Guangdong Department of Kitchen Power Meets Development Nodes: Two Major Bottlenecks Urgently Need to Break Through

Guangdong Department of Kitchen Power Meets Development Nodes: Two Major Bottlenecks Urgently Need to Break Through

The two schools in Guangdong and Zhejiang basically monopolized the Chinese kitchen power market. Guangdong representatives are Vantage, Wanhe, Wanjiale and Sakura, and Zhejiang representatives are Fang Tai, the boss, and Shuaikang.

Compared with Guangdong and Zhejiang kitchen appliances, the Zhejiang school is even better. Taking 2015 as an example, the revenues of Guangdong-based kitchen and electric companies are all about 4 billion yuan, while the revenues of Zhejiang-based kitchen and electric appliances companies are all above 4.5 billion yuan, and in particular, the kitchen and electronics boss Fang Tai is even more than 6.5 billion yuan. And the profitability of the latter is generally better than the former.

China's kitchen electricity industry has three significant characteristics:

The first is all family businesses. However, after more than 20 years of development, most of them have completed the transition from founders to second-generation successors. Compared with the founders of the first generation, most second-generation managers are well-educated, open-minded, advanced in concept, and more experienced in corporate management. Their overall quality is higher than that of their parents.

Second, basically do not fight the price war. Unlike any other home appliance products, the kitchen and electric industry seems to have formed a tacit agreement for many years: not to fight price wars. Therefore, the average gross profit margin of the kitchen and electric industry is much higher than that of other household electrical appliances, which is very beneficial to the healthy development of the kitchen and electric appliances industry. For example, in 2015 almost all home appliance companies complained that “the winter is coming”, but the kitchen and electric industry did not agree with the “winter”.

Third, the brand concentration is low. There is an argument that the market space of China's kitchen electricity is about 100 billion yuan. Even if the market has the best performance, the market share is only 6.5%, and the refrigerator industry, Haier, has a market share of about 30%. The market share of Gree is about 35%, and the market share of color TVs in Skyworth is about 20%. This shows that the market competition in China's kitchen electricity industry is not enough.

At present, many kitchen and electric companies have introduced or completed equity incentive plans, such as Fang Tai, the boss, and Vantage, which are considered to be the signs of a transition from a family business to a modern partner kitchen. The use of the "family business" to look at kitchen and electric companies is no longer appropriate.

However, compared with home appliance products such as TVs, air conditioners, and refrigerators, kitchen electrical products have much less technical content and technical difficulties.

It is not difficult to study carefully the structure of the kitchen power company's competitiveness and find that product factors are not in a dominant position in the market competition. Who is in a dominant position? First is the corporate governance structure, that is, whether the company can establish advanced enterprise management mechanism, organizational structure, and value. The second is whether the brand image (including the “corporate image” and the “product image”) can keep pace with the times and win the recognition of young consumers.

If these two points are done and well done, in general, the performance of this kitchen and electric appliance company and the market performance must be good; from the negative perspective, those kitchen and electric companies that are gradually declining in the competition are often the result of these two Did not do a good job.

In recent years, the Zhejiang-based kitchen and electric power companies are better than the Guangdong-based companies and generally believe that they have established a modern corporate governance structure earlier, and on this basis, they have formed a leading brand and market competition consciousness.

This actually means that if the Guangdong Department of Kitchen Power wants to catch up or exceed the counterparts of the Zhejiang Provincial Department, it must make efforts in the governance structure and brand image.

Take the case of Vantage, a Guangdong-based kitchen appliance representative company. The company’s so-called “**” occurred in September 2015. Major shareholder Pan Yejiang initiated a shareholders’ meeting to replace the original chairman, ending Vantage for many years. "Common governance" power pattern.

The industry generally believes that the decline of Vantage’s industry status in recent years has a lot to do with its difficult to adapt to market competition. The power structure of “co-governance” seems to be both warm and humane, but it is difficult to adapt to the market competition in the world today. Accelerated the transformation of Vantage Enterprises.

From the current perspective, the effect of Vantage reform has begun to show. In the first quarter of 2016, the company’s operating income was 876 million yuan, an increase of 14% year-on-year, slightly lower than the annual average growth rate of 15%; the net profit attributable to owners of the parent company was 48 million yuan, a year-on-year increase of 31%. The average annual growth target of 25%.

It can be seen that once a company straightens out its governance structure, it will release surprising productivity.

It is very difficult for Guangdong-based kitchen and electric companies to implement "changes that are thorough in the bone marrow" from the governance structure, organizational model, industrial layout, product concepts, and competition methods, but it is worth promoting.

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