Chinese Shoe Enterprises Actively Develop Business Models To Solve The Current Dilemma

Transformation and upgrading of Chinese enterprises and China's economy Transformation Upgrading is already imminent. Where is the road? China's shoe enterprises are facing a critical period of development. The low cost advantage that we are relying on is constantly being eroded. The key to a more brilliant tomorrow for Chinese shoe companies is to build a business model. innovate 。

　　 Shoe enterprises Currently facing Predicament

When the shoe industry develops to today, the same mode of operation, the homogenization of products has become a common problem in the whole industry. Below this, most shoe enterprises can only be coerced by the status quo of the industry, collectively join the primal price struggle, profits continue to shrink, and enterprises fall into the increasingly difficult situation of strength. Under the current situation of "lack of business mode", there will inevitably be a lot of derivative defects that are troubling us.

1, diversification Management

For enterprises, diversification is not bad in itself. But why do many enterprises have different prospects under diversified development? First of all, we need to make clear that diversification is not a refuge for us to cope with the bottleneck of our main business. Many shoe companies in China are encountering business difficulties, instead of thinking about how to find a more suitable business model. Instead, they choose to go sideways and choose horizontal development. This is undoubtedly self exile. When we want to put eggs in multiple baskets, we should first examine whether our current baskets are reliable enough. For shoe companies, a strategic diversification strategy is needed, rather than a speculative diversification. To concentrate on the industry requires more powerful industry leaders to withstand pressure.

2, frequent changes in business strategy

"Development strategy" is the focus of attention of many shoe companies now. But I have to remind you that business strategy focuses on goals, more dominant and short term, and the business model is heavy on the path and how to achieve the goal, and the layout is more important. Chinese entrepreneurs should pay more attention to business models when they focus on short-term strategies, because business models are strategic strategies, and business models are the guide and direction, principles and foundation for business strategy. An excellent business model can lead you to make an excellent annual strategy or 35 year strategy. Chinese enterprises should first innovate and design business models, and then formulate the strategic direction and objectives of enterprises. This is the rational order of business operation.

In the absence of finding the right "business mode", shoe enterprises are most prone to make frequent changes in their management strategies. The biggest problem is the constant adjustment of personnel and the increase of blind investment, resulting in serious internal friction. {page_break}

3, blindly follow the example.

When shoe companies encounter bottlenecks in development, enterprises are eager to find learning objects, hoping to learn from others. But the problem is that many enterprises only learn the superficial representation of objects, and do not grasp the essence of "business mode". Enterprises can not understand their own lesions and the drug's property.

4. Behind the capital operation

Many shoe companies are clearly unable to keep up with the times in terms of capital operation, but competition in the future is largely a competition of capital. Whether you can win the attention of the capital market, compared to the current scale of profit, depends more on whether your "business model" can bring them a better future.

5, unclear market positioning

Without a systematic business model, it will inevitably make us unclear about our business orientation, or just take the market positioning for granted. It is our urgent task to identify what is our core competitiveness and constantly consolidate and enhance it. According to our strength, we will decide our market position. Without core competitiveness to obstruct competitors, they will never have the right to speak. This is the biggest problem of the lack of successful business models.

6, the rapid flow of professional managers.

While seeking breakthroughs, enterprises also place more expectations on professional managers. However, because professional managers are limited by their habitual thinking and industry vision, it is difficult to formulate a set of customized development plans for enterprises in a relatively short period of time. Without the innovative thinking of business mode, enterprises will not bring new breakthroughs to enterprises even if they are constantly changing.

For shoe companies, to get rid of the current quagmire, apart from the innovation of business models, do not know if there are still second ways to go?

　　 What is the business model?

The business model is far greater than and inclusive of the profit model. The business model is "enterprise strategy", and the business model is innovated. Enterprises can get 10 times profits and get 10 years of sustainable development. The business model will win the world.

Why does the same technology level enter the same industry, but the result is quite different? Why is it that enterprises that have worked hard for more than ten years or even decades have been easily overtaken by emerging enterprises? Why are they hard to accumulate, but enterprises are unable to break through the ceiling of growth? Why are corporate profits always so meager? Why are enterprises always stuck in the upstream and downstream? Why do they fight from the manufacturing industry and foreign trade to the domestic market, and do not know where to start? Why is it so pointless when docking with venture capital? {page_break}

In fact, there are two sentences that can be generalized in terms of business models: in the first sentence, "you can copy yourself"; in the second sentence, "it's hard for others to copy you". These two sentences seem contradictory, but they are the image interpretation of business models. The so-called "can copy themselves", that is, sales of enterprises continue to grow, business profits continue to grow, the number of stores continues to grow, that is, the continuous economic growth of enterprises, is a long-term sustainable growth process. Of course, growth is not necessarily a purely representative operation, but also an integrated growth of mergers and acquisitions. No matter what way it is used, your business efficiency is increasing. Many of our enterprises have encountered growth ceilings in the process of operation. This shows that the first sentence has not yet been broken and has not been really solved.

