In recent years, the competitive environment of China's paint companies is undergoing drastic changes. With the opening up of foreign countries and the accelerating pace of investment promotion, the huge market demand for coatings has attracted foreign companies.
In front of the competitors of powerful foreign-funded coating companies, the market share of many domestic paint companies has been continuously lost. The reasons are many.
Substantial changes in the competitive environment of the market At present, the total world production of paint is about 28 million tons, of which construction coatings account for nearly half, about 11 to 14 million tons. In industrialized countries, architectural coatings represent the largest percentage of consumer coatings, accounting for about 50% of total coating output. The annual output of American architectural coatings has been maintained at around 2.7 million tons in the past 10 years, accounting for 52% of the total coating output. Europe and Japan also basically remain at this level. Relevant statistics show that the annual growth rate of world paint demand is 3.7%, reaching 28 million tons. Although the world paint industry has come through a period of rapid development and has entered a period of maturity, and the paint market in developed countries has become saturated, the rapid growth of the commercial economy in developing countries and regions in recent years has stimulated the demand for the paint market, especially in the Asia Pacific region. The paint market has grown faster. Although India, South Korea and Taiwan also have rapid growth, China will grow at a faster rate, with an average annual growth rate of 6.6%. The huge paint market potential in China has become the focus of competition among the world's paint companies.
Before the 1990s, some private enterprises in China had won a place in the paint market by their flexible management methods, distinctive paint products and special geographical advantages. However, quite a few companies still produced workshops, and the production scale was small. Marketing is even more provocative and has no long-term business strategy. It is understood that among the thousands of domestic paint companies, the output of paint companies with more than 5,000 tons is less than 3%, and the paint products are mostly concentrated in middle and low-end markets. With the increasing awareness of domestic consumers of brand, China's paint companies can no longer rely on price cuts, should pay more attention to changes in business strategy. The current competitive environment in the domestic paint market has undergone substantial changes. These changes are specifically reflected in the following aspects:
First, foreign companies participating in competition have changed.
Before the 1990s, foreign capital was mainly the small capital of Hong Kong, Macao and Taiwan to enter the paint market in China. Its purpose was to use the low labor force and preferential policies in China to engage in processing trade at both ends, and there was a market complementary relationship with domestic paint companies. The impact on the domestic paint market is small. After the 1990s, with the entry of large multinational corporations, they gradually occupied the Chinese paint market through strategic mergers and acquisitions, cooperation, and joint ventures, encircling Chinese paint brands, forming a scale effect of market integration, and achieving global business goals.
With the concern of consumers and the international community on environmental protection, the investment in product research and development in the international coating industry has continuously increased, and the increasingly saturated world paint market has led to fiercer competition. For these reasons, international coating companies have continued to conduct global mergers, acquisitions, mergers, and joint ventures to achieve a global scale of rationalization. They have formed a scale effect of market integration, and have increased their competitiveness through a degree of monopoly. Therefore, they are in a competitive relationship with domestic paint companies in the market. They want to annex China's local paint companies in fierce competition and achieve the purpose of monopolizing and monopolizing the Chinese paint market.
Second, the form of competition and intensity have changed.
In the 1980s and 1990s, the competition in the paint market in China was dominated by the internal competition of domestic paint companies, including the participation of some small capitals from Hong Kong, Macao, and Taiwan. It was basically a form of complete competition, and the competitors were quite equal in strength. The market environment that is in short supply, and its advantages and strengths that are equivalent to each other determine that the nature of competition is not to the extent of your death or death. Instead, it can share a bowl of porridge and gain a certain amount of market share and profits. It is just how much. In the 1990s, after the long drive of international capital, its profound changes occurred in the form and intensity of competition. With strong capital, advanced production technology, management and marketing concepts, and the advantages of international brands, multinational corporations have launched a powerful offensive for domestic domestic paint companies with the goal of taking a strong command of the market's commanding heights, and this has brought competition into the white-hot stage. China Coatings worry-free network s XE*`I;p1AB
Third, the way and means of competition have changed.
