Strive for specialization, focusing on being \"small but excellent\"”

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Pursuing specialization and focusing on \"small but high-quality\" – An overview of the development models in the advanced **security industry. Summary: There are mainly two development models for enterprises in the advanced **security industry: specialization and diversification. Enterprises that pursue specialized development aim for \"small but sophisticated\" safety products, that is, they concentrate all of the company’s resources and capabilities on their core areas of expertise in order to achieve economies of scale and efficiency. There are numerous and large-scale security industry enterprises abroad. Studying the specialized development models of these foreign enterprises can provide some valuable experiences for the development of related industries in China. ■Liu Wenting: At present, countries **attach great importance to the development of the security industry. According to statistics, 42% of the global security industry companies are located in the United States, while 51% are located in Europe. Many well-known companies are large in scale, highly market-oriented, and highly competitive, driving the development of the global security industry. There are mainly two development models for enterprises in the advanced **security industry: specialized development and diversified development. Enterprises that pursue specialized development aim for \"small but sophisticated\" safety products, that is, they concentrate all of the company’s resources and capabilities on their core areas of expertise in order to achieve economies of scale and efficiency. Companies that pursue diversified development aim for \"bigger and more comprehensive\" growth, seeking economic benefits by expanding their overall scale. From the perspective of specialized development, this paper examines foreign security industry companies in order to provide some insights for the development of related industries in China. Define a clear position; drive the company forward through innovation; assess the situation and clarify the company’s development strategy. Whether to pursue specialization or diversification is the first question that a company must consider in formulating its business strategy. Therefore, enterprises in the security industry should assess the situation carefully, leverage their own strengths, and define their development direction based on their internal resources. Generally speaking, in the early stages of their development, enterprises are usually small and medium-sized companies with relatively weak capabilities in terms of capital, technology, and human resources; it is difficult for them to pursue a diversified strategy. Instead, they can choose a specialized approach, that is, focusing on the production of one specific type or category of products, and following a development path characterized by specialization, precision, uniqueness, and innovation. Under this model of development, enterprises can leverage their strengths and management experience to choose low-end products, gradually master core technologies, keep up with changes in market demand and the product life cycle, and actively engage in the research, development, and production of mid-to-high-end products in order to create their own market. This advantage of specialized development is particularly evident in the field of personal protective equipment such as eye protection, hearing protection, and respiratory protection gear; several large international companies hold the majority of the global market share. For example, the three companies of Sporian, 3M, and Uvius together account for over 50% of the market share. Master key technologies to ensure specialization in core business areas. Mastering key technologies is the core of implementing a specialization strategy. For example, Swedish company Autoliv is the world’s largest producer of automotive occupant protection systems. Collision safety technology, as the company’s core technology, has a wide range of applications and exhibits significant clustering effects; it has always been a focal point of competition among various component suppliers. Therefore, a company’s R&D capabilities and technical expertise are crucial for its own development. On the one hand, Ottoliv actively applies for patent collaborations. According to incomplete statistics, there are currently over 36 companies that have filed patent applications in collaboration with Ottoliv, including those from various stages of the industry chain as well as competitors. Through numerous patent cooperation applications, Autoliv has established close ties with upstream and downstream enterprises, enabling it to effectively control the key technologies within the technology chain and further solidify its position as a leader in the industry. On the other hand, Ottoliv places great emphasis on the upgrading of traditional products. As early as 2012, the company added two shoulder anchor points to the traditional 3-point car seat belts, developing a new seat belt system that can protect passengers in side impacts or rollover accidents, and is particularly effective in safeguarding elderly passengers. By mastering key technologies, it is possible to ensure the professionalism of a company’s core business, build a certain level of reputation and recognition in the market in a short period of time, enable the company to serve its target customers more effectively, and enhance its core competitiveness. Increase investment in research and development, using innovation to drive the company forward. By examining the development trajectories of foreign security industry enterprises, it is evident