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Why is it said that enterprises are substitutes for the price mechanism?

Event: In recent years, the prices of agricultural products such as sugar, edible oil, and flour have fluctuated greatly. For food companies that use basic agricultural products as raw materials, production costs are increasing and unpredictable. In response to this situation, Youkang Food Group Co., Ltd. established a price committee in early 2006 to conduct price analysis of raw materials. This price committee is composed of personnel from various departments such as purchasing, sales, quality control, and production. They discuss product cost accounting, brand positioning, etc. from their respective perspectives. If there are major changes in the futures market, the group members will also hold an emergency meeting to discuss the matter. Respond to market changes.

Youkang's approach to establishing a price prediction mechanism is not new. Many advanced companies in the world have already done similar things. For example: American companies have a "trigger pull mechanism", EU companies have an "import monitoring rapid response mechanism", and some large Indian companies have a "key commodity import monitoring mechanism." These mechanisms are actually corporate early warning mechanisms, which enable companies to predict market changes as early as possible in the increasingly fierce competition in the international market, adjust and standardize business strategies and corporate behaviors in a timely manner, avoid being passively beaten, and even turn crises into business opportunities. In the process of accelerating the transformation of our country's enterprises from manufacturers to service providers, Youkang's approach is very gratifying. It marks that Zhejiang enterprises are gradually maturing and moving towards modern enterprises with standardized management.

Specifically, the enterprise price forecasting mechanism has at least three major benefits:

First, it helps enterprises grasp market price dynamics, avoid business risks, and explore business opportunities. By establishing a price prediction mechanism, Youkang promptly grasped the rising prices of production raw materials, relied on price reduction management and production costs, digested the adverse effects of rising raw material prices, and gained the initiative in production and operation.

Second, it helps enterprises predict market trends, make scientific decisions, adjust business strategies in a timely manner, and improve market adaptability. By establishing a price prediction mechanism, Youkang accurately predicts the price change trend of the product market on the basis of grasping the rise in raw material prices, thus providing a scientific decision-making basis for investigating business strategies. Youkang has weakened the adverse impact of raw material price fluctuations by implementing a business strategy that focuses on both reducing costs and influencing consumer price expectations.

Third, it is conducive to advancing the service-oriented process of enterprises and accelerating the transformation and upgrading of enterprises. The transformation of manufacturing enterprises into service-oriented enterprises is a major trend in the growth of modern enterprises. It requires enterprises to pay attention to and strengthen value-added services such as forecasting, research and development, design, and marketing to improve the enterprise's energy level and efficiency. Youkang's establishment of a price prediction mechanism is in line with this trend, and in its practice it is conducive to accumulating experience in corporate servitization.