Economic adjustment cycle challenges and opportunities in the printing industry
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Wandering all the way
In the early 1990s, China began to promote the market economy. The printing industry was one of the first industries to implement marketization and privatization. It was the first to open to foreign investment in the field of cultural publishing, and the first to implement the democratic advancement. The government no longer Participate in the management with the power of the administration, but correctly return to the management of industrialization and functionalization. It is precisely because of the smooth operation of the market operation mechanism at the production relationship level and the clarity of the property rights subject, which directly promotes the vigorous development of the printing industry's productivity. The printing enterprises with private (including foreign capital and joint ventures) as the main body have experienced a leap in both quantity and scale. In the development of printing, printing enterprises have sprung up. During the l0 years from 1998 to 2007, the trend of net inflows has increased. According to official statistics, there are nearly 10 million households; equipment investment is booming, especially with the investment quota of foreign-invested enterprises. Policy and encouragement of import tax exemption policy for printing equipment of domestic enterprises, 2000-2005 spurt-type introduction of printing equipment; at the same time, enterprises with certain family bases have begun to consider buying land and building factories in order to seek more stable development, hoping to change the past The state of existence of the fixed office and the eastward move to the west.
The rapid development of China's printing industry in the past 10 years is the 10 years of gold in China's economy since the reform and opening up. Under the background of continuous growth of the large environment, the continuous development and growth of printing enterprises is the main theme of this period.
According to incomplete statistics, the average establishment period of private printing enterprises in China is less than 10 years. The growth of printing demand in the past 10 years is the core driving factor (GDP growth), but the supply side, such as the number of enterprises and the number of equipment, is also fast. The increase has led to the continuous decline in the price of work (such as the reduction of each color from 50 yuan to 30 yuan to less than 20 yuan), which directly guides the profitability of an industry from the initial development to the full competition to the average profit level of the society. Normal return. But on the whole, the printing companies that take the Chinese economic high-speed chariots are indeed walking all the way.
An unprecedented dilemma
2008 is a very important point in time. The 70th anniversary of the first world economic crisis, the 30th anniversary of China's reform and opening up, the 10th anniversary of the Asian financial crisis, and the 10 years of China's economic GDP bull market... There have also been some events worthy of history in this year, but the history of the world economy. Since the first financial crisis known as the "global financial tsunami" is hitting the world with tsunami-like speed and destruction, the global economy suffering from inflation (including GDP, CPI, PPI, and high fever) China) Immediately like a patient with high fever suddenly thrown into ice water, history can't tell us that economists can't use empirical models to demonstrate the depth and breadth of the impact of this kind of attack on the economy, but only to see them in panic In the way of "rescue", the Chinese economic chariots have also slowed down. GDP fell by 5 percentage points to 6.5% in the fourth quarter of 2008. We can't rely on China's GDP of 6.50%, which is still the world's highest comfort, but to demonstrate the extent of cooling (5%) or the extent of brake shifting. The impact on the economy. So far we have not seen a 5 percentage point decline in the GDP of Western developed countries. We do not want to see a basic phenomenon – the faster the speed, the greater the risk of rapid braking, which was verified in this crisis.
The young Chinese printing companies serving various sectors of the Chinese national economy have deeply felt the impact of the tsunami: weak market demand, declining sales revenue, long payables, increased risk of bad debts, and falling wages. And the decline in demand among all the influencing factors is the core factor. The printing industry has fallen into an unprecedented dilemma.
According to Far East Leasing's 2008 customer survey data, the average sales revenue of 387 sample printing companies in 2008 increased by 7.1% compared with 2007. The ending accounts receivable increased by 20% year-on-year, while the net sales profit decreased by 8.4% compared with the same period of last year. If the data of the first three quarters are deducted, all the indicators of the printing enterprises in the fourth quarter of last year will fall by 10% to 30%, except for the receivables.
Even without a financial crisis, the days of printing companies have not been as comfortable as in the past 10 years. From the first half of 2007 to the third quarter of 2008, the cost has been rising. Since the fourth quarter of 2008, the entire industry has been experiencing the test of falling demand. In addition, the industry has been weak for a long time. From the perspective of industrial chain, printing enterprises are in the squeezed part of the industrial chain, and the ability to transfer costs and risks is relatively weak. It is difficult for upstream manufacturers to form bargaining power due to the dispersion of procurement, because they compete with each other for downstream customers. A larger dependency is formed.
