the text, I would like to share two short stories:
Story 1: People are watching a movie in the cinema. In order to get a better view, the people in the front row stand up, and the people in the back row can't see, so they have to stand up. In this way, the people who are blocked behind have to stand up. Until the end, everyone could only stand up and watch the movie.
Story 2: An enterprise of country A opened a gas station in a certain place, and the business was in full swing. Later, some enterprises opened fast food restaurants, supermarkets, car wash shops, car repair shops and so on next to the gas station, which brought fire to the local economic development. Enterprises in country
B also opened a gas station in a certain place, and business was in full swing, but later more and more enterprises opened more gas stations nearby, and then there was a price war among enterprises, and profits plummeted. Regardless of the truth of the
story, there is a simple truth in both stories: meaningless "involution" competition will only bring disaster to everyone in the end, which will not only harm others but also benefit oneself.
Recently, the Political Bureau of the Central Committee of the Communist Party of China held a meeting, which clearly put forward the need to strengthen industry self-discipline and prevent "involution" vicious competition. Subsequently, cement industry associations in Shandong, Zhejiang, Shaanxi, Guizhou and other places responded positively and launched initiatives calling for resistance to the "involution" vicious competition in the industry.
Looking at the cement industry, the "involution" vicious competition is becoming more and more intense. Under the heavy pressure of demand contraction, supply shock and expected weakening, low-quality and low-price disorderly competition among industry enterprises in order to compete for limited resources leads to the rapid reduction of industry operation efficiency and innovation ability, and even some enterprises abandon the bottom line, reduce quality and price to occupy the market, resulting in the vicious competition situation of "bad money expelling good money".
Including the Yangtze River Delta, Pearl River Delta and other domestic hot markets, there have been cement prices below 200 yuan/ton. The result of market chaos is that the overall interests of the industry are damaged. Relevant data show that the industry lost about 1.2 billion yuan in the first half of the year, and sales fell by 11%.
For an industry, it is very important to maintain a reasonable profit level. Reasonable profit is not only an important basis for the survival and development of enterprises, but also a source of power to promote technological innovation and high-quality development of the industry. The current "involution" competition in the cement industry is more like a farce of "one loss, all losses". When the
farce will end depends on the actions and efforts of all cement enterprises. First, it is necessary to strengthen industry self-discipline: industry associations should play a greater role in guiding enterprises to abide by industry norms and avoid vicious competition. The second is to advocate rational competition: enterprises should compete by positive means such as improving product quality and service level, rather than relying solely on price war. The third is to promote industry integration: optimize the allocation of resources and improve the overall competitiveness of the industry through mergers and acquisitions. Fourth, government guidance and supervision: government departments should formulate reasonable policies to guide the healthy development of enterprises, while strengthening the supervision of the market and cracking down on unfair competition.
As the first two stories show, both the audience standing in the cinema for a better view and the enterprises around the gas station whose profits are declining due to excessive competition reflect the harm caused by the vicious competition of "involution". The current challenges facing the cement industry are the true portrayal of the situation of "one loss, all losses". How to build a healthy and sustainable development environment for the cement industry? The answer needs to be written by all participants. We also look forward to the day when the "involution" competition in the cement industry disappears.