In the 1980s and 1990s, the paint market competition mainly used low-cost means such as mutual price reduction, rebates, and imitation. After entering the 1990s, multinational corporations undertook strategic siege of the domestic paint market and broke through each. They use monopolistic competition to deal with Chinese domestic paint companies still in cradle, relying on their capital strength and brand dominance to pressure their opponents, further monopolize the market and technology, and allow opponents to fight back and force you to give in. Then, through mergers and acquisitions, the company will strengthen its strength, reduce costs, increase its competitiveness, and seize the market's commanding heights, achieving the monopoly of the Chinese paint market and its aim of obtaining high profits. Chinese paint worry-free network OX! LV. p&]2～
There are many reasons for the enterprises' failure to compete due to the weakness of the enterprises caused by the competition failure of the paint companies in China. It is easy for people to attribute them to differences in the production process technology and paint quality performance between Chinese and foreign coatings companies. But from a marketing point of view, differences in product technology do not absolutely imply competition. Because consumer income is multi-level, consumer demand is also diverse and multi-level. In fact, multi-level consumer income determines the diversity and multi-levels of consumer demand. Therefore, it is not the most advanced and advanced coating that has a market. The gap between the management concepts and strategies of paint companies is the fundamental reason for the failure of Chinese paint companies to compete. China Paint No Worries Network (\#)?5^DoA tb)T^
The first is that business concepts are old, stick to conventions, and do not adapt to changes in the competitive environment.
Judging from the business philosophy, in different market environments, the government and the company should have different business orientations. On the one hand, there is a relatively short time in the market environment where supply and demand in China's paint market are largely balanced. The government’s structural adjustment orientation and the company’s business orientation have just shifted from bottleneck-oriented and production-oriented to market-driven, and the market environment has undergone a turnaround. Changes, the competitive situation has disrupted the timetable for the smooth transition of paint products and industrial structure and transformation of business concepts by domestic companies. On the other hand, the concept of China's paint companies is aging, sticks to regulations, and cannot keep up with the times. The business orientation of the company still stays at the market demand-oriented stage. It does not change to market-oriented competition, but only sees the market demand, but does not see the paint. The competitor of the enterprise has not yet calmly analyzed its advantages and disadvantages in the competition. As long as the paint company sees new market demand, it will enter the paint industry with no regard for its own conditions and objective environment, resulting in the current low level of repeated construction of the paint industry in China, resulting in a large number of Chinese paint companies (nearly 8,000) but competing The reality is not strong. Of course, this is related to institutional factors, but in the end it is still a problem that business concepts do not adapt to changes in the market competition environment. The low-level repeated construction of paints under the guidance of backward business philosophy has on the one hand inappropriately exacerbated the fierce competition in a certain level of paint market, and on the other hand, the demand for paint market at a higher or lower level has resource allocation. blank. In contrast, foreign companies' business orientation after entering China is always market-oriented, and their pricing strategies, sales strategies, advertising strategies, and merger and acquisition strategies are all subject to competition.
The second is the backwardness of brand management.
For a long time, there have been many problems in the management and management of domestic coatings companies. In the market competition, China's paint companies take the price war as the first priority, and do not pay attention to the growth and protection of the brand, let alone to the development and utilization of the brand. For example, in Shunde, Guangdong, a company with seven or eight brands is very common. Some companies have more than 10 brands although they are small. Numerous brands have led to a further increase in the cost and difficulty of decentralizing resources and nurturing leading brands. On the one hand, the establishment and cultivation of these brands require financial support, resources are dispersed, and the burden on enterprises is greatly increased. On the other hand, it also causes the situation that each brand is difficult to be outstanding. Therefore, the number of paint companies in Shunde is the largest in the country, but so far there is not a well-known paint brand such as Shunde Home Appliances Kelon and Midea. The foreign multinational companies have more concentrated brands, high visibility and strong competitiveness, and at the same time they focus on the protection, utilization and development of brands. Therefore, China's paint companies should conduct a successful and effective elimination of these brands, concentrate their energy, human resources and financial resources to cultivate, protect and develop competitive leading brands.
