Under the dual impact of the agricultural machinery industry's transformation and escalating demand, some agricultural machinery companies are facing a systemic and structural aging crisis across their products, channels, management, and mindset. This multi-dimensional, complex challenge is shaking the very foundations of these companies and becoming the biggest obstacle to high-quality development.

Faced with competitors' relentless offensive across strategic deployment, product innovation, channel expansion, and service upgrades, some companies are unable to launch targeted counterattacks or proactively attack, falling into a dilemma of avoiding conflicts, slow response, misplaced countermeasures, and a lack of systems. Even when forced to engage in a cycle of "countering each move with a countermove," their tactics are quickly countered by their competitors, ultimately leading to a passive response and a passive, half-hearted approach. To break this situation, these companies must confront the issues head-on and comprehensively identify shortcomings across every link in the value chain. Through strategic restructuring, we will clarify our direction, implement quality leadership, channel optimization, management reengineering, and innovative thinking, and conduct multi-dimensional self-reform. We will strive to break free from our passive predicament and achieve a qualitative leap in our market competitiveness.

01

Product Aging: Quality Upgrades Face Multi-Dimensional Pressures

Products are the core vehicle for companies to participate in market competition. The current product matrix in the agricultural machinery industry exhibits the following typical characteristics: Low-end products are slow to exit the market due to price factors, mid-range products are mired in price wars due to homogeneity, and high-end product development is in its infancy. This structural imbalance is essentially a serious disconnect between companies' innovation capabilities and the upgrading of market demand.

Industry research shows that low- and mid-range products still account for over 90% of agricultural machinery categories, such as large and medium-sized tractors and seed drills, and their market share is shrinking at an average annual rate of approximately 5%. In stark contrast, the localization rate of products such as power-shift tractors and precision variable fertilizer spreaders is less than 20%, and the market continues to grow. Leading and strong companies maintain a temporary lead by leveraging their resources and capabilities. Most mid- and low-end companies still focus on selling low- and mid-range products and lack a high-end product portfolio. Some companies' high-end product development remains at the "parameter benchmarking" stage, lacking precise insight into deeper user needs. Consequently, initial market launches of experimental products often fail to gain widespread user acceptance.

The key to overcoming product aging lies in establishing a closed-loop innovation cycle: "demand-driven, technical breakthroughs, and scenario-based validation." We should establish and improve user co-creation mechanisms, delve into the fields to understand the real pain points of agricultural machinery operators and farmers, and translate these needs into product features and performance selling points. We should increase R&D investment, focusing on breakthroughs in key technologies such as energy-saving and environmentally friendly powertrains and intelligent operation control. We should deepen industry-university-research-application collaboration to shorten technology transfer cycles. We should launch specialized, specialized models for niche markets, building a multi-dimensional competitive advantage for our products.

02

Channel Aging: Full-Chain Digital Reconstruction Is Urgent

Channels serve as the bridge connecting businesses and users, but for some agricultural machinery companies, this "bridge" is facing a serious aging crisis. The traditional distribution model is primarily based on a three-tier distribution system: manufacturer, dealer, and user. With the rise of e-commerce and the trend of younger users, traditional sales practices are becoming unsustainable. Previously, the "sit-down" phenomenon was prominent in the channel, with some dealers relying on policy rebates for survival and lacking the ability to proactively acquire customers. Storefronts served merely as product display venues, failing to transform into user service and experience centers. The fragmentation of online and offline channels hindered traffic flow and targeted conversions.

The underlying contradiction lies in the fact that some agricultural machinery companies still view channels solely as "selling products" and have failed to build a "full-chain digital ecosystem." They lack the ability to dynamically allocate distribution resources, making it difficult to optimize supply and demand based on regional cropping patterns and evolving user needs. They have failed to establish a three-dimensional matrix of "physical channels + virtual channels + social channels." Physical channels focus on experience and service, virtual channels on information access and transactions, and social channels on user stickiness and word-of-mouth. Digital tools are superficially applied, limited to order management, and have not been extended to the entire business process and lifecycle, including user profiling, demand forecasting, and after-sales tracking.

The core of channel innovation lies in user-centric digital transformation. Agricultural machinery companies need to build a unified digital channel management platform, integrating online and offline data resources to enable real-time collection and analysis of user behavior data, thereby accurately delivering product information and service solutions. At the same time, they should promote the transformation of dealers' roles, upgrading them from "product carriers" to "solution providers." Through training and empowerment, they should enhance their capabilities in value-added services such as technical consulting, after-sales maintenance, and financial insurance. They should explore the "manufacturer direct supply + regional warehousing sharing" model to reduce channel costs and improve response speed. They should comprehensively deepen customer relationship management, establish a dynamic maintenance mechanism, continuously improve customer satisfaction, and accelerate the formation of a partner-based and loyal customer base.

