Under the guidance of a series of major policies supporting the production of heavy chemical equipment in the country, machinery manufacturing of heavy companies is really like showers. The market for manufactured goods is in short supply, but in the face of orders such as snow flakes, the steam turbine industry and the heavy-duty motor industry The bosses of the state-owned large and medium-sized compressor industries have been overwhelmed by their inability to deliver on time. In the case of large and medium-sized compressor companies in the general machinery industry, although the number of corporate orders has continued to increase, the benefits and benefits of the enterprises have not been able to maintain the same period of time as orders.
State-owned enterprises compete to lower prices
The correct concept of market competition is: focus on researching what new needs the user has? How much has changed in foreign technology? What new moves have the technology taken by competitors? In response to these changes, what kind of improvement measures are adopted in product development. This is the question that corporate CEOs should consider at any time. However, in the years of operation, the CEOs of large and medium-sized compressor companies focused on how to defeat and squeeze their competitors and grab orders instead of taking into account the win-win and sound development of the entire industry.
The compressor industry leader, Shenyang Gas Compressor Factory, decided that their competitive strategy would be to find a profitable hydrogen compressor product for R&D and make money, as a competitive bargaining chip, and in order to squeeze out small-scale breweries, they would be fiercely bidding in the fertilizer industry. Do not hesitate to take orders below the cost price; if you want to squeeze your competitors, you will enjoy huge profits. This kind of bid-price bidding is a common occurrence in the compressor industry.
For example, in 2001, at the Zhejiang Xuzhou Chemical Plant, the annual output of 230,000 tons of synthetic ammonia energy-saving technical transformation project tenders, Shanghai Dreiseran company quoted 15 million yuan, Shanghai Dalong Machinery Factory quoted 118.83 million yuan, Sichuan Huaxi General Machinery Company quoted 948 Million yuan, Shandong Weifang Shengjian Compressor Factory quoted 8.94 million yuan, Shenyang Gas Compressor Co., Ltd. eventually won a bid of 7.68 million yuan.
Shanghai Dalong Machinery Factory also adopts a low-price strategy and has repeatedly won the bid in the industry. For example, in the June 2001 Anhui Linquan CO2 Compressor project bidding process, Sichuan Huaxi General Machinery Co., Ltd. quoted 2.53 million yuan, Shenyang Gas Compressor Co., Ltd. quoted 2.35 million yuan, and Shanghai Dalong Machinery Factory quoted 2.06 million yuan. Shanghai Dalong Machinery Factory's "relentless" efforts have finally reached the top spot in the industry in 2003: 2003 total output value (constant price) 427 million yuan, sales income of 352 million yuan. However, behind this dazzling digital performance, it can't change the situation of low profits. The industry believes that this phenomenon of repeatedly winning the bid at a low price should cause the compressor industry to reflect on and pay attention to it.
After Shandong Weifang Shengjian Compressor Factory entered the large and medium-sized compressor industry, it took advantage of the low cost of labor reform factory and the quality assurance of compulsory labor, and won the bid at a low price, which was unmatched by anyone, and it quickly occupied large and medium-sized compression. The vast market in the machine market, the rapid increase in the output value, so that people in the industry retreat. In September 1998, in the tender for the Yihua Fertilizer project in Hubei, due to the few projects in the fertilizer market at the time and the competition was fierce, low-price competition had become inevitable. Shandong Weifang Shengjian Compressor Factory won the bid for 3 sets of CO2 compressors, and the stand-alone price was less than 2 million yuan. Such a price is not even enough. Many people think that the successful bidder is not crazy.
Due to the erroneous and wrongly positioned ideas of industry leaders and the special policies of special industries, the development of large and medium-sized compressor industries has been misunderstood: it is uncomfortable to obtain orders, and even more difficult to obtain orders. The development of such a vicious competition has led to a decline in the overall profits of the large and medium-sized compressor industry. The industry insiders exclaimed: Where is the outlet for the compressor industry?
The private enterprises entering the large and medium-sized compressor industry have focused their attention on the highly profitable compressor fittings market. They have also invested heavily in the problems encountered in the operation of the compressor products of large and medium-sized state-owned enterprises in order to solve the reluctance of state-owned enterprises. solved problem. This won the trust of users, quickly occupied the accessories market, and accumulated experience in entering the large and medium-sized compressor manufacturing market. In operation, state-owned enterprises have once dominated the world's compressor market and are gradually losing in the process of private enterprises' infiltration.
