Changes and changes in the business model of the h

2022-08-08
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Changes and changes in the business model of construction machinery industry

as a cyclical industry greatly affected by national macroeconomic policies and investment factors, China's construction machinery market in 2019 seems to have reached the threshold of reincarnation. Facing the prediction of rising tide or falling tide, where will industry practitioners go? Seeing the gradual emergence of new forces, how can industry veterans calmly deal with it

as a cyclical industry greatly affected by national macroeconomic policies and investment factors, China's construction machinery market in 2019 seems to have reached the threshold of reincarnation. Facing the prediction of rising tide or falling tide, where will industry practitioners go? Seeing the gradual emergence of new forces, how can industry veterans calmly deal with it

China's construction machinery industry has been surging for decades, from a seller's market where one machine is difficult to find, to a buyer's market where supply and demand displace, and then gradually to a rental market that returns to rationality. The business model of the industry seeks to break through and gradually upgrade in the butterfly change of the market, and the practitioners are no longer confined to the past, winning a voice conducive to their own positioning in the industry supply chain. In this kind of upheaval and trial and error, the market is playing a game of "the leftover is the king"

the three stages of the development of the construction machinery market

1, the difficult stage of one machine

this stage is the initial stage of construction machinery, and there are few domestic brands, most of which are European, American, Japanese and Korean. In China, it is mainly the distribution and supply of local electromechanical companies/agricultural machinery companies/machinery industry companies. Few people in the private sector can purchase and operate construction machinery and equipment. At that time, the supply was limited, and there was enough oil and water to operate equipment

construction machinery and equipment are scarce resources, and people often need to queue up or take a road strip in order to purchase equipment. At this time, the host manufacturers do not need to spend too much effort on the sales channel, so they make a lot of money, so they mainly rely on production. At that time, the manufacturing technology of construction machinery in China was backward, and most of the major domestic brands such as Liugong and XCMG were dominated by loaders

2. Buyer's market stage

with the development of urbanization in China and the arrival of the era of large infrastructure construction, joint venture brands and domestic brands have increased their R & D and production efforts, and oversupply has become the norm. Foreign brands began to meet the needs of buyers with localized services, and agents, as the backbone of sales and service channels, came to the front

in that era of fierce competition, many people of insight who used to work in the offices of electromechanical companies and other enterprises owned by the whole people went to the sea to join the agent sequence to show their skills. Now these trendsetters have become masters of the industry. Their participation and witness means that it will not break or fragment the development of the construction machinery industry, but also become the first beneficiaries

the contradiction between overcapacity at this stage and the pursuit of profit maximization has led to a war of market share throughout. Facing the same piece of cake, everyone issued a dead order to their agents to continuously increase their share in the local market. As a result, various sales innovations came into being, such as smashing golden eggs for exhibitions, financial leverage, financial leasing, zero down payment, old machine replacement and other sales wars that open the minds of end users

when the spring tide comes, the tide will eventually ebb, and the naked swimmer will finally have to drink the bitter wine he brewed

therefore, the manufacturers experienced three market adjustments in 2004, 2008 and 2016. We are fully aware of the great depression caused by excessive overdraft of market demand and excessive leverage. Of course, macroeconomic policies and the deterioration of the economic environment are also important factors in this process

also at this stage, local brands have successfully broken through, and local brands represented by SANY have disappeared, successfully catching up with European, American, Japanese and Korean brands. The market share of local brands has been matched with foreign and joint venture brands, and the leading edge is also expanding

3. The three industry adjustments in the lessee market stage have taught manufacturers and end users a lesson: brands, agents and end users are a community of destiny. This is not a fast-moving game. In order to digest inventory, everyone does not hesitate to use inductive or incentive sales methods. It looks like a good sales report, but due to the influx of a large number of devices at the user end, it will inevitably lead to low-cost competition for equipment shift fees, In addition, the fluctuation of macro environment will inevitably affect the collection rate. Therefore, the consequences of economic stagflation will also be transmitted to manufacturers through the weak recovery of accounts receivable

therefore, from the seller to the buyer and then to the lessee, it is the safe sales strategy that objectively responds to the market demand. Therefore, we can see that at this stage, manufacturers have entered the leasing market, living within their means, and directly match the needs of users through leasing, so as to reverse and capture the needs of the market, so as to avoid misjudging the market demand for overcapacity or delayed response

the three stages of the business model of construction machinery

1, the direct rent monopoly stage

in the early stage of the development of the construction machinery industry, the biggest feature is that the market is opaque and suppliers occupy the dominant position. Therefore, at this time, the brand has adopted the profit maximization mode, and there is no need to benefit the channel. It can obtain the maximum price difference by opening its own office or setting up regional managers. At the same time, at this time, end users are more about obtaining equipment, so they are not sensitive to service quality, so it also weakens the urgency of brand localization service layout to a certain extent

this is an era of three pillars, and resources are relatively concentrated in the hands of brands. The degree of marketization is not high, and the ownership is not large, which belongs to the enlightenment stage of the market business model. Even the second market is mainly for domestic sales of foreign trade machines from Japan and South Korea. The domestic secondary circulation, remanufacture and other post market has not yet taken shape, and the market body is relatively single