Third, insufficient market research and corporate marketing strategy mistakes.
For a long time, China's coating companies lacked research on the market and research on marketing strategies. Some people even thought that market research wastes manpower and financial resources. Dispensable marketing strategies are advertising and promotion. From a subjective point of view, it is the weak awareness of business strategy and the insufficient attention to it; objectively speaking, it is the lack of talents in market research, marketing and strategic management. In reality, some large-scale paint companies occasionally conduct market research. However, they often focus on the total market demand and the market's growth forecast, but they do not consider competitors' technological capabilities, marketing channels, partners, and products. The strengths, etc., never measure the market share that the company may strive for in a particular market demand. The multinational companies regard market research and marketing strategies as the core content of the business strategy.
Compared with foreign companies, China's paint companies also have great deficiencies in marketing strategies. Before entering the Chinese market, some foreign companies conducted a thorough study of consumers both at home and abroad. As a result, they came to the conclusion that current foreign consumers pay attention to product quality and indicators while Chinese domestic consumers focus on brands. Therefore, the marketing strategies of these foreign companies such as Nippon, ICI, etc., are the well-known brands of trees, and they use advertising and brands to open the market. They attach great importance to the role of advertising and brand promotion. However, domestic Beijing paint companies often adopt methods such as drinking paint, painting fish tanks, painting the models in the bustling downtown, and other methods that may be counterproductive. This can easily lead to consumer aversion.
Fourth, there is a short-term behavior in business operations.
Most paint companies in China have the problem of short-term management behavior. The business strategy will inevitably focus on short-term profits. The multinational companies that entered the Chinese market in the 1990s were all pursuing long-term profit maximization as their goal. They did not hesitate to lose money in the short-term and adopt the strategy of first obtaining the largest market share and then obtaining long-term monopolistic profits. However, our country's paint companies only pay attention to short-term profits while ignoring market share and long-term profits. This is an important reason for the failure of the paint companies in China. No wonder that in the current Chinese paint market, the business opportunities of foreign brand companies have continued, and domestic companies have struggled. It is no wonder that Nippon has occupied almost half of China’s market share in just over two years.
The fifth is the pursuit of a diversified growth strategy.
In the past period, many paint companies that had begun to take shape in coatings have taken the road to paint diversification in order to achieve greater development. The lighthouse painter engaged in the battery project. After the body-shell separation variants of the Twin Tigers Paint Co., Ltd., they could not see the traces of paint. Northwest Chemicals continued to enter new business areas, and Ning Tianlong changed its name into the pesticide field. As we all know, the long-term development of a company depends on whether it has core competitiveness, and the formation of core competitiveness requires great efforts and long-term accumulation of operations. In general, the formation of a company's core competitiveness is closely related to the business areas in which the company is engaged. Therefore, to implement specialized operations, the main focus is to focus on the most familiar and powerful business areas, and to enhance the competitiveness of the company. Effective Ways. Practice has proved that the implementation of professional management is the only way for large paint companies at home and abroad to succeed. Hunan Xiangjiang Group has always positioned coatings as its main business in the paint industry. In recent years, it has been firmly following the path of professional management, and it has developed rapidly. It has entered the top ten coating companies in China; the Three Gorges, Hangzhou Pagoda and other enterprises With one mind and one paint, the results have all been well developed. In fact, it is not difficult to see from the successful experience in the development of these large coating companies that in order to maintain sustainable competitiveness and strengths, companies must select the relevant business areas that they are most familiar with and have the most strength in order to continuously enhance their core competitiveness. The direction of excellence, bigness, and strength is growing rapidly. Otherwise, in the current situation of increasingly fierce competition among enterprises, a company that is not very powerful will be extremely difficult to obtain competitive advantages in many areas.
