak demand, product homogeneity, and fierce competition have gradually emerged. The situation of "more monks and less rice" has brought the LED industry from the era of huge profits to the era of meager profits. However, many of our LED companies are too ambitious, trying to get rich overnight through one or two projects, so they aggressively expand their production lines and expand the industrial scale without conducting in-depth market research. At the same time, production management cannot be planned, organized, and coordinated, resulting in low production efficiency, delayed orders, and uneven quality. As a result, whenever there is a "turbulence" in the industry, companies will be heavily in debt, products will be piled up, and the capital chain will be broken at the first touch. Bankruptcy is inevitable. It is understood that almost all of the companies that have closed down in recent years have blindly expanded production.

Some companies blindly follow the trend, which is the so-called "herding effect". They like to follow others and follow what others do, regardless of whether there may be wolves ahead or better grass not far away. For example, some companies neither research the market nor analyze trends, but blindly follow other companies to play with concepts and follow the latest trends. Just imagine, when entrepreneurs get together to discuss "What is the most popular product this year, and which company's product is good? Let's buy a few for reference and strive to make a 'breakthrough' on this product." When homogeneous products are already everywhere, prices can only drop again and again.

There is nothing wrong with the "herd effect", but blindly copying the experience of large enterprises regardless of their own technical and financial limitations, and having the same positioning as large enterprises, the result is of course the same as the southern orange and the northern orange. According to industry insiders, the fundamental reason for the collapse of Thunderstar Optoelectronics, which was only established for three years, was that it copied the experience of large companies and focused on mid-to-high-end products without considerable financial and technical support.

In 2016, there will be difficulties in the LED industry, but the future is bright. So, under the new situation, how can LED companies "set things right" and position themselves accurately?

1. Conduct market research and analyze market demand

Conducting market research is the first step to accurate positioning. Currently, due to the increasing downward pressure on the domestic economy and the global economic downturn, the overall growth rate of the LED market has slowed down; moreover, after several years of rapid development, my country's LED industry is close to saturation, and problems such as overcapacity and fierce competition have become increasingly prominent. In addition, industry reshuffles and mergers and acquisitions have become the norm, and the situation of the big player Evergrande has begun to emerge, and the living space of small and medium-sized enterprises will be further squeezed. It is said that those who understand current affairs are heroes. Therefore, enterprises should follow the development trend of the entire industry, be far-sighted, assess the situation, and avoid blind expansion of production. Only by integrating one's own development with the development of the entire industry can we go forward in the long term.

2. Find your own positioning and focus on market segments

Liu Chuanzhi, President of Lenovo Group, once said when talking about corporate development: "Having an accurate and suitable positioning for the company is an important factor for us to survive and gradually prosper. Because only by combining the industry and industrial development status and achieving accurate company positioning can we have high aspirations, achieve the goals step by step, and ultimately achieve the long-term development of the company."

Industry leaders such as Cai San, marketing director of Unilumin Technology, Jiang Xiangrong, general manager of Chip Optoelectronics, and Tang Huijun, general manager of Decai Optoelectronics, have also said: "In order to survive and develop, companies must find their own positioning and specialize in market segments."

And Lixiang Huike, which is famous for its creative display screens, tells us with practical actions the importance of being determined to innovate, focusing on market segments, and insisting on not taking the ordinary path. According to reports, in the first half of 2015, Lixiang Huike had steadily earned more than 100 million, an increase of 20% compared with the same period.

Therefore, enterprises must give themselves a clear positioning, be clear about what they can and cannot do, abandon those ideas that seem very profitable but are unrealistic, develop rationally, concentrate limited resources and energy, stick to a certain market segment, and do their best to become a leader in this field. In this way, when others think of you when they see this product, you are already more than half successful.

3. Adhere to independent innovation and develop differentiated products

At present, the LED industry environment is not very prosperous, price wars are intensifying, and homogeneous products with low technical content abound. Therefore, when conventional products are no longer profitable, only differentiated products can emerge and find a bright road. The research and development of differentiated products cannot be separated from the innovation of enterprises. Therefore, enterprises must first increase capital investment, increase research and development of new products, and increase product added value; second, they must make breakthroughs and innovations in technology, form their own characteristics, and create independent core competitiveness.

4. Establish brand awareness and focus on brand building

Brand is an intangible asset of an enterprise. In today's era of brand competition, countries rely on brands to revitalize, markets rely on brand integration, and companies rely on brands to survive. However, due to the long cycle and difficulty of brand building, many small and medium-sized LED companies have talked about brand changes. In recent years, the domestic market has been saturated, and the cake has become smaller and smaller. Many companies have held high the banner of "survive first, develop later", which makes companies have no time to consider brand building.

Therefore, companies must establish brand awareness, adhere to the principle of quality first, and use good products to impress customers, win their trust, and thus establish solid customer relationships. Secondly, with the rapid development of the Internet, the channels for brand building have become diversified. Companies must seize opportunities, increase investment, and make full use of the current Internet platform to promote their brands and build their own brands from a high-level overall perspective.

In the future, driven by mergers and acquisitions, the technological advantages and scale advantages of leading companies will become increasingly prominent. Therefore, when companies are looking for a path to survival and development, they may as well move with the "market" on the basis of "seeking stability first and then developing", constantly adjust their development strategies according to market changes, find their own "fulcrums", and create unique competitive advantages in order to develop steadily in "chaotic times".