2. Brand/price war stage

in the mid-term development of the construction machinery industry, with the full differentiation and marketization of competition and the arrival of the era of supply exceeding demand, end users have full options, and the radical marketing strategies of major brands also make the product prices more transparent

therefore, the strategy to win customers' orders at this stage mainly depends on the host brand and the price war that benefits customers. When they are jealous, manufacturers even enter the stimulating sales mode, that is, packaging construction machinery into a financial tool or money making tool that rivals real estate speculation, regardless of whether end users have the ability to operate equipment or industry background

therefore, the risks of accounts receivable and creditor's rights have been operating at a high level. However, at that time, the manufacturers had not considered whether the firewall of risk prevention and control was enough to resist risks. Most of them were obsessed with the interest margin of new machine sales, which really staged a crazy construction machinery marketing event

at this stage, in order to quickly distribute goods, take into account the customer's service experience and increase the risk sharing after leverage, brands began to support localized agents as the main force in the battle. At this stage, manufacturers became the princes of PK in positional warfare, street warfare and guerrilla warfare. Everyone entered the spring and Autumn period and Warring States period, and frequently staged the drama of "you sing, I come on stage"

however, in the three market adjustments, the irrationality of the manufacturer's model directly led to the complete withdrawal of some brands from the market, some brands were greatly weakened, and some were united in one attack. End users are also becoming more and more mature in market education, and the waves wash away the lead

the biggest feature of this stage is that the market ownership is increasing day by day, and the strength of agents is also expanding and strengthening. It has entered the stage of power awakening, taking Qianlima supply chain to build its own independent brand as a typical case

sales channels have entered the integration stage, represented by Alliance digging and good opportunity exchange, which not only meets the internal needs of second-hand car dealers and other practitioners for transformation and development, but also aims to gather procurement resources and channel resources to strengthen negotiation chips with brands and cut greater market dividends. At the same time, in order to avoid losing control of channels, brands have also become an option to directly sell, participate in channels, network direct sales or choose platform cooperative sales. The mode of localized sales is being challenged

At the same time, with the increase of ownership, asset management companies, consignment platforms, valuation software, industrial auction companies, equipment control software, consulting service institutions and legal service institutions that reduce the risk of accounts receivable, as well as value-added services that provide end users with equipment maintenance, elimination and upgrading, have emerged. The construction machinery industry no longer takes manufacturers as the main practitioners, so as to produce better and more exquisite experimental machinery and equipment based on the needs of customers. The service provider is also sounding the call of assembly, and has become the power of eliminating the false and preserving the true and brewing the transformation of the business model of construction machinery

3. Service oriented stage

in the mature development period of the construction machinery industry, customers tend to be more rational, "it is better to rent than buy, and it is better to rent than package" has become a consensus. Customers are no longer obsessed with owning equipment, nor do they have to rent equipment for self operation. They can provide earthwork stripping or tunnel pavement construction turnkey projects by directly contracting projects and letting manufacturers or powerful lessors contract directly. Customers only need to pay fees. A large number of professional management, internal coordination, equipment holding risks and depreciation risks are no longer worried by users

therefore, we see that manufacturers have to embark on the road of transformation. The sales means provided for users are also getting closer to the service demand. Leasing and engineering contracting, as hot words in the industry, continue to appear in various industry conferences and people's leisure topics. At this stage, manufacturers are facing the pressure of transformation. In the past, the model of simply selling new machines has been unable to meet the call of the market. At this time, the business entities with comprehensive operation ability and risk control ability have become the winners of the market. At the same time, supporting service providers have gradually entered the central stage of the market

the biggest feature of this stage is that with the increase of the dominant voice of customers, the market is more flat, especially with the arrival of the era of IOT, AR and 5g technology, the advantages of manufacturers are no longer, and the relationship game within manufacturers is no longer simply dominated by manufacturers. All market-oriented has become an overwhelming theme

integrated operation of manufacturers will become inevitable. At the same time, the market must pay full attention to various service providers in the post market. It has become a must to work together to provide customers with one-stop and comprehensive services

changes and changes in the business model of the construction machinery industry

1. Changes in the business model of the construction machinery industry

(1) brands and agents face the market hand to hand

in the past industry, brands were responsible for R & D and production of machinery and equipment, creating value, while agents were just sales, so their role was to transmit value. In the case of IOT and market becoming transparent, the price competition between brands is essentially an undifferentiated standard product. It is not the competition of the product itself, but the competition of price war. In this case, if we cannot unite as one and reduce the internal consumption war, we will inevitably lose our competitive advantage. In fact, the rapid development of Sany in recent years should have a lot to do with it. At the same time, this is also why brands have given priority to this channel in the adjustment of agents in recent years

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