by Chris Devers
Beware Of Chinese Manufacturing In The Three Big Innovation Traps – In China, The Chinese Home
Chinese manufacturers follow the existing management platform, and go it alone, make their way in danger of innovation. To be successful innovation, decision makers must have the courage to change in ways of thinking
China’s manufacturing industry is booming behind unspeakable pain!
Statistics, China’s rapid manufacturing growth in recent years. China’s auto output in 2005 is 2.75 times the 2000 export volume was 8.25 times that of 2000; 2005 production of refrigerators and television sets were 8.34 times in 2000, 2.29 times; color TV exports in 2004 was 2.7 times in 2000 .
However, this seemingly behind the scenes of prosperity, it is the reality of low added value products. China’s most outstanding home appliances manufacturer?? Haier, Changhong and TCL companies, significantly decreasing profit margins and even losses. Multinational enterprises to purchase large quantities of key components, such as Matsushita compressor, Intel and Motorola processor chip, making China the U.S. and European companies the largest market for high value-added products. At the end of the domestic value chain, manufacturing, sales growth was only the face.
Innovative two paths Appreciate the hard earned money coolies and some Chinese enterprises began to explore independent innovation, but most of them at the end of the value chain, innovation can only be a starting point for the assembly of end products and non-core products manufacturing. Thus, the choice of innovation, there are two main roads: either reverse the original track line, nurturing the core technologies, such as Hisense TV chip development; or rapid innovation, replace the existing industries, such as laser typesetting technology Founder Compared with the traditional type layout and printing technology. Whichever path, there is the possibility of success, are facing enormous challenges and risks.
In fact, most successful international companies have core technology, to develop related products, then this axis, expanding range of applications into multiple end markets. For example, Canon’s competitiveness reflected in the precision machinery, precision optics, imaging technology, microprocessors etc.; edge products are “optical engine”; end products are cameras, video cameras, photocopiers and so on. In general, these companies share in the global market share greater than the end product.
Different with these successful multinational companies, in addition to a few companies such as Huawei, most Chinese manufacturers into the market and technology innovation with significant market driven nature. For example, the Lenovo computers and other products from agents and distributors into the market, trying to take the “Mao Gongji” business development paths. Hisense also similar path, it first entered the manufacturing end products. Four years ago, Hisense started the development of digital video media processing chip, would like to start from the end products, in-depth development to the core technology research and development, thus fostering the competitiveness of enterprises.
Despite the long-term efforts, Lenovo is also only from the “trade” and extends back to the “workers” (product assembly). Although the two formed Lenovo Research Institute, but “technology” has not really cultivated. Currently, Lenovo has acquired the technology is essentially a service to “work” framework technologies, such as improving the appearance of the product, reduce noise, increase heat and so on. In the core design and manufacturing technology, the lackluster. It is one of M & A motives IBMPC sector, it is also to make up their own “technical” deficiencies.
After the integration of innovation 3 large trap
Chinese manufacturers greatest strength lies in the ability to control labor costs, market demand for understanding and controlling ability, these advantages and easy to learn and imitate the structure of technology combined with natural selection is the first to enter the market.
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