How should home appliance companies develop entry and exit strategies?

BBK's entry into the small home appliance market eventually ended in failure. Prior to this, BBK's new product entry strategy has been successful. No matter whether it is DVDs, educational products, or communication products, it has achieved impressive performance. Why does BBK's marketing model fail? Since the diversification of Chunlan in 1994, many home appliance companies have started to enter different categories of home appliances. There are not only such successful companies as the United States, but also disappointed people like Chunlan, Konka, and Amoi. Then how should home appliance companies formulate entry and exit strategies? What?

How to develop an entry strategy First, identify industry development opportunities Backgammon has always been committed to finding blue oceans in the home appliance industry. In fact, the key factors such as the growth space, growth trend, profitability, and industry barriers of the small home appliance market are not high, and it is an ideally large scale. The sales of the market-changing Chinese small home appliance market from 2007 to 2010 were: 97.19 billion yuan, 110.2 billion yuan, 117.5 billion yuan, and 150 billion yuan. The compound annual growth rate was 16%, which is comparable to that of the developed countries for every 100 households. With 30-40 small household appliances, China's possession is only 1/10 of that of foreign countries. At the same time, the life of small household appliances is relatively short. As the income increases, it will be upgraded in advance, and the market growth rate will continue to increase. With rapid sales growth, the profits of the small household appliances industry are also very impressive. The average profit margin is about 30%, and the profit margin is 2-4 times that of the black and white industries. Not only that, small household appliances have relatively low barriers to entry. Small household appliances require less technical research and development capabilities than black and white electricity. Small household appliances do not require core components, and they have strong bargaining power for upstream suppliers. It is subject to the core parts supplier.

Of course, such an attractive market will, of course, be entered as early as possible. As the representative of Baidian, Midea took away the poorly-operated small household appliance business from the listed company in June 2005 and set up a small household electrical appliance group separately. At that time, the concentration of small household appliances was relatively low, and the industry had not yet formed a leader. It was precisely because of this layout that Midea’s small home appliance sales exceeded 30 billion yuan in 2010, becoming the largest domestic small appliance group, apparently backgammon in 2009. It was too late to formally introduce the first small home appliances.

Second, the key factors of the industry and the matching of core capabilities The key elements of the industry are divided into two levels. The first level is to control the core links of the industrial chain, and the second level is to build the key success capabilities of the industry.

From the first level, the core links of the industrial chain of home appliance companies are divided into three types. The core links of black power are basically controlled by foreign companies. For example, the panels of LCD TVs are controlled by Japanese and Korean companies, and Chinese companies generally At the bottom of the industrial chain, the profit rate is very low, and some of China's outstanding companies have been able to control the core of white power. The small household appliances industry generally does not have a core link. Companies need to measure the technical barriers that they may encounter after entering different industries and analyze whether they can solve these industry barriers. These capabilities will determine the position of enterprises in the industry. Midea and Galanz basically have these capabilities in their main products. In the air-conditioning industry, Galanz has mastered the magnetron technology in the microwave oven industry and has mastered these core links. Only then did they each become leaders in the industry.

The second level is mainly the key factor of the industry. The key elements of the household appliance industry's industry focus on R&D, quality, integrity of the industry chain, capital, scale, brand, marketing capabilities, channel building capabilities, and management support systems. Although small home appliances do not need to control the core links, Backgammon is lagging behind its main competitors in terms of product development speed, product line fullness, industrial chain integrity, capital, and scale. It is these shortages of capabilities that have caused the failure of Backgammon. Chunlan’s diversification started in 1994 was also the same issue. TVs, washing machines, refrigerators, computers, and other home appliances were launched. They even entered trucks, motorcycles, new energy, and batteries. However, Chunlan forgot that he did not have the same business at the same time. The ability to carry out these businesses and the lack of key elements of the industry led to the failure of Chunlan's diversification strategy.

Once again, obedience to corporate vision and mid- and long-term development plans have identified industry development opportunities, and when they have the appropriate capabilities, companies need to formulate their own mid- and long-term development plans and business plans, and gradually implement various businesses under the guidance of this plan. Enter the strategy.

The United States will continue to implement the "professionalization, industrialization, globalization," the development strategy, strengthen independent innovation, and actively promote structural adjustment, mainly highlighting the two major categories of white goods and small appliances. Haier, on the other hand, is home appliance products entering the market. One of the key points is the transformation from manufacturing to service industry. Not only selling products but selling solutions. The second transformation is the transformation from traditional economy to internet economy. A real front end has R & D, mid-end has a very good manufacturing, the back end has a very good business platform, sales platform, and ultimately become a provider of a better home life. Both Midea and Haier have clear and accurate strategic plans. Based on this, they enter various new business areas. The reason why BBK enters small household appliances is mainly to replace BBK DVD business. Substitution is the driving force, not the development planning of the company. Under the guidance of targeted entry, it is difficult to form industrial synergy and complement each other in all businesses.

Fourth, the selection of new businesses cannot enter all business areas at the same time, and all businesses and products that may be entered need to be sorted. This sorting requires a comprehensive and objective evaluation, so that the selection and sorting of related businesses can be made to facilitate the company's overall planning. Resources. We can use some professional tools to help companies make choices, such as evaluating each possible new business on an item-by-item basis. The dimensions of the assessment are mainly divided into two categories: The attractiveness of the business market can range from market size, business growth, profitability, competition, etc. In terms of evaluation, the strategic matching analysis can be evaluated from aspects such as familiarity with the business, talent pool, consistency with the company's strategic goals, and the degree of support of the company's resources. The selection and assessment can be combined with the current status of the industry and the actual situation. Selectively set appraisal indicators, and then set weights for each indicator. Through comprehensive assessment, it can be concluded that companies enter new services.

Finally, accurate competition positioning.

Based on the status quo of the industry competition and the company's core competence, combined with positioning theory and methods, determine the positioning of each type of business to enter the market segment, and carry out marketing work based on this positioning, and give the corresponding organizational security system matching resources and design.

Of course, not every home appliance company can succeed in entering a new market every time, and there are also many varieties of home appliances. When more companies implement the entire product line, the exit of home appliance companies will occur from time to time. How do household appliance companies decide to withdraw?