"To live or to die, that's the question. ”
This famous sentence of Hamlet, for enterprises, is not a literary discussion, not a philosophical proposition, but a subject that has to be faced.
Drucker believes that the purpose of the existence of a business is to "create customers".
In Tang Fei's view, the premise of "creating customers" lies in the "existence" of the enterprise itself.
This is just as Ren Zhengfei said, survival is the minimum program of the enterprise, but also the highest program.
To understand it in layman's terms, it is that the purpose of the existence of an enterprise is to exist, that is, to strive for survival and avoid death.
That's right, today I would like to talk to you about the topic of the medium-scale death trap of home furnishing enterprises.
Let's start with the "middle-income trap".
To better understand the term "middle-income trap", we can start with the "middle-income trap".
Because the concept of the "middle-sized trap" itself is derived from the "middle-income trap".
The "middle-income trap" is an economic concept.
The concept originated in the World Bank's 2007 report, East Asia Renaissance: A Perspective on Economic Growth.
In this report, GDP per capita is defined as "middle-sized income" of around $1,000-$12,000.
The central finding of the report is that most countries are stuck between the cost of driving forces** and the decline in cost competitiveness when they reach middle-income status.
This is what we call the "middle-income trap".
The middle-income trap: the scale cannot be increased, and the cost cannot be reduced.
Countries caught in the "middle-income trap" often find themselves in a dilemma:
The first difficulty is that it cannot compete with advanced economies with high skills and innovations, and "cannot go up";
The second dilemma is that it cannot compete with low-income and low-wage economies in the cheap production of manufactured goods.
It is neither "going up" nor "coming down". The obvious outcome is that the economy will stagnate, and income levels will stagnate, making it difficult to make the leap to higher income levels, or even fall back into low income levels.
Over the past few decades, many countries around the world have fallen into the middle-income trap, including Argentina, Brazil, and Mexico in South America, and the Philippines and Malaysia in Southeast Asia.
This is also the proposition of the times in China today: Can China overcome the middle-income trap?
80% of medium-sized home furnishing businesses will die
Returning to the enterprise itself, the concept of "medium-sized trap" is much easier to understand.
In the same way that the "middle-income trap" of a country's economy is corresponding, we can also define the same situation faced by the development of enterprises as the "middle-scale death trap".
In China, 80% of medium-sized home furnishing businesses may face death!
This is the "medium-sized death trap"!
However, Dazai Research believes that most of the medium-sized home building materials companies may face the risk of elimination, but this situation will not appear soon, and may have to go through decades of reshuffle.
The shuffle will not be fast, gradual, curved. Judging from the situation of furniture enterprises above designated size, at the end of 2022, there will be more than 7,000 furniture enterprises above the designated size, which will be pushed forward by 10 years, and in 2012, there will be 4,412 enterprises above the designated size, and the number has increased significantly.
This is only the furniture sector of the enterprise, without considering the floor, doors and windows, building ceramics, lighting and other civil building materials market, the whole volume is very huge. There are still a large number of medium-sized brands active in these sub-categories.
Even if the competition intensifies and the market concentration rises, the process is relatively slow, and most of the medium-sized home building materials companies can still survive, and some can still live well.
However, with the increasing intensity of the market reshuffle, it is necessary for medium-sized enterprises to be prepared to fight a tough battle, find their own position, and consolidate their advantages.
Home furnishing companies are caught in the medium-sized death trap: struggling.
When your company's development reaches a certain scale (you can refer to the 50-80th percentile data in the industry), the revenue growth is basically in a bottleneck, or even regressive and shrinking, you need to be wary of whether you have fallen into the medium-scale death trap!
In China's home furnishing market, there are a large number of medium-sized brands with annual sales of 3-1 billion, or enterprises with annual sales of less than 100 million
On the one hand, the market position of "too big to fail" has not yet been established, and the economies of scale are not obvious
On the other hand, it is gradually losing the advantages of regional branding, service and so on.
For home furnishing companies caught in the medium-sized death trap, there is nothing more "difficult" than this.
Why do most home furnishing companies fall into the medium-scale death trap and can't "save themselves"?
Why home furnishing companies are caught in the medium-sized death trap
Tang Fei often said that if you find a problem, you will find the answer.
Let's take a look at the cause of the medium-scale death trap of household enterprises
One of the pitfalls: Big Home Strategy Trek.
Chinese home furnishing brands have started to enter the market from a subdivision, with a strong category label.
Nowadays, everything has changed, many brands have become "whole family customization", and I have what others have, and the boundaries of this category have become blurred.
Recently, Yao Liangsong, chairman of Opai Home Furnishing, asserted that "if you don't do big home, there will be no future", which is a stone that has stirred up thousands of waves.
For many home furnishing companies that fall into the medium-sized death trap, it is often easy to lose themselves in the face of the big home strategy: it seems that they want to do everything, do everything, and can do anything.
