Basic Business Model knowledge

                                                                         

Today's entrepreneurs want to get funds from investors, while investors want to start a business or the projects they invest in have
A good business model. In fact, many entrepreneurs do not know what the real business model is? Just like many entrepreneurs, the enterprise business model will be summed up after success. In fact, in the start-up stage
Phase. The business model we call can be divided into two categories: one is a narrow business model, and the other is a broad business model.

   
The narrow business model, that is, the relationship between the value proposition and the cost structure of an enterprise, refers to how the enterprise makes money. The broad business model can be summarized as the way enterprises do business, how to Make Money continuously
Problem. Some international experts believe that it includes value proposition, target customer group, distribution channel, customer relationship, value allocation, core capability, Partner Network, cost structure, and income model. These indicators are relatively
Complicated. In many cases, entrepreneurs will not consider so many issues. Most of them are revenue models.

 

   
Features of business models

 

   
Business models must have the following two features.

   (1) The business model is an integral and systematic concept, not just a single component. Such as the revenue model (advertising revenue, registration fee, service fee), the value provided to the customer (price competition, quality competition ), organizational structure (self-built business units, integrated network capabilities) and so on, these are an important part of the business model, but not all.

   (2) The components of the business model must have an internal link, which organically associates the components so that they can support each other and work together to form a virtuous circle.

   
Based on the above understanding, we can divide the business model into two categories.

   
(1) operational business model. Focuses on solving the interaction between enterprises and the environment, including the interaction with the industrial value chain. The operational business model creates the core strengths, capabilities, relationships, and knowledge of an enterprise. It mainly includes the following aspects.
   
Industry Value Chain positioning: What kind of industry chain enterprises are in, what kind of position they are in, and how they should be positioned based on their own resource conditions and development strategies.
   
Profit Model Design (income source and Income Distribution): Where do enterprises obtain income, which forms of income are obtained, and which forms and proportions of these income are allocated in the industrial chain, does an enterprise have the right to speak about such distribution.

   
(2) strategic business model. Strategic Business Models expand and use operational business models. It should be said that the strategic business model involves all aspects of enterprise production and operation.
   
Business Model: The value and benefits provided by enterprises to customers, including brands and products.
   
Channel Mode: how enterprises can deliver business and value to customers, including channel multiplication and channel centralization/compression.

   
Organizational Model: how enterprises establish advanced management and control models, such as establishing customer-oriented organizational structures and building digital organizations through enterprise information systems.

 

   
How to design business models

 

   
Successful business models should comply with the following eight core principles:

    1. Principle of continuous profit

   
Whether an enterprise can continue to make profits is the only external standard for us to determine whether its business model is successful. Therefore, when designing business models, winning benefits and making profits naturally become an important principle. Of course, this refers to the continuous profit in the sunshine. Continuous profit refers to "profit", development stamina, sustainability, rather than instant profit.
Continuous profit is the most effective consideration for an enterprise's sustainable development ability. The more hidden the profit model is, the more unexpected the effect is.

   2. Principle of maximizing customer value

   
Whether a business model can continue to make profits depends on whether it can maximize the value of customers. A business model that cannot satisfy customers' values, even if the profit is temporary or accidental
Continued. On the contrary, a business model that maximizes the value of customers will eventually make profits even if it is not profitable for the moment. Therefore, we begin to realize and satisfy the customer's value as an enterprise.
The final subjective goal.

   3. Principles of Resource Integration

   
Integration is to optimize the resource configuration, that is, to achieve the optimal overall performance, to ensure that there are advances, advances, and gains and losses.
   
(1) Optimize the internal value chain of an enterprise and obtain the professional concentration advantage
Enterprises concentrate on one or several links in the industrial chain, constantly optimize internal value chains, and gain professional advantages and core competitiveness, at the same time, it is highly collaborative and closely cooperating with professional enterprises in other links in the industrial chain in multiple ways.
   
(2) deepen collaboration with upstream and downstream enterprises in the industrial value chain, and consolidate
Through investment, collaboration, cooperation and other strategic means, deepen the relationship with upstream and downstream enterprises in the industrial value chain, and conduct close collaboration in development, production, marketing, and other aspects, integrate its products and services into the value chain operation of the customer's enterprises, and improve the overall competitiveness of the industrial chain.
   
(3) strengthen the weak links in the industrial value chain and release the overall efficiency
Specific practices include controlling low-efficiency enterprises by strong and efficient enterprises, establishing strategic partnerships, or systematically integrating the industry chain by leading enterprises in the industry chain. For example, Mengniu's acquisition of the upstream Milk Station and the acquisition of the upstream foreign distributors by the listed company Hunan Torch.
   
