Research On Differentiation Strategy Of Woodworking Machinery Industry

After nearly 20 years of development,TZ Woodworking Machinery Company has become a private-owned manufacturer of panel woodworking machinery which is engaged in the development,design,manufacturing,sales and after-sales service.Moreover,the company has owned its independent brands.However,in the process of rapid development,it also faces a series of problems.Since 2017,the company’s main business revenue and profit margin have both declined for three consecutive years.The panel furniture machinery industry that TZ Company engaged is the midstream of the furniture manufacturing industry chain and is also one of the sub-industries of wood processing machinery(woodworking machinery for short).In the past two decades,China’s domestic panel furniture machinery market has been keeping prosperous with the market size growing constantly.Benefiting from favorable factors such as the expansion of customized furniture production capacity,the future market demand and huge profit have made this industry the blue ocean market that thousands of both foreign and domestic panel furniture machinery manufacturers compete for fiercely.Currently,the high-end market in China is dominated by large foreign companies,domestic panel furniture machinery manufacturers are more in the mid-and low-end market.Due to the lack of core technology,price wars frequently occur and the phenomenon of homogeneity is very serious.TZ’s competitors continuously narrows the gap of products and services through imitation,resulting in the loss of TZ’s market share,sales of products at reduced prices and lower profit.How to get out of this dilemma has obviously become an issue that TZ needs to deal with urgently.This thesis applies strategic management theories and analytical tools to diagnose the current strategy adopted by TZ,to analyze causes of the problems,then to propose measures to help the company gain a sustainable competitive advantage,and finally solve the problem of falling revenue.The research believes that TZ can take advantage of constant growth of the panel furniture market to enhance its competitive advantage through the implementation of differentiation strategies from the three dimensions of product,market(distribution channel)and service.At the same time,the company should find value drives in R&D,marketing activities and service activities to build a system of differentiated competition.The specific suggestions include:(1)In terms of product differentiation,TZ should make sure to establish the advantages of three aspects: technology upgrades,new product development and function optimization;(2)In terms of market differentiation(distribution channels),TZ should make sure to,based on maintaining the original distribution channels,rely on material suppliers to broadens sales channels and creates unique distribution methods;(3)In terms of service differentiation,TZ should make sure to focus on customer demand for services other than products,and introduce diversified value-added services and create personalized services in the pre-sale,on-sale and after-sale.