that they have a long-standing tradition of emphasizing scientific research. Their commitment to innovation and R&D serves as the foundation for their continuous growth and expansion. Especially with the rapid development of global technology today, energy-saving and environmental protection technologies, clean energy, biotechnology, advanced materials, and so on are increasingly integrated into products and equipment used for safe production and emergency rescue. The application of emerging information technologies such as cloud computing and the Internet of Things has significantly improved the automation and intelligence levels of these products and equipment. Many security industry companies that have chosen a path of specialized development place great emphasis on investment in technology, such as Honeywell in the United States. Honeywell believes that technological innovation is a prerequisite for achieving sustainable development, and it invests over $50 million each year in research and development for security technologies. In addition, the German chemical company BASF has maintained an annual investment in research and development of over 9% in recent years, and did not reduce such investments even during the financial crisis. Currently, the company has over 20,000 employees dedicated to research and development, with R&D investments rising to 1.5 billion euros. At the same time, BASF pays great attention to filing patents and focuses on using intellectual property rights to protect its interests. In addition, intellectual property is also used to create barriers and widen the gap with competitors. Integrate upstream and downstream industries to consolidate advantageous resources. Generally speaking, in specialized enterprises, diminishing marginal returns occur once a certain scale of production is reached. To this end, security industry companies can adopt an alliance strategy to integrate upstream and downstream industries and consolidate their advantageous resources. By cooperating with suppliers that are strong in various fields and forming vertical or horizontal corporate alliances, as well as by strengthening mergers and collaborations with upstream and downstream industries, it is possible to make full use of cost advantages, resource advantages, and transportation advantages in order to maximize the synergistic effects among enterprises and enhance the market competitiveness of core industries. At the same time, this approach helps to improve the resilience and flexibility of corporate supply chains, enabling them to cope with the current complex and volatile market competition environment. For example, as a leader in the global security industry, Honeywell sought to further solidify its position as a leader; during its early stages of development, it was not content with growing only within its own country, but instead pursued aggressive mergers and acquisitions. In 2010, it acquired Sperry Corporation, a globally renowned manufacturer of personal protective equipment, for $1.4 billion. With this strong merger of the two companies, the sales volume reached 900 million dollars. Through a series of cross-border mergers and acquisitions, Honeywell successfully completed its transformation, expanding its product portfolio to thousands of items and enhancing its competitiveness. Honeywell has demonstrated through examples that it is capable of buying from others, and it holds value when acquired by them. Improve product reliability to achieve sustainable corporate development. Products and equipment in the safety industry are closely related to the life safety of workers. If there are issues with such safety products or equipment during production, it can lead to very serious consequences, including large-scale casualties. Therefore, improving reliability is of great importance for these safety products and equipment, and enhancing product reliability has become a common task for companies in the safety industry. Companies like MSA in the United States advocate for \"ensuring that people all over the world can work safely, and that their families and those around them can live a healthy life!\" ” Therefore, the mission of the company is to consistently strive for improved product reliability, and to enhance safety through continuous efforts in product quality, service, cost, value, and technology. At the same time, improved product reliability also enhances the product’s reputation in various industries; an increased reputation leads to higher sales volumes, and these higher sales volumes further boost the reputation of both the company and its products, creating a positive cycle that facilitates the long-term development of the company. It has significant advantages that help enhance market competitiveness; since most of them are small and medium-sized enterprises, it helps them overcome issues related to insufficient resources. At present, although the global security industry offers broad prospects, the low entry barriers result in most companies engaging in unfettered competition. How to establish a product brand through accurate product positioning, and thereby carry out targeted marketing, is an issue that many companies in the security industry need to consider carefully. By studying companies that pursue a path of specialized development, it can be observed that they share one common feature: they generally have limited strength, are mostly small and medium-sized enterprises, and suffer from many shortcomings in terms of funds, resources, and talent. Adopting a specialized development path by concentrating resources on the research, development, and production of one or a few types of products allows companies to overcome the disadvantages resulting from limited resources and achieve sustainable growth. For example, the U.S.