How can the cable industry "internalize" under the shadow of crisis?
Jun 25,2019
Under the impact of the financial crisis, adverse factors such as excess production capacity and chaotic market competition are constantly troubling the wire and cable industry. Difficulties do exist objectively; being overly optimistic is not feasible, and being excessively pessimistic is no different. In the face of the crisis, the cable industry should neither be overly fearful nor should it overestimate itself.
From a macro perspective, we are currently in an era of great transformation and development for the wire and cable industry, so it is essential to correctly grasp the direction. From a micro perspective, it is necessary to implement the scientific outlook on development and change the outdated thinking that is unsuitable for the development of the cable industry, strengthening "internal training" during the crisis.
The urgent task is for the wire and cable industry to follow the rules of economic development.
Under the impact of the financial crisis, adverse factors such as excess production capacity and chaotic market competition are constantly troubling the wire and cable industry. Difficulties do exist objectively; being overly optimistic is not acceptable, and being overly pessimistic is no different. In the face of the crisis, the cable industry should neither be overly fearful nor should it be arrogant.
From a macro perspective, we are currently in an era of great reform and development in the wire and cable industry, so it is essential to correctly grasp the direction. From a micro perspective, we need to implement the scientific development concept and change the outdated thinking that is not suitable for the development of the cable industry, strengthening 'internal practice' during the crisis.
The urgent task is for the wire and cable industry to follow the laws of economic development and base its growth on technological progress, improvement of employee quality, management innovation, and intensive development. Enhancing the internal capabilities of wire and cable enterprises is not an overnight task; it requires strengthening in multiple areas.
Development goals must be continuously emphasized. Currently, wire and cable enterprises are generally in a difficult situation of poor production and operation, making it more important than ever to strengthen confidence. A long-term strategic goal should be formulated based on thorough verification; this serves as a guide for all actions of the enterprise and a banner that inspires progress, uniting and motivating people. The development goals of the enterprise are not just a guiding direction, a series of dull numbers, or a grand blueprint, but a concrete embodiment of the mission, vision, and core values recognized by all employees. Emphasizing goal awareness means frequently looking up to see the road, walking hand in hand, and avoiding detours. We must firmly believe that as long as we find the road, we need not fear the distance.
Business strategies must be continuously implemented. In the face of a significant shrinkage in domestic and international cable market demand, it is necessary to quickly innovate business models and methods. It is essential for enterprises to have certain resources, but the key is the quantity of resources that can be utilized and the methods and efficiency of resource utilization; it is necessary for enterprises to have certain core capabilities, but the key is to identify gaps and find the correct development direction for the future. Enterprises must maximize the use of resources and capabilities under the guidance of the correct strategy, and the organic integration of resources, capabilities, and strategy constitutes the strategic capability of the enterprise. Enterprises can no longer follow an extensive development path; they must enhance core capabilities and actively explore breakthroughs in technological innovation, management innovation, energy conservation, and harmonious development.
Enterprise capital must be continuously increased in value. Cable enterprises generally face reduced profit margins and tight funds. It is necessary to effectively operate all tangible and intangible stock assets owned by the enterprise through various means such as flow, fission, combination, and optimization to maximize value increase. As competition in the wire and cable market intensifies, traditional growth methods can no longer keep pace with development. Only by flowing, integrating, and reconstructing various elements of the enterprise, including products, technology, equipment, factories, trademarks, strategies, services, culture, and management teams, in the form of capital, and further optimizing configuration to form synergy can new breakthroughs be achieved and value preservation and appreciation realized.
