Analysis of the Market Competition of China's Food Machinery

In the international community, people analyze the competitiveness of an industry's market, often using a "five-factor model," which mainly includes the market competition of existing competitors, the competition of potential entrants, the threat of substitutes, and the power of suppliers to bargain. The power of the demand side to bargain. According to the customs import and export statistics, the total import and export volume of China's food machinery in 2004 was US$ 352 million, a drop of 60.1% year-on-year. Among them, the import value of food machinery was 273 million U.S. dollars, down 62.1 percent year-on-year; the export value of food machinery was 79 million U.S. dollars, down 51.5% year-on-year. According to the net export index model, China's food machinery market competitiveness index in 2004 was -0.6. This figure shows that China's food machinery is in a comparatively inferior position, and its market competitiveness is poor; at the same time, it also shows that China's food machinery manufacturing. The growth mode of the industry still lacks rapid improvement in overall quality. Therefore, we should not only objectively analyze the market competition situation of China's food machinery, but also actively create conditions to gain competitive advantage. According to the "five-factor model" theory, the intrinsic situation of the market competition in China's food machinery industry is analyzed as follows:

1, the existing competitors' market competition

At present, the market competition of China's food machinery is mainly reflected in the high-end product market and the middle and low-end product market competition.

(1) The market competition of high-end products. The high-end products of China's food machinery are mainly obtained through import or mapping imitation. Many technologies have yet to be mastered. The lack of innovation ability and intellectual property issues have constrained the development of these high-end food machinery. The foreign food machinery mainly relies on technical advantages and technical barriers to gain competitive advantages in China's food machinery, which has long occupied the major market share of China's high-end food machinery (such as large-scale, high-precision and other products). In addition, foreign food machinery actually has fierce competition. For example, food machinery manufacturers in the United States, Britain, France, Germany, Switzerland, Italy, and Japan also use their respective advantages to compete for the Chinese market. None of them has the ability to monopolize the entire food machinery market, but they have different degrees of monopoly characteristics in some products, some technologies, and some materials. Therefore, the market competition of China's food machinery is actually a continuation of the fierce competition in the international market in China's food machinery industry; and the focus of market competition is not the number, but the competition of technology, standards and product quality.

(2) Market competition for middle and low-end products. China's food machinery manufacturing industry is still dominated by middle and low-end products, relying mainly on low-cost advantages to participate in competition and occupy the market. Companies generally adopt price competition methods and continuously improve quality to win market space. Enterprises still lack sufficient independent innovation. Capabilities form the dominant force in the left and right markets. Even if the industry's strong players only have certain dominant advantages in individual products, most of the products are still in a state of decentralized competition. There are three main reasons why companies generally adopt price competition: First, with the formation of a diversified and market-based investment system, more and more foreign capital has entered China's food machinery manufacturing industry, which has led to many low prices in China. End companies cannot compete with foreign companies and form the so-called "low level of repeated production," causing price competition. Second, high-end products in the Chinese market are the minority, and middle- and low-end products are the majority. Therefore, the market structure shows the strong competitiveness of middle- and low-end products. Therefore, the competitive mode of medium and low-end products can only adopt price competition, while high-end products only have technical competition. Third, most enterprises in China still do not have a strong ability for technological innovation. Enterprises rely more on imitating foreign technologies or other domestic technologies to gain short-term benefits.

2. Potential entrants’ competition

Whether there are many potential entrants in the food machinery manufacturing industry in China depends on whether the industry has enough attractiveness. Judging from the current situation, China's food machinery manufacturing industry will remain a very attractive industry for a long period of time. Can be reflected from the following aspects: First, considerable average profit margin. The sales profit rate of China's food machinery manufacturing industry is greater than that of the major industrial equipment manufacturing industry.

Therefore, China's food machinery manufacturing industry is still an industry that invests in high returns. The second is a broad and sustainable market prospect. From a qualitative point of view, agricultural products or foods are indispensable to people's lives, and as people's quality of life improves, their market demand will continue to expand, requiring more refined quality, health, and safety. From a quantitative point of view, the average growth rate of China's food industry from 2001 to 2004 was 18%, which was much higher than the growth rate of the national economy. Therefore, the food machinery manufacturing industry has a broad and sustainable market prospect. The third is a relatively loose national industrial policy, which is very beneficial to the development of food machinery. First, the country continues to implement industrial upgrading and restructuring of the agro-processing industry and the food industry, and accelerates policies that are in line with international standards. It adopts high-tech instead of traditional technologies, advanced and applicable technologies to replace backward technologies, and greater efforts to adopt international standards. Measures, which provide a good space for the development of the food machinery manufacturing industry. Second, the state will support long-term technical innovation, technological progress, and scientific and technological breakthroughs in agricultural product processing technology and equipment with food processing as the main target, in order to enhance the market competitiveness of enterprises.

3, the threat of alternatives

As China is a big country in agriculture and a big producer of agricultural products, food machinery manufacturing is irreplaceable; as long as agricultural products processing and food industries exist, the relevant machinery manufacturing industries that provide them with technical equipment cannot be replaced. In spite of the acceleration of scientific and technological progress in recent years, various new technologies, new materials, and new equipment emerge in the food processing field, but all of them focus on the industry to increase technological content, reduce production costs, and increase economic efficiency and production efficiency. And it appears. In terms of certain processed products and technical equipment, alternative competition is actually present and is accelerating the replacement. Some newly-developed products are or will soon replace traditional products and are replaced by advanced production processes. Technology, advanced production equipment replaces outdated technology and equipment, uses high technology to replace traditional technology, and so on. Alternative competition is a serious challenge to existing food machinery manufacturers. From the current situation in China, alternative competition provides new entrants with a good market entry point and potential competitive advantage. According to industry experts, in recent years, about 1,000 food machinery manufacturing companies have ceased or closed down each year, and another 1,000 or so companies have been born each year and entered the industry. The new entrants are mainly private enterprises and foreign-funded enterprises. Facing the traditional positions of state-owned enterprises, the introduction of new technologies, new processes, and the transformation of enterprises has already broken the old pattern in which state-owned enterprises dominated the world.

