With the increasing recovery of the global economy, demand in the traditional security market represented by Europe and the United States has begun to recover. Emerging markets such as the Middle East and Latin America have also shown strong demand due to factors such as public security prevention and control. Overseas markets will further recover. The degree of concentration in overseas markets is low, and the increase in demand will also prompt more domestic security companies to go abroad. Although they will face low-price competition from some domestic peers, brand, delivery, and service will replace price as the factors favored by overseas customers. Key factor. By cultivating a global vision, attracting global talents, building a global delivery system and products suitable for localization, some security companies with technology, financial strength, brand influence and large-scale production capabilities are rapidly going abroad and Further increase overseas market share. 

 

Domestic security companies continue to expand overseas markets

In 2014, security companies maintained their previous efforts in overseas expansion, and overseas markets continued to expand. Hikvision pointed out in its semi-annual report that with the rapid recovery of the security video surveillance market in developed countries in Europe and the United States and a significant increase in demand, emerging economies such as the Middle East and Latin America The overall demand for the security video surveillance market is also expanding rapidly. Its overseas market achieved sales revenue of 1.617 billion yuan, an increase of 107.38% over the same period last year.

Dahua Co., Ltd. pointed out in its semi-annual report that in 2014, the company timely seized the opportunity of the recovery of overseas markets, accelerated the pace of internationalization, and overseas sales continued to increase rapidly. Dahua has established relatively complete sales channels in all continents, and the Dahua brand has formed full competitiveness and influence in some overseas markets. In the first half of 2014, Dahua achieved operating income of 969 million yuan, a year-on-year increase of 66.62%. Domestic listed security companies continue to expand overseas markets, and are also reminding other security companies how to view the overseas security market and how to better go global.

As an emerging technology industry, the security industry has been in China for more than 30 years and has achieved rapid development. Especially during the "10th and 11th Five-Year Plan" periods, it has become a golden development period for the security industry. During this period, market demand and product sales have become the main forces driving industrial development. Enterprises with market channels and product sales networks have become the main body of industry expansion, forming a sales-oriented industry development structure. At the same time, they have also gained long-term development. During the "Twelfth Five-Year Plan" period, China's security industry entered a period of adjustment, and the industry as a whole encountered a development bottleneck. With the gradual adjustment of China's economic development structure and the slowdown of economic growth, capital investment, which was previously the leading force in the development of the security industry, has gradually taken a back seat. How does the industry as a whole find new development momentum? What is the future development direction of the industry? How to cooperate with the country Better integration of the overall economic development plan has become a puzzle that China’s security industry needs to solve.

Facing the ever-changing industry environment and new market demands, security companies should better focus on the future and promote the steady development of the industry and enterprises by formulating long-term development strategies. In general, the development strategy of security companies should use capital operation as the main means. By integrating the industrial chain, superior resources should be continuously invested in projects with higher profits and relatively lower costs, so as to build strong profitability of the enterprise and reduce costs. The overall operating costs of the enterprise are reduced to achieve the goal of increasing the value of large security enterprises. Under such a grand strategic background, expanding overseas markets will become an important part of security companies' development strategies.

Through the value chain of each link in the security industry, we can see that R&D, integration, and operation services have the highest profit margins in the entire industry, while the profit margins of domestic security companies in the above three aspects are relatively low. Taking R&D as an example, 50% of patented technologies are currently in the hands of international security companies. Although China's local security companies have continued to increase their investment in R&D funds and have made great progress in R&D strength, compared with security companies in developed countries abroad, , the gap is still large, which has also seriously affected the voice and profit-making ability of our country's security companies in the international market. As a result, my country's security companies have to pay high patent fees in many aspects such as processing, manufacturing, integration, and sales, which greatly increases costs and reduces corresponding profits. This means that if security companies want to achieve rapid development in the future, they need to make breakthroughs in these aspects, participate in the competition in the international market, and achieve more redivision of labor in the industrial chain through the acquisition of international industrial competition elements, and obtain more Large profits, establish a good brand, thereby driving the overall improvement and development of China's placement industry.

