LED industry "group army" VS "Eighth Route Army", which one can surprise and win?

In the process of integration and mergers and acquisitions in the LED industry, some LED companies have formed a large scale, which we call "group armies" for the time being. In contrast, there are still many "Eighth Route Army" in the "four sides" of the LED industry chain and in the "all directions" in various regions. They are small, medium and micro enterprises.

I don’t know when or who made the conclusion. There is always a view that “the Chinese market does not need so many LED companies” to explain the mergers, acquisitions and bankruptcy cases in the LED industry. "The Chinese market does not need so many LED companies." The first ones to bear the brunt are LED small, medium and micro enterprises, which is equivalent to a death sentence for them. This view is wrong! This erroneous view only sees the superficial "number" of mergers, acquisitions and bankruptcies, and fails to grasp the essence of "industrialization." This misleading view has caused excessive panic in the industry!

The "Group Army" of large enterprises is enviable, but the "Eighth Route Army" of small businesses also has its own advantages. As many LED CEOs of large companies said, "When a company reaches a certain scale, it feels more difficult to develop. It is not as easy to develop as a small business. Small businesses are small in size and can easily find a place in the market and accumulate strength and gradually grow; small businesses are small in size, flexible in approach, and have strong adaptability and rapid response to market changes."

In fact, as long as it is combined with their own actual conditions, strategic positioning is accurate, and tactics are used appropriately, both the "group army" of large enterprises and the "Eighth Route Army" of small enterprises can fight a good battle. Big fish can eat small fish. However, isn't it very clear in Chinese history that the "Eighth Route Army" defeated the "Group Army"?

Part 1 "Group Army" seizes market opportunities on a large scale

In recent years, LED companies have adopted a variety of methods to seize market share, and large-scale enterprises have relied on technological advantages and cost advantages to seize a larger market share. When an enterprise reaches a certain scale, its advantage is that its ability to resist risks will generally increase. Therefore, whether it is the current integration cooperation between upstream and downstream enterprises or horizontal mergers and acquisitions, they are all aimed at increasing the scale of production capacity.

Scale also drives down costs. Today, when cost optimization is particularly important, LED giants have adopted large-scale production methods to amplify small profits to the extreme. The LED industry is moving step by step towards the era of meager profits. In fact, in a truly mature industry, small profits are the norm. A company's profits are not earned through huge profits, but through the accumulation of many small profits, which is the so-called benefit of scale.

However, large enterprises cannot be blindly optimistic about their own "scale" and must correctly understand "scale". "Scale" means not only "large volume", but also "high technology, diversified industries, multiple series of products, high quality, and good services." While expanding production scale, we should continue to enrich product series and optimize and upgrade product technology to stabilize our customer base and maintain and enhance our market position.

Part2 Doesn’t the Chinese market need so many LED companies?

First, the sentence "The Chinese market does not need so many LED companies" has a specific usage environment.

For example, in the field of chips, we hope to make high-quality, world-leading "Chinese chips". Only large companies with large scale and strong technical capabilities can do this well.

Second, the number of enterprises in the upper, middle and lower reaches of the LED industry chain should be pyramid-shaped. There are more enterprises in the midstream than in the upstream, and there are more downstream companies than in the midstream. Only in this way can the pyramid-shaped LED industry have a solid foundation and stand firm.

With the continuous advancement of LED technology, LED will become more and more popular, there will be more and more application fields of LED, and there will be more and more market segments of LED. Therefore, it is not that "there is no need for so many LED companies". On the contrary, there will be more and more LED companies in the downstream application fields.

Third, LED industrialization is not simply measured by the number of companies surviving.

(1) In the process of survival of the fittest in LED industrialization, there will inevitably be bankruptcies. The ones that go bankrupt are those "bad" companies, that is, companies that have lost their innovative power and cannot keep up with market development. Please note that we are talking about "enterprises that have lost their innovation and cannot keep up with market development", not the size of the enterprise! If they lose their innovation and fail to keep up with market development, even large companies will degrade and collapse! On the contrary, if they adapt to market trends, small businesses can also keep up with the wave of industrialization!

(2) The final result of the "survival of the fittest" in LED industrialization is the entire LED industry's advanced technology, wide range of applications, and high-quality products and services. This does not mean that only a few companies can survive! To give a simple example, if you have 3 children, can’t all 3 children be good children? You can survive as long as you adapt to the market. As mentioned above, if they adapt to market trends, small businesses can also keep up with the wave of industrialization!

At this point, the question to be solved is: How can small businesses adapt to market trends? The "Group Army" of large enterprises seizes the opportunity by relying on scale, but what does the "Eighth Route Army" of small enterprises rely on?

Part3 "Eighth Route Army" personalized surprise

The "Group Army" of large LED companies can be scaled up, while the "Eighth Route Army" of small businesses can be personalized and flexible. As long as you establish the correct concepts and adopt the correct methods, small businesses can find their own path to rapid growth.

First, do not doubt the prospects.

(1) "Survival of the fittest" is not the same as "comparison of size". Competition between enterprises has never been a game of size. The competitiveness of enterprises does not entirely depend on the size of invested capital. You have a good plan, I have a wall ladder. Enterprise competition is not only a battle of capital and scale, but also a battle of wits and courage.

(2) LED application fields are very wide and will become more and more extensive, and even a certain type of application product may independently develop into a branch industry. Moreover, the professional application of LED products will also lead to further subdivision and subdivision of the market. Enterprises can completely concentrate on certain advantages and resources they have, lock in a market segment and become the champion, and gain room for development in the market segment to become bigger and stronger.

Second, don’t be superstitious about scale.

Large companies have their strengths, and small companies also have their own unique advantages, such as flexible management mechanisms, fast market response, timely delivery, high-quality and low-price products, etc. The key to an enterprise's competitiveness is to find its own position and understand what it does, how to do it and whether it can do it well in the LED industry chain.

Third, don’t be rigid and stagnant.

(1) Keep a keen eye for new knowledge and new products. Even if it has nothing to do with your current production, try to learn more about it. Once you find an entry point that suits you, you should start in time.

(2) Pay attention to market changes and adjust strategies at any time to reposition the market. In the fiercely changing market environment, large companies with too long industrial chains often "have a ship that is too long and difficult to turn" and find it difficult to adapt to changes, thus turning their advantages into disadvantages. Small businesses, on the other hand, can use their strengths to quickly adapt to this change and take advantage of "overtaking on corners", thereby potentially surpassing seemingly powerful competitors and quickly becoming bigger and stronger.

Fourth, win by surprise.

The current competition in the LED industry is mainly homogeneous competition. Overcapacity is homogeneous excess, and the products are too similar, making it difficult for customers to distinguish. Therefore, product "personalization" has become the key to shopping around.

We must give full play to our own strengths and highlight "personalization" in one or more aspects of product technology, performance and quality, appearance design, practical functions, packaging and services, marketing methods, etc. We must be innovative and make our products different, and the more obvious the difference, the more conducive it is to consumers' priority choice.

"Appearance design" with low technical content cannot be ignored, especially in consumer terminals. "Appearance" may be more important than "quality" because consumers may not be able to judge the quality on the spot when they first come into contact with the product. However, a novel "appearance design" can give him a good first impression and have a chance to attract him.

In fact, LED small businesses can also form "scale". Fighting alone is somewhat disadvantageous. Be good at making friends in the LED industry and cooperate privately with small businesses. This kind of cooperation does not involve equity, but can exchange information, jointly plan, form alliances, and coordinate operations. The first step is to win a certain local market. The LED "Eighth Route Army" conquering the country is not a myth!

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