Competition is an inevitable behavior among enterprises. The goal of an enterprise is to achieve profitability and create value, and competition will inevitably arise in the process of achieving enterprise profitability. Maintaining a good competitive relationship between enterprises can help enterprises update technology, improve services, and provide consumers with more affordable and high-quality products; on the contrary, improper competition will make enterprises enter the abyss or even die.
Coincidentally, in the machine tool industry, improper competition is often seen, such as low-price competition. We often see such scenes, some business owners are proud to show off the low prices of their products publicly: "Our machine tools are sold cheaper than others. Others sell 200,000, I sell 180,000; others sell 180,000, I sell 150,000; others sell 150,000, I sell 100,000." In their mouths, cheap seems to be the best marketing tool, and they can be used to boast. As long as the machine tool is cheap enough, users don't have to worry about not buying it. Therefore, we can't help but ask, is low-price competition really a shortcut for machine tool companies?
It is true that lower prices can help companies get more sales, but it does not mean greater profits. The machine tool industry itself is a small-profit industry, and the net profit of most companies is kept within a very low range. Today, repeated price reductions have resulted in a reduction in the net profit of a single product and a reduction in the profits owned by the company, which will inevitably lead to problems in a series of capital chains such as R&D, production, and sales. If the capital chain breaks in one place, the entire enterprise will collapse in an instant. Therefore, low-price competition is like walking a tightrope.
From the perspective of research and development, the research and development expenses required by machine tool companies are a huge expense. The reason why machine tool companies in Europe and Japan are technologically advanced is that the research and development cycle is long and the research and development costs are sufficient. And this research and development cost comes from the profit of the product. We rarely see these countries relying on low-price competition to attract customers. It is also because the reduction of profits will affect the capital investment in research and development, production and other aspects. Therefore, the development of the enterprise relies on a good cycle of input and output. It is obviously low-profit that still advertises itself as a tens of millions of research and development. Just listen to it.
Of course, low-price competition does not necessarily mean low profits. There are also some machine tool companies that "swords go sideways" in low-price competition. These manufacturers use inferior machine tool parts to replace regular machine tool parts with shoddy ones, and seek benefits at low prices. However, such an approach is essentially deceiving consumers. As long as consumers use the product to discover the problems, they will lose trust in the enterprise. Once the trust disappears, consumers will no longer choose the company's products, and what's more, the machine tool company will suffer a lawsuit.
In addition to the above problems, there is a legacy of low-price competition, which is the impact on the brand. Nowadays, many domestic machine tool companies have risen, and their three-axis and five-axis machine tools have made great progress in terms of accuracy and stability, but they still cannot sell at a high price. Because of their previous long-term low-price competition, users' recognition of their brand has been reduced. When users think your brand is cheap, it can be difficult to get a big price increase even if the quality goes up a lot.
We often see two slogans when we go to shopping malls, one is "promotional discount" and the other is "refused to bargain". Even though the "promotional discount" store has become popular in the past two days, it often changes its store after two days. On the other hand, the "refused to bargain" store, although it can't make it into the market, is better than a small stream and continues to develop with excellent quality. The same is true for the machine tool industry. Although low-price competition can attract a large number of users in a short period of time, this method is difficult to last and has many "sequelae". For machine tool enterprises, compared with low-price competition, good business strategy, active R&D investment, and excellent and high-quality product output are the right way.
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