Competition Structure and Countermeasures of Gate Valve Industry
2016 China’s stainless steel gate valve market has improved, which makes Chinese manufacturers see opportunities and turn to the gate valve industry. In this way, the competition intensity of stainless steel gate valve manufacturers in our country has increased, which has certain universality and representation. The main trends are: product developing globalization, the strategic direction integration.
With the economic globalization, the owner of new management technology and manufacture technology will gradually take new market, and penetrate the existing market, and with low cost, high value-added products started valve brand. With high, new, sharp and market optimization for the competitive base; today it is clear that the bidding phase of the bidding price is too high and will be forced to withdraw from the stage of competition. Therefore, we can only by improving the product market share, improving product quality and reliability, and forming the scale effect to reduce costs to improve competitiveness.
In the face of some new competitors, entering the industry will bring new production capacity and the demand for resources and markets, it may result in industry production costs rise, market competition, price decline, industry profits. The threat of potential competitors depends on the degree of barriers to entry and the extent of the reaction of existing companies within the industry. The higher the degree of access to the industry, the more intense the existing business, the more difficult the potential competitors
are not easy to enter, the smaller the threat to the industry. The barriers to enter the industry are:
1. Brand loyalty
The company product image or brand loyalty establishing by long term propaganda or customer service is one of the main obstacles of potential competitors to entry the industry. Especially the ball valve, the cut-off valve or butterfly valve production enterprises to enter the industry, new manufacturers have to spend a lot of time and investment to overcome the original brand loyalty, then establish their own products (of brand)image.
2. Distribution channel
Distribution channel can be key barrier of entering an industry. For example, a new valve manufacturer, he must through the price discount, a lot of advertising or marketing activities so that he can squeeze out of existing competitors. The less the distribution channels, the tighter existing competitors control the distribution channels, the higher barrier to enter the industry.New industry manufacturer even have to reinvent the wheel, and establish their own distribution channel from scratch.
3. Capital requirement
Capital requirements to enter the industry, including not only the plant equipment and other fixed capital investment, but also consumer credit, product inventory and the opening of the loss of liquidity needs; the requirement not only need the production of funds, but also need a lot of money for business, product development, advertising and corporate public relations activities etc…For some stainless steel valves, large diameter valves, American Standard valve or WJ41H bellows valve etc,capital requirement is a major obstacle to enter the industry.
4. Scale economy
Scale economic benefits include product manufacturing, research and development, marketing and after-sales service aspects. It is an important obstacle to potential competitors entering the industry, economic scale industry is to enter the new requirements of manufacturers with production and operation of the same size with the existing manufacturers, or face the cost of production of marketing cost competitive disadvantage.
In the face of these competitive enterprises only product innovation has always been closely followed or leading the trend of the times, to get more profits and market space. Enterprises should continue to enhance brand awareness. In this area of homogenization of products, enterprises must establish brand awareness, establish brand strategy, and do well in brand promotion, win the client with good service and win the market with high quality.