03

Aging Management: Restructuring and Reshaping the Management Model is Urgent

Management is the "operating system" for efficient operation and the driving force for development in the hands of enterprises. Recent competitive performance in the agricultural machinery market reveals that the management systems of some agricultural machinery companies exhibit clear characteristics of "big enterprise disease." A pyramid-like hierarchical structure leads to delayed and distorted information transmission. Compartmentalized and departmental silos hinder resource coordination, and rigid assessment systems stifle innovation. This "half-step" management model contradicts the agricultural machinery industry's rapidly evolving demand and high-frequency technological advancements.

It is noteworthy that some agricultural machinery companies often fall into the trap of "empiricism" in management, losing sensitivity to external competitive pressures. They tend to use past successful approaches to address current challenges and adopt a conservative approach to market integration. This ultimately leads to a passive situation where they "discover problems earlier than competitors but resolve them later." In contrast to the lack of relevant management systems, some companies frequently change their management systems or implement them arbitrarily based on individual needs, turning management systems into formalities and making standardized management impossible. A typical example is a dealer discovering that a certain model of agricultural machinery has shown excellent results after being modified by a user, and promptly conveying this information to the company. However, due to information disparity between R&D, production, and sales departments, the company's product launch lags behind competitors, missing the peak sales season and losing the competitive advantage. Some companies, due to performance evaluations focusing solely on sales targets, lack the motivation for technical and management personnel to invest in long-term R&D projects, ultimately losing out to emerging companies in the intelligent agricultural machinery development sector.

The key to overcoming outdated management is to build an "agile organization." First, optimize the organizational structure. Implement a "platform + small team" model, with headquarters focusing on strategic planning, resource integration, and risk management. Terminal units will establish cross-functional small teams to directly connect with user needs, shortening the decision-making process. Second, break down departmental barriers. Use digital tools to enable real-time information sharing, establish a cross-departmental project-based evaluation mechanism, and incorporate collaborative efficiency into the performance evaluations of relevant departments. Implement an "OKR + project dividend" incentive model and establish an innovation tolerance fund to encourage employees to propose "micro-improvements," "micro-innovations," and "micro-explorations," making "daring to think and try" a driving force within the organization. Through multifaceted management innovation, we can gradually revitalize the kinetic and potential energy of management mechanisms and leverage the spillover effects of resources and capabilities distributed across different units of the enterprise.

04

Outdated Thinking: The Loss of Innovation Genes Is on the Verge of "Exhaustion"

Thoughts determine actions, and actions determine the future. As industry transformation enters a period of profound change, some agricultural machinery companies have fallen into a "boiling frog in warm water" mentality. They are content with their traditional market share and ignore technological trends. They lack a proactive approach to innovation and blame declining sales on the external environment. They even exhibit a bureaucratic tendency to "solve the problem if the problem can't be solved." This outdated thinking is essentially a complete deterioration of corporate innovation culture.

Benefits from benchmarking show that the key to the continued leadership of international agricultural machinery giants and domestic innovative companies lies in their "innovation, entrepreneurship, and efficiency" mindset. These agricultural machinery companies generally invest more than 5% of their revenue in R&D, establish open innovation platforms, and encourage employee participation in internal entrepreneurial projects. In contrast, some agricultural machinery companies have yet to develop an innovation culture that tolerates failure and encourages trial and error, let alone build the capabilities for "reverse innovation" or "cross-industry innovation" that integrates technologies such as AI, the Internet of Things, and new energy.

Reshaping innovative thinking requires a dual approach of culture and mechanisms. On a cultural level, company leaders should lead by example, spearheading the values of "customer first, development paramount, and innovation-focused." They should foster an atmosphere of daring to think and act through internal mobilization meetings, rationalization proposals, and innovation competitions. On a systemic level, a "rewards for innovation" program should be established to quantify employee participation in technical research, process optimization, and market expansion, linking this to individual promotions and bonuses. Management innovation, technological innovation, and industrial innovation should be strengthened, actively fostering new business forms, new models, and new drivers. Focusing on cutting-edge technologies, we should deepen collaboration with leading domestic and international research institutes. Participating in high-profile industry exhibitions and development forums will allow team members to access cutting-edge technologies and business models, further exchanging experiences, broadening their knowledge horizons, stimulating cross-pollination of ideas, and accelerating the development of innovative awareness and capabilities.

Conclusion

The "four old dilemmas" are not a localized problem at a particular stage; rather, they represent structural difficulties and systemic aging within agricultural machinery companies, from products to mindset, a phenomenon that has accumulated over time. To resolve this dilemma, agricultural machinery companies must break free from the rudimentary mindset of "treating symptoms without addressing the root cause." Instead, they must promote comprehensive, in-depth reforms centered on "strategic leadership, organizational support, performance-driven growth, and cultural empowerment." Only in this way can agricultural machinery companies committed to future development gain a firm foothold in the tide of industrial transformation and product upgrades, achieve the transition from "survival" to "development," and contribute more valuable products and services to China's agricultural modernization.