June 10, 2023

It is not easy for small and medium security companies to survive, and only with right strategic planning can they survive.

It is not easy for small and medium security companies to survive, and only with right strategic planning can they survive.

The security industry has grown rapidly in recent years, and many people are optimistic about future. But for security of small and medium enterprises, in fact, ideal is very complete, and reality is very skinny. These enterprises are facing various survival problems and struggling.

It is not easy for small and medium security companies to survive, and only with right strategic planning can they survive.

The current situation in security industry

1. The cost is too high and price is expensive

The problem of high cost leading to high price manifests itself in several ways:

Firstly, due to small volume of sales in early days, cost of product was high, especially HD camera was much more expensive than previous SD camera. network cameras on market, these products sacrifice quality and effect, and in long run it is not beneficial for popularization of high definition;

Second, limited by development of video processing technology, with same codec technology as before, high-definition video provides a higher bit rate, which leads to an increase in network transmission costs and video storage costs;

Third, accordingly, cost of central platform equipment and display equipment also increased to a certain extent.

Of course, as market expands, planning gradually becomes smarter, and more efficient video processing technologies become popular, cost problem will gradually be solved.

2. Compatibility is a problem in division of labor model

High resolution reflects overall solution. From front end to central control and storage, and then to internal display, products in each link must be in high definition. To form a system of these products, it is necessary to solve issues of interconnection and interconnection. At present, HD video surveillance is mainly network-based, and there are still no mature and unified standards for network surveillance, causing compatibility issues between cameras, platforms, and NVRs from different manufacturers. This problem posed great challenges to former division of labor in security industry: it is not enough for manufacturer to produce products in only one link, he needs to produce products in several links at same time. In this context, in past two years, more and more attention has been paid to standardization of network monitoring, and progress of some standards and norms has become more and more smooth.

It is not easy for small and medium security companies to survive, and only with right strategic planning can they survive.

Difficulties faced by small and medium enterprises

1. The situation in security market is difficult, and it is difficult for small and medium enterprises to cope with it

The security market has not yet formed a mature and unified standard management system, small and medium-sized enterprises lack brand recognition, and market competition is fierce. On other hand, security market concentration of SMEs is low, management methods have lagged behind, and response to market supply and demand relationships is not timely enough. In addition, various strategies adopted by security companies in Longkou make it difficult for many SMEs to continuation.

2. Serious product homogeneity and unbalanced market development

Currently, there are many types of security products that seem dazzling, but similar products from different manufacturers are similar, lack their own style and uniqueness, making it difficult for engineering companies and users to choose. At same time, due to lack of industry self-discipline and insufficient protection of intellectual property rights, products are easily imitated by others. Many companies want to enter high-end market, but when they develop a new product, others imitate it.

Market development is uneven. The scope of security includes monitoring, anti-theft alarm, access control identification, etc., and products are very rich. However, at present, only video surveillance equipment is widely used, accounting for half of security market Other anti-theft alarm products, The scope of application of access control identification products is relatively narrow.

3. Rising production costs

At present, cost of labor is getting higher and higher, and security equipment components industry is also growing. The profit margins of manufacturing companies are getting smaller and smaller. If shipment volume is small, it will be difficult to survive, survive in cracks.

For example, various equipment production costs in Shenzhen are constantly rising, and price can no longer be kept low. Whether labor costs are rising in a straight line or prices of various upstream inputs are also rising, gross margins of manufacturing companies generally do not exceed 5%. So if volume of shipment is small, it will be difficult to survive.

It is not easy for small and medium security companies to survive, and only with right strategic planning can they survive.

How Small and Medium Enterprises Overcome Challenges

1. Avoid price wars and target customer groups

SMEs involved in security must identify their core customer groups, avoid price wars, and raise prices to a certain level in order to have more opportunities to compete with competitors.

In addition to price competition, if product center, brand operations center or channel control center is detailed and deep, it will inevitably have its own competitiveness.

2. Make a big difference with a little, do a good job

Catching 1% of market is already a big goal. If company is determined to eat only 1% of shares, this will also be very profitable.

3. Open source and cost reduction, mutually beneficial cooperation

Being severely tested by high costs in manufacturing industry as a whole, security industry will inevitably find a way to break through and reemerge. Faced with increasingly tough market conditions in security industry, how to adjust industrial structure and create new profit growth points has undoubtedly become an important measure for "open source" manufacturing enterprises.

4. Innovation is key to keeping businesses viable and invincible in face of fierce competition

Enterprises should strengthen cooperation, expand R&D spending channels, and increase investment. According to company's own situation, make good use of application of advanced technology such as big data and artificial intelligence to improve application range and quality of products, and achieve goal of timely replacement of product.

Without independent R&D innovation, security enterprises will have no future. Each challenge is a new breakthrough, and each breakthrough has a new development. Small and medium-sized security enterprises also need to break out of cocoon and cope with a strong market challenge in order to make a quantum leap. Only by possessing his own key advantages, he can become truly strong in development.