LED price war pre war analysis and coping strategies

Hot summer weather strikes, it will make people restlessness, but in the LED lighting industry, with more fierce lamp price war, more like a fire burning moment throughout the industry, but to provoke people already restlessness heart.

At the beginning of the year or shortly before the time, in the face of this industry price war will continue, the international giants in the price war "and other topics or events, you may be in a" bystander "mentality, such as watching a talk with eloquence, pointing jiangshan. But now OPPLE lighting, FSL, and other brands to join, Linsen Huaqiang LED T8 lamp price war LED T8 lamp flame, the price dropped to 10 yuan in the competition category, directly touch the bottom line the margin and cost of lamp products. It is understood that the adjustment of LEDT8 pure glass lamp sales price FSL classic series 15 Watt, 1500 lumens of 9.98 yuan / branch; OPPLE lighting LED T8 glass tube to 9.90 yuan each; Linsen lighting LEDT8 lamp prices hit the lowest price of 8.8 yuan / branch, Huaqiang benbon T8 tube price in 6.8 yuan / shipment to branch. This time the price war aroused widespread concern in the industry.

Prewar analysis

Four reasons for price war

In order to better understand the price war in the LED lighting industry, first of all, we can discuss the definition and origin of the price war.

The so-called "price war", generally refers to the enterprises to reduce by a commercial competition in the market prices of the products launched, the main internal power to promote market pull, cost push and technology, to suppress competition and occupy more market share, to digest inventory, such as price war, Dangdang raise a Babel of criticism of Jingdong LED the lamp lighting industry price war. At the same time, price war also refers to the price as a competitive strategy of a variety of market competition, in some industries will have a high price to win the case.

1 reasons: seize the market

With the enrichment of products, diversification, the production of the same product enterprises are increasing, resulting in similar product structure, low technology value. The homogeneity of the products of many enterprises is very serious, the products have no innovation, the technology renewal is slow, and the difference is not enough.

This situation is characterized by a large price range, the price range of products and a wide range of long duration, mainly by the seller's market, the price of the product is generally not restored to the original price level. This price will generally reduce their level of profitability, especially after the other sellers to follow the price, it is likely to lead to the turn of the price reduction, causing price war.

2 reasons: cost driven

Industry economies of scale will lead to lower costs. The current computer and mobile phone industry is a significant representative. As the industry has become a scale, rapid technological upgrading, so the cost of the entire industry will decline, the decline in prices will naturally drive down prices. Price war based on cost advantage. Some enterprises through the scale of operation, the establishment of the cost structure of healthy and effective management measures to obtain a large cost advantage within the industry and can make their own ongoing price war, and can form a long-term pressure to the competition in price.

3 reasons: oversupply

Excess production capacity, strong sense of vicious competition. The production cost of the enterprise is reduced, and the technological progress leads to the excess production capacity of the enterprise. In order to reduce the cost of stock recovery, the enterprise begins to make a big fuss about the price. And many companies failed to do market research, business strategy to adjust the enterprise long-term development, do not make price war for strategic deployment, only through the difficult, I also blindly follow the trend of the price you drop down, but brought the whole industry vicious melee. Weak market demand, consumer demand is not strong, enterprises to stimulate consumption, stimulating demand, the implementation of price cuts.

4 reasons: forced to fight

More and more small and medium-sized enterprises in the actual operation of the market is forced to participate in a price war, because of the strength of enterprises, price policy, market level and large enterprises can not be compared, the result is often suffered heavy losses, the market fall, business interests.

Strategic response

LED T8 price war throughout the industry, about?

This is like a fierce war situation mutation spread, has been burned into their gates, to each big enterprise, can't seem to stay, is no longer on war, but to decide whether the war, war to the point. In the past, Di Di asked: Yuan Fang, how do you see this matter. Now, Dee: Yuan Fang, may ask you how to play this?

Price war, the enterprise can not be stereotyped

Price war will exist in every industry, but the performance of different ways. We can find that enterprises can set off a price war, often in the scale of production and management advantages, or in the product technology and capital advantages, can further reduce costs or strategic operation.

On the other hand, the current LED lighting industry price war occurs only in the field of circulation segments market, which is a highly competitive market in the red sea. Standing as Sidon lighting deputy general manager Chen Shi accept the interview said: "the LED T8 lamp fell to less than 10 yuan, or even more than 6 yuan, the price of this phenomenon is normal, because over the years invested capital, capital and industry production capacity has exceeded the actual market