Several factors that are restricting the rapid development of LED lighting business
Several factors that are restricting the rapid development of LED lighting business LED products began to gradually replace traditional lighting products all over the world! Companies are facing a transition, increasingly fierce price war, generally the industry felt tremendous pressure. There are several major factors as below that are restricting the quick development of LED lighting businesses. First, the operating margin reduced In order to establish the size advantage, some companies adopt cost leadership strategy , active low prices in order to enlarge the market, expect a competitive threshold, forcing the price of other brands can only follow up on the way to the use of special promotional ship , particularly in the T8 tube bulb, the T5 light source such as a stent is particularly intense circulation category . Compared to traditional lighting stage, bringing the industry average gross profit margin dropped significantly Second, significant increases in hidden costs In line with the enterprise switching products , continue to improve and enrich the product line , larger research and development costs ; to meet the sales , stocking factories to quickly causing sluggish stock, followed by corporate cash flow will be affected, resulting in lower capital utilization efficiency. These hidden costs led to increased business is difficult to achieve from the side edge of hematopoietic development . Third, the cost of greatly increased channel marketing For the rapid construction of the marketing network, regardless of the cost invested some companies marketing costs, many marketers into various delivery Showcase, send samples, advertising, distribution and other preferential policies one after another, those in the traditional lighting of the times is unthinkable.