Occupy the local market
In the 1990s, the small nitrogen fertilizer industry in China caused several losses, resulting in the loss of debt for the large and medium-sized compressor industry. Due to the rapid development of the small nitrogen fertilizer industry at that time, the manufacturing industry for large and medium-sized compressors brought about a false boom in the bubble economy. There is a huge financial gap in the initial construction of small chemical fertilizers, and in order to grab this “potential†market, everyone is rushing to lower prices. In order to get tenders, some bids are even at all costs. In order to get this market, some people don't need to send money to the equipment. The consequent consequence is that large amounts of capital have flowed into the market of small fertilizer equipment. As the small chemical fertilizer industry runs very sluggish, the collapse of companies abounds, and the equipment of compressor companies becomes bad debts and dead accounts. In this way, the company's funds have turned into bad assets. The large and medium-sized compressor industry people cry and tears. They finally tasted the bitter consequences of the cannibalism.
On the other hand, when it comes to private enterprises in the compressor industry, they now supply compressor accessories. Because of the investment of funds is its own, plus the means of ditching the sales of products. Settling the main representative of the purchaser, the monetary return, without much effort. The business of fittings is profitable, and it occupies less funds. In addition, if the parts are missing, the user's production cannot operate normally, so the occupation of funds is not a big problem. The flexible mechanism and diversified sales methods have brought vitality to the development of the company.
Long turnover of capital
Large and medium-sized compressors have long production cycles, occupy large amounts of capital, have slow capital turnover, and require large amounts of raw materials and mechanical and electrical support funds. Due to the fact that the purchase of steel and the purchase of large electro-mechanical supporters for many years cannot pay off in the short term, the supplier's supply price has been high, resulting in high product costs. After the large-scale project was awarded as a bid, the payment for the petrochemical project was: 30% for advance payment, 65% for installment and acceptance payment, and no problem to pay 5% for one year of operation. The procurement of raw materials and electromechanical equipment requires 100% payment to take delivery of goods, which indirectly brings financial pressure to the company. What is even more is that the products are produced according to the contract, but users do not pick up the goods according to the contract period, which increases the company's capital occupation. Due to the huge shortage of funds, there is no guarantee of product investment in R&D. The backwardness of equipment and the inability to conduct timely technological transformation have become another bottleneck restricting the development of state-owned enterprises.
Rationally face the bottom
Although large and medium-sized compressor companies still have many problems, they have already realized the root causes of the problems and tried their best to reverse this situation, trying to get companies out of the cycle of vicious competition and demise. Sichuan Huaxi General Machinery Co., Ltd. in the bid for more than 10 million compressor projects in 2004, due to low prices, can not guarantee the normal profitability of enterprises, decided to withdraw from the bidding; they insist on the loss of things do not do, loss of business talks, not for Others do their wedding work and turn to the development of high-value-added products, constantly exploring new markets and seeking new profit growth points. West China’s refusal to make non-meaningful bids has also set an example for domestic large and medium-sized companies. Profit is the most fundamental part of a company’s survival and development.
After experiencing domestic and international challenges, Wuxi Compressor Co., Ltd. finally achieved a steady development of the company. In the tendering process of 10 sets of 100-m3 non-lubricated air compressors in Shandong Nanshan Group in 2003, they automatically withdrew from the bidding when the bid price was lower than 670,000 units, but the final winning price was only 51 each. Ten thousand yuan. From the cost analysis, such prices are much lower than the break-even point. Wuxi Compressor Co., Ltd. operates in a low-key enterprise, has a correct business philosophy, and continues to improve itself. It has invested more than 3 million yuan in the introduction of CAD management software, and has carried out ERP transformation of the company. Constantly introducing foreign technology, constantly introducing high-end equipment from abroad, and constantly learning from the advanced experience of the domestic industry, they gradually matured under the new model of market economy.
The Shenyang Gas Compressor Company recently replaced the new coach. It is reported that the company has been incorporated into Shenyang Blower (Group) Co., Ltd. Shanghai Compressor Stock Co., Ltd. has also completed the division with Dresser-Sandland, regrouped and moved lightly.
