Exploring the development of LED SMEs under the capital market

According to the data, the LED project investment in Shanghai was close to 20 billion yuan in 2009. It is estimated that the investment amount of the domestic LED industry will reach 60 billion yuan in 2010 (citing the national high-tech enterprise development LED professional committee director Zheng Haowen revealed to the "First Financial Daily" data). In addition to international capital, domestic listed companies including Sanan Optoelectronics, Silan Micro, Lianchuang Optoelectronics, Zhengtong Electronics, Dehao Runda, Dazu Laser and other companies have successively announced the announcement of capital increase and expansion. At the same time, the high growth expectation of the LED industry has also attracted private investment, and many companies in the industry have already raised funds through various means. For a time, the LED industry has gathered a lot of capital, and the investment projects are not the largest and only bigger, showing a scene of “crazy chasing”.

Dazu Laser invested a total of 139.38 million yuan in LED packaging, packaging equipment and terminal products application, respectively, investment of 50.58 million yuan, holding 51% Shenzhen Guoye Starlight Electronics Co., Ltd.; investment of 29 million yuan, holding 86% of Shenzhen Dazu Photoelectric Equipment Co., Ltd.; invested 18 million yuan, holding 100% Shenzhen Lusheng Optoelectronics Technology Co., Ltd.; invested 41.8 million yuan, holding 51% Shenzhen Yuanheng Optoelectronics Co., Ltd.

Dehao Runda originally used small household appliances as its main business. In 2009, it acquired a 51% stake in Jianlongda and a 60% stake in Ruituo, and officially entered the LED industry. Through the stock market targeted fundraising of 1.526 billion yuan, it is said to invest 6 billion yuan in the construction of LED industry base in Wuhu, Anhui, covering LED chips, packaging and lighting projects, is expected to be completed in 2012, and will form a sales value of 18 billion yuan.

Sanan Optoelectronics originally engaged in the research, production and sales of LED epitaxial wafers and chips. In 2009, it raised 800 million yuan to build a northern LED base in Tianjin. In January 2010, it announced an investment of 12 billion yuan to establish an Anhui Wuhu LED base, covering almost all industrial chains, with the goal of becoming the largest LED manufacturer in China.

It can be seen that the emergence of capital has changed the pattern of the steady development of LED enterprises in the past. These enterprises often carry strong financial strength and adopt a strategy of high-stakes, or vertically integrate into the entire industrial chain, or horizontal mergers and acquisitions rapidly expand. The production capacity has formed a scale advantage and quickly squeezed the survival and development space of the original enterprise. For a time, the existing enterprises in the LED industry are facing the “black cloud pressure city” of strong capital enthusiasm, and there is a great potential for “mountain rain to come”.

In this situation, is there any space for SMEs in the LED industry to survive and develop?

The answer is obviously no.

The competition between enterprises is never a game bigger than the size. The competitiveness of enterprises does not depend entirely on the size of invested capital. Faced with the new competitive situation, every small and medium-sized enterprise in the LED industry can find its own path of rapid growth as long as it establishes the correct concept and adopts the correct method.

To establish three correct concepts

First of all, not superstitious in scale. Large enterprises have their own strong places. LED SMEs also have their own unique advantages, such as flexible management mechanism, fast market response, prompt delivery, and high quality and low price. The key to enterprise competitiveness is to see what the company is positioning in the industry chain, how to do it and whether it can be done well. Large capital is often vertically integrated into the upstream and downstream industries. This is certainly true from the development of the enterprise itself, but from the development stage of the LED industry, it is not necessarily the most effective. At present, the technology, products and market of China's LED industry are still undergoing drastic changes. Specialized collaboration and division of labor may be the right path for the healthy development of the industry.

Second, there is no doubt about the prospects. Why is the LED industry attracting huge capital like a wolf? It is because the LED industry has great prospects and great potential. LED technology and products are still in their infancy, and the application fields will become more and more extensive. Even a certain type of application products may develop into an industry independently. The professional application of LED products will make the market segmentation subdivided. Enterprises can concentrate on their own advantages and resources, lock in a market segment and become a champion, and gain a bigger and stronger development space in the market segment.

Again, it is not rigid. The technical level of LED technology is still improving, driving the application of products to change constantly, and it is necessary to adjust the strategy at any time to reposition the market. In this fiercely changing market environment, companies with too long industrial chains tend to “have too long, difficult to turn” and are difficult to adapt to change, thus turning from advantage to disadvantage. SMEs can take advantage of this, quickly adapt to this change, and use the "curve overtaking", so that it is possible to surpass the seemingly powerful competitors and quickly become bigger and stronger.

At least five steps must be considered in operating a business.

It is not enough to have the right concept, and there must be a correct way for SMEs to truly embark on the growing highway.

