Ruigu Technology: Positioning in the competition

[Source: Gaogong LED 's " LED Research Review" magazine January issue / Tang Guirong finishing]

Positioning has always been at the heart of corporate strategy. However, due to today's turbulent market and changing technology routes, many people believe that corporate positioning is too static, thus abandoning this concept.

“In all factors affecting strategy, growth desire has the greatest negative impact on strategy. Managers are often difficult to resist and want to gradually break through the above restrictions, but the result is more ambiguous.” Global Chief Strategy Master-- Harvard professor Michael Porter describes companies that are lost in the face of market competition. The same is true in today's LED driver power industry.

In the past two years, the competition in the LED power supply industry has become increasingly fierce, and the number of enterprises has risen sharply. This makes the traditional power supply companies that have just entered the LED field seem to be overwhelmed.

At present, the gross profit margin of domestic traditional consumer power sources has been less than 5%, while the profit of LED power supplies is much higher. Take Maoshuo Power (002660.SZ), the first listed company in China's LED driver power supply, as an example. The company's LED driver gross margin remains at a high level of 30%. This has forced a group of traditional power supply manufacturers to join the LED market.

According to the statistics of the High-tech LED Industry Research Institute (GLII), there are about 300 LED drive power manufacturers with a certain scale in China as of the end of 2012. This figure does not include those lighting companies that provide power supply for themselves.

But behind this number growth is the market chaos in the LED driver power industry. As a Sino-foreign joint venture engaged in the research and development and manufacture of high-end power, Ruigu Technology (Shenzhen) Co., Ltd. (hereinafter “Ruigu Technology”) was not so lucky in 2012.

"This year, the company's personnel scale has been reduced from 1,800 people last year to about 1,200 people." Xiao Zhiwei, general manager of Ruigu Technology, admitted that the LED market has been fluctuating in the past two years. The company has spent a lot of energy in the field of LED drive power, but the market performance and Not obvious.

In fact, each brand has a clear positioning behind it. In the field of high-power drive power, Moso's positioning is the first brand of high-power LED power supply, while Infineon is taking the technical route; in the field of low-power drive power, the number of enterprises is even larger, and the market competition is particularly fierce.

"This year, the company is also adjusting its strategy to position it as a super lightning protection and voltage-proof LED power supply." Xiao Zhiwei said that as the largest supplier of Huawei communication power, Ruigu Technology has a strong technical foundation and a high-end customer base in the power supply field. “Our LED market strategy has shifted from the previous 'big pass' to a focused attack.”

Dr. Zhang Xiaofei, CEO of Gaogong LED, said that there are many types of LED driver power supply. If a company does all of it, on the one hand, it can't cope with it, on the other hand, customers may not accept it. “If you target in a certain segment and strengthen marketing, you will form a stronger brand.”

In other words, dealing with the highly competitive LED drive power market depends on the unique positioning that companies need to make trade-offs.

Confused power market

Xiao Zhiwei: In 2009, we started to invest in the LED field. At that time, the market was chaotic and not very popular. After two rounds of shuffling in the industry in the past two years, we found that there is more and more demand for power in the market. You can't do it, and you can't do it. Because of the variety of individualized product models, each customer is personalized, each model has to be redesigned and opened, and the cost is high, which leads to high prices.

Zhang Xiaofei: At this stage, due to the large number of enterprises, LED power supply has not been standardized yet, and customers have their own personalized needs, which makes power supply companies very helpless. However, I don't think standards and personalization are conflicting. You can do it separately. In a sense, you can define your own standards in customer promotion, but only if you want to ensure that the product is reliable. This is the standard when you use and accept your product in large numbers.

Xiao Zhiwei: We basically have three main markets now, communication, solar energy and LED. The LED business is the focus of the transformation, covering areas such as advertising screen lights, indoor commercial lighting, tunnel lights, landscape lighting, etc. There are more than 20 power products. Last year we had more than 1,000 projects, of which LEDs accounted for the vast majority.

Zhang Xiaofei: There are many requirements for power supply in the market, but you also have a wide range of fields. However, customers will think that you can do all the LED power products of all specifications in all fields, so naturally when they have individual needs, they will first find you.

Xiao Zhiwei: Our technology is very good, but there are many problems in the promotion. For example, when promoting low-power power in the market, many customers think that it is not a benchmark enterprise, and the price should not be more expensive than Leyford, which is unbearable. Although we are not a benchmark company, our technology is excellent, quality and design are very good.

