Song Zhiping dissected the phenomenon of internal rotation: excessive obsession with market share often leads to price wars in many industries, creating a vicious cycle of fighting to the death.

date
27/07/2025
"Profit = sales volume x price - cost, this simple formula contains the entirety of the connotations of management. We Chinese entrepreneurs look at this formula and see two things we like: one is sales volume, and the other is cost. I asked a leading enterprise in the photovoltaic industry: what is your goal? He told me that the number one goal is sales volume. The same goes for chatting with leading companies in the automotive industry, when asked about their goal they also say sales volume is number one. Everyone is competing for sales volume, no one says profit is the most important, and no one says quality is the most important." On July 25, Song Zhiping, President of the China Listed Companies Association, made these comments while analyzing the phenomenon of intensification at a seminar reviewing the development in the first half of the year and outlook for the second half of the year in the photovoltaic industry. He stated that many entrepreneurs are pursuing increasing quantity and market share, and that if they have to sacrifice a bit of market share, they consider it a great humiliation, which is a tendency among us. Many people believe that costs can be infinitely reduced, but in reality, costs are rigid and exhibit diminishing marginal returns. When costs are reduced to a certain extent, it can only sacrifice quality.