After undergoing the baptism and elimination of the market economy, the above-mentioned compressor companies can bravely face and find out the fundamentals that restrict the development of the enterprise. They can change their minds or start from scratch and face the changing market situation with a positive attitude. A positive attitude to seek the development of the Sun Avenue, we have reason to believe that the compressor industry will go out of the mistakes and valleys, usher in its a splendid spring.
State-owned enterprises compete to lower prices
The correct concept of market competition is: focus on researching what new needs the user has? How much has changed in foreign technology? What new moves have the technology taken by competitors? In response to these changes, what kind of improvement measures are adopted in product development. This is the question that corporate CEOs should consider at any time. However, in the years of operation, the CEOs of large and medium-sized compressor companies focused on how to defeat and squeeze their competitors and grab orders instead of taking into account the win-win and sound development of the entire industry.
The compressor industry leader, Shenyang Gas Compressor Factory, decided that their competitive strategy would be to find a profitable hydrogen compressor product for R&D and make money, as a competitive bargaining chip, and in order to squeeze out small-scale breweries, they would be fiercely bidding in the fertilizer industry. Do not hesitate to take orders below the cost price; if you want to squeeze your competitors, you will enjoy huge profits. This kind of bid-price bidding is a common occurrence in the compressor industry.
For example, in 2001, at the Zhejiang Xuzhou Chemical Plant, the annual output of 230,000 tons of synthetic ammonia energy-saving technical transformation project tenders, Shanghai Dreiseran company quoted 15 million yuan, Shanghai Dalong Machinery Factory quoted 118.83 million yuan, Sichuan Huaxi General Machinery Company quoted 948 Million yuan, Shandong Weifang Shengjian Compressor Factory quoted 8.94 million yuan, Shenyang Gas Compressor Co., Ltd. eventually won a bid of 7.68 million yuan.
Shanghai Dalong Machinery Factory also adopts a low-price strategy and has repeatedly won the bid in the industry. For example, in the June 2001 Anhui Linquan CO2 Compressor project bidding process, Sichuan Huaxi General Machinery Co., Ltd. quoted 2.53 million yuan, Shenyang Gas Compressor Co., Ltd. quoted 2.35 million yuan, and Shanghai Dalong Machinery Factory quoted 2.06 million yuan. Shanghai Dalong Machinery Factory's "relentless" efforts have finally reached the top spot in the industry in 2003: 2003 total output value (constant price) 427 million yuan, sales income of 352 million yuan. However, behind this dazzling digital performance, it can't change the situation of low profits. The industry believes that this phenomenon of repeatedly winning the bid at a low price should cause the compressor industry to reflect on and pay attention to it.
After Shandong Weifang Shengjian Compressor Factory entered the large and medium-sized compressor industry, it took advantage of the low cost of labor reform factory and the quality assurance of compulsory labor, and won the bid at a low price, which was unmatched by anyone, and it quickly occupied large and medium-sized compression. The vast market in the machine market, the rapid increase in the output value, so that people in the industry retreat. In September 1998, in the tender for the Yihua Fertilizer project in Hubei, due to the few projects in the fertilizer market at the time and the competition was fierce, low-price competition had become inevitable. Shandong Weifang Shengjian Compressor Factory won the bid for 3 sets of CO2 compressors, and the stand-alone price was less than 2 million yuan. Such a price is not even enough. Many people think that the successful bidder is not crazy.
Due to the erroneous and wrongly positioned ideas of industry leaders and the special policies of special industries, the development of large and medium-sized compressor industries has been misunderstood: it is uncomfortable to obtain orders, and even more difficult to obtain orders. The development of such a vicious competition has led to a decline in the overall profits of the large and medium-sized compressor industry. The industry insiders exclaimed: Where is the outlet for the compressor industry?
The private enterprises entering the large and medium-sized compressor industry have focused their attention on the highly profitable compressor fittings market. They have also invested heavily in the problems encountered in the operation of the compressor products of large and medium-sized state-owned enterprises in order to solve the reluctance of state-owned enterprises. solved problem. This won the trust of users, quickly occupied the accessories market, and accumulated experience in entering the large and medium-sized compressor manufacturing market. In operation, state-owned enterprises have once dominated the world's compressor market and are gradually losing in the process of private enterprises' infiltration.
