Hardware industry profit

by:Ipromo     2021-06-26
At this stage, there are many types of hardware companies in the society. They operate according to their own rules, but their operating efficiency and profit points are very different. Their service targets, competitive advantages, and intangible asset proportions also have their own characteristics. High and low classification, divided into four categories:

   Third-rate hardware companies rely on hard work to earn money for their employees; second-rate hardware companies rely on selling products and services to earn consumers' money; first-class hardware companies rely on selling brands and technologies to earn money from other companies; super-first-class hardware companies rely on selling rules to earn money Industry money.

   First and third-rate hardware companies rely on hard work to earn money from their employees

   Third-rate hardware companies work hard. As we call 'contract processing' companies, they do not have any competitive advantages and rely on other companies to grant 'quotas'. They are roughly classified as 'contract workers'. Because there are too many competitors and their own strength is not good, they can only earn some labor fees by selling their own labor, and earn the average profit of the entire industry. The business model of hardware enterprises is a disguised way of earning the hard work of the employees of the enterprise. It is the lowest-grade among various survival methods, but it is the business model with the largest number of enterprises in our country. Among them, township enterprises and old heavy industrial bases There are many small and medium-sized state-owned enterprises and small private enterprises.

   Second and second-rate hardware companies rely on selling products and services to earn consumers' money

   Hardware companies selling products and services are a form of less efficient operation. In comparison, selling services is more efficient than buying products.

The disadvantage of    selling products is that the raw material cost of the product itself accounts for a large proportion of the cost of the finished product, so the profit margin is low; the investment in production equipment is large, which affects the turnover of funds; the product is directly supplied to the final consumer, After-sales service spends a lot of money and energy; the number of customers is large, and the marketing cost is high; the individual needs of consumers are strong, and it is more difficult for enterprises to meet their needs; similar competition is fierce and the market space is narrow; consumption is protected Various laws and regulations on the rights and interests of consumers have been introduced, and enterprises’ inadvertent mistakes have caused high compensation costs; counterfeit products have been repeatedly banned; the entire society has become quite transparent with regard to product business models and industry rules, and operational regulations have also been very standardized. , Differentiated operation is more difficult. All of the above problems hinder the operational efficiency of enterprises.

   Compared with selling products, the    selling service model has no other advantages except for higher profit margins. Both are selling products and services to earn money for consumers' low-level needs. The most common result of such competition is a price war. It is neither a win-win nor a win-win, but a lose-lose, which is detrimental to the development of both parties and society.

   But there is one exception, which is to give added value to products and services that can meet the needs of high-level consumers, such as adding value to products and services such as brand, technology, management, etc., so that consumers can feel 'noble Satisfaction such as The differentiation of products and services caused by brand, technology, and management is also intensifying. Price wars will never spread here. For example, if Coca-Cola does not reduce its prices, sales are still increasing year by year.
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