Abstract:In the early stage of the development of the power tool industry in China, domestic manufacturers generally adopted the OEM model for OEM production for customers. With the continuous strengthening of the production and operation capabilities of these enterprises, the continuous expansion of technology research and development capabilities in cooperation with customers and the continuous accumulation of funds, at the same time, domestic power tool manufacturing enterprises have experienced the introduction and digestion of foreign advanced technology, cooperative design and manufacturing, independent research and development, design and production of the development path. Nowadays, with the continuous increase of enterprises to invest in research and development, the level of production technology and technology has been rapidly improved, and the gap with foreign enterprises has been narrowed, which has greatly promoted the development of China's power tool industry. According to the data, the market size of the power tool industry in mainland China will reach 49.77 billion yuan in 2022, a year-on-year increase of 8.7%.
1. Definitions and Classification
Power tool is a kind of mechanized tool that is powered by an electric motor or electromagnet and drives the working head through a transmission mechanism. It has the advantages of easy to carry, simple operation and diverse functions, which can greatly reduce labor intensity, improve work efficiency, and realize manual operation mechanization, so it is widely used in construction, housing decoration, automobiles, machinery, electricity, bridges, gardening and other fields, and a large number of families. According to different application scenarios, power tools can be mainly divided into three categories: professional-grade, industrial-grade and general-purpose.
Second, industry policies
The precision of power tools is one of the important indicators that reflect a country's manufacturing capacity and industrialization ability, and plays a very important role in the improvement of the national economy, energy utilization, environmental protection and people's quality of life. In order to consolidate the industrial foundation, improve the quality and efficiency of industrial development, and promote the transformation of the mainland from a manufacturing country to a manufacturing power, the state has successively issued a series of relevant policies to support and standardize the development of the power tool industry, providing a good policy environment for the industry.
3. Industry barriers
1. Financial barriers
The power tool industry is a capital-intensive industry, and the entry of the industry requires high capital investment. In order to make the product form a series and scale, new enterprises entering the power tool industry need to invest a lot of equipment funds at one time, and subsequent technology updates and product upgrades also require large R&D investment, so a certain capital threshold has been formed for new entrants.
2. Market and customer barriers
The performance, reliability, and delivery of power tools on time and quality are particularly important to customers. For this reason, when customers choose a power tool supplier, they usually choose a manufacturer with a good reputation and brand in the industry as their supplier. In order to ensure quality, the customer will conduct a series of rigorous audits of alternative suppliers and pass multiple evaluations before determining the supplier relationship. Only power tool manufacturers with strong R&D capabilities, strong manufacturing capabilities, stable product quality and good service reputation can obtain customer recognition. In the fierce competitive environment, well-known power tool manufacturers have achieved steady and rapid development by virtue of the recognition of their brands by downstream customers, which constitutes a certain customer recognition barrier for new entrants. At the same time, the state has certain requirements for the qualifications of enterprises in the power tool industry, and has certain market access barriers.
3. Technology and talent barriers
Power tools is a need to use a variety of comprehensive disciplines of the industry, from the perspective of product design, power tools is the unity of durable, ergonomics, efficiency, safety four factors; from the perspective of manufacturing, the need to comprehensively use gear processing, motor manufacturing, precision aluminum parts processing, injection molding, heat treatment and assembly and other technologies, into the power tool industry needs a group of interdisciplinary expertise and rich practical experience of senior technical personnel and technical management team. Even if potential industry entrants have the corresponding funds, it is difficult to master the R&D and manufacturing technology of power tools in a short period of time. Therefore, the power tool industry has high technical and talent barriers for new entrants, and with the acceleration of technological updates and the continuous application of new technologies, the industry's technology and talent threshold will be higher and higher.
4. Process barriers
There are many manufacturing processes of micro motors, the core components of power tools, involving precision machinery, fine chemicals, magnetic material processing, winding manufacturing, welding insulation treatment and other process technologies, requiring a large number of process equipment and high precision, and a series of precision testing instruments are required to ensure the quality of products. This requires production enterprises to have a high level of production process management and strict quality control system to ensure that the product qualification rate reaches a high level. The improvement of the process is completed in the process of continuously summarizing experience, finding and solving problems, which requires a long accumulation process, which is not possible in the short term for new entrants.
Fourth, the industrial chain
From the perspective of the industry chain, the upstream of the power tool industry is a supplier of raw materials (such as steel products, aluminum products, plastics and electronic components, etc.), and the upstream industry is currently developing more mature and sufficient, and the upstream supply provides a good industrial foundation for the development of the power tool industry. However, there is a risk that the industry will see a significant drop in profitability due to rising raw material prices. In order to minimize the impact of cost fluctuations on business performance, power tool enterprises should strengthen the study of raw material price trends, and reasonably choose the timing of procurement to reduce the impact of cost fluctuations on business performance;
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