If you can do something, he can do it, and I can do it. At this time, there is only one common solution, that is, a brutal price war. Fierce price wars usually result in small profits. Therefore, enterprises must complete the business model second sentences: "others can hardly copy you". Other companies watch you make money and stare at this time, you will have a good profit, because you have the most valuable "pricing power" in the operation of enterprises. Why is it that venture capital investment projects are very concerned about business models, because investors want your enterprises to have "pricing power". Enterprises with "pricing power" often mean that they can get high profits. Why can you fix prices? Because you can do this thing, others can not do it, you can do it, others can hardly do it. This is another principle of business mode.

　　 Components of business models

First, customer precise positioning, killer (hidden) core needs.

If your business is only a small customer demand, it is just a viable enterprise; if your company can meet the core needs of your customers, your business will be a fast growing enterprise; if your company meets the hidden core needs of the customer killer, your business can stand out and grow into a listed company, or even grow into a great company.

What is the implicit demand of customers? Implicit demand is the demand that your customers can not express clearly, or the needs that your customers can not express publicly, the customers' needs that your competitors do not know, or the needs of customers who are aware of in the industry, but no one can satisfy them. Only by finding and meeting the hidden needs of customers, especially the hidden core needs of customer killer, can enterprises win the opportunity in competition before finding a good start for business models.

Two. What kind of products / services are revenue derived from, what stage and in what way do they get the sustainability of income (sticky) and the potential for explosive growth?

This is mainly to tell you how to make money, and not the traditional way to make money, but how to get 10 times the traditional profit, and to make profits for 10 years, that is, to get long-term high profits. Not only that, the income multiplier mode of business mode is still a way of making money for competitors to set up a high competitive threshold, which means not only obtaining high long-term profits, but also successfully obstructing competitors.

For example, we have seen AOKANG, from establishment to today, from wholesale business to state-run shopping mall, from opening chain monopoly to making customized monopoly, from famous brand space to creating "1+N" mode, from setting up "no shoes" shop to building online shopping mall, AOKANG has undergone continuous changes and innovations. This is the second factor of the business mode, which products, at which stage and in which way are the revenues achieved. This requires entrepreneurs and entrepreneurs to make accurate and unique creativity and design. The way of income acquisition, stage and product design should be different from those of competitors. The more dependent on the income realization mode, the higher the competition threshold of enterprises.

At the same time, how big is the sustainability of earnings and the growth potential of the explosion? This is also the key to the second factor of the business model, the revenue multiplier model. The cost of developing a new customer is to maintain the cost of 6 old customers, almost every enterprise. Therefore, under such circumstances, can enterprises achieve high repeat purchase rate? How big is the viscosity? This is also a question that business models must answer. {page_break}

Three, how will the cost be reduced in a revolutionary way?

Note that what we are talking about here is a revolutionary reduction. If the cost falls from 100 yuan to 90 yuan, it is not revolutionary cost reduction. We divide the cost into two categories, one is to reduce a cost from 100 yuan to 60 yuan and 50 yuan. When the overall cost of the company falls by nearly half, we call it a revolutionary reduction. The other is the cost of sub item, but the cost of a project should be reduced to 20% or even zero cost, which means revolutionary cost reduction. How to reduce the cost of the enterprise? It is not about frugal, nor by pressing, nor by deducting the wages of the employees. What is the purpose of relying on the design of the business mode to achieve a revolutionary reduction in the cost of the enterprise?

Four, self replicability, is there an expansion bottleneck?

Any enterprise, any business mode will have the bottleneck of expansion, so we will talk about the bottleneck problem of the ceiling. We can not wait until you meet the ceiling to break through again. It will be very difficult. We should find out what kind of ceiling the enterprise may encounter in advance and then find a way to break the ceiling through the design and planning of business models. In this way, enterprises will have the opportunity to achieve long-term sustainable development, rather than getting smaller and smaller.

Five, high competition threshold, control of core resources, others can not be copied.

This part is often the key support point for VC investment. Because any company that can not be duplicated has the threshold of competition, and has the pricing basis of high competition threshold. With the pricing power, it can get high profits and sustainable profits.

You have no control over the upper and lower reaches, which is very exhausting for enterprises and is very difficult. How can our enterprises be able to be proud and able to control the upstream and downstream? The core is to control the core resources. This core resource may be a unique ability. It may be a unique policy protection advantage. It may be a new technology or a scarce raw material, but anyway, you have to control the core resources, you have core resources, others do not have it, then you have the right to speak.

The design of business mode is to enhance the right to speak through controlling the core resources, and ultimately form the pricing power and establish a high competition threshold.

Six, the design and reorganization of systematic value chain.

The sixth factor of the business mode is "systematic value chain operation", and how the upstream, downstream and customers of the enterprise form a perfect business ecosystem together. This is the highest state of the business mode competition. We compare the systematic value chain to a big forest, a big ecosystem. The members of the value chain system should cooperate with each other to form the overall value chain with the highest efficiency, the lowest cost and the minimum risk. The profit, risk and cost should be allocated reasonably and creatively in the members of the value chain. This is the sixth factor to solve the business model.

