Chinese companies have lost 700 million yuan in two years, what are the reasons for giving up Apple's orders?
Introduction. In the global electronic product chain, Apple has always had high standards for its best businessmen. However, a partnership with Apple is not necessarily beneficial, but rather a great loss and danger. Through the specific analysis of OFILM and Wingtech Technology, this paper discusses the relationship between state-owned enterprises and Apple, in order to play a reference role in the development of China's private enterprises.
O-film's death.
As a provider of optical devices and systems in China, OFILM has provided a large number of optical lenses and components to Apple for many years, and has been well received by the company. However, in March this year, Apple suddenly announced that OFILM would remove it from the entire industry chain. This decision led to a significant reduction in OFILM's orders and led to a stagnation in its production.
OFILM is facing an abrupt termination of cooperation and is in urgent need of new customer replenishment capabilities. At this time, OFILM took a fancy to Wingtech Technology, and finally chose the latter's factory in Suzhou to replace OFILM as Apple's new generation of optical module suppliers. Through this merger and acquisition, Wingtech will obtain more users from OFILM, including a large number of orders from Apple.
However, Wingtech quickly realized that behind the orders of this seemingly attractive large customer, there was a huge loss. From 2021 to 2022, Wingtech Optoelectronics has lost nearly 700 million yuan in the field of optical communication components. Apple is strict about the quality and pricing of its top merchants, which makes their profit margins low.
Wingtech spent a lot of money on this, improving the process and introducing new equipment to meet Apple's requirements. However, due to Apple's strong strength in pricing, Wingtech struggled to reach a win-win situation. Wingtech Technology has cooperated with Apple for two years, but due to the supply of optical components to Apple, it is difficult to achieve ideal profits, and there are great losses. Due to risk concerns, the company canceled orders for optical components supplied to Apple in late 2022.
Stop compensating Wingtech Technology.
Wingtech's decision may completely break up the partnership for more than two years, but at least in their opinion, this decision is undoubtedly very correct. Under the lure of large customers, enterprises should make reasonable choices according to their actual situation. This incident is also a reminder for other manufacturers not to sacrifice their profits because they are greedy for big customers like Apple, but to see the situation clearly and seize the opportunity.
Judging from the examples of companies such as OFILM and Wingtech, state-owned enterprises must carefully weigh various factors when choosing with Apple, and not be misled by Apple's products. Here are a few tips and things to consider:
a) The market-oriented and collaborative strategy of the enterprise.
When facing a large customer like Apple, state-owned enterprises must be clear about their product direction. Whether the cooperation between the two sides can adapt to their own development strategies and strength will determine the best effect and quality of the business. The strategic partnership between the two sides is not only the pursuit of order quantity, but also from the perspective of the company's own capabilities and long-term development.
(ii) Cost control and cost budgeting.
Apple is the leader in this industry, and it has the power to price suppliers. In order for a state-owned enterprise to do business with Apple, it must calculate the cost in advance and make the right budget. Avoid entering a crowded market to get more orders, which can lead to over-budgeting or unprofitable expenses. In order to ensure the stability and profit of the ** chain, it is very necessary to reduce the production cost.
iii) Stable collaboration and obtainable profits.
In the ** chain, short-term losses are a common phenomenon, but such losses should be based on the long-term interests of both parties. If the two parties cannot achieve the desired profit target, they should make strategic adjustments in a timely manner, or take the initiative to withdraw, and be ready to stop losses at any time. Only by establishing a long-term partnership can the sustainable development of the enterprise be realized.
4) Selection of quality partners.
Large users like Apple have a high demand for their suppliers. When purchasing them, state-owned enterprises should pay attention to their own technical strength and quality control level. Good manufacturers are more likely to get long-term recognition from large customers like Apple, so they have more stable and consistent orders.
Conclusion and reflection.
From the examples of companies such as OFILM and Wingtech, it can be seen that when cooperating with large customers like Apple, in addition to ensuring the number of orders and profits, long-term stable and sustainable profits between the two parties should also be taken into account. When state-owned enterprises (SOEs) carry out strategic cooperation with large customers such as Apple, they should carefully consider multiple factors to ensure full control and management of both parties.
Doing business with large customers like Apple is a challenge and a risk for SOEs. However, only with a clear strategy, proper control, and stable cooperation, can enterprises achieve long-term development in opportunities. Therefore, when facing a large customer like Apple, state-owned enterprises should build an e-commerce logistics model in the new era with a prudent and pragmatic attitude and a positive and enterprising attitude.
Through the case study of OFILM, Wingtech and other companies, we believe that in order to cooperate with large customers like Apple, China's state-owned enterprises need to work strategy, strengthen cost control and budget management, ensure the continuous and stable cooperation between them, and choose good partners if they want to achieve better development. If you want to deal with a big customer like Apple, you have to think holistically, make decisions carefully, and avoid risks at the right time.
Therefore, when dealing with large customers like Apple, state-owned enterprises should focus on long-term development, not blindly chasing the number of orders and brand effect, but should carefully evaluate each link, strengthen risk management and quality control, so as to ensure stability and long-term benefits between the two parties. Only in this way can we achieve a win-win situation with large customers like Apple and provide a good environment for the sustainable development of the company.