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Business model addition and subtraction


									Business model addition and subtraction
Post-industrial era, companies are often caught in the homogenization of competition
and price wars. Blue Ocean at this time the industry can be luck, even if accidentally
discovered, is fleeting, quickly catch up with later ones become the standard of the
Red Sea. "A move fresh" shelf-life may be less than hundred
days. However, if we look closely, still found in a number of companies in various
industries, successfully beat the average profit margin. Their core competencies come
from? Unique business model innovation!
Enterprise business model as the genetic code, determine the fate and outcome of the
enterprise. The business model is the key to a long-term vitality: one is the demand
side, can increase the size of customer demand and certainty, the other is the supply
side, can reduce costs and shorten the supply chain. Myriad return to cases, that is, a
Addition: the negative effect more customers
Want their customers to do business lot. Here "many" includes
two meanings, one is to purchase goods or services consumers are generally more
than one is a consumer to buy more time, or many times to buy.
The main factors affecting the amount consumers are the characteristics of the product
itself. Such as milk, target audience, need to drink every day at least a glass of milk,
but milk production facilities, often two or three years to replace a hardware. In other
words, milk consumption than production equipment short cycle, high consumption
frequency. Of course, as compensation, milk production equipment, the profit was
higher than single-product of milk. So, is there any way to get milk production
equipment, sold as milk? Seemingly idiot, Tetra Pak has done.
500 Swedish Tetra Pak, one of the main production and sales of packaging materials,
beverage processing equipment and filling equipment, since 1985, entered the
Chinese market, China has control of the aseptic market share 95%. And happy to
success is "buy paper to send machine", will be filling machines
and packaging materials bundled.
Expensive production line, in the hundreds of millions of milk manufacturers to save
money investment in equipment, can be used for market development or other
projects, of course, is warmly welcomed. However, Tetra Pak filling machine installed
after the exclusive use only, and happy packing material, if switching to another
family of materials, there is no corresponding ID code, device will not work. This
identification code technology, both to avoid the possible moral hazard, and also
fulfill the digital production process, and be documented. Once the milk product
problems, back, and troubleshooting very easy. This focus on food safety of milk
industry, is clearly a vital bonus items.
Tetra Pak filling machine is certainly not send for supermarkets. Each box of milk
sold on the market, will increase an income Tetra. Erie's annual data show
that 40% of the cost of sales from packaging areas. This shows that Tetra huge profits,
its earnings growth rate as high as 40%.
Tetra Pak is not a special case of bundling ideas. Such as Gillette, the razor blade
bundled with the first razor with inexpensive lock customers and building barriers to
competition, then the size of the blade business with more stable earnings. Another
example is Kodak, who in 2000 launched the "99 thousand yuan
boss" program, a "Kodak Rapid Color" Franchising
photographic processing shop just invested 99,000 yuan (including the purchase of a
photofinishing equipment, some supplies and shop fitting fee) Naturally, this is
dependent on profits tied up supplies.
This binding mode is the ingenious addition, a small amount of days the customer
demand for one-time gathering a large order, and form almost a natural monopoly.
The only problem is the lack of guaranteed certainty. Tetra Pak's success is
because of China's dairy industry has entered a rapid growth period. If
Tetra Pak has just entered the market, the Chinese dairy industry problems such as
collapse of the melamine appears, Tetra-front investment also failed to be
implemented. Similarly, investors Kodak kiosks operating improperly, will result in
the loss of Kodak. Even if the operation is no problem, after 2000, the traditional film
market quickly replaced by the digital wave, Kodak had to start all over again. This
also shows that business models can not once and for all the times.
Next, how many times a consumer to buy, or purchase a much much better? Some use
high-quality after-sales service, such as Haier; some use of strong brands, such as LV;
some use of feedback rewards, such as shopping malls VIP scorecard. Consumers
purchase a swipe card for each, the more the number more, the more a consumer, the
greater the points, get prizes (special discounts or gift in the form) the more and
become loyal customers, "tied" the probability of also greater.
Of course, the mere probability of it or not certainty.
Now can see with certainty the case is pre-paid stored value card mode. Such as
phone bill, a top-100 China Mobile, will soon be over, all but gradually over time in
the future consumption, but can only use the services of China Mobile. For example,
China Mobile launched online this custom TD, tying the user to subsidize the bill,
each line of the subsidies to 2,100 yuan. Biaomian a lot of losses, China Mobile, but
considering the construction of TD networks once completed, its services, the
marginal cost of zero for the basic premise, the user is bound stream of Xiao Fei Yi
Hou certainly can lead to more profits.
