In this new form of Internet competition, all walks of life are facing severe challenges. The living environment is harsh and the waterproof industry is not included.
The existing problems are too numerous to enumerate. The industry has low thresholds and pros and cons. Its operations are not standardized, prices are competitive and low-price competition; the living environment is harsh, non-standard products are popular in the market, and so on. The malicious low-price competition will not only harm the vital interests of consumers, but also cause fatal harm to manufacturers and distributors.
The Prisoners' Dilemma in the Waterproof Industry In order to gain more market share, there is a strong sense of vicious competition among companies. In the waterproof material market, the degree of intensification of the industry is not high, and the quality of the waterproof material of the building is not the same for the unqualified enterprises, and there are many varieties of building waterproof materials, which is not difficult for professionals to distinguish clearly. Some merchants seize the psychology of “cheating on the cheap†of customers, and the quality of products cannot be verified in a short period of time to induce consumers to make wrong decisions. This behavior not only disturbed the market order and led to difficulties for manufacturers of high-quality products, but also accelerated the speed of the closure of small and medium-sized waterproof material manufacturers.
According to Adam Smith's classical economic theory, each person is a rational economic person. While individuals pursue the maximization of their own interests, society can also achieve maximum development. Prisoner theorem just proves that this is a paradox, rational Individuals often choose to betray the alliance to achieve their own optimal, rather than cooperation to achieve the overall optimal. Like most industries in China, the waterproofing industry is also in the prisoner's dilemma. Low-price competition, low-quality products flooding the market, and low levels of profitability in the industry are all examples of Prisoners' Dilemmas.
Low price is equivalent to the discount of product quality and service In the waterproofing industry, every company is seeking to maximize profits and rationally make corresponding market behavior. When making market decisions, they all faced three strategic choices. First, they provided qualified products to the market and guaranteed their reasonable profits at relatively high prices. The second strategy was to reduce production and service costs and provide poor quality to the market. Products, at a relatively low price, also ensure their own reasonable profits; the third strategy is to provide qualified products to the market, adopt low-cost strategies, expand sales, and occupy competitors’ market share, so as to ensure that they obtain reasonable profits.
"One penny and one goods" This is an eternal law. No matter what kind of product, there is always a lower price. No matter how low the price given by downstream users, someone will always take orders. From a production point of view, such prices cannot guarantee profit margins. Shopping malls, such as battlefields, are not supported by profits. Enterprises can only maintain their operations by cutting corners on raw materials and processes, and by discounting service guarantees in later periods. The cost of raw materials has risen so severely that the cost in all aspects remains high. What kind of high-quality waterproof materials can be purchased with low prices?
Low price disrupting the market is not only harmful to the vital interests of consumers but also fatal to manufacturers or distributors. On the one hand, consumers buy products at low prices, and they always feel that they have taken a "great bargain." They do not know that low-priced products have no quality assurance. Of course, there is no guarantee on the after-sales service. Although the truth will not be exposed all of a sudden, slowly consumers will find problems, which is also a serious impact on the future development of the waterproofing industry.
On the other hand, rushing business at a low price leads to no profit. Other players in the product are similarly consumed. For example, in the same region, the manufacturing industry is likely to form agglomeration. The homogeneity of the same type of products is serious, but the demand is limited. If a company depresses prices to occupy the market, the remaining counterparts are bound to have no orders. Backlog, wages released, and eventually face the risk of closing. However, sold goods may not be able to survive for a long time, there is no profit, and it seems that orders are being received, but the seller knows exactly how much it has earned. In order to attract consumers and occupy more market share, they tried to knock down competitors through malicious low-price competition. However, this low price is not a constraint, and some merchants' product sales prices are lower than the production costs. Under such circumstances, it seems that business is smooth and the sales volume has increased dramatically, but there is no way to justify this. Letting your peers fail to manage their business, it may also cause a fatal blow to themselves.
Low-price competition restricts self-development. A company is not a list of buying and selling companies. It is not a single transaction, and the waterproofing industry is still a booming industry with rapid development. There is still a long-term development. The result of this is that even the best products will be disrupted by the market. Such low prices simply cannot guarantee profit margins. Over time, the healthy development of the industry is bound to be threatened, and the influence of Chinese manufacturing will certainly decline.
However, we do more than one prisoner’s dilemma that we face. Therefore, in this environment, we must adhere to our own principles. The product is expensive in quality, the premise of service is profit, and profit space can be compressed but cannot disappear. If you focus only on profit before the eyes, the seemingly compelling choice of individuals will endanger the healthy development of the industry as a whole, and a malignant tumor will be implanted in the future development of the industry. If companies insist on seeking development at the expense of others and malicious low-price competition, they will not only lose space for product development and process innovation, but will also narrow their development path in the future.
Making a company bigger and stronger has never been such a trick. But a strong product quality, reliable brand and good quality service.
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