In early June, the “2017 China LED Lighting Industry Top 100” complete list was announced, which attracted the attention of the industry.
As we all know, the domestic LED industry has already gone through the spring of vigorous development, with serious product homogeneity, fierce price wars, market downturn, low profits, and rising labor and raw material prices. In the context of the industry's great turmoil, the backward productivity and management capabilities are facing the established outcome of being eliminated.
So, how do the LED companies that are shortlisted this time maintain sustained revenue growth and stand out from the crowd?
The Best Management Consulting Group, which has served LED companies such as Leyard Optoelectronics, Feidiao Electric, Eagle Electric, Alto Electronics, etc., has a comprehensive and profound understanding of this. The reporter interviewed Best Founder Zhang Zhenghua, He said: “Amidst all kinds of things, only those who change can survive. These companies that have entered the top 100 are pioneers in the LED industry. They stimulate profit growth and maintain corporate vitality through cross-industry innovation, mergers and acquisitions integration, blue ocean development, and internal management upgrades. Whoever can find the right direction for transformation and upgrading will have the initiative in the future market. ”
The giants have crossed borders and opened up the industry in Xinjiang.
Representative companies: Lianjian Optoelectronics, Leyard, Lehman Co., Ltd.
At present, a competitive landscape in the LED industry has taken shape. Under the influence of factors such as the macro-economy and the weak growth of the LED industry, companies must consider improving their sustained profitability and need to explore new profit growth points. Especially for LED industry giants, cross-border upgrades and opening up new territories are imperative. Implementing the strategy of dual main business or multiple main business is the best way for an enterprise to obtain new profit growth points.
There are many examples of this among the top 100 companies in the industry in 2017. Lianjian Optoelectronics has flourished in the field of digital media, established Linkage Culture, and acquired companies such as Timeshare Media, Youtuo Public Relations, Precision Focus, and Estar, in an effort to build a huge digital media group; Lehman Co., Ltd. has been since 2015 Pursuing the "LED+Sports" dual-main business development strategy and participating in the establishment of the Lehman Kaixing Sports Culture Fund. Obviously, Lehman shares will go farther and farther in the sports industry; Leyard went deep into the cultural media business and acquired Jin Companies such as Da Lighting, Internet Yida, Lifeng Culture, Gionee and Pinneng Optoelectronics have achieved significant business integration effects and created a new type of “urban culture, tourism, performing arts”business model……
The above case analysis shows that whether it is cross-border to sports, digital media advertising, or cultural media, financial electronics, the strategic upgrades of industry giants are based on the original core resources of the company. At the same time, the main business brand remains strong.
For LED companies, cross-border transformation is indeed full of temptations, but the risks of setting foot in another field are also obvious. The degree of grasp of the market in new areas, the ability to resist risks, and the level of corporate management are all facing challenges. Therefore, most cross-border transformations occur in more mature LED companies.
Frequent mergers and acquisitions, synergistic effects are highlighted
Representative enterprises: Mulinsen, Unilumin Technology
Entering 2017, the LED industry M&A tides one after another, and the industry reshuffle is intensified. Some leading companies entered the fast track through mergers and acquisitions to achieve expansion and upgrade.
Mulinsen, as the leader in LED packaging, has a holistic view of the acquisition. In addition to increasing the main business of LED packaging, it has laid out the entire LED industry chain. Through the acquisition of Ultra Times Light Source, additional investment in the development of Jingjing Lighting, and equity investment in Huaian Aoyang Shunchang Optoelectronics, the company's core business industry chain has been extended. In addition, through the acquisition of LEDVANCE, it officially entered the international market and rapidly increased its overseas market share. As the company's packaging business advantages continue to strengthen, Mulinsen's products will continue to develop in high-end, branding and internationalization.
In 2017, Unilumin Technology had an amazing pace of mergers and acquisitions and bought five companies in a row. Through the acquisition of Hangzhou Bainian and Tsinghua Kangli, high-profile entry into the field of landscape lighting; acquisition of Aijia Lighting to expand the market share of the mid-to-high-end lighting field; acquisition of Xihe Optoelectronics, using its existing plant as an East China base to deepen the East China market…… On the whole, Unilumin Technology's frequent mergers and acquisitions are horizontal expansion centered on the main business, and achieved remarkable results in 2017. The total operating income increased by 73.33% compared with 2016, and the operating profit increased by 90% compared with 2016. 54%.
With the fermentation of scale advantages and synergies in various links, the gross and net profit margins of companies that expand their business through mergers and acquisitions continue to increase, and their revenue volume has reached a new level, continuing to widen the gap with other LED companies.
Deeply cultivating market segments to get rid of the Red Sea dilemma
Representative companies: Alto Electronics, Sanxiong Aurora
In 2018, the general lighting market has become more and more competitive, and traditional LED products are moving towards competition "Red Sea". In order to maintain the continuous growth of corporate revenue and net profit, LED companies have opened another direction, that is, to tap new market segments and highlight their differentiated advantages.
In the past Guangya Exhibition, landscape lighting, home lighting, plant lighting, UV LED and other sub-fields have attracted much attention. Among them, after the government proposed the construction of night tourism economy, the market demand for landscape lighting broke out. Alto Electronics has made great efforts in the landscape lighting blue ocean. Since the acquisition of the lighting engineering double-class enterprise Qian Baihui at the end of 2016, the landscape lighting business has grown rapidly, which has provided a guarantee for the company's annual performance.
As concepts such as smart homes and smart cities continue to heat up, home lighting has also been in full swing, and many companies have increased their investment in this field early. Prior to this, Sanxiong Aurora had always had a strong brand and market advantage in professional fields such as commercial lighting and tooling lighting. In the first half of 2017, Sanxiong Aurora officially struck the bell and went public. On the basis of a stable commercial lighting and tooling lighting market, it actively explored the home lighting market and launched the construction of an LED smart lighting production base.
Management upgrade, demand benefits from refinement
Representative enterprise: Jufei Optoelectronics
Under the current economic situation, LED companies want to achieve transformation and win the market, adopting a lean growth work method is another way. Many companies pay more attention to the direction of capital and energy investment, how to manage costs, and how to use the benefits obtained for reinvestment.
Among the top 100, Jufei Optoelectronics is an outstanding representative of internal management upgrade. Continue to promote lean management is one of the core competitiveness of Jufei Optoelectronics. The company adheres to PDCA as its corporate management language, and further optimizes and perfects IT system functions through the successful launch of an efficient production system, agile supply chain system, and marketing management system. In terms of human resource management, the management principles of focusing on goals, contributions, and results have become the guiding ideology and methods of employees’ work. At the same time, it creates a positive, collaborative and efficient organizational atmosphere, and the "first responsible person system" strengthens employee responsibilities. Awareness promotes teamwork.
It is understood that last year Jufei Optoelectronics introduced Best Management Consulting Company to start the procurement process optimization project. Introduce Huawei's process system, formulate and optimize procurement procedures and rules, and improve the business capabilities of procurement personnel.
Under the background of internal management upgrades, Jufei Optoelectronics achieved total operating income of 2.055 billion yuan in 2017, an increase of 36.18% over the same period of the previous year.
Generally speaking, in the LED industry that has entered a mature stage of development, market competition is fierce, and a hundred flowers bloom. Leading companies maintain the advantage of the strong, strive to enclose land, and upgrade across borders; some companies use capital means to merge and integrate industrial resources and expand their business; some companies seize the opportunity of the wind of wisdom and the explosion of night travel economy to deepen their efforts in subdivided fields and earn money. It has to be full. Under the new normal of the economy, how the LED market structure will be surging in the future, please wait and see.
