Cement, steel and glass, these traditional heavy industries, are collectively experiencing an irreversible downward curve. From the rapid expansion of supply and demand, to the basic balance of supply and demand, to the downward market shocks and the continuous shrinkage of the total amount-this is not a business mistake of an enterprise, but an objective economic law in the late stage of industrialization, which is not transferred by the subjective will of the enterprise and the good wishes of the individual. The total
demand has been shrinking in front of us, and it is difficult for the industry to return to the past era of high growth. Faced with this reality, there is only one core proposition in front of the whole industry: in the era of stock, the old rules have failed, how to reconstruct the new rules?
The old rules have been impassable, the stock era must reconstruct the logic
of the industry, when the total industry peaked and began to decline, relying solely on the original development model has been impassable. The logic of competition in the incremental era-expanding production capacity, grabbing share and competing for scale-not only fails in the stock era, but also intensifies the involution and drags the whole industry into the loss quagmire.
Enterprises must actively adapt to the changes of the times, abandon the old competitive thinking in the incremental era, and jointly explore the establishment of new industry operation rules adapted to the stock era, so as to resolve the growing dilemma of involution.
In the process of reconstructing industry rules, market-oriented mergers and acquisitions are the key means to improve industrial concentration and the basic conditions for the landing of new rules. If
the concentration is not improved, any coordination rules will lack the foundation of implementation. However, a red line must be made clear: only the necessary coordination of production hours is made, the price is completely formed by the market independently, and any form of price alliance touches the legal bottom line and must not be touched.
Rational capacity is difficult to achieve spontaneously, price war is the inevitable fate
of the downward cycle, the downward stage of the industry, enterprises naturally tend to vicious price competition. Driven by the pressure of survival in reality and the deep influence of thousands of years of commercial culture in China, when a large number of domestic enterprises are facing the contraction of the industry, the first choice is often not to take the initiative to reduce production and withdraw orderly, but to reduce prices and lose money for market share.
Every company wants others to quit and everyone wants to stay; everyone wants to hold out until the end, hoping to bring down the competition.
As a result, a typical prisoner's dilemma is formed: rational coordination and initiative to reduce production capacity are difficult to achieve spontaneously, people would rather endure losses and fight a price war than withdraw from the market voluntarily, and it is difficult for the industry to achieve a smooth soft landing.
Staggered peak production and industry self-discipline are easy to break through in the face of tremendous survival pressure. This is not a moral problem of an enterprise, but an inevitable manifestation of the market mechanism in the downward cycle. It is often difficult to achieve industry rationality in reality by relying on a paper initiative and an industry conference.
Anti-involution begins with full involution, and only when it reaches the extreme can real consensus
be forced out. The realistic path is often not "everyone takes the initiative to be rational", but the market is fully involuted and the competition goes to the extreme. Part of the production capacity is naturally cleared by the market, forcing the whole industry to thoroughly recognize the reality and abandon the fantasy, so as to promote the real consensus. Open up new space for development.
Taking the cement industry in the Yangtze River Basin as an example, the author puts forward the following ideas for reference:
1. All cement enterprises from Yibin, Sichuan, through Chongqing, along the Yangtze River to Shanghai, Jiangsu, are integrated into the overall planning of the anti-involution of the cement industry in the Yangtze River Basin.
2. Within the scope of the above-mentioned river basins, select a group of like-minded enterprises as the representative enterprises of "volume to the end". Participating enterprises should base themselves on their own market advantages, establish long-term competitive thinking, and abandon the speculative mode of "deceptive peak staggering production" and private price reduction after short-term price increase. Before the new industry rules have not yet reached a consensus, on the premise of strictly abiding by national laws and regulations, we should adhere to the marketing strategy close to the cost line, fully release our own production capacity, and calmly participate in the full competition in the market.
3. In the practice of full market competition, we should jointly explore and construct new operation rules of the industry. Here we must strictly abide by the bottom line of the law: it is strictly forbidden to set a unified price through consultation within the industry, or to unify the time nodes of price rise and fall; commodity prices are completely formed by the market itself, and strictly abide by the relevant laws and regulations of the state on anti-monopoly.
The new rule mainly contains two core connotations: first, the whole basin jointly negotiates the unified production hours as the most important reference basis for industry synergy; Secondly, for the peripheral enterprises 200 kilometers away from the Yangtze River, we should strive to do a good job of coordination and communication. If the peripheral enterprises are unwilling to coordinate, the enterprises in the basin close to them should carry out communication and coordination at the interest level. Enterprises within the scope of the Yangtze River Basin must abide by the rules of the unified agreement; once any enterprise within the scope violates the rules, all core participating enterprises should immediately drop the product price to the cost line and make market response.
4. On the basis of the above market practice and rule exploration, further explore the implementation path of improving industrial concentration, and continue to promote the steady increase of industrial concentration in the basin.
Anti-involution is not a dinner party, nor can it be solved by a paper proposal. Only by rolling to the extreme, letting the production capacity be cleared thoroughly, and letting all participants really recognize the reality, can industry have a chance to rebuild the rules on the ruins. Roll to the end, can roll out a new world.
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