4, the power of the supplier to bargain

Whether the supply force of China's food machinery manufacturing industry is developed is not only because many food machinery manufacturers are active in the industry, but also because the supply chain or supply system is complete, the technology is mature, the product quality is reliable, supply and use. Whether enterprises maintain a stable and honest supply relationship, etc., and the degree of production specialization and marketization of enterprises is also an important factor in enhancing the power of suppliers. If a company pursues a "big and complete, small and complete" production organization, then the company's production management and commanding difficulty will be greatly increased, and the flexibility of the company's operations will also be reduced. As a result, it is difficult for companies to reduce their procurement costs, and the quality of finished products is difficult to increase overall. From the point of view of the operating mechanism, if the production specialization cooperation system is developed and the degree of supply marketization is high, the price, quality, and service of the final product will increase. From the point of view of China's food machinery manufacturing industry, the power of suppliers will not form a monopoly market for users in the short term, but may be monopolized by foreign companies on individual large-scale, high-tech imported equipment. This is mainly because: First, China's food machinery supply system and supply chain are in the process of rapid development and continuous improvement, and the overall situation is still underdeveloped. The second is that the equipment supply chain presents a competitive market pattern, with quality competition and price competition as the main expressions. The result of competition is to reduce the profits of suppliers. Third, the barriers for suppliers to enter the market are constantly rising. Continuous, automated, and high-tech equipment have become the mainstream of development. Simple, traditional, backward, and small-scale food machinery are not suitable for the development of the new situation in the industry. Fourth, the old organizational system has been broken, but the new organizational system has not yet been fully formed. Under the disorganized pattern, the competitive order of China's food machinery manufacturing industry needs to be further regulated.

5, the demand side of the bargaining power

From the perspective of the industry in recent years, China's food machinery manufacturers are under greater pressure from demanders, but the pressure on different market segments is not the same. In some food machinery products with high technical content and high added value, the market forces are generally favorable to suppliers; and in the middle and low-end food machinery products, equipment manufacturers are under strong pressure from market demand, and the demand side grasps the bargaining power. More initiative. From the demand side's perspective, the main factors influencing the demand side's bargaining power are the comparison of demand quantity and supply quantity, the concentration degree of demand side and large customer power, the degree of self-organization of demand side, and the demand side's ability to pay. In addition, the ability of the demand side to bargain can also be analyzed from the perspective of supply, which mainly involves the comparison of supply quantity and demand quantity, the intensity of competition among production enterprises, the utilization rate of production enterprises, and government industrial policies. From the aspect of supply and demand, the overwhelming majority of products in China's food machinery industry are in a state of strong competition in oversupply, and the overall production capacity is generally higher than the market demand, so the demand side has always been in a strong market position, namely the buyer's market. In the middle and low-end product market, the limited market demand is mainly divided by several large-scale enterprises; while in the high-end product market, despite the domestic demand is very strong and domestic production companies are difficult to provide equipment, due to the foreign production companies The fierce competition has also given buyers a great deal of choice. In fact, the initiative to bargain is still in the hands of domestic buyers. Judging from the form of competition, in the middle and low-end product market, domestic equipment manufacturing companies have become protagonists of competition. Most of them use price competition strategies to occupy limited markets; in high-end product markets, foreign companies differ from domestic companies in that foreign companies are often There are technological advantages in market segments or in certain aspects. They generally adopt differentiated strategies to occupy the market rather than compete for price cuts.

To sum up the above analysis and reverse the passive situation in which China's food machinery market is less competitive, we should pay close attention to the following aspects: First, accelerate the pace of integration with the international community. In the aspects of food machinery design, manufacture, and use, we actively adopt the standards of the International Organization for Standardization (ISO) and the standards of the European Committee for Standardization (CEN), or adopt the equivalent international standards in China. These standards have been widely recognized and adopted by all countries in the world, especially developed countries, and represent the mainstream of the development of international food machinery technology standards. The second is to actively implement brand strategy. In the process of structural adjustment and industrial upgrading, people’s pursuit of brand name products for food machinery has become more and more evident. Famous brand products with high reputation, trust, and security will increase the widespread adoption of users and will help improve the competitiveness of the industry. Therefore, we must pay attention to accumulating certain technologies, funds, talents, and policy inclinations, and constantly cultivate China's food machinery brand-name products, and gradually form a brand-name industrial group of China's food machinery. The third is to accelerate the transition from imitative innovation to independent innovation. In the past, the upgrading of China's food machinery mainly continued the development model of "introduction, digestion, and absorption". It belongs to the category of imitation and innovation, and many technical know-hows are not copied. Nowadays, the market development needs to create brand-name products for food machinery. It should have its own uniqueness, should have its own intellectual property, and should have its own housekeeping skills. This requires effective measures from the development strategy and strategy to enhance the industry's ability to independently innovate and accelerate the transition from imitative innovation to independent innovation.