Machine Tool Warfare

China's machine tool industry has been at the low end of the industry due to its late start and lack of professionals. However, due to the good situation in the past few years, low-end machine tools have increased a large number of companies to enter the market, resulting in the current price war due to market demand saturation, excess production capacity. The price war will enable enterprises to further take into consideration the research and development capabilities, and then fall into the vicious circle of "low-tech content → low prices → low profits → low product R & D investment → surplus of low-end products", which is trapped in the quagmire of vicious competition.

The machine tool is different from the ordinary daily consumer goods, its production quantity and enterprise development scale, should be more cautious in planning and implementation. The former Minister of Machinery and Tools of the State Machinery Industry Bureau, Liang Xunqi, once said that machine tools are the products most closely associated with the user's individual needs in investment products, and their production and business models are multi-category, small-batch, “tailored” and complete sets of supply. The effective organization and form of the entire machine tool industry is a combination of professionalism and short-sightedness.

In the environment where the prices of raw materials have risen sharply, the machine tool industry, whose profits were not high, has not had a good day. Production costs have also increased by about 10% to 20%. If the impact of the price war, it will certainly affect the mood of the industry, reduce R & D passion, the brand will only decline.

The price war is a bad style. It will result in a decline in corporate profits, and even result in the collapse of a large number of enterprises and the loss of the entire industry. Disrupt the market order, seriously damaged the overall image of the industry development and economic environment, resulting in a decline in the interests of the entire industry. In order to make up for the losses caused by product price cuts, companies can easily reduce costs by cutting corners and other means. This will inevitably result in a decline in product quality and damage the company's own credibility. The price war may not only have no effect in seizing the market, but instead smashed its own brand and made the product in the market fail. Because the company has no profit or even run at a loss, the enthusiasm of the employees is not high, and the company is bound to fall into recession.

At present, the source of funds for technological upgrades and product structure adjustments of enterprises is mainly self-accumulated. However, enterprises have no ability to invest funds for technical upgrades and product structure adjustments, and that is, some enterprises rely on bank loans for technical upgrading. And the adjustment of product structure, but also unable to pay the principal and interest of the bank, and finally dragged the company to death. Due to the decline in the price of machine tools, the price of functional components will be depressed by the host manufacturers. Each price reduction of the machine tool will be transmitted to the downstream machine tool accessories and accessories manufacturers, so that the downstream manufacturers can not develop new functional components, which is not conducive to the technical upgrading of functional components throughout the industry.

In addition to stabbing competitors and injuring the company itself, price wars also hurt brokers and users. After the price reduction of enterprise products, the existing inventory of middlemen will be greatly affected, which will seriously affect the enthusiasm of middlemen. For end-users, this time the price of the product has dropped, and it is also looking forward to a further decline in prices, while also allowing users to lose confidence in the quality of products and service levels.

This is the same root, what to worry about too fast. Each machine tool company is closely related, not just individual development, but also related to the balance of the entire market. At present, the machine tool has not paid much attention to the price negotiation mechanism and the quotation is often chaotic. The products displayed on the website are more often displayed as negotiable status, which is detrimental to the open and fair sales behavior of the market. Of course, the explanation of the company is that due to different configurations, the price will fluctuate. Personal advice, it may be more reasonable to formulate a company's standard quotation and then negotiate the price of other configuration options. In addition, the machine tool association should regulate the behavior of the company. In addition to the members of the association, it must strive to persuade the non-members of the business norms.

In the face of price wars, companies should not share the "copy price". Instead, efforts should be made to obtain more brand added value and development space. While upgrading the existing field, try to enter multiple industries and application markets. To achieve the integration of industrial chain resources through strategic cooperation plans, enhance the company's initiative, enhance brand image, and expand market coverage, this is what should be done.