Should the cabinet enterprise “horizontal expansion” or “longitudinal deep cultivation”?

In the wake of e-commerce's rise and the concept of "big home" solutions, the cabinet market has become increasingly complex, marked by a situation where "everyone has something, and everyone is trying to get what others have." Many home furnishing brands have entered the cabinet industry, while traditional cabinet companies are also expanding into other furniture sectors. This cross-sector movement reflects a broader trend in the industry. **Diversification as a Horizontal Expansion Strategy Needs Caution** Looking at the Chinese furniture industry, diversification has become a common strategy among many companies. Large cabinet firms have expanded horizontally, entering different product categories. For cabinet companies, diversification can be an effective way to capture more consumers and gain a competitive edge. However, it is not a magic solution. Many cabinet companies have suffered due to blind expansion without proper planning or expertise. So, what conditions allow cabinet companies to succeed in this "diversified" landscape? Industry insiders suggest that two key factors are essential: first, consumers are increasingly looking for integrated furniture services, which aligns with the trend of smart home design; second, cabinet companies with strong expertise in their core area can naturally expand into related custom fields. This shows that expanding into related areas based on existing strengths is a smart approach. Most successful diversified companies follow this principle, leveraging their technical foundations, resource integration, and brand recognition to enter new markets smoothly. **Specialization Still Holds Strong Potential** While many companies are chasing diversification, fewer are focusing on deep specialization. Does this mean that being specialized is no longer viable? The industry believes otherwise—specialization remains a big opportunity. As the saying goes, “To be good, to be great, to be the best.” Companies that focus on one area and master it can become industry leaders. Historically, globally recognized brands and long-standing businesses have grown through specialization. They have achieved excellence in specific niches and become trusted leaders. Consumers often perceive professional brands as more reliable and high-quality. In China, many well-known furniture companies that continue to specialize have become market leaders in their respective fields. According to industry experts, the choice between diversification and specialization is closely tied to a company’s culture and development stage. Some companies may choose to focus deeply on one category, while others may pursue a broader strategy. However, it's important to adapt according to market changes and internal capabilities. **Cabinet Companies Face a Choice Between Diversification and Specialization** Currently, the Chinese furniture industry seems to be leaning heavily toward diversification, overshadowing the value of professionalism. Will more companies move away from deep specialization and embrace a more diverse model? Industry experts believe that the ideal path lies in combining both approaches—prioritizing professionalism while exploring diversification. A diversified strategy, especially the "big furniture" approach, requires significant resources, talent, and capital. Not all cabinet companies are suited for such an expansion. While some powerful brands may emerge in the large furniture space, most companies would benefit more from returning to their core specialties. Experts emphasize that diversification should be built upon a solid foundation of specialization. Expanding into unrelated categories carries risks, as most Chinese furniture companies lack a clear advantage in any single niche. Therefore, a balanced approach is essential. Some industry insiders view specialization and diversification as choices made at different stages of a company's growth. Liu Yongkang, chairman of the China Furniture Brand Alliance, suggests that in the early stages, companies focus on survival and growth. Once they grow, they must shift toward specialization to build a core competitive advantage. In conclusion, whether a cabinet company chooses to diversify or specialize depends on its unique circumstances, market trends, and long-term goals. Both paths have their merits, but success ultimately comes from understanding the right timing and strategy.

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