However, from 2012 till now, the domestic cable industries are faced with enormous obstacles which hamper their steps. The first is serious lagging problems resulted from excess capacity and low operating rate; followed by low profit margins causing small businesses unable to support themselves and delisted from the market. Several causes accounted for the low profit margins of cable industry, such as the sharp rise in raw material prices, the increasingly fierce market competition, staged seasonal effects, etc., but I think they are not the essence; in fact, it is rootless technology that caused today's predicament.

 

Although in recent years there are many blames for the serious shortage of R & D capabilities, low technical input and lacked deep and systematic research. In fact, only if we carry out research on technology and development capability, can we find out the domestic cable manufacturers fundamental causes to find an effective avoidance. However, domestic cable industries seem to be caught in a vicious circle – often talk more than they do.

In fact, in terms of technology, there are very large gaps between China and international wire and cable industry. Prominent problem is that the local cable companies’ overall technology has not kept pace with world’s pace. Although the local technology has also made ​​some achievements, the high-end wire and cable R & D is still weak, and we cannot compete with international cable giant.

 

In fact, in terms of technology, there are very large gaps between China and international wire and cable industry. Prominent problem is that the local cable companies’ overall technology has not kept pace with world’s pace. Although the local technology has also made ​​some achievements, the high-end wire and cable R & D is still weak, and we cannot compete with international cable giant.

 

At present, China takes the first place in wire and cable sales, but industry concentration is low. The convergence in technology and variety and serious lack of core competence also lead to homogeneous competition trend.

 

Besides, technology system of domestic cable companies, are still “copy" or “translation” from foreign technology, not even 100% imitation, let alone innovation. The local cable companies can not keep up investment of new technology which is closely related with funding issues and innovation consciousness. Of course, the existing capital, technology and every major links in the commercialization of the company's products are maturing.

 

The hard reality is that cable prices continue to decline in fast speed, while cable manufacturers are constantly input costs and effort to restore the declining prices and margins. This brutal contest depends on the average speed. In order to speed up, Wire and cable manufacturers should have two necessary conditions: the rapid technological renewal capacity and organizational efficiency of commercialization of the product.

 

To have quick updates with technological capabilities, cable companies must create new competitive products, and enterprises should have strong R & D system, by which the enterprises associate with the outside(now usually refers to the global scope) resources--one that can be integrated into their organization 's technical resources. Because in the market, there must be a strong research and development system for new product coming out quickly.

 

As for the second point “organizational efficiency”, it means enterprises should apply R & D results quickly to market quickly as soon as possible and get the payment

From the situation of wire and cable industry, China’s wire and cable companies obviously do not have their own R & D system, the so-called innovative products are the products of low-level imitation, and technology owners are not willing to sell their "capital" to us, so the so-called local Chinese wire and cable industry are assembly and processing plants to some extent.

The second point is that China’s wire and cable companies still do not establish their own business organization to respond to the rapid technological changes, giant high inventory of deficient enterprises organization has proven poor operational capabilities.

Rapid technological updates should not be simply seen as a technical issue, it determines the morphology evolution to a degree, because the rapid updates of technology can accelerate the organization’s efficiency, thereby enabling organizations to better adapt to this competition.

Because of the lack of technology, the development of operational enterprise organization of China's wire and cable companies was largely suppressed, and this organizational form is extremely easy to create inventory and the inventory in turn inhibited technological innovation. From the current situation that wire and cable industry losses, China's wire and cable enterprises are in such a dilemma. The financial statistics is a black digital result, and to visualize this on the market, this is a huge burden on the back, and this awful situation of this industry is really thought-provoking.

 

Obviously, the good period of development of China's wire and cable seems to have passed. At present, domestic wire and cable manufacturers will face great international challenges. In they win in the battle, the domestic wire and cable manufacturers are able to survive and develop, but once failed, they will take the risk of being out of the market, especially for large enterprises. As the international cable giants continue to penetrate China's cable market , the competition heats up , if not by increasing R & D costs to compete for the high-end market, they will bear enormous pressure due to the lack of money.

 

We should have clear mind, it is wrong that we rely on “low price model “because the advantage of the “low prices of model” is not from the price of these factors but from the technology behind the management and organizational variables. The predominance of “low price model” production factors is decided by the one who has mastered technology and management variables. So that local cable companies should develop technology and management, rather than focus on the short-term profit.

 

Obviously, the fundamental factor for wire and cable development does not due to the vicious competition on the market, nor the continuous rising cost of raw material, but the technology and management factor. Conversely, if cable manufacturers cannot develop technology and management, they will lose advantages, let alone break into the high-end market or improve profitability.