The exploration behind the diversification of agricultural machinery

[ China Agricultural Machinery Industry News ] The diversified development mode of enterprises is more suitable for the rapid development of enterprise development under the background economy. Financial management has a very important significance in the diversified development of enterprises. For agricultural machinery companies, diversified development is also of great significance.
I don’t know if you noticed it. In recent years, several well-known agricultural machinery manufacturers that have grown up in China have chosen the road of diversification without exception, such as Zoomlion, Jiangsu Wode, Xingguang Agricultural Machinery, Zhongnong Boyuan. Even the brave machinery that has been advertised as a professional corn harvester will launch a baler this year. In this way, several large companies we know, including Yituo Donghong and Lovol, have chosen to diversify.
The exploration behind the diversification of agricultural machinery

The behavior of individual companies may be a case, but the choice of most companies must be regular. According to the author's judgment, there are several reasons for large enterprises to choose the diversification of agricultural machinery.
First, the reasons behind the choice of agricultural machinery production enterprises
1. Competition forces companies to choose diversity
As we all know, the competitive environment of agricultural machinery is complicated and there are many competitors. The professional competitors of the company are not just specialized companies like themselves.
For example, the brave machinery that produces corn harvesters, its competitors in addition to Jumei, Zhongshou, Boyuan and other relatively professional corn harvester manufacturers, as well as such as Zoomlion, Lovol Heavy Industries, John Deere and other comprehensive The predators, these companies have the comprehensive advantages of brand, capital, channels, product mix, etc., professional companies are difficult to compete with them only by the advantages of specialized products.
In addition, for agricultural machinery dealers, they are also willing to cooperate with diversified companies with more comprehensive product lines. Because they cooperate with such companies, they have a full range of products, and the strong products of big brands can also drive the sales of weak products and new products. The management difficulty is much smaller.
Therefore, the production of specialized single products faces greater competitive pressure and limited development space. Therefore, in order to meet the needs of competition, many companies will naturally choose diversified enterprises.
2. Diversification can increase capacity utilization
The parts and parts of agricultural machinery products are mostly made of metal parts. The parts processing equipment of most products is universal. For enterprises that do not want to let technology and trade secrets flow out, it is usually preferred to reduce the proportion of outsourcing. Produced in-house, and self-production can also better control quality.
It is quite true that diversification can improve the utilization efficiency of internal production capacity, and resources such as technology, management, quality control, marketing resources, and channel network can be fully utilized.
3. Entrepreneur ambition and ambition
Some people say that the height of entrepreneurs determines the height of the enterprise, and the boundaries of entrepreneurs determine the boundaries of the enterprise.
In fact, most of the companies behind the company are standing with an ambitious or ambitious entrepreneur! If the foundation of the company is good and the economic situation is better, the diversified development of the company may be smooth. For example, the agricultural machinery industry of Lovol Heavy Industries and Zoomlion was completed in the ten years of agricultural machinery in 2004-2014, but if the foundation of the enterprise is poor and the economic environment is not good, it is just that the entrepreneur’s ability is not good. Entrepreneur's ambition and ambition may be a disaster for the company.
4. Inertia of business operations
In a competitive environment, enterprises have the inertia of becoming bigger and stronger, because business operations are like sailing against the water, they can only move forward, and there is no retreat. Therefore, if agricultural machinery enterprises do not want to be eliminated, they can only expand their scale or implement diversified development. .
The expansion of scale is a direct manifestation of the enhancement of competitiveness. Everyone knows that on the African grasslands, herbivores and elephants and hippos are because of their size, even lions and tigers dare not provoke them. This is the scale. The advantages of the company, of course, companies also hope to scale against rivals and the economic cycle.
Second, since diversification is inevitable, then talk about how to diversify better!
From the above analysis, it can be seen that, regardless of whether or not it is willing, in the competitive environment, the choice of agricultural machinery enterprises to become diversified becomes inevitable. This is not based on the individual will of enterprises or entrepreneurs, unless you do not want to mix in the agricultural machinery industry, then the diversity of agricultural machinery. How to do it in the end? The author believes that there are several ways.
Concentric diversification
Usually, different series of products are developed around a category. For example, the tractor business of Yituo Group is a typical concentric diversification.

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