Some scholars have concluded that each company can be seen as composed of "five elements." The "five elements" are: market, technology, personnel, capital, and organization. First, there must be a demand for products and services provided by the company in the society. This is called the market. Second, there must be technology to enable the company to produce products or provide services to meet market demand. Of course, there must be personnel: managers and Employees, who use their abilities and skills to provide products and services to meet market needs; there must also be various sources and forms of funds to support the business activities of the company; in the end, there must be an organization that provides a structure that systematically Combine the above four elements together. Therefore, the relationship between the five elements of the enterprise is: the organization provides the structure and system to guide employees to use funds and technology to produce products and provide services to meet market demand.

The “five elements” that make up the company are all vital and indispensable. Every major element must be balanced and developed in proportion to other major elements. There should be harmonious coordination and close collaboration. For large companies, it is not easy to maintain a balance between the “five elements”. It is not always possible to make adjustments quickly when the imbalance is not achieved. For LED SMEs, once the market demand for LED products in a certain market segment appears, the organizational structure that can respond quickly will quickly raise funds, recruit employees, immediately organize technology development and manufacturing, and provide products with market demand. . Along with the surge in the market, such a process is repeated and cycled up, which has formed a rapid growth path for LED SMEs. Namely: taking LED market demand as the forerunner, driving LED technology research and development and manufacturing; continuously recruiting and cultivating employees at all levels to ensure the company's fast-growing human resource needs; continuously raising funds to alleviate the funds caused by the rapid development of the company Tension; constantly improve the organizational structure and system of the company's operation and management, so that the market, technology, personnel, and funds are organically combined and produce a benign interaction.

Four strategic stages of enterprise development

The process of enterprise growth is also the process of upgrading the management level of enterprises. The development of general manufacturing enterprise management generally goes through four strategic stages. First, the basic normative management stage. This stage is based on the implementation of ISO9000 quality management system standards and the implementation of 5S activities. After the product quality is guaranteed and reaches a certain scale, it will enter the functional management upgrading stage, which will form a clear level of high, medium and basic management. The team structure of the personnel; the scale of the enterprise is getting bigger and bigger, and then it is going to the stage of strategic implementation management. At this time, the performance target system for implementing the company's development strategy should be established. All work should be further standardized, streamlined and informatized, and strive to achieve the company. The scale of business can be expanded in a cloned manner; in the end, the highest level of enterprise management is management using corporate culture. After continuous growth, some successful values ​​will be accumulated, and they will be consciously refined, sublimated, supplemented, and solidified. Forming a distinct corporate culture and promoting the behavioral norms that all employees can consciously follow can reduce internal consumption and improve the performance of the system, thus ensuring the harmonious development of the company.

These four stages are a gradual process. Although there are no strict boundaries, they cannot be reversed. There are often some companies with small scales and poor product quality. Managers pay most attention to high-profile strategic slogans and complex management methods. High corporate culture. In fact, the first concern for small businesses is basic norm management, which guarantees product quality. Although the company is small, the products provided must be of good quality, which is the cornerstone of the company's growth. At this time, the management activities are very simple. As long as the quality management system required by the ISO9000 standard is gradually established, this is the product quality assurance during mass production. The mistakes that countless Chinese companies have made are: certification only for certificates, and getting everything is a good thing, without profound understanding and conscientious implementation of the spirit of ISO9000 standards. As a result, companies that have obtained ISO9000 certifications are numerous, and few factories that actually meet the production requirements for high-quality products are few and far between.

Enterprise innovation

The magic weapon of competition that SMEs should never forget is: continuous innovation. It is difficult to develop innovative products that can guide the market direction of small and medium-sized enterprises, but innovation is ubiquitous. Don't be tied up by so-called “high-tech” thinking that innovation is invention and patent. It should be noted that the patent is not equal to technology, the technology is not equal to the product, the product is not equal to the market, the market is not equal to the profit, it is necessary to keep in mind that the purpose of SME innovation is profit. Therefore, the development of new products for SMEs should adopt the market follow-up strategy, keep up with the existing market demand and leaders, and be sales-oriented, with “short (slow development cycle, concentrated advantage of strength in a certain value point), Ping ( The method of developing the technical level suitable for the production conditions of the enterprise) and fast (the product can quickly see the market benefits) quickly meets the market demand. In addition, every improvement in innovative processes, equipment improvements, and inspection technologies can improve product quality, reduce product costs, and increase production efficiency from different perspectives. In addition to research and development, innovation can come from many aspects, such as operating model innovation, product portfolio innovation, sales model innovation and so on.

In short, SMEs have the pressure of competition, and large enterprises also have to face it. No one in the face of competition can be spared. Competition, only competition, and escalating competition are the real driving forces for industry and enterprise development. Capital is coming from profit, and the swarming capital proves that the LED industry has an infinitely good market prospect. Natural selection, survival of the fittest, and a broad market is a good natural environment for the survival and development of enterprises. With the right ideas, the right methods, and the right actions, our vast number of LED SMEs will not only survive but also be able to survive because of the capital frenzy of “black clouds and pressure”. A company with its own distinctive characteristics to grow fast!

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