How should companies compete in a low-concentration industry?

In 2019, China will become the world's largest consumer market. Wide market space does not mean smooth competition, on the contrary, we see all kinds of low-industry concentration of enterprises in the grueling fight. Therefore, it is very important to understand the characteristics of the low-concentration market, and to grasp the reasons for the low market share of the brand, which is very important for the business owners in the adversity.

Low-concentration industries, i.e., industries with a low degree of concentration of major brands in the market. Industry fragmentation, low barriers to entry, and lack of monopoly brands are the main characteristics of this type of market. Although large, small and medium-sized enterprises face relatively more opportunities, but the competitive environment of the market is also more intricate and complex, the lack of accurate brand strategy and positioning of the enterprise, it is easy to fall into the vortex of homogenized competition, on the price war, resource war, the sea of war on the vicious competition predicament.

To put it simply, under these conditions, it is difficult for enterprises to break through, and it is even more difficult to develop without breaking through!

What kind of strategy should be taken by the enterprises in the industry of low industrial concentration to attack and prevent killing, and quickly become a well-known brand in the industry or even a leading brand?

1. Business model innovation to take the lead in breaking

Low concentration rate situation often appears in the beginning of the industry development, new entrants into the market enterprises, the market is still in a period of rapid expansion. Like China's maternal and child retail industry, the development of only a short period of nearly 30 years, the trillion-dollar market cake attracted a large number of investors, capital to generate more entrepreneurship, competition prompted by the enterprise on the industry model of more in-depth exploration. In such an environment, enterprises with superior industrial models are more likely to gain access to the market quickly. Among them, the child king is a business model innovation bold breakthrough typical, in the Oasis consulting services, the child king to create parenting consultant mode, innovative new concept of parenting, will operate the customer relationship as the core of competition to subvert the traditional business logic, and ultimately jumped to become the mother and baby retail first shares of the brand.

2. Category dominance to seize the industry's commanding heights

Part of the industry at a low level of competition stage, due to the industry's generally weaker overall strength of enterprises, the inability to build a strong brand, resulting in the industry's market concentration is low. In this type of industry, it is easier for companies to grasp the first opportunity to quickly seize the industry's commanding heights through category dominance.

Such as the famous Wujiang squash, squash market in the mixed competitive environment, through strategic positioning to pre-empt the "Fuling squash" category to occupy, put forward the "Chinese squash number Fuling, Fuling squash number Wujiang" brand appeal, so that the Wujiang The brand is in the right position to control the Fuling squash category resources, and successfully make 3 yuan a packet of squash sold 2 billion a year.

3. Channel change for breakout victory

Not only the industry's low comprehensive strength of enterprises will result in low industrial concentration, and vice versa, in the industry enterprise strength is generally strong, the major brands compete with each other and evenly matched difficult, the market will also be a low concentration of the phenomenon. Such as China's more mature development of the stationery industry, has been Chenguang, true color, Deli and other leading players to divide the world. It is difficult for major companies to find opportunities to break out from the stalemate, brand enhancement relies heavily on the expansion of channels. Chenguang successfully launched the "Chenguang Partner Pyramid" channel strategy, which created an amazing sales volume of 1.3 billion RMB in 2007 through direct sales + FMCG distribution model. The company also continued to upgrade its channels, creating the "Morning Glory Life Center" for students and young consumers, and connecting high-quality consumer demands with the "Nine Woods Miscellaneous Goods Club". In the field of literature and creativity continue to eat up market share, the achievement of the first brand of stationery.

4. Supply chain breakthrough product attribute barriers

There are also some industry itself by the product attribute limitations, such as short shelf life and high freight rate of fresh milk, relying on handmade work is difficult to scale up the production of tea and other commodities, it is more likely to form a small and medium-sized enterprises in a certain geographic range of radiation market. The industry has become highly decentralized, with low market concentration, making it difficult to form strong brands. At present, this type of industry in the development of a lot of successful cases, looking at their development **** sex, supply chain innovation has become the key to victory.

In recent years, such as the rapid development of the small pot of tea, through a high degree of integration of the supply chain to successfully break the barriers of tea standardization, to achieve multi-category operations. And increase the investment of 1.5 billion yuan in the supply chain end of the force to build intelligent factories, to provide consumers with higher quality, more stable price products.

The dark horse in the yogurt industry, Le Chun innovatively put forward the "flexible supply chain" to user-driven products to achieve rapid transformation, this model is the core of Le Chun to establish product competitiveness.

This model is the core of Lechon's product competitiveness.