The hottest view of China's low voltage electrical

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From Schneider Electric's development strategy to see the way out for China's low-voltage electrical appliances in the new era

for some time, we have become a spectator of a famous joint venture. The wolf has finally come. The reshuffle of China's low-voltage electrical appliance industry is coming so soon, and the autumn is coming

it is found that the situation of China's electric market from 2006 to 2007, such as the Chinese war situation from 1936 to 1937, has strong opponents inside and strong enemies outside. I want to know how Chairman Mao Zedong Thought about the way out of the Chinese revolution? I reread the selected works of Mao Zedong, focusing on the works of 1936 and 1937. Reading history can be a good lesson. The chairman was 43-44 years old. Men of this age were "high" in intelligence and energy. Coincidentally, Mr. Nan Cunhui, who rose in 2006-2007, is also of this age

The coincidence of history makes people smile, and the wisdom hidden in history is awe inspiring. Attack, defense and counterattack are like the fate of go. The attack of a master may make you feel threatened, but the correct defense and subtle counterattack can change the world as well

strategic attack

undoubtedly, on December 17, 2006, Schneider Electric launched a strategic attack on China's low-voltage electrical appliances in the name of a joint venture

1. Schneider Electric is a global enterprise specializing in strategy. Schneider Electric has a history of more than 170 years. Since the 1980s, it has put aside some non strategic activities and committed itself to the electrical field, taking mergers and acquisitions as an important development strategy. The three iconic brands of Schneider Electric, te appliances, Meishang Shikuai power and Meilan Zilan, all came from mergers and acquisitions. Three strategic mergers and acquisitions in 1988, 1991 and 1992 established three major global brands of Schneider Electric

at present, Schneider Electric has about 70 different brands in the world, most of which are acquired, such as expert brands and local brands such as alombard in France, Clipsal in Asia, Feller in Switzerland and Elio in Sweden. In 2005 alone, Schneider Electric had about 20 global mergers and acquisitions. Schneider Electric's sales increased from 8.78 billion euros in 2003 to 13.73 billion euros in 2006, and its M & a strategy contributed a lot

2. Schneider Electric's M & a strategy in China

Rahman, chairman of the board of directors and global president of Schneider Electric, said that in the next three to five years, he hoped that Schneider China's business volume would become the second in its global strategic system

At the end of 2005, Schneider Electric (China) Investment Co., Ltd. set up a department responsible for mergers and acquisitions and integration. Before the joint venture with Delixi, Schneider had 15 successful acquisitions in China, accounting for nearly 15% of China's high-end low-voltage appliances

Mr. Rahman said: "from the performance of the past nine years, Schneider Electric has grown at an average rate of 35% in China every year. By 2008, Schneider Electric China will become a company with an output value of 10billion yuan." In 1995, the turnover of Schneider Electric in China was only 390 million yuan. In the 7th top 100 research of China's electrical industry published by the electrical age, Schneider Electric has five subsidiaries into the top 100

one of Schneider Electric's strategies is to acquire or joint venture China's first-class electrical enterprises

in February, 2006, Schneider Electric and Baoguang group, the major shareholder of Baoguang, jointly established Schneider (Shaanxi) Baoguang Electric Appliance Co., Ltd. Four months later, Schneider Electric acquired Baoguang shares, the leader of the medium and high voltage vacuum switch industry. If the transaction is successful, Schneider Electric will become the largest shareholder, and Schneider Electric will build the largest vacuum switch production base in China in the West

suitable for manufacturing electrical enclosures in December, 2006, a joint venture agreement was signed with Delixi, one of China's leading enterprises in low-voltage electrical appliances. Before that, Schneider Electric's focus was on Chint, another leading enterprise of low-voltage electrical appliances in China. Schneider Electric implements the idea of mergers and acquisitions in China in order to create the best production enterprises in China, and even form a certain monopoly position

3. Motivation of Schneider Electric's joint venture Delixi

(1) will low-end products have a negative impact on the high-end positioning of Schneider brand

according to the product positioning of low-voltage electrical appliances, Schneider, Siemens, etc. are in the middle and high end, and Chinese electrical enterprises are in the middle and low end. Will a joint venture with a low-end product enterprise have a negative impact on the Schneider brand with high-end positioning

Schneider Electric has dozens of expert brands and local brands around the world, all of which have their own positioning and mission. All expert brands and local brands can only obey the strategy of Schneider Electric's three major global brands, without self distress

around an aircraft carrier, there is no need for another aircraft carrier to act as a shield, just arrange some destroyers, otherwise it will interfere with itself; In the main competitive markets, it is the right strategic and tactical behavior to arrange some local brands to suppress competitors

keep Delixi as a medium and low-end local brand, avoiding the impact of low-end products on the brand value of Schneider with high-end positioning. This is the beauty of Schneider Electric's multi brand strategy in the world

