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Analysis of the phenomenon of "shuffle" in the furniture market
In 2012, it was a very difficult year for the furniture industry. The international economic environment has not improved, and the export market is difficult to recover. The domestic real estate regulation and control policy has not been relaxed. The consumer market has continued to slump, which has led many companies to survive and even be eliminated. The market “shuffle†phenomenon has intensified.
Natural selection, survival of the fittest, under the conditions of market economy, the phenomenon of "shuffling" in an industry is normal. However, for the entire industry, it is necessary to carefully analyze the reasons for the failure of these “shuffled†enterprises, learn from them and find the right direction for development. Here, the author sorts out the cases of the closure of some furniture companies in the past two years, analyzes the reasons for their closure, and hopes to learn from the industry.
Capital chain break
There is no need for rumors about the importance of capital for the survival and development of a company. Looking at the furniture companies that have been eliminated in the past two years, at least half of them are caused by the break of the capital chain. On May 12th, Shandong’s home today collapsed, and its boss was also “running the road†due to the break of the capital chain, involving an amount of nearly 600 million yuan. Its creditors are complex, not only banks, guarantee companies, individuals, but also PE.
The lack of funds for furniture companies is difficult to operate, as is the case for dealers. For example, in September this year, Qumei Furniture Chongqing store was delayed in delivery and was exposed by consumers. According to the owner of the store, two years ago, he and another shareholder partnered to win the Qumei Chongqing distribution rights. In August this year, the partner shareholders suddenly withdrew the capital, causing the capital chain to break. He could not pick up the goods from the manufacturers, so he delayed the payment to the consumers. Supply.
It can be seen from the above cases that both enterprises and distributors must always maintain the safety of the capital chain, especially to strengthen the management of cash flow. A company must always maintain a certain amount of effective cash flow in order to maintain normal operations, otherwise it will have a fatal impact. In addition, strengthening cash flow management can also effectively enhance the competitiveness of enterprises. Because with the increasingly fierce market competition, furniture companies must adjust the product structure in time to meet the changing needs of consumers. If the furniture company has sufficient cash, it can be transformed into productivity and improve the competitiveness of the company.
Blind expansion
This is particularly true in the furniture store. In recent years, in order to quickly occupy the market, several national chain hypermarkets have been desperately trying to “slap the groundâ€. In order to maintain their positions, some local stores have also increased their business area through transformation and expansion, resulting in a serious excess of the store area. When the market is in a downturn, some stores that run a loss will have to close their doors.
For example, in July of this year, Red Star Macalline was located in the shopping mall in Pazhou, Guangzhou, and was forced to close due to the fact that the business was not profitable and the contract was expired. This fully exposed the huge crisis brought about by the expansion of the franchise model. Not only in Guangzhou, but in most first- and second-tier cities this year, there has been a collapse in stores.
For example, in Beijing, the Octagon Dragon Lighting City, which is known as the “Big Eight Lighting (Lighting Decoration Effect) City†in March this year, has been transformed into a flower and bird market. The number of home building materials stores in Beijing has closed down since the beginning of this year. . In Shenyang, since 2011, there have been stores closed down. First, the three stores of Ouyada closed, and the Dadong store opened in the past two years to welcome the closing of the store.
Therefore, some experts pointed out that in recent years, the home market in some areas has been built too fast, the phenomenon of repeated construction is serious, the market capacity is limited, the number of stores has increased, the turnover of single stores has been naturally diluted, and the profit margin of dealers has been Compression, it is inevitable that the store will not operate. At the same time, the expert also believes that the current phenomenon of the closure of furniture stores is essentially the self-regulation of the furniture industry. It is not a bad thing for the furniture industry to squeeze out the bubble itself.
Lack of brand
In recent years, due to the impact of the international financial crisis, the overseas market has shrunk severely. The EU and the United States have often introduced various trade barriers against Chinese furniture, which is a fatal blow to OEM-type export furniture companies that lack brands.
For example, this year, in the traditional furniture export towns - Dongguan, Guangdong and Wenzhou, Zhejiang, a large number of OEM-type furniture companies closed down. Dalingshan Town, Dongguan is a famous “first town for furniture exportâ€. The local furniture enterprises are mostly small and medium-sized enterprises, and most of them are OEM production, lacking independent brands. According to industry experts, there are dozens of furniture companies that have closed down in Dalingshan Town this year because they have not received overseas orders.
In another furniture production base - Longjiang, Shunde, there are many OEM-type small and medium-sized enterprises that have closed down in the past two years. In Shenzhen, which is adjacent to Dongguan, the situation is different. Although Shenzhen’s furniture exports last year dropped by 40%, there were not many companies that closed down. That is because most of Shenzhen’s furniture companies have been transformed and upgraded, have their own brands, and have long since entered the domestic market.
Therefore, the author believes that the downturn in the foreign trade market is only the external cause of the collapse of these export-oriented home enterprises. Excessive reliance on the OEM business model is the internal cause of the key role.
Management error
Although China's furniture industry has developed for so many years, it has never produced a "giant-type" enterprise like Haier in the home appliance industry. Most of them are small and medium-sized enterprises, and they are mainly family-owned enterprises. There are many in management and management. Missing.
For example, at present, many furniture companies are bosses making decisions, prefer to "slap their heads" to do things, and have not established a scientific management mechanism. In actual business activities, "people" are often above the "system". The following people also Only the boss is from, it is difficult to help companies find problems and solve problems. In contrast, the bosses of individual furniture companies like to look for a human-like “savior†and hope that a certain person can help them manage the company, and they rarely spend time and energy. Once there is a problem, it is too late to change people.
Managers are the nerve center of a company. All resources are organized, deployed and created by managers. For the furniture company, no matter how good your product is, as long as the management has a problem, it is a matter of time before the bankruptcy.
Always have a sense of crisis
In addition to the above reasons, there are still many factors that cause companies to be “shuffled†by the market, such as lack of talent, technology, policy support, and so on. No matter what the factors can be avoided by implementing some effective measures, the key is that furniture companies can foresee these factors. This requires entrepreneurs and managers to have a sense of crisis at all times, to be able to anticipate risks in a timely manner, and to scientifically avoid risks.
There is such a story: a group of endangered deer, protected by a circle of water and grass, eat, sleep, sleep, and no natural enemies approach them. Soon the number of deer is increasing, but it is the body of these deer that is getting worse and worse. Scientists have used various methods to treat them and they are not getting better. Finally, some people proposed to invite the "Wolf Doctor". When the wolves came to the middle of the deer group, the deer group that was used to "preserving the good deeds" still stood there stupidly. When the wolf saw the food, he naturally rushed to the past, when the deer group knew that they were rushing to escape. In this way, the wolves chased the deer in the grassland every day, and they were eaten when they could not run. A few months later, this group of deer has become "sturdy as a cow" under the chase of the wolf.
This story embodies a natural law: only when there is a sense of crisis can you survive better. This rule also applies to businesses. The world-famous Boeing Company, when it comes to the induction of new employees, broadcasts the hypothetical news of Boeing’s collapse, with the aim of keeping employees in a sense of crisis.