Competitive Strategy Of The Cpu Card Vendors

The CPU card industry is one branch of information technology field, which refers to computer technology, code technology and biology identity technology. The main functions of CPU card are figure identity, payment and encrypting information. The products are used in large rang of mobile communications, banks, administrative management, city management and network security. The key technology is invented and applied by foreign companies in first instance, and they entered Chinese market to play the role of market leader through join-venture enterprise, or cooperated companies. The foreign companies shared large market steadily, and complemented similar marketing strategy. On the other hand, the foreign companies still have advantages of brand, scale, technology, and product quality. In some application field of CPU card, the government cumbers foreign companies for the reason of information security and local companies protection policy. With imitating technology and introducing into equipment, the local CPU card enterprises have formed a large group. As the government put forward the "golden card project", the demand of CPU card increased rapidly. Meanwhile, the local group seized this opportunity depending on the advantage of close to market, and strategy of low price. The local group has held the key point of industry chain after mastering of key technology, thus, they obtained basic ability of competition. Almost all of products on sale are similar to each other, thus the buyers chose according to their price. That caused the price go down rapidly at the rate of about 20% per year, and the profit reduced with the step of price. The local group has no advantage of lower total cost, when they faced this situation. Each of the local group members has to innovate both in product and technology. After a round of investment depending on high marketing expectation, all of local group members have to suffer from marketing recession. Under the limited resource, they want to achieve both targets of short finance and marketing share, and they cannot but balance product innovation and improvement. Choosing a suitable segments combination should be a good way to walk out this difficulty. According to demand of target market, each of members adjusts their product line, so that they can focus the buyer's needs. The local CPU card companies take part in competition from low-end market and low interest, where they wined a big part share and grew in both scale and experience. Now they plan to move into high-end market, such as mobile communication SIM card segment. Contrasting with other segments, SIM card market has its own specialty, where the competitors are world famous companies who are marketing leader there for long time. As a follower, the local group is used to its market strategy that is successful in other segments, but it is not suitable here.