　　 How to innovate business models

First, we must break the inertia of enterprises and break the inertia of entrepreneurs' thinking. Today our enterprise strategy and our practice are not because you are right, not because of how scientific you are, but often because you have been doing so for so many years. {page_break}

So what is the way to break inertia? Every one of us has a "hypothesis" when making decisions, and the overthrow of "hypothesis" is the beginning of innovation.

As we mentioned above, the case of Chinese trend Kappa, if we assume that "sportswear is only worn during sports", there will be no Kappa sports fashion suit in China today. China's sales in 2008 are 3 billion 300 million yuan, gross profit margin 62%, net interest rate 40%, and net profit in one year is 1 billion 300 million. Kappa clothing is not a high-tech industry, it is a typical traditional industry, and clothing enterprises are numerous, and international enterprises and local enterprises are strong. However, why China's trend has suddenly become a new force, and it has become the most valuable enterprise in China's garment enterprises in just 5 years. All of these rely mainly on capital operation and business mode innovation. The most fundamental reason is that Kappa has gone out of a new fashion of "sports fashion" in China, which stems from Kappa's sportswear boldly defined as not only sportswear worn on sports grounds, but also worn more time than sports occasions, which has subverted people's traditional assumptions.

There are many ways to carry out business mode innovation. In this section, the author summarizes only two innovative paths with obvious effects, strong operability and great breakthroughs. The first innovation path is "cross industry and cross boundary duplication". The second way is to "take it from the people, use it to the people", "from the masses to the masses", and explore new opportunities through in-depth exchanges with customers and creative thinking.

The first innovation path is "cross industry and cross boundary duplication".

This is what many venture capitalists often refer to as "copying to China". Many readers will think, since it is copied, why is it called innovation? In fact, many enterprises' so-called "duplication" often can only reproduce the external appearance, often can only copy a concept and a formulation, and can not be copied to the key operation system of the entire enterprise.

The business model is a giant system, not just a concept, formulation or direction. Just like icebergs, the iceberg that we can see above sea level is only a small part. It only accounts for 1/7 ~ 1/6 of the total volume of the iceberg, and the real giant is below sea level. The huge Titanic cruise ship is not an iceberg above sea level, but a huge monster below sea level.

The same is true for business models. It is not difficult to put forward a conceptual direction. However, the huge system of establishing business models is quite difficult. Our enterprises copying foreign projects are often just copying the external representations, concepts and concepts, and the real huge business mode system still needs our own businesses to establish. From this perspective, this is still a kind of innovation, or even a difficult innovation. Therefore, "copying to China" is often a good start. The huge system of business models still needs entrepreneurs to complete, we can understand the external representation of foreign enterprises, but the internal operation system still needs our own to complete, especially the localization of China's operation and foreign environment is bound to be very different, which requires entrepreneurs to adjust and redesign.

Therefore, the difficulty of "cross industry and cross border duplication" is still not small. The huge system needs enterprises to innovate themselves. It only refers to some ideas, concepts and directions of successful enterprises, and can not replicate all the successes. Therefore, we still put the "cross industry and cross boundary duplication" into the category of innovation, and even as a major innovation path. {page_break}

The second innovation path, 80% of innovation comes from our customers and partners.

IBM, the largest and best IT company in the world, has counted the global innovation behavior. It has found a very important conclusion: 80% of the global innovation comes from customers and partners. Therefore, readers need to ask ourselves whether we have 50% of our time with our customers and at least 30% of our time with our customers or potential customers, because they are the source of innovation. A group of people stay in the office, and it is difficult to find innovative "faucets" in suits and meetings. Innovative "faucets" are in the customers' offices, customers' homes and customers' brains.

Most entrepreneurs and managers are often interested in customers when they talk about customers. They think that is the next thing. They are sales and customer service departments. When it comes to competitors, they are often interested in increasing competition. On the one hand, we have missed the opportunity to innovate, care for customers, enterprises can become different and stand out, and competitors are always caught up in fierce competition.

One of the key factors in the process of innovation is industry insight. Attention is industry insight rather than industry experience. Every entrepreneur or manager who has worked in his industry for many years often has experience in the industry, which is helpful to innovation, but it is not the key to innovation. Often, people in many industries are entangled in some non core issues, often unable to see clearly the intrinsic nature of the industry, "do not know the true colors of Mount Lu, only in the mountains."

Why do venture capitalists often provide constructive and groundbreaking opinions on business models of enterprises, because they have very strong capabilities and many "eye piercing eyes" experienced by many projects. These experiences make them often have strong insight and penetrating power, and can often see the intrinsic nature of the industry in a very short time. This is one of the greatest values of venture capitalists to enterprises. There are few projects that can get VC investment. However, a sentence, a model proposal or even a criticism of VC can often lead enterprises to take a few years' detours or seize the rare opportunities.