(2) driven by competition other than the growth of Schneider Electric's performance

before the joint venture with Delixi, Schneider had 15 successful acquisitions in China, which had occupied nearly 15% of the market share in the high-end field of low-voltage electrical appliances in China. A joint venture with a brand comparable to Chint will ensure the realization of Schneider Electric's gold mining plan in China

however, Schneider Electric, which is at the high end, ranks 469 among the world's top 500 in 2006, with a profit margin of 8.51%, 5.66% higher than the 2.85% profit margin of Siemens, which ranks 22nd, and 5.26% higher than the 3.25% profit margin of ABB, which ranks 281. Wenzhou enterprises, which are in the middle and low-end of low-voltage electrical products, have experienced price competition over the years, coupled with soaring material prices, and their profit margins are not optimistic. Why does Schneider Electric give up high profit margin for the realization of performance growth? Is it believed that we can create a Delixi with high profit margin in the low-end market of low-voltage electrical appliances in China with Schneider Electric resources? Or is there another reason

while consolidating the low-end market, China's excellent low-voltage electrical appliances enterprises are also planning to develop into medium and high-end products. Schneider Electric has entered the low-end market of low-voltage electrical appliances, and its competitive strategy plays an important role

(3) who will become the "PHS" in China's low-voltage electrical appliance market?

Delixi brand will be retained like other global mergers and acquisitions of Schneider Electric. What is not optimistic is the development space of Delixi brand. The two sides agreed that after the products of the joint venture enter the market, they will be marketed with Delixi brand. Delixi focuses on the needs of the Chinese market and independently markets with its huge retail underwriting network

insiders generally believe that it is sooner or later that Delixi will be included in Schneider Electric's "numerous expert brands and local brands". As Schneider Electric's "expert brand and local brand", it will be subject to Schneider Electric's global strategy. Expert brands and local brands will inevitably be used by strategists in competitive strategies and tactics

in 2004, in order to enter the PHS market, Huawei occupied 10% of the market share at no cost, which made ut Starcom and ZTE, the two giants in the PHS field, suffer. PHS is insignificant to Huawei, but for ut Starcom and ZTE, it is an important source of income and even a lifeline. In fact, Huawei's entry is a typical strategy of "disrupting the situation", which quickly pushed the entire PHS market to a loss with its own non-profit, which not only effectively hit the main profit points of its competitors, but also accelerated the development of PHS into a recession

who will become the "PHS" of Schneider Electric's China strategy

Delixi, an old rival of Chint, has implemented a correct competitive strategy for Schneider Electric itself

the good play has begun, but it is far from over

strategic defense

Schneider Electric, which implemented the competitive strategy, encountered unprecedented resistance

Schneider Electric doesn't know Zhejiang people. Here, there are not only weak literati, but also famous generals who lead soldiers to fight

Schneider Electric doesn't know Wenzhou people. The typhoon season, which occurs almost once a year, has cultivated the anti wrestling temperament of Wenzhou people

even Schneider Electric doesn't know about Nan Cunhui. Nan Cunhui, who is famous for his steadiness, came up this time. International strategists have encountered thinking figures of China's electric leaders

on December 26, the 9th day of the release of the joint venture case, Nan Cunhui patted the case on Sina, and the news spread rapidly in the industry

Nan Cunhui said: "from Chint's contact with multinational companies, we see what foreign enterprises really want to do. According to Schneider's routine, it wants to eat all the high, medium and low prices. Now it wants to enter the middle and low-end market and eat this piece."

Nan Cunhui's "auction" is to explain that Schneider Electric will have a violent impact on the low-end market of low-voltage electrical appliances, which was originally dominated by private enterprises, and hopes that the government will treat foreign and private enterprises equally in terms of taxation. In addition, Chint also announced measures to strengthen its strategic department and resume its listing plan

a senior executive of Schneider Electric once said in his personal name that the Ministry of Commerce of China would conduct research, investigation, hearing and approval on whether the joint venture project caused monopoly according to relevant regulations. These are reasonable and understandable procedures. The joint venture case between Schneider Electric and Delixi will not involve national security issues. The low-voltage electrical appliance industry is not a national key industry, does not involve the national economy and the people's livelihood, and does not need the limitation that the proportion of joint ventures with foreign investment does not exceed 50%

strategic counterattack

Schneider Electric has made a move with great strategic wisdom. How can Chinese electric brands accept the move

Chairman Mao said in "on Contradiction": "all contradictory things are interrelated. They are not only in a unity under certain conditions, but also transform into each other under certain conditions. This is the full meaning of the identity of contradictions."

here, how can we transform this contradiction - the development of Schneider Electric and the survival of China Electric by 2007

In May, 1937, at the National Congress of the Communist Party of China, Chairman Mao made a report on the tasks of the Communist Party of China during the period of resistance against Japan, which pointed out that our party should achieve political leadership over all revolutionary classes in the country and strive for all tasks of the "anti Japanese national united front" and the "United Democratic Republic". Eight years later, the Chinese people defeated the Japanese invaders. In another four years, the people's Republic of China was founded

what is the strategic goal of CEC

contain the Chinese M & a strategy of Schneider Electric and all foreign investors, and urge Delixi people to "repent" to resolve the current dangerous situation and pressure

the result of CEC should not be a temporary calm, but through this event, let the dialectics of history change to our strategic goal - the proposition of internationalization of Chinese manufacturing brands

like Samsung in South Korea and Lenovo in China, CEC should achieve brand internationalization and become a famous peer of Schneider, Siemens, Ge, abb and other international electrical brands, which is the strategic goal of CEC

In October 1938, Chairman Mao proposed at the Sixth Plenary Session of the Sixth Central Committee of the Communist Party of China that "the role of the Communist Party of China in the national war

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