LEDinside: our growth strategy full interpretation

Although the mention of wood Linsen, often gives people the first impression is a low cost strategy (low-cost Strategies) package factory. However, only the cost leading strategy to think our, will inevitably fall into a misreading of the development strategy of the rapid growth of LED company, it is difficult to explain the rapid growth of (2008~2016CAGR39.45%) at the same time how to maintain a good quality of growth (gross margin continued to remain at 20 ~ 30%).

Data source: LEDinside

Low cost strategy is a very classic competitive strategy, but this strategy itself is a huge risk, is not sufficient to support a listed company for 10 consecutive years compound growth rate of revenue of nearly 40%, but not enough to draw the outline of an industry leader for the sustainable management of the grand vision.

To make clear in recent years continued rapid growth of our logic, no doubt need to put down the stereotypes, carefully observe whether Linsen on what to do, it may be more clear about his future cognitive. This paper hope through the growth strategy of the strategic level (Growth Strategies) M.L.S. enterprise comprehensive interpretation, a benighted this hidden LED packaging factory real strategy after the low cost strategy impression intention.

Low cost strategy to Linsen successful rise

Michael Porter defined three basic competitive strategies, namely, low cost strategy, differentiation strategy and centralized strategy. There is no doubt that the rise of our low cost competition strategy of victory.

There are a lot of packaging factory development and Linsen during the same period, to which Linsen cost control ability is on the low cost strategy, while others use the difference of the road.

Due to the lack of adequate R & D capabilities and brand awareness support, differentiation strategy is quite difficult to implement. Many of the domestic packaging factory is not easy to climb up the hill, completed the primitive accumulation, when found, organized a vote finally Conditions are becoming better and better. combat team, international competitors already through the patent monopoly, industry standard set up in numerous Kennedy Chenggu barrier to the international market on the road, leaving only a narrow the door closed with a lot of money.

Our choice is another way, low cost strategy, according to the description of Potter, is the whole cost of enterprises lower the cost of competitors, even the lowest cost in the same industry. The M.L.S. really do this, through the internal cost control, the cost has been compressed to the lowest level of the industry, and firmly establish this position, forcing other competitors or quit, choose differentiation strategy or.

Selection of differentiated packaging plants, some focus on operating segments, had to give up growth, become a market leader. While others want to continue to grow, but also subject to high-end market brands, patent barriers, have to do up the mercenaries - for international manufacturers do OEM work. But in a Linsen international companies do not choose positioning is bigger, the scale effect fully, rise as the largest Chinese packaging factory, is also the first among the world's top 10 China packaging factory.

Data source: LEDinside

However, it is due to the competitive strategy of Linsen being too successful, that most people stay in the understanding of Sen's inherent low cost strategy impression, while ignoring the higher level of enterprise strategy success. In fact, to explain the logic of Linsen high-speed growth, with growth type strategy for enterprises to analyze the overall strategic level might be able to get closer to the true picture.

Knowledge point: the strategic level of an enterprise is divided into overall strategy, business strategy and function strategy. The overall strategy includes growth strategy, stability strategy and contraction strategy. Potter's five basic strategy, known as general strategy, is business strategy, also known as competitive strategy.

Sen's growth strategy

Growth strategy, also known as "expansion strategy", refers to the existing strategy on the basis of the overall strategy to develop higher goals. We briefly list several kinds of growth strategy mainly, and the growth strategy meaning and implement the strategy of the forms and methods, a corresponding view Linsen has taken action.

1. we strengthen strategies (intensive strategies):

The strengthening strategy includes market penetration, market development and new product development, strengthening investment from two dimensions of market and product, and enhancing competition status. From strengthen strategic perspective, Linsen what things to do?

Although in many types of packaging products have very strong Linsen cost advantage, but also has the absolute advantage and comparative advantage is not enough, rawlinson. Before and after 2014 2835 became the biggest selling single product market, continues to expand the scale of production capacity 2835 M.L.S., compared to other varieties, the relative advantage in the 2835 MLS to more similar specifications, Linsen prices remain at almost half the peers in the low-end market, 2835 soon left alone Rawlinson big.

In the development of new products, select a small spacing LED and M.L.S. backlight LED products market. The backlight market as expected, and the decision to give up the direction of rawlinson. Small spacing LED market began to successfully intervene and Rawlinson, and has small pitch screen leading liard small pitch LED cooperation, become the market can not be ignored a new force.

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