In theory, the "buy more" means that utility is negative.
Traditional theory holds that a commodity in the cycle is diminishing marginal utility
to consumers, the utility of zero is the so-called cut-off point more with less. Suppose
a person drinking 500 ml of milk a day, drink 500 ml of the time just right, exactly
zero effect. However, due to the presence of the packaging, utility is a zero or even to
negative. If the factory into 500 ml of milk packaging box, utility on a zero, you can
not buy a half case. If the factory into a 550 ml packing box, and that is a little
Is there a way, the same as Tetra Pak, to drink the milk needs of the consumer life,
gathering up, one-time sell him? Do not probability, to order indeed. The scale of
demand theory by the negative effect of the way contracts, the more consumers
demand more, uncertainty tied in knots.
Subtraction: the shorter the supply chain
Finished the demand side of the addition, subtraction should return to the supply side.
Way we are all part of the supply part of set, production, distribution, consumption,
and finally to the hands of consumers. So the shorter the supply chain, cost control,
the better, more flexible commodity prices.
Subtraction should be to have to do certain things, things only by the reduction,
quality of goods and services can not be consequent shrinking. The success of this
example is as at home. If the hotel before home only two forms: One is the high-end
luxury hotel, offers accommodation, entertainment, shopping and other full-service,
but expensive; One is the low economic hotels for lower prices, reduce the
expenditure environment unsafe, unsanitary. Such as the home to target customers on
the leisure travelers, the target to meet its core needs, to simplify, highlight the key: all
unnecessary equipment and services (such as KTV, bar, sauna, conference centers, etc.)
shall be discarded, only Accommodation basic but good enough service (convenient
location, clean and comfortable room environment, etc.).
The purpose of subtraction is to focus on core competencies, outsourcing of other
links. Nestle for example, high-end coffee market in the distillation system, the
original Nestle taking on everything, from raw materials to the machine and then to
sell the terminal, built a complete business chain integration, unfortunately operating
bleak. Later, Nestle changed the business model, focusing on sustainable competitive
advantages and profitability of the coffee capsule part, a coffee machine licensed to
manufacturers of small appliances, coffee machine with coffee capsules supplied by
the club, the result was very successful.
With the advances in productivity and information technology, supply-side will show
flat, modular trends, outsourcing will become increasingly common phenomenon. At
this point the ability to collect the most critical needs and the integration of supply.
Home Tyrone example, only the most critical information flow control, and will
manufacture some of sale terminals, logistics outsourcing, in just four years
Home Tyrone has developed a set of visual design and home service system
configuration, and more than 200 domestic and international decoration company
established cooperation alliance. Consumers enter their room in the system
parameters, select your favorite style and decoration materials, will be fully consistent
with the actual scene of three-dimensional images. At the same time, using the system
recommended products, prices cheaper than the home store. Consumer demand for
the collection, ranking Tyrone cooperation with developers, so that when consumers
purchase with the Unit plans to get the renovation program.
Home Tyrone like Wal-Mart, to grasp customer needs, the use of information
technology, the full integration of resources, reduction of intermediate links, lower
distribution cost, and quality service with low prices and gain a competitive edge.
Interestingly, the highest Tyrone not only for consumers to get a favorable price, but
also to fight for their own profit to the manufacturer rebate. Even more interesting is
that manufacturers have not distressed, but fame or fortune, because the excess
capacity was to determine the export demand. Harmony win, a successful business
model is an essential element.
Here is a special case worth mentioning, the cost benefits of the business model into
that     placement       in     film     and     television    drama.       Such     as
"Transformers" in General Motors, Ebay Network and Hasbro
toys, "Italian Job" in the BMW car, Feng Xiaogang's
New Year film of mobile phones, computers, "Liu Laogen" in
Longquan Villa ... ... resolve the filming and props and other practical problems, they
get advertising revenue can be described as the ultimate of subtraction.
When the financial crisis led to both internal and external demand declined, as long as
we adhere to increase demand, by Gong Ji's direction, continue to refine,
upgrade and innovation their business model is bound to get more space for the
survival and development.

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