The advent of the financial crisis is even worse. China's printing industry is indeed facing an unprecedented dilemma. This dilemma is manifested in the fact that the global financial crisis has not yet bottomed out. The Chinese economy is still afraid to retaliate, and the sequelae and complications of a series of rescue measures may be When it appears, these factors will directly affect the micro-management of printing companies. The reason why it is called “an unprecedented dilemma” is not because of the dilemma itself, but that the entrepreneurs and operators of the printing industry in China have not experienced a big crisis for more than a decade, and they have no immunity, and there is no system. Respond to the experience. Because every crisis or problem is covered by later growth, this time is a really particularly severe test. Therefore, the dilemma we are talking about is not the dilemma itself, but whether it is prepared for a full response in the face of this situation. A crisis cannot subvert an industry, but it is enough to shuffle an industry and reorder it internally.
Thoughtful response
In the face of the current predicament, printing companies must learn to think carefully and calmly respond. Don't be pessimistic. Take the thinking mode of "doing the best preparation with the worst intentions", do your best, shrink the battle line, recharge your batteries, and save your strength with a conservative strategy to survive the economic downturn. in particular:
First, ensure that the company's cash flow is stable and survive above all else.
Harold Williams, former chairman of the US Securities Regulatory Commission, said, "If I make a comparison between profit information and cash flow information, then I choose cash flow."
At present, the importance of cash flow to a company is self-evident. Focus on cash flow, that is, we must pay attention to the liquidity risk of the operation of corporate funds, pay attention to the safety of the capital chain, and seek a balance between reducing risks and increasing profits with a prudent principle. . To ensure the liquidity of assets (the ability to quickly realize assets) and the liquidity of liabilities (the ability to obtain funds in a timely manner), and to avoid structural mismatch caused by long-term short-term loans, it is necessary to re-examine the receivables policy.
Second, take the opportunity to practice internal strength. Most printing companies start with workshops, guerrilla operations, and extensive management. There are many weak links in governance structure, enterprise system, strategic management and operation management, and standardized management. There must be sufficient time to study these during the economic adjustment period. Weak links, management and remedial classes, such as market and product positioning, brand connotation and positioning, marketing management, technology research and development, procurement and supply chain management, internal process management, management team and team building, corporate culture construction, etc. It is indispensable to form the core competitiveness of a printing enterprise, and it will definitely benefit the enterprise. All this is prepared for regaining lost ground after winter and spring.
Challenging opportunity
Although the international financial crisis has not yet bottomed out and there is certain uncertainty in the future, it is certain that the world has acted and adopted unconventional measures to deal with it. It is only a matter of time before the crisis emerges. Countries have taken active actions in the face of common challenges. This unprecedented unity, no matter how close each other is, is unprecedented. As far as the current situation is concerned, it is expected that the global economy as a whole will still have a large number of iterations in the bottom region. It takes about two years to get out of the recession and enter the recovery phase.
But in the face of the global crisis, China is the most capable of China, and China will be recognized as the first country to recover. From the series of data in the first quarter of 2009, there are also signs of improvement. If the fundamentals of the Chinese economy are not originally good, and the internal driving force of China's economic growth is insufficient, it is very difficult to have such a situation, because such a major crisis has a huge impact on an economy. If it is not healthy, then 3 The month has been hit hard and it is impossible to recover gradually in three months. In the past six months, the Chinese government has added more horsepower to the Chinese economy, such as 4 trillion investment, 5 interest rate cuts, and 10 major industry revitalization initiatives.
The reason why China is most capable of making a breakthrough is that China's domestic demand market is huge, the world is unique, and China's consumption structure and industrial structure are undergoing a historic upgrade. China is one of the fastest growing countries in the world. According to international experience, a country's per capita GDP is below 2000 US dollars is the economic take-off stage, and more than 2000 US dollars means a rapid development stage. In 2006, China's per capita GDP exceeded US$2,000. In 2008, per capita GDP reached US$3266.8, and it reached a new level of US$3,000. The per capita GDP of more than 3,000 US dollars means that China's urbanization and industrialization process will accelerate, and the types and behaviors of residents' consumption will also undergo major changes, and the economy will maintain a longer period of growth. Based on the above judgments, we have predicted the future China's printing GDP, as shown in Figure 1.
