Contemporary Chinese office furniture has experienced nearly 10 years of rapid development, in recent years has entered a period of slow development. Along with government procurement control, real estate collapse tide, raw material expansion and other issues came one after another, so that the original weak office furniture enterprises snowballed. The face of the slow development of the stock market, had to rip open the sleeves to collect meat, office furniture such a group of past production and processing-oriented manufacturers had to think: where is our market? Our products with what competition? Our users are concerned about what in the end, and so on, these new topics have emerged to promote the industry into the second half: deep user, brand competition, is a challenge is an opportunity! Here, let's talk about the core logic of competition in the office furniture industry.
The current situation of the local office furniture industry
The "ant enterprises" all over the place reflect the inefficient production and marketing drawbacks of the industry.
The biggest feature of China's local office furniture market is the "ant" phenomenon. China's office furniture industry 300 billion scale, no enterprise more than 3 billion, CR5 less than 3%, "ant companies" everywhere! While in Europe and the United States and Japan, the industry's CR3 can do 80%, Japan's KOKUYO and the United States Herman Miller each occupy more than 50% of the country's office furniture market share.
What exactly is the reason for China's office furniture industry so scattered small? The industry is extremely inefficient production and marketing model is the key, which is behind the existence of several problems that restrict the development of enterprises, but also the industry enterprises need to continue to break through the big hurdle.
Difficulty one: sales-oriented production, inefficient production model to limit the development of enterprises
As a traditional labor-intensive manufacturing category, the vast majority of office furniture companies are still accustomed to the "sales-oriented" order-based production model, the various production factors are relatively stable, relying heavily on human participation, production by order preparation and regular delivery, the biggest problem is the unstable quality, low efficiency, long delivery cycle, and even difficult to independently complete oversized orders, greatly limiting the development of enterprises. As the limitations of the "production by sales" model become more and more serious, the head enterprises began to form a "production by sales" production transformation, the enterprise according to the capacity plan to set performance targets, match the market team, based on the market and digital system to achieve modern industrial manufacturing, thus significantly improve production efficiency, reduce costs and promote the rapid development of enterprises This will greatly improve production efficiency, reduce costs and promote the scale of enterprises Rapid development!
Difficult problem two: a wide range of categories, inventory costs pressure mountain
Throughout the office furniture large system there is a very interesting phenomenon: do a single product is often more powerful than the business of doing the system, a chair to sell a few hundred million a lot, while the system of office furniture is very little. Office furniture industry products copied into the wind, and the scene, material, style, function, etc. caused by a wide range of office products, the lack of core product development, follow the trend of copying to generate a large number of SKU, resulting in a small number of orders for single products, product inventory backlog excess, the cost remains high. As Mr. Maike Porter proposed a strategic point of view, focus on becoming one of the key strategies of the office furniture industry, the product to do fine, bursting out of the industry had to face the strategic choice, only then can form a large-scale modern industrial manufacturing, is the key path to reduce costs and improve efficiency.
Difficult problem three: relationship win, regional relations behind the "local snake" phenomenon
The essence of office furniture sales is B2B, whether large projects or small purchases are a system of decision-making, driven by bidding, fixed-point cooperation and other procurement methods, information channels, relationship resources are the key elements of industry sales, this feature has led to a very strong regional performance of office furniture companies, there are a large number of ten million to billion dollar scale of the ground snake enterprises. Office furniture head enterprises to become civilianized absolute leadership position, must break this regional barriers, to achieve a substantial lead in market share and brand discourse. Therefore, the brand value has become a key element, which is also the direction of the industry enterprises to explore, but also the industry's largest "blind spot" where.
Difficulty four: information asymmetry, manufacturers lack of market discourse
Office furniture is a very low attention, information is extremely asymmetric market, unlike civil furniture strong brand power on the impact of user decisions, the vast majority of office furniture purchasers basically do not know which office furniture companies, even if there is a corporate procurement catalog and bidding, etc., the user is faced with channel agents rather than manufacturers. Therefore, the office furniture channels in the hands of most customer resources, but also hold the manufacturers and the supply side of the discourse, interest-driven channel, but also the "ant factory" breeding ground. Companies must break through the information asymmetry, and through brand awareness to drive the user's purchase choice, is an important strategic task for the future.
The nature of competition in the local office furniture industry
The most primitive product competition logic behind the traditional large distribution model.
Today's office furniture industry, in essence, is still in the most traditional era of large wholesale distribution, focusing on running volume, who wants to give, which is typical of product competition. Office furniture product competition in the three elements: quality, price, appearance and style, but also to the office furniture industry enterprises brought the fundamental competitive landscape of product characteristics.
Office furniture industry has been the existence of the Guangfu faction and Hangzhou faction of the two factions, the Guangfu faction is to do a large circulation of cost-effective products, Hangzhou faction is good at product and space design. From the competitive landscape, according to the grade of the product can be divided into three camps, from high-end to low-end changes, is the product from the original design, product innovation, and then to the cost-effective win. The competitive strategies of the three camps can be summarized by the "father of strategy" Mike Porter's three general strategies.