Big home furnishing is the patent of the head enterprise
But what about the result?Only a few leading enterprises can open up the situation in three or five categories, forming a situation where multiple carriages go hand in hand, and most of the companies have immediately deployed a large home strategy for many years, but the core business still relies on one category.
Therefore, for most medium-sized home furnishing enterprises, making single products is still the main channel of operation. In the trillion-dollar home market, the success of a single product also has a great future.
Trap 2: Insufficient brand potential energy.
What is the essence of a home furnishing business?It's channel-driven.
In China, one of the major laws of local marketing is: channel sinking under brand potential.
To sum up in one sentence: brand and channel are a two-way relationship.
In other words, medium-sized enterprises that need to achieve a breakthrough in revenue will inevitably be unable to escape the fission in the channel dimension.
And if you want to develop quickly, you must work the brand.
The serious lack of brand potential energy is the biggest problem encountered by medium-sized home furnishing enterprises.
For this reason, the growth of the number of dealers is weak, and the problem of difficulty in attracting investment in the future is still one of the bottlenecks for medium-sized home furnishing enterprises to achieve growth.
Differentiation is the only option for waist businesses.
For these home furnishing companies, the only way to improve the potential energy of the brand depends on whether there is differentiation.
Medium-sized home furnishing companies without differential value will not have sustainable growth and will eventually exit the market.
Many people will think that the level of home homogeneity is very high, and it is difficult to differentiate.
In fact, people who have this kind of thinking need to be pulled out to play the board.
For home furnishing businesses:
Compared with the ordinary 18mm thick plate, the 25mm thick plate is also differentiated
Compared with domestic timber from Northeast China, Guangxi, and Hebei, imported timber from Malaysia and Brazil is differentiated
Many new materials used in high-end home furnishings, such as the combination with aluminum alloy, the combination with leather, the combination with textiles, and the combination with metal, are all a differentiated ......
Trap 3: Organizational inertia and even inertia.
Any organization, without the intervention of external forces, is entropy.
What is entropy increase?Entropy increase is to spontaneously move from order to disorder, from neatness to chaos, from high efficiency to low efficiency.
To put it simply, organizational inertia and inertia are the realities that all household businesses that fall into the medium-sized death trap need to face.
On the one hand, organizational inertia is the practice, experience and model cultivated within these home furnishing enterprises, and it is the source of enterprise competitiveness in a certain period.
On the other hand, these conventions, experiences, and patterns (i.e., corporate culture) become obstacles to organizational change when the external environment changes, or when the organization needs to change.
Anti-entropy increase: Shaping the hyperthermal, high-pressure state of the tissue.
For household enterprises that fall into the medium-scale death trap, there are two main points to look at to the inertia and inertia (anti-entropy increase) of the organization:
First, see if the founder has the determination to start a second business;
The second is to see whether we can build consensus internally.
The team must create a state of high heat and high pressure, and cannot relax for a moment, coupled with walking on the right main channel, is the right way for home furnishing companies to get out of the medium-scale death trap.
Trap 4: Costs are rising and efficiency is decreasing.
Efficiency is the general law of the universe.
When the enterprise climbs to the medium scale, the organizational hierarchy becomes more, the management process becomes longer, and the number of auxiliary personnel and institutions increases, if the scale advantage and technological innovation are not fully used to reduce the direct cost, it will inevitably lead to the increase of the overall cost and the weakening of competitiveness.
At the same time, there are more people and businesses, and if there is no reasonable and scientific organizational structure and management methods, the efficiency will be very low.
The direct monetization drivers of falling into the medium-sized death trap are all inefficiencies.
For medium-sized custom home furnishing enterprises, there must be no "disease" of large enterprises before the "life" of large enterprises.
The essence of custom home furnishings is efficiency-driven.
For custom homes, the essence is efficiency-driven.
The efficiency of customer acquisition, the efficiency of conversion, the efficiency of design, the efficiency of production, the efficiency of installation, and the efficiency of service ......
The seamless connection of the whole process efficiency of the organization is the underlying competitiveness of customized home furnishing enterprises.
Therefore, in all aspects of enterprise management and operation, such as R&D, production, sales, design, and service, efficiency issues need to be considered.
Final words. The surging tide of the times will form a huge pressure of reversal. And under the pressure of the limit, most enterprises will be crushed into the dust of history.
Only a very small number of companies will deconstruct and reshape at the atomic level, just like graphite carbon becomes diamond!
For home furnishing companies, it is the same, most enterprises will be trapped in the "medium-sized death trap" and retreat, only a few enterprises to determine the comfortable strategy, enhance the brand potential energy, break the organizational inertia, adhere to the efficiency driven, in order to break through the "medium-scale trap", sustainable development, become the industry's top 10 brands.
Each brand has its own niche. Only in each ecological niche, find your own advantages, can you have your own competitive advantage, only have your own competitiveness.