In front of the competitors of powerful foreign-funded coating companies, the market share of many domestic paint companies has been continuously lost. The reasons are many.
Substantial changes in the competitive environment of the market At present, the total world production of paint is about 28 million tons, of which construction coatings account for nearly half, about 11 to 14 million tons. In industrialized countries, architectural coatings represent the largest percentage of consumer coatings, accounting for about 50% of total coating output. The annual output of American architectural coatings has been maintained at around 2.7 million tons in the past 10 years, accounting for 52% of the total coating output. Europe and Japan also basically remain at this level. Relevant statistics show that the annual growth rate of world paint demand is 3.7%, reaching 28 million tons. Although the world paint industry has come through a period of rapid development and has entered a period of maturity, and the paint market in developed countries has become saturated, the rapid growth of the commercial economy in developing countries and regions in recent years has stimulated the demand for the paint market, especially in the Asia Pacific region. The paint market has grown faster. Although India, South Korea and Taiwan also have rapid growth, China will grow at a faster rate, with an average annual growth rate of 6.6%. The huge paint market potential in China has become the focus of competition among the world's paint companies.
Before the 1990s, some private enterprises in China had won a place in the paint market by their flexible management methods, distinctive paint products and special geographical advantages. However, quite a few companies still produced workshops, and the production scale was small. Marketing is even more provocative and has no long-term business strategy. It is understood that among the thousands of domestic paint companies, the output of paint companies with more than 5,000 tons is less than 3%, and the paint products are mostly concentrated in middle and low-end markets. With the increasing awareness of domestic consumers of brand, China's paint companies can no longer rely on price cuts, should pay more attention to changes in business strategy. The current competitive environment in the domestic paint market has undergone substantial changes. These changes are specifically reflected in the following aspects:
First, foreign companies participating in competition have changed.
Before the 1990s, foreign capital was mainly the small capital of Hong Kong, Macao and Taiwan to enter the paint market in China. Its purpose was to use the low labor force and preferential policies in China to engage in processing trade at both ends, and there was a market complementary relationship with domestic paint companies. The impact on the domestic paint market is small. After the 1990s, with the entry of large multinational corporations, they gradually occupied the Chinese paint market through strategic mergers and acquisitions, cooperation, and joint ventures, encircling Chinese paint brands, forming a scale effect of market integration, and achieving global business goals.
With the concern of consumers and the international community on environmental protection, the investment in product research and development in the international coating industry has continuously increased, and the increasingly saturated world paint market has led to fiercer competition. For these reasons, international coating companies have continued to conduct global mergers, acquisitions, mergers, and joint ventures to achieve a global scale of rationalization. They have formed a scale effect of market integration, and have increased their competitiveness through a degree of monopoly. Therefore, they are in a competitive relationship with domestic paint companies in the market. They want to annex China's local paint companies in fierce competition and achieve the purpose of monopolizing and monopolizing the Chinese paint market.
Second, the form of competition and intensity have changed.
In the 1980s and 1990s, the competition in the paint market in China was dominated by the internal competition of domestic paint companies, including the participation of some small capitals from Hong Kong, Macao, and Taiwan. It was basically a form of complete competition, and the competitors were quite equal in strength. The market environment that is in short supply, and its advantages and strengths that are equivalent to each other determine that the nature of competition is not to the extent of your death or death. Instead, it can share a bowl of porridge and gain a certain amount of market share and profits. It is just how much. In the 1990s, after the long drive of international capital, its profound changes occurred in the form and intensity of competition. With strong capital, advanced production technology, management and marketing concepts, and the advantages of international brands, multinational corporations have launched a powerful offensive for domestic domestic paint companies with the goal of taking a strong command of the market's commanding heights, and this has brought competition into the white-hot stage. China Coatings worry-free network s XE*`I;p1AB
Third, the way and means of competition have changed.