1-Leading sales in the low-end and mid-range camps
Behind the price/performance win: Total cost of ownership strategy
How to establish differentiation with low threshold and homogeneous products? The essence of competition in the low-end mass market is price differentiation. The low-end mass camp is mainly dominated by Guangpai enterprises, through the advantages of large manufacturing to achieve efficient mass production, so as to complete better cost control, and then through the channel model of large distribution to achieve a balance of production and sales, the formation of cost-effective win sales leadership. MEET＆CO as a model of cost performance, its business slogan is "let office life creative wireless". From the marketing point of view, the low-end first-line camp has achieved a leading position in three major marketing strategies.
Strategy One: Omnichannel Strategy
China's office furniture core channels have two legs: terminal and engineering. In the domestic market, the channel can enter, the brand stores, a variety of cooperation outlets, such as a European store in the country more than 500 stores, all kinds of cooperation and service outlets more. In addition, the engineering channel shipments account for more than half of the total sales of enterprises, enterprises have to the provinces and cities as a unit to recruit a large number of engineering partners. At the same time, the traditional e-commerce and various procurement platforms will be fully stationed, as far as possible through the realization of a diversified distribution network to cover the country's corporate customers.
Strategy two: multi-brand strategy multi-brand strategy to achieve a deep run
Office furniture market there is a distribution center, the distribution center shipping advantages are very obvious, and there are interests between the enterprise and the agent to protect the relationship. Like office furniture requires a large number of resources in the industry, an agent is often difficult to meet the quality of regional coverage, enterprises through a multi-brand strategy to absorb more partners to achieve a more intensive and deeper radiation of channels and customer resources.
Strategy three: explosive strategy
A simple truth: the cost of doing 100 pieces of a product and doing 1 million pieces is not a level. Low-end camp through the burst strategy, the formation of product boutique, a large area to cut SKU, to achieve a large number of products less pieces, both to meet market demand and cost advantages. Similar to the custom "19800 package" of the huge cost control strategy to win the market, "table, chairs and cabinets explosive three pieces" ultra-low price, to achieve a single product mass shipment of explosive strategy, the use of future sales to develop production plans, so as to achieve cost advantage.
2-Product innovation in the mid- to high-end camp
Behind the winning innovation: differentiation strategy
Positioned in the high-end office furniture products, decided their procurement customers are powerful private enterprises, especially the world's top 500 and China's top 500 such as the head of the enterprise. As these customers are mostly bidding and other centralized procurement, so the middle and high-end customers focus more on engineering-style, agency sales, focusing on creating regional customer experience showcase. The most critical point is how do they become the choice of such customers? Build brand value. Behind the brand value is to create differentiated products and services according to user needs and enhance corporate value.
Technological innovation, under the advocacy of the international office furniture concept, driven by the needs of large customers in Internet technology companies, office life freedom, health, openness, technology and other new goals of office furniture products. Ergonomics, office information technology, etc. has become the mainstream direction of office technology innovation, automatic height adjustment, sports office space, touch office equipment, human health detection and other office products continue to emerge. Among them, MEET＆CO office furniture main ergonomic products and automatically adjustable office desks and chairs have become the market's high concern products, numerous awards, sales continue to rise.
Environmental protection upgrade, the office furniture industry environmental protection track in two directions: one is to "Zhaosheng's environmental protection medium fiberboard powder spraying" as the representative of the plate standard innovation; one is to "sustainable development of European environmental standards" of the European and American environmental protection concept. Regardless of which, environmental health has gradually become the mainstream of high-end office furniture.
At the same time, with the introduction of explicit provisions such as national formaldehyde and indoor hygiene standards, Fortune 500 corporate clients have clear procurement requirements for national norms, environmental tracking is no longer a concept that has become an absolute strategy for high-end office furniture companies.
Segmentation, office furniture contains multiple segments, including uses, styles and users, etc., but also contains hotels, medical, display, office, etc., each segment of the furniture needs are not the same. Therefore, corporate products focus on segmentation, to create a professional product positioning.
High-end customization, as the head of the enterprise is getting larger and larger, the aesthetic is getting higher and higher, the future of office furniture will also enter the era of customization, except that the high-end customization of office furniture is concentrated in the independent offices of executives. High-end customization can achieve a balance in the overall sales of office furniture packages, office furniture finished products in the proportion of sales of tables and chairs is often greater than the cabinet, and even by the decoration company cross-border robbery. Enterprise data show that every 3 tables sold to sell 1 filing cabinet, high-end customization can not only dig deeper into the customer's product needs. At the same time, in the digital system is mature today, high-end customization is an important direction of product change, but also the direction of office furniture business transformation.
3-High-end camp design driven
Focus on original design, leading customer needs
High-end office furniture procurement companies mainly from the Fortune 500, such as Coca-Cola, Starbucks and so on, such customer companies focus on team culture and the overall atmosphere of the office. Therefore, high-end office furniture corporate strategy is design, their resources all product space design: original product space, international design team, super experience space ...... show the continuous exploration of the future design ...... are in three dimensions to show the enterprise's strong design ability to provide systematic office space solutions, thereby guiding customer demand.
In the past, office furniture companies retain a lot of traditional factory thinking, production-oriented and wholesale model will become a thing of the past. In the future, as the market changes and customer demand upgrades, China's office furniture industry will move toward branding, centralization, and youthful trends, companies in the second half of the deep user, deep product, deep brand, we expect to become excellent head of the enterprise can overcome the challenge.