Analysis of competition structure of water pump industry in China
Firstly, the competition among the existing enterprises is rooted in the basic economic structure, and far beyond the scope of the existing competitors. A state of competition within the industry depends on five basic competitive forces entered the threat, the threat of substitutes, Mai Fangkan price, bargaining ability, competition in the industry, these forces together determines the ultimate profit potential in the industry. Competition in an industry is substantially beyond the scope of existing participants. Customers, suppliers, alternatives, potential entrants are competitors in the industry and will show their importance more or less.
Competition within the industry: existing competitors compete for positions in a familiar manner. Tactical applications are often price competition, advertising campaigns, product introductions, customer service and warranty services. This struggle occurs, or because one or more competitors are under pressure, or because they see opportunities to improve their situation.
In most industries, the competitive action of an enterprise can have a significant impact on its competitors, which may prompt competitors to retaliate or manage to do so. In the water pump industry, the competitiveness of foreign enterprises is mainly reflected in the brand advantage. Vicious competition among domestic enterprises is very serious, and enterprises are copying and counterfeiting each other. Faced with this unhealthy growth environment, we believe that enterprises should pay attention to independent innovation and establish their own brand value. Existing pump manufacturing enterprises are mainly from overseas competition threat.
For Chinese pump manufacturing industry is facing fierce market competition pressure of foreign multinational companies, better economic Chinese asymptotic foreign multinational companies, has entered the Chinese pump manufacturing market, become the existing competitors. The competition of Chinese pump product market is one of the more competitive markets in modern commodity market, which has certain universality and representativeness. The main trends are: globalization of product development, strong integration as the strategic direction.
With the accession of WTO, the owners of new management technology and manufacturing technology will gradually compete for the new market, penetrate the existing market, and all of them will be branded with low cost and high added value products. With high, new, sharp and market optimization as the basis of competition, today's industry is well aware of the bidding stage, the cost of bidding too high will be forced to withdraw from the competition stage. Therefore, we can only improve product market share, improve product quality and reliability, and scale effect to reduce costs, in order to improve competitiveness.
Two, potential entrants analyze potential competition for firms or companies whose fingers may enter the industry for competition. The new entrants will bring new production capacity and demand for resources and markets, which may lead to higher production costs, increased market competition, lower product prices, and lower industry profits. Potential threats to potential competitors depend on the extent of barriers to entry and the degree of responsiveness of existing firms within the industry. The higher the barriers to entry, the more intense the reaction of existing firms, the less likely it is for potential competitors to enter or do not want to enter, and thus pose less threat to the industry.
Barriers to entry are:
The economies of scale. Economies of scale include product production, research and development, marketing and after-sales service. It is an important obstacle to potential competitors entering the industry, economic scale industry is to enter the new requirements of manufacturers with production and operation of the same size with the existing manufacturers, or face the cost of production or marketing cost competitive disadvantage.
The brand loyalty. Product image or brand loyalty established through long term advertising or customer service is one of the major barriers for potential competitors to enter the industry. Especially in the beverage industry, pharmaceutical industry and cosmetics industry, new entrants into the industry manufacturers have to spend lots of time and investment, to overcome the original brand loyalty, to establish their own products (or brand image).
The capital requirements. Capital requirements to enter the industry, including not only the plant and equipment and other fixed capital investment, including consumer credit, product inventory and the opening of the loss of liquidity needs; need not only the production of funds, but also need a lot of money for business, product development, advertising and corporate public relations activities etc.. Capital requirements are a major barrier to entry into the mining, petrochemical, steel or automotive industries.
The distribution channel. Distribution channels can also become an important obstacle to entry into the industry. For example, a new medical device manufacturer, he must through the price discount, a lot of advertising or marketing activities, can be squeezed out of existing competitors, we can use the distribution channels less, or existing competitors to distribution channel control more tightly into the industry barrier is high, new into the industry the manufacturers had to reinvent the wheel, began to establish their own distribution channels from scratch.