In the 1980s and 1990s, the paint market competition mainly used low-cost means such as mutual price reduction, rebates, and imitation. After entering the 1990s, multinational corporations undertook strategic siege of the domestic paint market and broke through each. They use monopolistic competition to deal with Chinese domestic paint companies still in cradle, relying on their capital strength and brand dominance to pressure their opponents, further monopolize the market and technology, and allow opponents to fight back and force you to give in. Then, through mergers and acquisitions, the company will strengthen its strength, reduce costs, increase its competitiveness, and seize the market's commanding heights, achieving the monopoly of the Chinese paint market and its aim of obtaining high profits. Chinese paint worry-free network OX! LV. p&]2～
There are many reasons for the enterprises' failure to compete due to the weakness of the enterprises caused by the competition failure of the paint companies in China. It is easy for people to attribute them to differences in the production process technology and paint quality performance between Chinese and foreign coatings companies. But from a marketing point of view, differences in product technology do not absolutely imply competition. Because consumer income is multi-level, consumer demand is also diverse and multi-level. In fact, multi-level consumer income determines the diversity and multi-levels of consumer demand. Therefore, it is not the most advanced and advanced coating that has a market. The gap between the management concepts and strategies of paint companies is the fundamental reason for the failure of Chinese paint companies to compete. China Paint No Worries Network (\#)?5^DoA tb)T^
The first is that business concepts are old, stick to conventions, and do not adapt to changes in the competitive environment.
Judging from the business philosophy, in different market environments, the government and the company should have different business orientations. On the one hand, there is a relatively short time in the market environment where supply and demand in China's paint market are largely balanced. The government’s structural adjustment orientation and the company’s business orientation have just shifted from bottleneck-oriented and production-oriented to market-driven, and the market environment has undergone a turnaround. Changes, the competitive situation has disrupted the timetable for the smooth transition of paint products and industrial structure and transformation of business concepts by domestic companies. On the other hand, the concept of China's paint companies is aging, sticks to regulations, and cannot keep up with the times. The business orientation of the company still stays at the market demand-oriented stage. It does not change to market-oriented competition, but only sees the market demand, but does not see the paint. The competitor of the enterprise has not yet calmly analyzed its advantages and disadvantages in the competition. As long as the paint company sees new market demand, it will enter the paint industry with no regard for its own conditions and objective environment, resulting in the current low level of repeated construction of the paint industry in China, resulting in a large number of Chinese paint companies (nearly 8,000) but competing The reality is not strong. Of course, this is related to institutional factors, but in the end it is still a problem that business concepts do not adapt to changes in the market competition environment. The low-level repeated construction of paints under the guidance of backward business philosophy has on the one hand inappropriately exacerbated the fierce competition in a certain level of paint market, and on the other hand, the demand for paint market at a higher or lower level has resource allocation. blank. In contrast, foreign companies' business orientation after entering China is always market-oriented, and their pricing strategies, sales strategies, advertising strategies, and merger and acquisition strategies are all subject to competition.
The second is the backwardness of brand management.
For a long time, there have been many problems in the management and management of domestic coatings companies. In the market competition, China's paint companies take the price war as the first priority, and do not pay attention to the growth and protection of the brand, let alone to the development and utilization of the brand. For example, in Shunde, Guangdong, a company with seven or eight brands is very common. Some companies have more than 10 brands although they are small. Numerous brands have led to a further increase in the cost and difficulty of decentralizing resources and nurturing leading brands. On the one hand, the establishment and cultivation of these brands require financial support, resources are dispersed, and the burden on enterprises is greatly increased. On the other hand, it also causes the situation that each brand is difficult to be outstanding. Therefore, the number of paint companies in Shunde is the largest in the country, but so far there is not a well-known paint brand such as Shunde Home Appliances Kelon and Midea. The foreign multinational companies have more concentrated brands, high visibility and strong competitiveness, and at the same time they focus on the protection, utilization and development of brands. Therefore, China's paint companies should conduct a successful and effective elimination of these brands, concentrate their energy, human resources and financial resources to cultivate, protect and develop competitive leading brands.
