As the saying goes, "take money and replace people." Although it is not very appropriate to use this sentence to describe corporate partnerships, no one will clearly point out the drawbacks of such cooperation. Lin Limin, general manager of Shandong Yantai Hongyu Lighting Co., Ltd. is different.
Although he is also an OEM for foreign brands GE, he still unscrupulously pointed out the fatal flaws of the OEM model. Does Red Dragon want to do OEM business again?
Quality issues are fatal flaws in the OEM model
Reporter: This year's 3-15 meeting will be announced. At present, the qualified rate of energy-saving lamps is only 39.3%. Even some well-known brands in the industry have been exposed to quality problems. According to relevant statistics, domestic energy-saving lamps have reached more than 3,000 brands. Big brands have quality problems. I can imagine the quality of the entire industry. Why is this happening?
Lin Limin: I think the reason why this phenomenon occurs is that China has a large number of OEM companies and the production level is also uneven.
The emergence of the OEM model is the result of a specialized division of labor. At first, the company will combine production and sales. Later, with the development of the company and the enhancement of brand strength, the company gradually transforms itself into a brand and a channel. For other manufacturers with certain manufacturing capabilities but not in good market conditions. A fatal flaw in the OEM model is that the brand's control over the quality of the product is weak. Although the brand will use a series of standards to select the manufacturer, the manufacturer's production is due to differences in culture and business models. The quality of the products is still inferior to the quality of the products produced by the early brand owners themselves. At present, some well-known brands in the energy-saving lamp market basically do not produce themselves, but transfer production to third-line manufacturers. This is the first reason why some well-known brand products will have problems.
With the rationalization of consumers and the arrival of fierce competition, consumers will gradually weaken the pursuit of “brand nameâ€. The price/performance ratio will be the most important standard for customers to purchase. Let others produce and OEM models of their own brands can be short-term. In order to reduce costs and manage losses, but in the long run, quality is not guaranteed. At present, many “brands†in the energy-saving lamp industry basically outsource production. There are quality hazards in this way. One of the core reasons for the low rate of quality inspection of energy-saving lamps announced at the 15th party was one. Hung Hom will not allow other companies to “build†for a long period of time, thus ensuring consistent product quality.
Reporter: How are the two business models, production and marketing, and production and sales separation, selected? Why make this choice? Which model do you think will become the trend of energy-saving lamps in the future?
Lin Limin: We adopt a business model of production and sales, because it can better reflect our professionalism and specificity. Third-rate enterprises do products, second-rate enterprises do brands, and first-class enterprises do standards. We are the standard for a good light in the industry. With the increasingly fierce competition and the need of market development, the separation of production and sales will occur and will become a trend in a certain period of time, but it will not last long.
Cooperation is only to improve myself
Reporter: It is understood that Hung Hom has cooperated with the world's lighting giant GE to affix its brand. Does this improve itself?
Lin Limin: GE Lighting is an old brand with more than 100 years of history. In the course of its development, it has formed a relatively complete industry standard and management system, which is what China's lighting companies are currently lacking. Through cooperation with GE Lighting, Hung Hom can learn the standards of relevant industries, can also learn a lot of product standard requirements, can learn the product control standards, etc., and greatly help and improve the internal production management of the enterprise itself. .
Reporter: At present, most domestic energy-saving lamps companies choose to give foreign brands such as Philips, Osram and other OEMs. Why is this happening? With the experience of Hung Hom, what issues should be paid attention to when domestic companies cooperate with foreign brands?
Lin Limin: This reason is because the marketing ability of many energy-saving lamps companies in China is not very strong, and the market development ability is weak. Branding to large enterprises can save market development costs, enhance the visibility of enterprises, and OEM by these large enterprises. Production can greatly help enterprises to do their own marketing, and lay the foundation for the company to do its own brand. The reason why we choose foreign brands is mainly considering the long-term aspects of cooperation. The development time of foreign lighting companies has been relatively long, and they have formed a certain scale, and they are relatively stable in cooperation with them. The management of foreign companies is also relatively standardized, and the implementation of contracts is relatively high, which may be one of the reasons. In addition, domestic companies can learn some advanced management experience and technology by branding foreign companies, and it is also conducive to the improvement of enterprises themselves. Own brand and OEM OEM are two distinct market operation modes. While operating the brand, Hung Hom actively develops cooperation with large enterprises in the same industry. While developing its own brand, it actively participates in large enterprises in the industry. OEM production, maximize the company's production capacity and profit margin, to lay a solid foundation for better brand operation
However, due to the different cultures and business models, various problems will arise when cooperating with foreign companies. The first thing to pay attention to is the quality of products, because foreign companies have stricter requirements on product quality. Secondly, in the process of cooperation, we must adhere to our own position and strive for reasonable interests for ourselves. Finally, in the process of making OEM production, we must also pay attention to our own brand building, because there is no way to do OEM production. OEM production is only for the survival of a company at a certain stage of development. Only by learning the strengths of others and developing their own brands is the way out for business development.