Main features of foreign security markets

The development process of the security industry in developed countries has gone through four very obvious stages: 1. The user type has changed from mainly commercial users to mainly residential users; 2. The source of income has changed from mainly equipment sales and engineering installation to charging Internet Service fees are the main focus; 3. Alarm methods have changed from wired alarms and local video monitoring to wired and wireless dual-channel alarms and remote video monitoring; 4. Enterprise scale has changed from small single network management centers and monitoring centers Mainly, it will be transformed into a large-scale network management center. After the above four stages of transformation, security companies in developed countries have significantly improved their commercial operation models and business models.

In terms of business operation models, security companies in developed countries basically fall into the following categories: First, they are multinational companies. The world-renowned security multinational companies are large in scale and are characterized by the integration of engineering installation, network monitoring and operation services, and have an oligopoly advantageous position; the second type is mass popular security companies. Mainly focusing on security services in cities, communities, and public places, the service scale is moderate, mainly targeting personnel and property security services, and has regional advantages; the third category is security operators. They have regional advantages and often use integrated network operations and bundled sales to occupy regional monopoly advantages; the fourth category is installation service providers. Maintain security systems by providing technical support; the fifth category is personal medical emergency rescue system operators. Provide health and medical services through the expansion of the functions of medical institutions or cooperation with medical institutions and insurance companies.

From the perspective of business models, developed countries currently mainly adopt the networked alarm service model. Networked alarms connect the entire country's security industry from horizontal to vertical. The profit path of several well-known large security companies has changed from simple product research and development and sales as the main source of income in the past to establishing network management centers, and then acquiring a large number of existing customers of small and medium-sized companies to connect to the network, and charging service fees to network users.

Problems existing in the internationalization process of my country's security enterprises

By comparing the characteristics of the security industry in developed countries, we will find that there are obvious gaps among domestic security companies. It is still in its infancy when it comes to exploring overseas markets. Individual companies have obvious behavioral characteristics, but the industry as a whole lacks motivation to improve.

Since my country's security industry has major problems such as unreasonable structure and low level, the domestic security industry has uneven distribution of resources and imperfect product lines and production capabilities. Many enterprises have many shortcomings. Primary products still account for a large proportion, and high-end products and high value-added products are lacking. Especially in the areas of security system integration and platform construction, there are many gaps. This has seriously restricted the pace of state-owned security enterprises to expand overseas markets. .

On the other hand, compared with developed countries, China's security companies are smaller in scale and have backward management methods. The total output value of the industry is not as high as that of several multinational companies in developed countries. This determines that China's security companies have weak wind resistance. Competitiveness and competitive inefficiency. In the face of overseas competition, Chinese enterprises have clearly shown a lack of independent innovation capabilities, especially the lack of research on high-tech and key technologies with large investments and long cycles. Technical dependence has caused the difficulty of Chinese security enterprises in exploring overseas markets. The bottleneck has led to the main entry point when choosing overseas markets to provide hardware accessories and equipment. Being in the middle of the industry chain, it is difficult to gain recognition from international peers through independent design and R&D capabilities.

Furthermore, it is difficult to integrate domestic industry standards with the international market. Compared with the same industry in developed countries, the domestic security industry has weaker management, incomplete industry regulations, and lack of standardized and mandatory laws and regulations, which results in the weak adaptability of our products and services in the international market, especially engineering construction standards. It is not fully matched with the evaluation standards and cannot fully meet the needs of overseas security system engineering construction. At the same time, due to insufficient industry self-discipline and disorderly competition in the market, counterfeit and shoddy products have seriously affected the brand and credibility of domestic products, resulting in low overall competitiveness of products and services.

Difficulties are faced by Chinese security companies, but they also breed opportunities. It is in the process of solving the above difficulties that Chinese security companies can absorb particularly effective industry resources, improve the company's living environment, and enhance the company's own value creativity.

Key points of the international development strategy of my country's security enterprises