(4) grasp the key links and reorganize the industrial value chain
Enterprises must identify and develop the core value links of their industrial value chains, namely, high-profit zones, and concentrate their resources on these links to cultivate their core capabilities and build a centralized competitive advantage, then, with the help of this key competition
Competition for advantages, gain the initiative to coordinate other links and leverage the benefits of resource integration, so that enterprises become the leader of the industrial chain, and gain the profit or value transfer of other links, build a competitive advantage based on industrial chain collaboration.
   
(5) Build a management-type industrial value chain to continuously improve system collaboration Efficiency
A leading enterprise, as an industry leader, cannot only meet the competitive advantages and leading position of the industry that has been achieved. It also needs to dynamically use the above several industrial chain competition models, to cope with the value in the industrial value chain
The constant transfer and change of the mind keep you in the key link of high value and maintain a competitive advantage. At the same time, we must pay close attention to the development and evolution of our industry and take the initiative to take responsibility for managing the entire industrial chain.
The industrial chain can have a reasonable structure and high collaboration efficiency, and lead the entire industry to cope with the impact or development requirements of other related industries, so as to maintain the competitiveness of the entire industry and seek the maximization of the interests of the industrial chain.

   4. Innovation principles

   
Michael Dunne, former CEO of Time Warner, said: "In the process of operating an enterprise, business models are more important than technology because the former is a prerequisite for an enterprise to establish a foothold ."
   
A successful business model is not necessarily a technological breakthrough, but a transformation of a link, restructuring or innovation of the original model, or even a disruption to the entire game rule. Business Model Innovation forms
Throughout the entire process of enterprise operation, it runs through all aspects of enterprise resource development, R & D model, manufacturing method, marketing system, and market circulation. That is to say, innovation in every aspect of enterprise operation can be changed
A successful business model.

   5. Principles of financing effectiveness

   
The establishment of the financing model has a special significance for enterprises, especially for large and medium-sized enterprises in China. We know that the survival of an enterprise requires capital, the development of an enterprise requires capital, and the rapid growth of an enterprise requires capital.
Gold. Capital has become an obstacle and a hard-to-break bottleneck in the development of all enterprises. Who can solve the funding problem will win the first opportunity for enterprise development and take the initiative in the market. From some successful companies
During the course of industry development, no matter what the reason for its external success is, it cannot avoid or conceal the important role of funds on its success, many failed enterprises fail to establish an effective financing model.
. For example, the "Giant" group collapsed only because of a shortage of nearly 10 million funds. guotong electric appliance, Once comparable to Gome, had a sales volume of over more than 3 billion yuan, it is sold only because of a shortage of millions of yuan.
Disappear. Therefore, a very important part of business model design is to consider the financing model. It can even be said that the commercial model that can be integrated with capital and use the local business model is half the success.
   
According to the publicly disclosed data analysis, Mengniu lacked necessary resource elements at the beginning of its creation. They proposed a "virtual operation" model through "creating a market first and then building a factory, joint Venture, alliance, hosting, outsourcing and leasing
And other forms to integrate the required resources. In the past, companies sought to own their own resources and implemented control over most of the resources in the business. However, the company now finds that some resources controlled by them are not as good as those obtained from the outside.
Resource operation results are good.

   6. Principles of high Organizational Management Efficiency

   
High efficiency is the dream of every enterprise manager and the highest goal pursued by the enterprise management model. From the perspective of economics, efficiency is the weight that determines whether a country is rich or poor. It is also the efficiency that determines whether an enterprise is profitable.
   
According to the modern management theory, if an enterprise wants to operate efficiently, it must first solve the vision, mission, and core values of the enterprise. This is the driving force for the survival and growth of the enterprise, it is also a good reason for employees. Second
A scientific and practical operation and management system is required to solve system coordination, planning, organization and constraints. Finally, we must have a scientific incentive solution to share the fruits of enterprise growth with our employees.
This is the question of centripetal force.

   7. Risk Control Principles

   
A good business model is designed. If the ability to withstand risks is poor, it will be like a building built on the sand dune, and it will not be able to withstand any storms. This risk refers to risks outside the system, such as policies, laws, and industry risks. It also refers to risks within the system, such as product changes, personnel changes, and fund failures.

   8. Reasonable tax avoidance principles

   
Reasonable tax avoidance, rather than tax evasion. Reasonable tax avoidance is the rational use of relevant policies within the current system and legal framework, and the design of a system conducive to the use of policies. Reasonable tax avoidance can also greatly increase the profitability of enterprises.

   
Summary 

   
The above reveals the eight core principles of business model design. Each enterprise should start from the actual situation of the enterprise and start from solving the development bottleneck of the enterprise, overall Arrangement to find a business model suitable for the enterprise's development.
   
At the same time, not only new enterprises need a good business model, but also a running enterprise must have a clear understanding of its own business model. In a sense, only when you understand your business model can you understand the public
Why does the company exist as an independent enterprise. Knowing the business model of your enterprise clearly and reaching consensus between the management and employees makes it hard to estimate the huge benefits of your business.