Reporter: At present, some well-known brands in China have experienced insufficient supply of energy-saving lamps. Do you think that the energy-saving lamps companies have insufficient capacity or other reasons? How should energy-saving lamps companies solve the problem of insufficient supply?
Lin Limin: I think there are three main reasons for the lack of supply: First, when domestic OEM companies choose partners, they first consider foreign large enterprises, which causes the overall capacity of domestic enterprises. Second, with the development of leading enterprises in the domestic lighting industry, they gradually turned their energies into brands, channels, and neglected their own production. In the case of insufficient capacity of OEM enterprises, it is easy to have problems of insufficient supply. Third, the lack of preparation for the coordination plan of the company's off-season season directly led to the shortage of supply when the peak season began.
To solve the problem of insufficient supply, we must first grasp our own production and tap the production potential. At the same time, we must standardize cooperation with OEM companies and establish long-term cooperative relationships. In addition, we must change our business philosophy, make products in the off-season, market in the peak season, adapt to local conditions, and formulate timely strategies and plans.
Focus on energy saving lamps
Reporter: At present, the development of diversification has become a trend in the industry. How does Hung Hom view diversification?
Lin Limin: China faces unprecedented market opportunities and market potential. Many manufacturers have been able to resist the temptation to make the first product after they made the first product. They blindly entered other industries and started to make other products. The result is the second. The product did not achieve the number one position in the industry, but the foundation of the first product was also greatly affected. In the early years when the industry competition was not very intense, there was not much problem with this kind of practice. The level of enterprises in the industry was as low as that, but with the intensification of industry competition and the emergence of enterprises with higher management levels in the industry, The effectiveness of this approach is getting lower and lower. At present, the current situation of the energy-saving lamp industry is just like this. Many companies that have done energy-saving lamps in their early years have entered other industries. Enterprises that originally started not to use energy-saving lamps have started to do energy-saving lamps. Under the same circumstances, the comprehensive quality of products produced by these manufacturers. Compared with a single company that makes energy-saving lamps, it is greatly discounted. I think that it is better to do a big job than a company. Take Microsoft and IBM as examples. Let Microsoft do hardware IBM software. They are completely okay with their strengths, but they have not done so, but they have done more refined and professional in their respective fields, thus creating their dominance in their respective industries today.
Yantai Hongyu Lighting Co., Ltd. will adhere to the principle of specialization in a relatively long period of time to lay the dominance of the energy-saving lamp industry.
1
Although he is also an OEM for foreign brands GE, he still unscrupulously pointed out the fatal flaws of the OEM model. Does Red Dragon want to do OEM business again?
Quality issues are fatal flaws in the OEM model
Reporter: This year's 3-15 meeting will be announced. At present, the qualified rate of energy-saving lamps is only 39.3%. Even some well-known brands in the industry have been exposed to quality problems. According to relevant statistics, domestic energy-saving lamps have reached more than 3,000 brands. Big brands have quality problems. I can imagine the quality of the entire industry. Why is this happening?
Lin Limin: I think the reason why this phenomenon occurs is that China has a large number of OEM companies and the production level is also uneven.
The emergence of the OEM model is the result of a specialized division of labor. At first, the company will combine production and sales. Later, with the development of the company and the enhancement of brand strength, the company gradually transforms itself into a brand and a channel. For other manufacturers with certain manufacturing capabilities but not in good market conditions. A fatal flaw in the OEM model is that the brand's control over the quality of the product is weak. Although the brand will use a series of standards to select the manufacturer, the manufacturer's production is due to differences in culture and business models. The quality of the products is still inferior to the quality of the products produced by the early brand owners themselves. At present, some well-known brands in the energy-saving lamp market basically do not produce themselves, but transfer production to third-line manufacturers. This is the first reason why some well-known brand products will have problems.
With the rationalization of consumers and the arrival of fierce competition, consumers will gradually weaken the pursuit of “brand nameâ€. The price/performance ratio will be the most important standard for customers to purchase. Let others produce and OEM models of their own brands can be short-term. In order to reduce costs and manage losses, but in the long run, quality is not guaranteed. At present, many “brands†in the energy-saving lamp industry basically outsource production. There are quality hazards in this way. One of the core reasons for the low rate of quality inspection of energy-saving lamps announced at the 15th party was one. Hung Hom will not allow other companies to “build†for a long period of time, thus ensuring consistent product quality.
Reporter: How are the two business models, production and marketing, and production and sales separation, selected? Why make this choice? Which model do you think will become the trend of energy-saving lamps in the future?
Lin Limin: We adopt a business model of production and sales, because it can better reflect our professionalism and specificity. Third-rate enterprises do products, second-rate enterprises do brands, and first-class enterprises do standards. We are the standard for a good light in the industry. With the increasingly fierce competition and the need of market development, the separation of production and sales will occur and will become a trend in a certain period of time, but it will not last long.
