Guangmingyuan: Strategic Exploration of "Fast M&A" and "Slow Channel"

[Source: "High-tech LED-lighting market" August issue Zhou Jianhua]

In the past 14 years, Guangmingyuan has been focusing on the research, development, production and marketing of green lighting source products. Among them, energy-saving halogen lamps, metal halide lamps, ultraviolet disinfection devices and new car lamps occupy an important position in the light source market. After four years of accumulation, the LED business now accounts for 20% of the annual output value. The goal for 2012 is to increase the annual output value to 30%.

In the first half of this year, Guangmingyuan's high-end brand “Zhaoshang” made a high-profile appearance, and eagerly hired the famous film star Yang Lixin as the brand spokesperson to fully enter the high-end field of energy-saving light sources. Hong Yannan, Chairman of Guangmingyuan Lighting and Chairman of Jiangmen Lighting Association, explained to the reporter his understanding of the strategy of “quick merger” and “slow channel”.

High-tech LED reporter : Many companies that traditionally transform LEDs rely on OEMs to attack the market. The competitiveness of their core products is not obvious, and it is easy to cause lack of stamina. Power companies have adopted M&A strategies. What is the M&A strategy adopted by Guangmingyuan in the LED field?

Hong Yannan : Choosing OEM is a strategic need for many enterprises to develop in the early stage. It can help some enterprises to seize a certain market share and bring about changes in the scale and efficiency of enterprises. However, if the company does not have R&D investment itself, especially the lack of talent echelon construction and the accumulation of core technologies, it is very difficult to continue to go far. What's more, LED and traditional lighting are different in terms of product and marketing.

After more than ten years of operation and development, Guangmingyuan has accumulated a large amount of production experience through cooperation with international lighting giants. Therefore, we choose a "big difference" strategy to enter the LED field. At the beginning of this year, we acquired two mature LED companies in Xiamen and established Xiamen Guangmingyuan Optoelectronics Technology Co., Ltd., which specializes in LED light source explosion-proof lamps and mobile lighting. The integration of LED street lamps is also the same, we will each other The integration of superior resources is complementary.

Gaogong LED reporter: Guangdong and other provinces have introduced subsidy policies for LED production and sales. Local governments have also responded one after another. Street lamps and explosion-proof lamps are LED production and sales systems that focus on government engineering. M&A is also a fast integration to meet the needs of the project, but the integration and integration after the merger is the key. How does Guangmingyuan do this work well?

Hong Yannan: You are right, grabbing the market share of the project is indeed a challenge for most companies, and it is indeed an immediate choice to seize the market through mergers and acquisitions, especially in the LED field. On the one hand, we must compete for the market, on the other hand, we need to quickly integrate resources.

We may wish to observe some international lighting companies first. The series of acquisitions and integrations are more focused on long-term goals. The acquisition targets are companies with forward-looking technology and a certain market share. It is particularly worthy of attention that these transnationals The focus of M&A has begun to shift to downstream segmentation applications in order to break through in market segments.

Therefore, how to achieve complementary resources advantages is the focus of mergers and acquisitions. At present, most LED companies generally have this phenomenon: there is no scale of technology, and there is a lack of technology at scale. The original intention of our merger is to achieve the complementary advantages of the two and achieve a win-win situation.

Therefore, the pre-merger period not only puts strict requirements on its own management and technology, but also has a detailed understanding of the operating strength of the other company. Our direction is output management and technology, and the brand and terminal channel resources of the M&A are effective. Integrate to gain 1+1>2 market competitiveness.

High-tech LED reporter: So, is Guangmingyuan's business model and household products classified under the brand name “Zhaoshang”? How do you view multi-brand operations in the field of light sources?

Hong Yannan: At present, the “Guangmingyuan” brand series belongs to the traditional mass-type popular brand strategy. As the star brand “ Zhaoshang ” launched this year, it belongs to the fashionable high-end brand and product system, which will carry the future of our new lighting products. Upgrade the brand mission.

We, or multi-brand strategic planning operations implemented by scale light source companies, are like many other industries that you see, such as the famous Procter & Gamble Company, which has Pantene, Head & Shoulders, Bilang, etc., different sub-brands, different brand strategies. . Of course, as a lighting industry, companies that actually implement multi-brand operations are still rare. This requires not only the idea of ​​a large-scale light source enterprise, but also an excellent product to support it.

High-tech LED reporter: celebrity endorsement home lighting, commercial lighting is a lot, and LED light source products are also not new to the home level, so it is still relatively new. “Zhaoshang” has changed the inertia of Guangmingyuan’s low-key promotion and played the star card. Does its brand positioning and marketing model have something different?

Hong Yannan: This is not only an innovative attempt, but also a conveyance to the market that we are operating this brand.

The “Zhaoshang” brand is not only to promote new products, but also to try new types of cooperation models. This time we will implement channel flattening and establish a strong customer service team to work closely with dealers. From retail to application, we will enhance the consumer experience of consumers in an all-round way and change the service model of traditional lighting brands.

Therefore, Guangmingyuan will comprehensively examine its strength and market resources before selecting the “Zhaoshang” brand with the agents. The most important thing is to check whether they pay attention to his target consumer group to ensure the “Shangshang” high-end brand. Positional consistency.

Gaogong LED reporter: At present, the terminal “into the sea” has not been opened. Other LED brands such as Dehao Runda and Hongli Optoelectronics have implemented the strategy of the specialty store, but it seems to have little effect. What is the channel strategy of “Zhaoshang”?

Hong Yannan: LED's current annual production and sales growth has reached or even exceeded double digits. However, due to the overheated upstream investment, some of the oversupply has formed. Of course, the future prospects are still quite good.

The pure LED product development monopoly channel is still not mature, because the product line is still relatively thin, the company rarely does what LED products are produced, and we push the "photos" channel is also more cautious.

Our initial plan is to start in East China and South China, and Fujian will be promoted as a key area. At present, more than 50 agents are operating. At the same time, the headquarters has also established more than 600 square meters of green lighting training base, a large part of which is the energy-saving light source experience-style exhibition hall, they are also the standard image of the stores in the future.

Not only that, the company headquarters will also export the overall energy-saving lighting solutions to help the terminal develop the engineering, home and other markets.

Gaogong LED Reporter: Indeed, compared with NVC, Sidon, and Pinshang, which are rich in channel resources, Guangmingyuan is more of a technology and scale advantage of energy-saving light sources. And in the channel to implement the "slow fire fish" strategy, then in the competitiveness of LED products, do you think that the original export-oriented enterprises can stand out from the crowd?

Hong Yannan: You are right. Those companies with rich channels not only have strong financial resources, but also have extensive brand influence. However, we need to see that as the core technology of the company's long-term development lifeline, Guangmingyuan never lags behind them. As mentioned above, this year we started to create a brand new high-end brand “Zhaoshang”, and at the same time set about building a new marketing communication system. In the field of brand influence, we believe that we have taken a solid step, and then in the field of LED. How we perform, let us wait and see.

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