Occupy the local market
In the 1990s, the small nitrogen fertilizer industry in China caused several losses, resulting in the loss of debt for the large and medium-sized compressor industry. Due to the rapid development of the small nitrogen fertilizer industry at that time, the manufacturing industry for large and medium-sized compressors brought about a false boom in the bubble economy. There is a huge financial gap in the initial construction of small chemical fertilizers, and in order to grab this “potential†market, everyone is rushing to lower prices. In order to get tenders, some bids are even at all costs. In order to get this market, some people don't need to send money to the equipment. The consequent consequence is that large amounts of capital have flowed into the market of small fertilizer equipment. As the small chemical fertilizer industry runs very sluggish, the collapse of companies abounds, and the equipment of compressor companies becomes bad debts and dead accounts. In this way, the company's funds have turned into bad assets. The large and medium-sized compressor industry people cry and tears. They finally tasted the bitter consequences of the cannibalism.
On the other hand, when it comes to private enterprises in the compressor industry, they now supply compressor accessories. Because of the investment of funds is its own, plus the means of ditching the sales of products. Settling the main representative of the purchaser, the monetary return, without much effort. The business of fittings is profitable, and it occupies less funds. In addition, if the parts are missing, the user's production cannot operate normally, so the occupation of funds is not a big problem. The flexible mechanism and diversified sales methods have brought vitality to the development of the company.
Long turnover of capital
Large and medium-sized compressors have long production cycles, occupy large amounts of capital, have slow capital turnover, and require large amounts of raw materials and mechanical and electrical support funds. Due to the fact that the purchase of steel and the purchase of large electro-mechanical supporters for many years cannot pay off in the short term, the supplier's supply price has been high, resulting in high product costs. After the large-scale project was awarded as a bid, the payment for the petrochemical project was: 30% for advance payment, 65% for installment and acceptance payment, and no problem to pay 5% for one year of operation. The procurement of raw materials and electromechanical equipment requires 100% payment to take delivery of goods, which indirectly brings financial pressure to the company. What is even more is that the products are produced according to the contract, but users do not pick up the goods according to the contract period, which increases the company's capital occupation. Due to the huge shortage of funds, there is no guarantee of product investment in R&D. The backwardness of equipment and the inability to conduct timely technological transformation have become another bottleneck restricting the development of state-owned enterprises.
Rationally face the bottom
Although large and medium-sized compressor companies still have many problems, they have already realized the root causes of the problems and tried their best to reverse this situation, trying to get companies out of the cycle of vicious competition and demise. Sichuan Huaxi General Machinery Co., Ltd. in the bid for more than 10 million compressor projects in 2004, due to low prices, can not guarantee the normal profitability of enterprises, decided to withdraw from the bidding; they insist on the loss of things do not do, loss of business talks, not for Others do their wedding work and turn to the development of high-value-added products, constantly exploring new markets and seeking new profit growth points. West China’s refusal to make non-meaningful bids has also set an example for domestic large and medium-sized companies. Profit is the most fundamental part of a company’s survival and development.
After experiencing domestic and international challenges, Wuxi Compressor Co., Ltd. finally achieved a steady development of the company. In the tendering process of 10 sets of 100-m3 non-lubricated air compressors in Shandong Nanshan Group in 2003, they automatically withdrew from the bidding when the bid price was lower than 670,000 units, but the final winning price was only 51 each. Ten thousand yuan. From the cost analysis, such prices are much lower than the break-even point. Wuxi Compressor Co., Ltd. operates in a low-key enterprise, has a correct business philosophy, and continues to improve itself. It has invested more than 3 million yuan in the introduction of CAD management software, and has carried out ERP transformation of the company. Constantly introducing foreign technology, constantly introducing high-end equipment from abroad, and constantly learning from the advanced experience of the domestic industry, they gradually matured under the new model of market economy.
The Shenyang Gas Compressor Company recently replaced the new coach. It is reported that the company has been incorporated into Shenyang Blower (Group) Co., Ltd. Shanghai Compressor Stock Co., Ltd. has also completed the division with Dresser-Sandland, regrouped and moved lightly.
After undergoing the baptism and elimination of the market economy, the above-mentioned compressor companies can bravely face and find out the fundamentals that restrict the development of the enterprise. They can change their minds or start from scratch and face the changing market situation with a positive attitude. A positive attitude to seek the development of the Sun Avenue, we have reason to believe that the compressor industry will go out of the mistakes and valleys, usher in its a splendid spring.