Market expansion must be continuously pursued. For cable enterprises, profit is important, but market share is even more important; market share is important, but competitive advantage is more important; competitive advantage is important, but the core capability of the enterprise is the most important. Only with core capabilities can enterprises create competitive advantages, and only with competitive advantages can sustainable development be achieved, ensuring the longevity of the enterprise. Therefore, the core capability of the enterprise is the true source of competitive advantage, market share, and enterprise profit. In the future, the development of the cable industry may be very challenging. Enterprises must not only study peers and competitors but also study the market and customers. First, stabilize the market and maintain steady growth in sales performance. Second, optimize the customer structure and focus on mainstream markets that can support enterprise performance growth, developing a group of strategic users. Third, expand the market; the cable market must rely on 'size' for support, emphasizing large projects, significant contributions, and substantial benefits to capture the largest piece of the market 'cake'.
Technological advantages must be continuously updated. The phenomenon of low-price competition in the wire and cable industry persists; it is necessary to promote the development concept of winning the market through quality and creating value through technology across the industry. Competitive advantage ultimately reflects the value that the enterprise can create for customers. True competitive advantage lies in having no competition; the best way to avoid competition is to create and monopolize a new technological field. In the technological research and development phase, enterprises should always adhere to a market and user-oriented approach, paying attention to both the general needs of the wire and cable market and being adept at discovering potential individual needs. By exploring and utilizing new technologies, new functions, and new materials, enterprises can develop high-value-added products that exceed user expectations, continuously improving their profitability and market competitiveness.
Brand effects must be continuously enhanced. Currently, the wire and cable industry does not have any truly well-known brands in the international market. A brand is an important intangible asset for modern enterprises, and a strong brand effect is a winning weapon and important symbol for enterprises. Brand building is not just a simple brand slogan and a brand goal, nor is it merely marketing promotion and advertising communication; it requires establishing a competitive and systematic brand strategy. On one hand, it is necessary to solidify the brand foundation. Half of a brand is quality, and the other half is integrity. Every management detail of the enterprise should be treated as a node for enhancing the brand, and this should be consistently pursued. On the other hand, it is essential to continuously enrich the brand connotation, set goals, directions, and guiding principles for brand building, make sound branding decisions, choose brand models, define brand identity, plan brand extensions, and manage the brand, forming widespread brand value recognition that allows products to take root in customers' minds.
Production management must be continuously optimized. Improving the quality of wire and cable products and work efficiency is currently an important task. Formulating production operation plans is a process of continuously optimizing various production factors; often, a mismatch of one factor can lead to production stagnation, causing waste and losses. It is essential to ensure that the production process, production technology, personnel allocation, equipment conditions, and other factors are coordinated and balanced, establishing a long-term monitoring mechanism. The site is the 'gathering point' of various production factors and the 'focal point' of various management functions of departments; site management is the management of various production factors on-site and also a verification of various management functions. Its most obvious characteristic is orderliness; only orderly production and operation activities can reduce management errors and avoid human mistakes.
Cost indicators must be continuously pressured. Wire and cable enterprises have long been 'troubled by copper', making cost management particularly important. Sales create profits, while management work increases costs. Customers are unlikely to be willing to pay for waste; otherwise, the inevitable result is that enterprises will lose the market. The fundamental purpose of strengthening cost management is to lay a solid foundation for winning the market, and the ultimate goal of cost management is to eliminate all ineffective labor and waste, thereby ensuring market and profit maximization. All management actions of the enterprise should revolve around this goal, applying reverse pressure, layer by layer, and implementing it at every level to reduce costs.
Management systems must be continuously adhered to. Good innovation management is a long-term research and practice topic for operators of cable production enterprises. Management includes both hard management (mainly control) and soft management (mainly guidance). In China, enterprise managers spend 80% of their time on 'management' and 20% on 'administration', while in excellent foreign enterprises, the opposite is true. Management must continuously standardize systems and processes, and more importantly, strengthen the execution capability of long-term adherence to systems and processes. Once even the best management system is breached, it loses its intended effect and may produce even greater negative effects. The key to enterprise management is persistence and proactive execution. By guiding through culture and fair rewards and punishments, it is possible to reasonably motivate employees' emotions, first making them emotionally engaged, and then prompting them to take action, thus forming proactive execution capability.
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