Under the general trend of future growth, China's printing industry will also be like a developed country, with large-scale, chained super-printing enterprise groups, and a large number of small and medium-sized enterprises serving specific regions or market segments. Therefore, the internal structure of China's printing industry will undergo major changes. In the future, industry exitors will be larger than entrants, the number of industry entities will be reduced, and the results of market competition will be polarized. Large-scale enterprises will appear in different regions and market segments. The social resources will further enrich the scaled enterprises and enhance their competitiveness. The Matthew effect and the strong and strong phenomenon will be fully manifested. The vitality of the printing enterprises that survive and develop by means of market will be more sustainable. Of course, not every company is pursuing scale. Many companies will position themselves in certain market segments or customer groups, and take the road of professional specialization with their unique technology or product competitiveness. Scale and specialization will become the characteristics of enterprises with certain market competitiveness in the future.
See who is in the Ming Dynasty
"When the Ming Dynasty is ups and downs," only one can dominate his own destiny, because whenever we see a great enterprise, someone must have made a big decision.
1. Strong printing main business owner ups and downs
Are many operators paying too much attention to whether the industry entering is large enough? I am always worried that I am not enough to make a big difference. In fact, there are already big rivals in the big market. The market is big but not necessarily yours. More important than the big market is whether you have the opportunity to be the first in this segment. The first is absolute success, indicating that you have established a foothold in the market. Although the printing industry is not a big industry, there are many value chain extensions around printing. Each extension is a new business model and a huge business opportunity. It can only make printing a part of its service to customers, and it can create printing links. Profits only account for 30% or 20% of the total profit of the products provided to customers, which not only achieves more profit, but also enhances the customer's right to speak. This is competitiveness. A lot of space is created, not long ago.
2. Shaping the printing brand
“Is it the last cake that makes people full?” A fable tells the mentality of a lazy young man when he asks an old man: the cake that doesn’t make you full will not have to eat it, just eat it and let it go. The man who is full of bread. Doing branding is not as easy as some people think, nor as difficult as some people think. In the end, to do branding, you only need to grasp two strategic points. First, choose a valuable product category and brand in a potential product category. If printing is just a service, then make the service a valuable brand. The second is to always be persistent, to accumulate, to endure the silence, and to freeze three feet. Enterprises, no matter which industry, the ultimate goal is to be a brand. Can shape the brand's main ups and downs.
3. Ups and downs with the Far East
This is the Far East's commitment to industrial development, which is the commitment of the Far East to the development of printing customers. From the first day of entering the Chinese printing industry, the Far East has established a clear strategic goal: a professional team will be rooted in the printing industry for a lifetime, to cultivate and support enterprises with future competitiveness as core interests, and to promote industrial development. . Although in the general economic downturn, some financing companies and leasing companies have chosen to leave or retreat, the Far East will always be stationed in the industry, to experience with customers, accumulate strength and seek common development.
First of all, increase the direct financing of purchasing equipment for printing enterprises, provide long-term working capital and short-term liquidity services for competitive enterprises, and do a good job in tax planning in the process of purchasing equipment by printing enterprises to ensure investment credit and VAT The deduction is in place. It is guaranteed that printing enterprises will have sufficient financial support when they are expanding their mergers and acquisitions or buying land to build houses, so as to ensure that the printing enterprises that have obtained Far East services are always financially sound. Far East is also determined to become a financial partner that the printing industry can rely on for a long time. It will strive to be the financial and financial advisor of the printing company and do everything possible to reduce the financial cost of the enterprise. The Far East will try its best to enable the cooperative customers to enjoy the national macro policy, especially the monetary policy. The cost of the change is reduced. Take the policy changes of the past two years as an example. In 2007, the interest rate was raised five times in the Far East. The Far East and the customers shared difficulties and gave the repaid customers a l/3 to 1/2 rate hike fee reduction. In the fourth quarter of 2008, Among the five interest rate cuts, the printing companies that cooperated with the Far East all received a large amount of interest in reducing loan interest, and the accumulated amount exceeded RMB 100 million, which helped the printing enterprises to overcome difficulties.