Zhang Xiaofei: Actually, this issue is still related to positioning. The reason why Maoshuo Power has been successful is because the positioning is very clear. His slogan is the brand of high-power LED power supply. In fact, he also does small and medium power, but he does not deliberately promote.

The LED industry has a wide range of fields, and the requirements for power supplies vary from field to field. Since your sales in some areas are not strong, you will not mention them when positioning. Especially if you enter a new market, don't say that you can do anything, which leads to the customer's inaccurate positioning. Many customers will think that if you do a good job with low power, you may not be able to do a good job of high power. If you do a good job with high power, you may not be able to do low power.

Xiao Zhiwei: Actually, we have done a lot of work in the domestic market. For example, in marketing, we will introduce our major international customers and give domestic manufacturers a confidence. In fact, the only companies in China that can do such high-end customers are Ruigu.

Zhang Xiaofei: I see a few of your big customers, basically foreign companies. However, the competitive environment in the domestic market is different from that in foreign countries. The interpersonal relationship in foreign markets is very simple. They are more concerned about the comprehensive management of the factory, product performance and reliability, and secondly the price. The domestic situation is just the opposite. Customers look at the price first, then look at the performance. As for what the factory does, everyone doesn't care very much.

Change and choice

Zhang Xiaofei: To be good at positioning, we must pay attention to the three rules. One of them is the “Focus of Law”, which means that enterprises should concentrate on doing the same business and thus have a concept in the customer's mind. Once a company takes the lead in this area, others will never be able to transcend because the customer's perception is hard to change. The second rule is the "law of sacrificing", that is, it is the existence of the house, the leader should constantly strengthen his position, beware of conceited to think that he can do any business. The third article is the “Extension Law”, which is appropriately extended on the existing advantages.

Xiao Zhiwei: The models on the market are very different, but we can't set up a project for a single model. Although this R&D expense is small in sales.

Therefore, this year we have adjusted and positioned in the high-end market. In fact, now we have three main markets, street lights, mining lights, tunnel lights. Other market requirements are relatively low, and many of the requirements are misleading, and we rarely touch them.

At present, we only keep a few major customers such as GE, Philips, Silong, Foxconn and Shanxi Guangyu. Perhaps the sales of my five big customers are equivalent to the amount of money made by more than 500 customers. Maybe people have done more than two hundred models, the sales volume is not high, and I do some standardized products, grab a few big customers, large-scale promotion, sales will come up.

Zhang Xiaofei: In the early stage, it is the first step to seize several large customers, but at the same time develop multiple channels. You have 5 big customers, although you can take a certain market share. But the market is changing, including prices, technology, competitors, etc., will always affect market share. In fact, what customers value is how big their influence on him is.

Xiao Zhiwei: The components of our products are imported, but our cost control is better. In the past few years, we have been cooperating with Huawei to do communication power, with a sales volume of 350 million yuan in the most year. Because we control the product quality and manufacturing process very strict, and the after-sales service response speed is fast, we can get the recognition and trust of big customers.

Zhang Xiaofei: Many small and medium-sized enterprises can't do high-end market. You can do it. This is an advantage. However, in the transformation of the LED field, you need to find a suitable way to cut. As the industry shuffles, the concentration of the market will become higher and higher in the future.

Xiao Zhiwei: In the LED field, we will stand at a higher point and locate the ultra-high voltage lightning protection power supply. Cooperate with customers, combine glue filling, anti-high pressure and lightning protection to give full play to the technical advantages of Ruigu.

Zhang Xiaofei: In fact, now Infineon , Mingwei, Maoshuo, etc., including Ruigu's LED street light power supply, has done a very good job. However, the street lamp still has the problem of heat dissipation and waterproofing, because the waterproof level of the street lamp needs to be IP68. Once IP68 is achieved, the glue filling will be fully filled. After filling the glue, it brought a lot of instability.

Xiao Zhiwei: We spent a lot of energy researching this problem. Last year, our sales were nearly 400 million, and R&D expenses accounted for 10% of sales. Some time ago, there was a customer who found several Taiwanese power supply manufacturers, but they failed to solve this problem. We use double-panel and double-sided dialysis on the glue filling products, which can withstand a lot of pressure. It can not only be waterproof, but also avoid the life damage caused by the expansion of glue. Now, Philips has also placed an order for us.

In addition, in terms of voltage protection, we have specially designed a module that can automatically switch. The power supply voltage on the market is generally 3 kV, and Ruigu can achieve 6 kV. In Africa and remote areas of China, the voltage is not stable, and it jumps from 220V to 330V in an instant. Our anti-voltage power supply can solve this problem.

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