At this stage, the LED industry is in a period of adjustment to a certain extent. With the rush of new entrants and the influx of capital, some companies have experienced a situation where incremental growth does not increase profits, and some small and micro companies are starting to feel a little "starved of food." Recently, the voices of the industry running out of business and going bankrupt are still ringing in our ears, as if the time for the industry's reshuffle has arrived. Regarding all these, Mr. Gong Wen, general manager of Jingtai Co., Ltd., sighed and said emotionally at the beginning of his speech: "I have been doing LED for 18 years and founded Jingtai Co., Ltd. in 2008. Over the years, every penny I have invested in Jingtai Co., Ltd., every penny has been invested in Jingtai Co., Ltd. I have devoted the best 18 years of my life to the LED industry. It can be said that I most hope and expect that the LED industry will always be vibrant." My words reveal my love and expectation for the LED industry.
The LED industry is not as bad as imagined
LED is a sunrise industry, and current problems should be viewed rationally. In the era of economic globalization, all problems in the LED industry cannot be attributed to LED itself. The LED industry is a member of the world's economic family, and it will inevitably be affected by the difficult recovery of the global economy. As Mr. Gong Wen, general manager of Jingtai Co., Ltd. said: "This is not just the LED industry that encounters such problems, the entire world economy encounters such problems."
Every industry will undergo a process of integration, elimination, redevelopment, reintegration, and elimination in the development process. The development of no industry is smooth sailing. This is a common problem and a necessary baptism process for every industry to be reborn from the ashes.
Mr. Gong Wen, general manager of Jingtai Co., Ltd., expressed his hope for LED lighting: "One of them is that the application of LED is actually very wide. LED has many applications in many subdivisions, indoors, outdoors, in cars, flashlights, desk lamps, roads, health lighting, agricultural lighting, etc. There are many market segments that need to be explored deeply. Secondly, the LED replacement rate is still very low, less than 10% globally, and 10 times the market growth. The third is the emergence of smart lighting, which will create a new blue ocean for LED lighting. Including future smart lighting and optical communications, every revolution will bring a new wave of replacement. If we continue to develop new blue oceans and new business areas, then this market will not be 1 trillion, but may be 2 trillion, 3 trillion or even 10 trillion."
There is no shortage of opportunities. What is lacking is the eyes to spot opportunities
The problems of one kind or another in the industry are actually closely related to the enterprises themselves. The key to the dilemma of enterprise development lies in the unclear positioning of enterprises. The output value of the LED industry will soar at a rate of no less than 30% every year. The market growth is very attractive, but few companies know which part of the huge cake belongs to them. In particular, most small and medium-sized enterprises are basically followers of the market, following the trend and "moving from one place to another". There are only a handful of leading companies on the first level of China's LED industry, and 90% of them are small and medium-sized enterprises. How small and medium-sized enterprises survive and develop is a major issue facing the LED industry.
"Large companies have their own characteristics. Their decision-making process is relatively long and their response speed is relatively slow. Can small and medium-sized enterprises take advantage of the small size of the ship and its ability to turn around to gain market share?" As a member of the LED industry, Jingtai's general manager Mr. Gong Wen uses his own personal experience to advise small and medium-sized enterprises.
He continued: "In the field of positioning, there is one called "focus theory" and another called "tasteless theory", which is to find where your core competitiveness lies and go all out. "I would like to turn into a small laser beam to defeat the sun's rays." This is what we mean by focusing; have we found something that big companies are unwilling to do, or that big companies don't want to spend all their money on? This is where our small businesses are willing to come in and take a look. No matter what, small businesses must find their own positioning. "This is not an empty theory, but a true experience. Thanks to its precise positioning, Jingtai has now become the top packaging device manufacturer and provider in the field of LED displays. This is because of professionalism and the power of concentration. This statement can be said to be a good medicine for small and medium-sized enterprises. If the enterprise does not have a scale advantage, but if it can become a king that others cannot match in a segmented field and have something unique of its own, it is also a wise strategy. In a word, there is no lack of opportunities in the LED industry, but what is lacking is the eyes to discover opportunities.