Cooperation is only to improve myself
Reporter: It is understood that Hung Hom has cooperated with the world's lighting giant GE to affix its brand. Does this improve itself?
Lin Limin: GE Lighting is an old brand with more than 100 years of history. In the course of its development, it has formed a relatively complete industry standard and management system, which is what China's lighting companies are currently lacking. Through cooperation with GE Lighting, Hung Hom can learn the standards of relevant industries, can also learn a lot of product standard requirements, can learn the product control standards, etc., and greatly help and improve the internal production management of the enterprise itself. .
Reporter: At present, most domestic energy-saving lamps companies choose to give foreign brands such as Philips, Osram and other OEMs. Why is this happening? With the experience of Hung Hom, what issues should be paid attention to when domestic companies cooperate with foreign brands?
Lin Limin: This reason is because the marketing ability of many energy-saving lamps companies in China is not very strong, and the market development ability is weak. Branding to large enterprises can save market development costs, enhance the visibility of enterprises, and OEM by these large enterprises. Production can greatly help enterprises to do their own marketing, and lay the foundation for the company to do its own brand. The reason why we choose foreign brands is mainly considering the long-term aspects of cooperation. The development time of foreign lighting companies has been relatively long, and they have formed a certain scale, and they are relatively stable in cooperation with them. The management of foreign companies is also relatively standardized, and the implementation of contracts is relatively high, which may be one of the reasons. In addition, domestic companies can learn some advanced management experience and technology by branding foreign companies, and it is also conducive to the improvement of enterprises themselves. Own brand and OEM OEM are two distinct market operation modes. While operating the brand, Hung Hom actively develops cooperation with large enterprises in the same industry. While developing its own brand, it actively participates in large enterprises in the industry. OEM production, maximize the company's production capacity and profit margin, to lay a solid foundation for better brand operation
However, due to the different cultures and business models, various problems will arise when cooperating with foreign companies. The first thing to pay attention to is the quality of products, because foreign companies have stricter requirements on product quality. Secondly, in the process of cooperation, we must adhere to our own position and strive for reasonable interests for ourselves. Finally, in the process of making OEM production, we must also pay attention to our own brand building, because there is no way to do OEM production. OEM production is only for the survival of a company at a certain stage of development. Only by learning the strengths of others and developing their own brands is the way out for business development.
Reporter: At present, some well-known brands in China have experienced insufficient supply of energy-saving lamps. Do you think that the energy-saving lamps companies have insufficient capacity or other reasons? How should energy-saving lamps companies solve the problem of insufficient supply?
Lin Limin: I think there are three main reasons for the lack of supply: First, when domestic OEM companies choose partners, they first consider foreign large enterprises, which causes the overall capacity of domestic enterprises. Second, with the development of leading enterprises in the domestic lighting industry, they gradually turned their energies into brands, channels, and neglected their own production. In the case of insufficient capacity of OEM enterprises, it is easy to have problems of insufficient supply. Third, the lack of preparation for the coordination plan of the company's off-season season directly led to the shortage of supply when the peak season began.
To solve the problem of insufficient supply, we must first grasp our own production and tap the production potential. At the same time, we must standardize cooperation with OEM companies and establish long-term cooperative relationships. In addition, we must change our business philosophy, make products in the off-season, market in the peak season, adapt to local conditions, and formulate timely strategies and plans.
Focus on energy saving lamps
Reporter: At present, the development of diversification has become a trend in the industry. How does Hung Hom view diversification?
Lin Limin: China faces unprecedented market opportunities and market potential. Many manufacturers have been able to resist the temptation to make the first product after they made the first product. They blindly entered other industries and started to make other products. The result is the second. The product did not achieve the number one position in the industry, but the foundation of the first product was also greatly affected. In the early years when the industry competition was not very intense, there was not much problem with this kind of practice. The level of enterprises in the industry was as low as that, but with the intensification of industry competition and the emergence of enterprises with higher management levels in the industry, The effectiveness of this approach is getting lower and lower. At present, the current situation of the energy-saving lamp industry is just like this. Many companies that have done energy-saving lamps in their early years have entered other industries. Enterprises that originally started not to use energy-saving lamps have started to do energy-saving lamps. Under the same circumstances, the comprehensive quality of products produced by these manufacturers. Compared with a single company that makes energy-saving lamps, it is greatly discounted. I think that it is better to do a big job than a company. Take Microsoft and IBM as examples. Let Microsoft do hardware IBM software. They are completely okay with their strengths, but they have not done so, but they have done more refined and professional in their respective fields, thus creating their dominance in their respective industries today.
Yantai Hongyu Lighting Co., Ltd. will adhere to the principle of specialization in a relatively long period of time to lay the dominance of the energy-saving lamp industry.
1
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