Segment the international market and leverage your own strengths. For the international security industry, there are still characteristics of uneven development and diverse needs. This also provides opportunities for growth and development for my country's security companies. As an enterprise with internationalization as its strategic focus, it should deeply explore the emerging security markets in surrounding and developing countries and regions around the world. For example: developing countries represented by Brazil, India, the Middle East and Southeast Asia, as well as neighboring markets such as Russia with huge security needs. With the rapid economic development of these countries and the improvement of people's living standards, the demand for security has grown rapidly. Since these areas are in the development stage, the demand for mid- to low-end security products and solutions accounts for a large proportion, and the sales potential is huge. Therefore, they are also the best sales areas for the products and solutions of large domestic security companies. For developed countries such as Europe and the United States, the security industry is mature and the market emphasizes overall solutions and high-end products. Therefore, domestic enterprises need to take advantage of cost advantages and use OEM products as an entry point to gradually improve service, operation, and R&D levels. On the other hand, because the security market in developed countries is relatively mature, the system construction is very comprehensive, and the demand for product upgrades, operation and maintenance is also a source of huge profits. The high cost of labor and consumables and accessories is a significant feature of the security market in developed countries. If domestic security companies master comprehensive operation and service technologies, they will have a favorable price advantage through relatively low labor costs and product accessories costs. , in order to participate in the competition of operational services and win a foothold through a more reasonable price/performance ratio. 

While selling products, another focus is the need to improve the level of the company's overall solutions. Whether they are developing countries, emerging markets or developed countries, in addition to their demand for products, they also need appropriate overall solutions. Therefore, domestic security companies should focus on promoting the internationalization of solutions in the process of exploring international markets. Through on-site market research and feasibility studies until the final solution is formed, we can achieve a smooth connection between the solution and market demand, fully express the demands of local customers, and integrate the standards and regulations recognized by the international industry at the same time, and then rely on hardware products as a basis. Lay the foundation for the upgrading of the entire industry chain. At present, domestic large-scale security companies export a full range of hardware equipment, software and system solutions, and the project construction is implemented by local engineering contractors. However, product support in the later stages of the operation business is relatively weak. The fragmentation of industry division of labor has resulted in a lack of matching of technology and resources. It is not coordinated and therefore affects the actual effect of the overall solution.

Correct handling of cooperative relationships will effectively ensure the internationalization process of domestic security companies. A major difficulty in internationalization is integrating with local society. Due to unfamiliarity with the business risks, policies, cultural traditions, customs, etc. of different countries and regions, the moral risks faced by business operations are high and immeasurable. Therefore, before internationalization, security companies need to form partnerships with local dealers, contractors, labor unions and other institutions to gain the support of the majority and reduce the resistance to internationalization.

Integration of multiple parties to achieve sustainable development of the security industry

In order to successfully realize the internationalization strategy of the security industry, in the process of internationalization, one of the effective business models is to use capital operations as a means to achieve circular enterprise growth, continuously integrate the security business, and enhance corporate profits and core competitiveness, thereby Achieve sustainable development. Looking at successful security companies, most of them are achieved through mergers and acquisitions of high-quality companies in the industry. This requires companies to have strong financial strength and strong management capabilities, so as to ensure the realization of cyclic growth driven by the capital market. model. Chinese security companies use the power of capital to carry out high-quality mergers and acquisitions, and then integrate the businesses according to the position of the acquired companies in the industrial chain, and classify them into different core business modules and their sub-business modules (roughly divided into: hardware equipment, software with system solutions, marketing, integrated construction and operations services). After everything is ready, these core business modules will be spun off and listed independently to obtain more capital support, and then a new round of "mergers and acquisitions-integration-spinoffs" will be carried out over and over again, allowing the enterprise to gain value in the cycle of capital. .

In order to have a steady stream of financial support, Chinese security companies almost always choose to list their high-quality assets to solve funding problems. Introduce various investors through listing and open up a new direct financing channel. The benefits are obvious, but it also imposes strict requirements on our security companies. For example: establishing a set of standardized management systems and financial systems, standardized internal operating procedures, standardized corporate regulations, integrity systems, and good equity incentives. On the other hand, the various businesses that have been split need to maintain good collaboration and communication channels, effectively utilize the company's external resources, and at the same time reduce disputes over internal resources, so that many module businesses can develop in a coordinated manner and continuously cultivate the core competitiveness of each module. , Reduce the operational risks of security companies.

With good capital channels and business structures, security companies need to further integrate the industrial chain, reduce traditional profit distributors in the value chain through integration, and continuously increase the profits of large security companies. According to past successful cases, security companies need to integrate according to the business types of the acquired companies and classify different businesses; after completion, adjust and allocate resources to various departments according to the overall development strategy of the company, especially corporate culture and the integration of values. With the two means of capital operation and industrial chain integration, security companies will be in a dynamic development process, providing lasting power for expanding overseas markets and achieving the sustainable development goals of Chinese security companies in overseas markets.