-based company Sterta specializes in the production of emergency life pods and underground mining roof supports ； Germany’s Dräger company focuses on personal safety and the protection of production facilities. Its main products include medical devices, aerospace equipment, gas monitoring systems, and respiratory protection equipment ； Uvex, a company from Germany, focuses on producing safety goggles ； Pantsuf in Canada is a leading company in the global fall protection industry. Improve the quality and reliability of products to achieve their advanced development. Companies that pursue a specialized path produce products with competitive advantages; by focusing on unique key technologies and continuously striving for specialization, they ensure that their products remain at the forefront of the industry in terms of technology and performance. This approach to growth is more effective in enhancing a company’s core competitiveness. At the same time, enterprises that pursue a specialized approach need to generate more profits, and to do this they expand their production scale, thereby achieving economies of scale that improve production efficiency, reduce production costs, and secure price and competitive advantages. Although enterprises that pursue specialized development have limited resources, they choose to focus their efforts on the research, development, and production of one or a few types of products. Through continuous technological advancement, they can gradually develop their products to higher quality levels, and in these niche markets they can even surpass larger companies to reach leadership status in the industry. For example, Ansell from Australia boasts the world’s largest market share in industrial gloves. It offers over 1,000 different types of personal protective equipment, thus securing a solid position in the highly competitive PPE industry. Focusing on technology injects vitality into corporate innovation; specialization enables companies to become leaders in their respective niche markets. At present, the security industry is an emerging sector that has arisen at a specific stage of China’s social and economic development. It will continue to evolve dynamically as technology advances and demands change. Traditional security products are increasingly integrating with industries such as IT and telecommunications, with different industries penetrating each other, and the participants in various links of the industrial chain are also becoming more powerful. China’s security industry features a variety of enterprise types, each with distinct core competencies; it is necessary to leverage one’s own strengths in order to clarify the strategic positioning. For small and medium-sized enterprises that are in the early stages of development and lack resources such as capital, technology, and human talent, it is possible to focus on their core business by leveraging their strengths, understand the competitive landscape, adapt to market demands, identify suitable entry points for business expansion, and ensure stable profits for the company. In this regard, our country also has many successful cases. Strive to improve internal capabilities and enhance competitiveness in core technologies. At present, the development of China’s security industry is still in its early stages, with strong demand and broad market prospects. Many enterprises, in a bid to compete for market share, tend to engage in price wars and cutthroat competition, ultimately leading to their failure. Only by continuously honing its internal capabilities, enhancing the competitiveness of its core technologies, and improving product quality can enterprises survive. Build a solid technical R&D team. If companies wish to break free from the vicious cycle of competition based on low prices and low profits, they must place great emphasis on the research and development of key technologies, using competitive technological achievements to improve product quality. Strengthen the organic integration of technology’s forward-looking nature and market orientation. New products and technologies must keep up with the trends in industrial development. Only by increasing investment in research and development based on market demands can we sustain innovation in China’s security industry enterprises, identify market needs promptly, and enhance their influence. Actively participate in standard-setting at all levels. Summarize and feed back the experience gained in actual production processes into standard formulation, adhere to the principle of combining standard development with practical application, and achieve comprehensive optimization of the structure and improvement in performance of safety products. Leverage opportunities for development and make full use of **support policies. The development of the security industry is in its infancy in our country, and the growth of enterprises relies on ** support. Currently, as the concept of safe development gains increasing acceptance, efforts to hold those responsible accountable are intensifying. To prevent safety accidents, both ** and enterprises will gradually increase their investments in safety. Therefore, China’s security industry enterprises must be adept at leveraging **’s strength to actively seek policy support. Especially for security products, due to their quasi-public nature and low profits, companies lack motivation to invest in them; therefore, stronger **intervention is needed**, and even **mandatory policies** must be introduced so that these companies can develop in this field. (Author’s institution: Security Industry Research Institute, CCID Consulting, Ministry of Industry and Information Technology)