Third, insufficient market research and corporate marketing strategy mistakes.
For a long time, China's coating companies lacked research on the market and research on marketing strategies. Some people even thought that market research wastes manpower and financial resources. Dispensable marketing strategies are advertising and promotion. From a subjective point of view, it is the weak awareness of business strategy and the insufficient attention to it; objectively speaking, it is the lack of talents in market research, marketing and strategic management. In reality, some large-scale paint companies occasionally conduct market research. However, they often focus on the total market demand and the market's growth forecast, but they do not consider competitors' technological capabilities, marketing channels, partners, and products. The strengths, etc., never measure the market share that the company may strive for in a particular market demand. The multinational companies regard market research and marketing strategies as the core content of the business strategy.
Compared with foreign companies, China's paint companies also have great deficiencies in marketing strategies. Before entering the Chinese market, some foreign companies conducted a thorough study of consumers both at home and abroad. As a result, they came to the conclusion that current foreign consumers pay attention to product quality and indicators while Chinese domestic consumers focus on brands. Therefore, the marketing strategies of these foreign companies such as Nippon, ICI, etc., are the well-known brands of trees, and they use advertising and brands to open the market. They attach great importance to the role of advertising and brand promotion. However, domestic Beijing paint companies often adopt methods such as drinking paint, painting fish tanks, painting the models in the bustling downtown, and other methods that may be counterproductive. This can easily lead to consumer aversion.
Fourth, there is a short-term behavior in business operations.
Most paint companies in China have the problem of short-term management behavior. The business strategy will inevitably focus on short-term profits. The multinational companies that entered the Chinese market in the 1990s were all pursuing long-term profit maximization as their goal. They did not hesitate to lose money in the short-term and adopt the strategy of first obtaining the largest market share and then obtaining long-term monopolistic profits. However, our country's paint companies only pay attention to short-term profits while ignoring market share and long-term profits. This is an important reason for the failure of the paint companies in China. No wonder that in the current Chinese paint market, the business opportunities of foreign brand companies have continued, and domestic companies have struggled. It is no wonder that Nippon has occupied almost half of China’s market share in just over two years.
The fifth is the pursuit of a diversified growth strategy.
In the past period, many paint companies that had begun to take shape in coatings have taken the road to paint diversification in order to achieve greater development. The lighthouse painter engaged in the battery project. After the body-shell separation variants of the Twin Tigers Paint Co., Ltd., they could not see the traces of paint. Northwest Chemicals continued to enter new business areas, and Ning Tianlong changed its name into the pesticide field. As we all know, the long-term development of a company depends on whether it has core competitiveness, and the formation of core competitiveness requires great efforts and long-term accumulation of operations. In general, the formation of a company's core competitiveness is closely related to the business areas in which the company is engaged. Therefore, to implement specialized operations, the main focus is to focus on the most familiar and powerful business areas, and to enhance the competitiveness of the company. Effective Ways. Practice has proved that the implementation of professional management is the only way for large paint companies at home and abroad to succeed. Hunan Xiangjiang Group has always positioned coatings as its main business in the paint industry. In recent years, it has been firmly following the path of professional management, and it has developed rapidly. It has entered the top ten coating companies in China; the Three Gorges, Hangzhou Pagoda and other enterprises With one mind and one paint, the results have all been well developed. In fact, it is not difficult to see from the successful experience in the development of these large coating companies that in order to maintain sustainable competitiveness and strengths, companies must select the relevant business areas that they are most familiar with and have the most strength in order to continuously enhance their core competitiveness. The direction of excellence, bigness, and strength is growing rapidly. Otherwise, in the current situation of increasingly fierce competition among enterprises, a company that is not very powerful will be extremely difficult to obtain competitive advantages in many areas.
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