Then, Mr. Gong Wen, general manager of Jingtai Co., Ltd., conducted an in-depth discussion on the common problems in the three industries:
1. Low-end gaming is not the best choice.
In the LED industry, not only is product homogeneity very serious, companies have also fallen into a vicious cycle of homogeneity in their business models, lacking innovative products and innovative business models. Since companies all compete in the same way, the only weapon is price war. "When we expand our market, our trump card is often price reduction." Gong Wen, general manager of Jingtai Co., Ltd. pointedly mentioned a common problem in China's LED industry. In fact, in order to reduce costs, many manufacturers have begun to sacrifice the quality of some products by any means, just for immediate profits. When developing, enterprises should really consider the added value of their products and what is the positioning of the enterprise? "Reducing costs is certainly important, but I don't think they are necessarily what our small businesses should achieve. This is not the only option." If we continue to use price wars to develop, it will actually be very costly. Not only will we not be able to achieve the purpose of expanding the market, but we will ruin the future of the company from the beginning. Such companies will never go very far. Jingtai has always followed a technology-driven development path, providing enterprises with high-performance, high-value-added products, one step at a time, so it can be a leader in the LED industry. Neutral and invincible.
2. Cash flow is not necessarily king
More than that, in recent years, companies have fallen into "triangular debt", leading to the rupture of capital chains and the collapse of countless companies. It goes without saying that cash flow is an important guarantee for the survival of a company, which shows its importance. Therefore, people in the LED industry began to pursue the saying that cash flow is king, believing that capital is the capital of the LED industry. However, Mr. Gong Wen, general manager of Jingtai Co., Ltd., put forward another opinion that deserves great attention: "Some companies will run away if they have good cash flow. Cash flow is an illusory part. Sometimes companies with good cash flow may blind the boss's eyes. Because there is still cash flow, the entire company will not cause losses when it suffers losses." Pay enough attention to it. This hole will get bigger and bigger, and when you wake up, the hole will be too big to be filled with cash flow, and you will fail at that time. A company without cash flow will definitely die. If it only has cash flow and is not profitable, it is absolutely worthless, and such a company should not continue." Therefore, the value of a company's existence lies in its continued profitability; otherwise, it will lose its value, and no matter how good the cash flow is, it will be in vain.
3. Enterprises must pay attention to management
In fact, in the LED industry, there are many companies whose teams are disorganized and have lost their jobs in Maicheng. If it is not managed well, it will be like a piece of loose sand. Without the impact of others, it will be defeated by yourself first. However, if we want to find the reasons for a successful enterprise, then it must be that it has a good management team, the enterprise's management system must be sound, the management must be effective, and the operation must be efficient. This is not only a matter of cohesion, but also related to the efficiency of the enterprise.
"Today's market is very transparent, and there is a seamless connection between customers and all suppliers. Do you want profits from customers? It is difficult. Do you want profits from suppliers? In fact, it is also difficult. So where do you want profits?" Mr. Gong Wen, general manager of Jingtai, raised a major issue that people are concerned about in his speech. "I think it's about asking for profits from management. Yesterday, the first question Mr. Wang from Nationstar Optoelectronics asked me when he met me was: What is your turnover rate? How much inventory is there? A company as big as theirs is very concerned about turnover rate and inventory issues. As members of small and medium-sized enterprises, what reason do we have not to pay attention to our management?" For example, the amoeba management model of Kazuo Inamori introduced by Jingtai has strengthened the cost awareness and innovation awareness of each department of the company. Thanks to its good cost control and management capabilities, Jingtai has always maintained a relatively high profit margin in the industry.
He was sincere and used 18 years of experience in the industry to make suggestions for the LED industry. Mr. Gong Wen, general manager of Jingtai Optoelectronics, gave a simple and cordial impromptu speech, which aroused warm applause from the leaders of the participating companies, and also won the heartfelt praise of those who have been working hard in the LED industry for many years.
ANNA