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Transformation and integration, the only way out for coating enterprises

transformation and integration, the only way out for coating enterprises

July 11, 2005

China's economy reached its peak in 2003, and began to cool down after macro-control in 2004. At present, it is in the period of adjustment and integration. In the first half of this year, the investment growth rate, price increase and enterprise profit growth rate are all slightly callback, and China's economy is expected to shift from the period of accelerated growth to the period of stable growth; The cooling down of the economy is not only the expected direction of regulation, but also the necessity of running to a certain stage. Roach, the global chief economist of Morgan Stanley, believes that excessive reliance on exports and fixed asset investment is a drawback of China's economic growth model. At present, China's GDP exports account for 36%, fixed asset investment accounts for 44% of GDP, and real estate development accounts for 20% of the total value of fixed assets. He pointed out that due to external trade frictions, China's export momentum will significantly slow down in the second half of this year, and the introduction of cooling measures for the real estate industry may substantially slow down fixed asset investment in the second half of this year, ultimately affecting the increase of GDP. At present, China's economy is facing new and more arduous challenges

in addition, according to the statistical data of China's coating industry in the first four months of this year published by the National Bureau of statistics at the government level, the total output of coating is 1035500 tons, including 656300 tons of paint and 379200 tons of architectural paint; Judging from the output figures, it seems that the momentum of the coating industry is good; On the other hand, according to the statistical data of the operation of 1500 domestic coating production enterprises, in the first four months, the total sales of these enterprises was 18.77 billion yuan, an increase of 23% over the same period last year, while the net profit was only 727 million yuan, a decrease of 18.2% over the same period last year, of which loss making enterprises accounted for more than 25%. In addition, many enterprises in the coating industry have shown a downward trend in production and operation since this year: for example, Chongqing Three Gorges coating lost 4.5 million yuan in the first quarter of this year, which is the first loss since the company was listed, and the gross profit margin of products also fell to 11.06% from 18.41% in the same period last year; The losses of some joint ventures are also gradually increasing, among which DuPont Red Lion paint (Changchun) Co., Ltd. and BASF Shanghai paint Co., Ltd. both suffered losses of more than 10 million in the first four months of this year. Similarly, the sales profit margin of the automotive industry, which is closely related to the coating industry, fell to less than 4% in the first five months of this year from 9% last year. Although the sales volume of domestic vehicles increased by 4.57% to 2.271 million units, the profit of the entire automotive industry was only 6.76 billion yuan, a year-on-year decrease of 69.1%. At the same time, the profit of the automotive parts industry will also decline for the first time in ten years this year. Since the profit margin of China's coating industry fell for the first time last year, the prosperity index of the industry has been declining. We must face this objective reality directly

the prices of coal, electricity, oil and transportation are rising, the production costs are rising, and the economic benefits are declining. Where is the way out for enterprises? Now there are only two ways out for most small and medium-sized coating enterprises; "Either transform or go bankrupt", now is the time for paint enterprises seeking survival and turnaround to completely change their ideas. A famous person said: changing ideas is to use different views to see things that have long been used to; Don't underestimate "changing ideas", which is often the key to solving problems and developing new products. Change with the passage of time, it should be said that if there is no new "trick", enterprises will have fewer and fewer opportunities to win in the future, because we will soon find that with the standardization of the market and the improvement of laws and regulations, the business environment of the coating industry is far less tolerant than in the past, and enterprises can easily make money

1 transformation and integration -- the only way out for coating enterprises

transformation is not a new topic for coating enterprises, but an old topic, because China has been in a period of great transformation from a planned economy to a market economy in the past 20 years. In the context of social and economic transformation, all enterprises in the paint industry that cannot realize the transformation in time have experienced the pain, as exemplified by the decline of many time-honored state-owned enterprises in the paint industry

from the analysis of the development track of the coating industry for more than 20 years, it can be clearly seen that it is not the environment that adapts to the enterprise, but the enterprise must adapt to the changing environment; To this end, enterprises must always make changes to their business positioning, business model and internal management that are suitable for market competition. The market is the last word, and change is the absolute truth. As "Haier" has repeatedly stated: there is only one thing that remains unchanged in this world, that is "change". Today, with the life cycle of coating products becoming shorter and shorter, how to deal with market changes and timely adjust product structure is a topic that coating enterprises must consider every day

(1) the mode of thinking determines the success or failure of enterprises

after more than 20 years of development, many coating enterprises have grown from small to large, from weak to strong, have a certain scale, have their own brands, and even occupy a lot of market space. Because of these successes, a considerable number of enterprises have formed their own strong inertia and fixed thinking mode. They are "ignorant of the changes in the environment" and live in peace while meeting the current situation. Due to lack of ambition, the traditional competitive advantage is gradually lost, and the new competitive advantage has not yet formed. We can only watch the market shrink gradually. Therefore, in recent years, we have seen many successful enterprises (especially private enterprises) fall out one after another

perhaps, the glorious past of these enterprises is worthy of our praise, but an enterprise without thinking about tomorrow is doomed to be a flash in the pan. If you always get used to the successful practices in the past and take them for granted, this is the sad place. Over the past few years, or even more than a decade, many coating enterprises have lacked change and innovation, and lacked analysis and understanding of the market and competitors. Today, when the market is the battlefield and competition is war, if the management of coating enterprises still use the old methods and methods of the past, without cost advantages and efficiency advantages, they are still carrying out yesterday's war, that is, using yesterday's practices to fight today's war, There is no reason to be invincible

