Price Rise And High Cost &Nbsp; Shoe Enterprises Are In Dire Straits.

April 28th hearing with the appreciation of the renminbi, cotton, crude oil, rubber and other raw materials prices continue to climb, as well as labor costs and other high, in 2011, many shoe industry brand Prices are beginning to simmering. The shoe industry in China ushered in a new round of price surges.

　　 Nike The third quarter earnings report released a 5.2% increase in revenue in the quarter, but the gross profit margin of the company was poor due to rising oil, cotton prices, labor costs and freight rates. Nike executives say that the only way to ease the rising cost pressure is to raise prices. Li Ning Co said its cost is expected to rise by 20% this year due to wage and raw material costs.

To cope with cost pressures, sports brands have been raising prices. For many shoe companies, especially small and medium-sized shoe companies, market There is no bargaining power at all. Cost pressure can not be transferred to the downstream, it can only digest itself, "no increase in price and so on, and price rise and death" has become an embarrassing situation that many shoe companies have to face. The competition faced by shoe enterprises has become more and more brutal. The rise of costs has made many shoe companies suffer from both sides. Under the blade, how to effectively solve the cost crisis and achieve rapid development has become a problem that shoe companies have to think about.

Strengthen Administration Control cost

The profit of an enterprise is the difference between income and cost. The premise of product value is that the cost is the decisive factor of the enterprise's income. In today's situation, such as raw materials and other prices continue to rise, shoe companies need to strengthen management, control costs, thereby gaining profits.

Some small and medium-sized shoe enterprises strictly control procurement costs, improve the utilization rate of raw materials, "goods ratio three", to maximize savings in procurement costs, to ensure that the company's procurement price is relatively stable. And with the supplier to form a community of interests, by increasing the volume of procurement, to mobilize the enthusiasm of suppliers, so that suppliers and companies share the pressure of rising prices of materials. In terms of cost management, many shoe enterprises introduce lean management mode to effectively cope with the cost crisis. Statistics show that the introduction of lean production mode can increase the output of enterprises by 30% - 50%, while actuarial, 1 yuan of lean production can create 6.7 yuan value. "In order to save money and spend money", such a remarkable result, let shoemaking enterprises in front of the pressure of raw material prices and labor costs increase, no matter how much money is spent to rebuild management.

Enlarge science and technology R & D and development of new products

Technology is the primary productive force. In the face of the current severe development situation, shoe enterprises should increase technology import and R & D. As labor prices rise and profits decrease, shoe companies are coming to a crossroads. In the past, labor intensive industries, which used a lot of cheap labor and consumed a lot of cheap raw and auxiliary materials, seemed to be struggling. Strengthening technological force and improving labor productivity, product quality and economic benefits through technology is the necessary choice for shoe enterprises to get rid of "cheap factories".

While using technology to transform production mode, increasing investment in science and technology and continuously developing products with high technological content and high added value are also effective means for shoe enterprises to seek new profit growth points under the pressure of high cost. It is understood that Nike has more than 100 technicians engaged in research and development of new products. Therefore, every month, Nike has a series of new products coming out to lead the trend of world sports shoes. Strong R & D technology, R & D personnel and R & D investment has become a powerful power for enterprise development.

Establishing independent brand and improving bargaining power

Although price is not a long-term solution to the cost crisis, it will help digestion pressure in the short run. Only if you have a brand can you have the right to speak in the market. By promoting brand building and strengthening the influence of independent brands, shoe enterprises can improve their bargaining power, thus effectively digesting the cost rising factors. Now, more and more enterprises have realized the importance of their own brands, and have different forms of brand cultivation and promotion. {page_break}

Anta, PEAK and 361 degrees have grown and built up in the long term brand building, occupying a market place. Strong brand support is a powerful weapon for them to compete in the market and create value. "Prosperity will eventually be lost by relying on resources and geographical advantages." today's world is full of competition. With the rapid development of science and technology, shoe companies only have to strive to move forward, accelerate innovation and create strong independent brands, which is the way to go further.

The rise of raw materials and other costs has hampered the development of many shoe companies. However, this is a difficult problem that shoe enterprises must face in today's society. Clearing the way of development and choosing the right way of development, enterprises will win new development in this round of shuffling.