Domestic Electronic Enterprises Well-prepared for Financial Woes

Even under the disadvantageous economic circumstances, China's electronics information enterprises can still change the pressures on operation into impetus and consolidate their major markets and core businesses, so as to resist the economic winter and welcome a spring of development if they can judge the situation calmly, make full use of internal potential and seize external opportunities.

Firstly, aiming at the market changes, businesses should timely adjust their marketing strategies, cultivate the current market deeply, and start exploring potential market. Influence by the international crisis, demands from occidental countries decreased and import shrank, so those export-oriented electronics information businesses should operate the product market  and marketing channels earnestly, and actively explore newly emerging markets in the Middle East, Central Asia, Russia and Latin America. Businesses should notice that inflation-proof clause of foreign exchange should be attached to the export contracts so as to prevent foreign exchange risk.

Meanwhile, China's electronics information businesses should emphasize on the exploration of domestic market, especially markets in Middle and West China, small and medium cities, and rural market. Research of the National Bureau of Statistics of China indicates that the income elasticity of Chinese farmers of demand for industrial products is 1.314, namely, when the average income of farmers' increases 1 percent, their consumer expenditure on industrial and agricultural products will increase by 1.314 percent. It means that if each farmer adds RMB10 yuan to their final consumption per year, a current purchasing power of near RMB9 billion yuan will take shape. RMB100 billion yuan of final consumption in rural areas can bring RMB235.6 billion yuan of consumer demand for Chinese economy, thus can expand RMB125.3 billion yuan of immediate input from industrial departments. All these show that the rural areas have great market potential for us to cultivate. The recent moves like "Home appliances to the countryside" testified the infinite possibility of rural market.

Secondly, facing the deficient consumption and demand, electronics information companies should strengthen product innovation, application innovation, and business model innovation, analyze consumer demands earnestly, design proper products, prevent extensive operation and quantity explosion determinedly, and follow the road of intensive development.

Creative products and services are always welcome on the market. What's boring for consumers are those outdated products and stiff operation pattern. For instance, while the automotives sell badly, such automotive electronics products as GPS, vehicle-mounted MP3, and vehicle-mounted Bluetooth phone sell well.

To explore rural and town market, businesses should develop and produce products suitable for rural environments with simple operation, high cost performance, reliable performance and in accordance with rural consumption characteristics. For example, develop TV sets with high sensibility to suit the weak television signal in mountainous areas, refrigerators suitable for seeds storage, washing machine capable of washing vegetables and fruits, and develop mouse-proof board or mouse-proof wire case, etc.

Thirdly, facing the insufficient resources and increasing higher cost, businesses should conduct industrial chain collaboration and look for operation resources from internal potential exploration and external cooperation. For one thing, they must improve themselves and dig deeper into their own potential. The production and sales management should communicate flexibly and try to realize "determination of production volume in accordance with sales", "zero storage" and "flexible production", and avoid the overstock of raw materials, parts and products; for another, they should strengthen cooperation, alliance and competition of industrial chain.

In addition, the state has announced to add RMB4 trillion yuan of investment, and 24 provinces or municipalities published their investment plans of economy development boosting. These investment plans cover widely, involve long chains and will have a quite obvious drive to economy. Most electronics information businesses will benefit from them. Presently, departments concerned are making "Electronics Information Industry Revival Plan" to try our best to drive the stable and relatively quick development of electronics information industry. Businesses should make full use of national policies and actively participate in cooperation to gain new development.

(The author is a professor of School of Economics, Renmin University of China)