(2) seeking a successful business model

the transformation of enterprises is particularly important in the following cases: the market is saturated, the product life cycle is in decline, the organization is huge, the efficiency is low, the inertial thinking is strong, the innovation of enterprises is insufficient, and so on. Of course, for those enterprises with good development momentum and obvious competitive advantage, the first task is how to go to a higher level and expand this advantage; For those start-ups, the key problem is to make a breakthrough in the market as soon as possible. Transformation is not the top priority of these enterprises. Transformation is actually the problem of choosing the right ideas and formulating strategies for the future development of enterprises; Industry insiders often say: first choose the right thing (industrial positioning, products, strategies, etc.), and then do things right in the right way. Realizing the importance of transformation is only the beginning of enterprise transformation. Finally, an operable business model must be formed to realize enterprise transformation

then, where to find a successful business model? If you want to get the answer, you must have a realistic attitude

when it comes to seeking business models, many enterprises focus on the old competitors, analyzing the advantages and disadvantages of competition. This analysis is important, but more important than that is to study the changes in the whole industry, because often when we can't imagine, new competitors will push your market, and this competitor is often something we haven't noticed or imagined before; There are also some competitors that are not emerging from this industry, but "foreign troops" in related industries. All these show that it is more important to study the market than the old competitors. Because the first thing enterprises face is always the market,. Always competing with old peers is often a low-level competition, which ends in losing both sides

therefore, for enterprises, Shanghai machinery manufacturing plant; Cmt1302 electronic universal experimental machine, the most important thing is to understand what customers are thinking? To complete differentiated competition by understanding customers, we should proceed from the reality of the market and realize differentiation through innovation, which can include four aspects: first, innovative products; Second, innovative packaging; Third, innovative product performance; Fourth, innovative marketing means. Communicate with consumers in innovative ways, including the publicity of the internal quality of coatings, coating guidance, color guidance, etc. Let marketers know the highlights and advantages of paint products, let them tell consumers the benefits that high-quality products can bring to them, understand the relationship between price and quality, price can reflect quality, and value their products. Value may come from our services, not just the product itself. In a simple sentence: when others don't have it, you'll be faster; When others realize it, you will be better

(3) problems to be faced in the transformation

"transformation" is actually a question of whether the enterprise itself and the small-scale mass production electroplating equipment have been completed. It should be said that the success of many coating enterprises is due to geographical advantages, monopoly advantages and opportunity advantages, rather than the internal skills and business acumen of the enterprise. Therefore, these enterprises will encounter greater problems and difficulties in the transformation

some more than 140 professors and experts from 15 colleges and universities, such as Central Nanjing University, central China Normal University, Xiangtan University and so on, will pre meet and make academic reports. Enterprise leaders often have such shortcomings: first, one-sided information filtering. All the information he gets is the information he wants, and all the information he receives is praise, but no criticism; Second, one hears and one believes. Whether the information is true or false, he doesn't bother to find out; Third, wishful thinking. When you have no ability, you have great delusions; Fourth, fear. Form a bureaucratic decision-making system in the enterprise; Fifth, extravagant expectations for the market

the reality is that only by being smart in major events, having down-to-earth analysis and ahead of time keen vision, can we make correct decisions. Transformation is to recognize the true nature of things, that is, to have the courage to do what you must do, not what you like to do. Enterprise leaders should not make any excuses in front of the market, but should establish an open mind and the courage to change and overcome themselves

enterprise transformation is not so easy, because it is painful to deny yourself. However, enterprise leaders should constantly sum up experiences and lessons. After every 3-5 years, they must clean up the disk, just like the computer has a recycle bin to clean up the traditional thinking mode and outdated things. The key to the success of an enterprise lies in the establishment and continuous adjustment of its business model and profit model, so as to improve its internal execution. To this end, enterprises should take practical actions and improve their internal capabilities. Only in this way can they create an enterprise with lasting vitality

2 regular reshuffle -- the law of industry development

at present, the annual output of China's coating industry ranks second in the world. The United States ranks first with an annual output of 6million tons, 670 enterprises, and Japan ranks third with an annual output of 2million tons, 167 enterprises. While China's annual output is more than 2.4 million tons, thousands of enterprises are producing. This phenomenon is in great contrast with other countries such as India and Australia. In these countries, Three to four manufacturers account for 60% to 80%

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