LED lighting industry will welcome a new pattern

After the baptism of mergers and acquisitions integration and closure, the lighting industry's advantageous resources will be concentrated in certain enterprises, and the competitive landscape will be stronger and the weaker will be weaker. The LED lighting industry will usher in a new pattern.

Price battles

"Price warfare" has become an attractive phenomenon in China's current market economy. No matter what the industry's enterprises, they will adopt a certain price strategy in order to form a larger scale effect, and "price war" often leads to the vicious between manufacturers. competition. From the analysis of China's current LED lighting industry market structure, product competition in large circulation has shown obvious oligopolistic competition characteristics. The specific performance in the natural increase in the scale of the company, with economies of scale, and the products produced by the companies have a certain degree of homogenous characteristics, each other to a certain extent, the alternative.

In 2014, LED lighting will usher in new changes and developments. The development of LED lighting industry has been accompanied by the bloody turmoil of “price wars.” Large companies hope to continue their initiative in the market by transforming their scale advantages into price advantages. Small and medium-sized enterprises hope to use low prices as "heavy guns" and "bombing" the market. The result of the price war may be beneficial to consumers, but it has caused a large number of enterprises in the industry to experience a decline in profits, difficulties in survival and even bankruptcy. Some economists believe that "price war is a destructive competition. After the price war has passed, among them, including the provoked person himself, he is scarred, exhausted and has no winner." However, many companies have enjoyed this and continued to provoke price wars one after another, claiming that this is "corporate action," "marketing means," and "the most effective strategy for expanding market share." However, the price war makes the profits of the operators decline, it is not conducive to technological innovation of enterprises, distorts the consumer's consumption psychology, and it is unfavorable for the long-term development of enterprises. However, it is an indisputable fact.

Of course, price wars are not harmful and they do nothing. The price war is a double-edged sword. In the course of competition, it is inevitable that blood flows into the river. However, in the period when the LED lighting industry has not entered into sound development, price competition will help expand the market share of LED lighting products and accelerate the replacement of traditional lighting with LED lighting. The cycle will enable industrial restructuring of the survival of the fittest to achieve a transition from price competition to technology competition. In spite of this, the price war still cannot be used as a means of long-term market competition.

In 2014, traditional lighting accelerated its transformation and new-type companies began to make efforts. The LED lighting market is still a price war.

Mergers and acquisitions integrated into the wind

In the past few years, China's LED lighting industry has emerged a case of mergers and acquisitions. Whether in the form of corporate mergers, asset acquisitions, or equity acquisitions, the motives for mergers and acquisitions are all to increase their competitive strength and gain competitive advantage.

Weston Synergy believes that "mergers and acquisitions will bring about an increase in the efficiency of production and operation of enterprises, the most obvious role being the achievement of economies of scale." In 2014, M&A will become a new melody in the LED lighting industry with the advancement of price wars and the acceleration of shuffling. Industry M&A awards rewrite the current industry structure and become a new growth point for future business operations.

The LED lighting industry is in a period of reshuffle, and business failures happen from time to time. To develop, we must first solve the problem of survival. LED lighting companies wishing to achieve long-term development hope to use M&A integration to make up for their deficiencies in LED lighting products, brands, technology and channels, and M&A is the fastest way to address these deficiencies.

However, mergers and acquisitions are easy and integration is difficult. There are inevitably differences in the management, culture, and values ​​of the two companies. Although the benefits of mergers and acquisitions are obvious, if you want to go light on the battlefield and resolve turbulence that can easily occur after mergers and acquisitions, you must do it gradually, otherwise it will be difficult to achieve the desired results.

Closed-out tide gave birth to a new pattern

Looking back on the development of the LED lighting industry in recent years, companies have constantly joined and companies have fallen. Some companies have been vigorous and quiet, and they have fallen silently. Some companies have “no traces of coming and going,” and the closure of the industry has long been nothing new. In the article “The Top Ten Industries That Are Closing Down” exposed by certain media, the LED lighting industry is listed in the book. Since 2011, the industry has experienced a number of large-scale bankruptcy incidents involving the two sides of the Taiwan Strait. Haobo Optoelectronics, Yiguang, Leixing Optoelectronics, Zhongshan Xiongji Lighting Factory, and Chili Optoelectronics have not been able to survive the darkness before dawn. "The reasons for bankruptcy were mostly capital breaks and excessive use of financial leverage."

With the LED lighting industry entering the reshuffle period, traditional lighting giants have joined the battlefield of LED lighting. In 2014, there will be more closing events and usher in a real "closed tide." However, falling into the tide of closure does not explain the good or bad of the LED lighting industry. Entering the LED lighting industry, the threshold is low, and many companies claim to be able to do LED lighting products. The "screwdriver" factory has become a piece of film, and the mix of people, the quality of personnel, and the level of technology have been uneven. This has led to chaotic industry competition. LED lighting industry reshuffle is the development of the market. The inevitable result. After the baptism of M&A integration and closure, the dominant resources will be concentrated in some enterprises. The competitive landscape will be stronger and the weaker will be weaker. The pattern of LED lighting industry will be initially visible, and the winner is the winner. .