Vertical integration of VS horizontal acquisitions, LED how to choose the path of enterprise development?

Even in the LED industry as a whole the depression behind the competition and integration of manufacturers also moves constantly, since September 2012, the industry has undergone 6 large-scale integration of mergers and acquisitions, involving three places, mostly together. The second quarter of 2013 began, the sluggish state of LED industry anabiosises gradually warmed up, the enterprise is more chase momentum, the industry integration plan again into their development planning. However, the choice of what kind of integration, vertical integration or horizontal integration, it is worth every company thinking.

From the previous case of mergers and acquisitions, the industry chain vertical merger more, such as Elec-Tech acquisition of NVC, the acquisition of U.S. Luminus shares Sanan optoelectronics, Taiwan canyuan etc.. Of course, many large enterprises through mergers and acquisitions expected expansion strength, secure their leading position, small and medium-sized enterprises are expected to be mergers and acquisitions to keep this point in Taiwan crystal power plant of a series of mergers and acquisitions in the most incisive. At the same time, there are many enterprises to LED lighting industry consolidation and distribution channels in parallel as its development strategy, such as honglitronic LEDIA lighting capital, to expand the company's share in the lighting applications market; Taiwan, three billion light with the acquisition of overseas market, with the thunder lighting channel layout, BDO, LED packaging leader Linsen (MLS) through this new light the family brand into the market in Taiwan. Thus, the choice of enterprise integration model is not stereotyped, but local conditions".

Insiders said that the current era is the era of LED lighting, vertical integration of upstream and downstream LED industry, will be the inevitable trend of the development of the industry. In particular, some upstream and downstream enterprises, more suitable for the market to take the road of vertical integration in mature period. The cultivation of lighting terminal market, not only the main thing LED lighting companies, but also the entire LED industry to work together to complete the middle and lower reaches of the task.

At the same time, it was also suggested that small businesses and rising star should be more horizontal integration, complementary advantages, the use of the integration of their own strength, enhance core competitiveness. Occupy the market share of the number of enterprises is based on the fundamental. Merger integration can not only produce scale effect, better integration of both market resources, play a multiplier effect. In the case of structural overcapacity, competition intensified, mergers and acquisitions to a certain extent, reduce duplication of investment, reduce vicious price competition, enhance the overall ability to resist risks. On the other hand, the outbreak of the lighting market is expected, many companies choose to complete the production capacity through mergers and acquisitions, channels, patents, talent and market resources integration.

Prior to the industry predicted that in 2013, LED industry entered a critical period of integration. The face is about to usher in the explosive growth of the LED lighting market, lighting enterprises to talent shows itself in the competition, must through mergers and acquisitions, integration of resources, strong combination, complementary advantages to enhance the overall strength in order to gain the competitive advantage in the market really broke out when. Create a fully competitive environment the current overcapacity, investment overheating, prices decline, falling profits in exactly LED industry, focusing on the current industrial development, whether vertical integration or horizontal on the middle and lower reaches of the integration of acquisitions in the industry, has appeared and become the trend of LED, the industry reshuffle is accelerating in.

However, in the critical period of integration, vertical integration of VS horizontal acquisitions, which is the path of development of LED enterprises? Xiao Bian believes that this problem is no standard answer. Each enterprise should be based on their own development characteristics, learn from the successful experience of the predecessors to choose the integration model, rather than blindly follow the footsteps of others. Vertical integration or horizontal acquisition is not the only two choice. From the perspective of marketing management, horizontal integration and vertical integration of the two ways are not independent of the existence of the integration of the two means, often combined with the use of resources to achieve a more balanced. For some enterprises, the vertical and horizontal cooperation in the industrial chain is not a better development model.