How to find out a company's business model

We have simply analyzed the industry in which a company is located, that is, the track, just to see how wide, how long and flat it is.

Then, let's go back to the company itself. Figuratively speaking, how is the car running on the track? Can it win this race?

The most important thing is to look at a company's business model.

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So what is the business model? How to treat the company's business model?

For the former, if we study it carefully, we will find it extremely complicated, but we can go back to the most basic problem of business and analyze it in detail, that is, "What kind of products does it provide and what problems do it solve?"

Or you can simply understand it as: How does this company make money?

For example, beverage companies make money by selling drinks; Express companies make money by sending express delivery; Advertising platforms make money by charging advertising fees.

In short, as long as there is money, there is a business model.

For the latter, there are two main steps:

Step 1: Write out the company's income formula and see clearly the core driving force of growth.

Step 2: Define the strategic positioning of the company.

Let me briefly talk about these two points.

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Let's look at the company's income formula first. It seems very simple. Isn't it just the multiplication of several indicators?

For example, the income of the courier company is the number of parcels * the average unit price; The input of beverage company is sales volume * customer unit price; The income of e-commerce is the number of users * the unit price of customers.

These indicators can generally be found in financial statements, so this does not seem to be a big problem.

But the problem here is that they are too thin. Although there is no difference in the results, it will make you unable to find the core driving indicators and give you guidance.

Take e-commerce as an example. If the income formula is the number of users * the unit price of customers, then there are two points of force, either to find ways to increase the unit price of customers or to find ways to increase the number of users. The latter is a big problem. How to increase the number of users? It seems that it needs to be decomposed again, and it is impossible to draw a conclusion directly.

But if the income formula is written as traffic * click rate * conversion rate * customer unit price, it will be much clearer. Traffic is nothing more than getting it through advertising. The click rate is based on the eye-catching main picture and the preferential price. The conversion rate depends on the product quality and user experience, and the customer unit price engages in additional purchase discounts and so on.

Of course, the formula of income is not this dimension. If you want to be more detailed, you can also write it in modules, such as income from main products plus income from other products. Each income is listed in a formula and then added up.

Compared with the former, you know that the latter will pay more attention to the income of the main product, thus paying attention to the main product.

In addition to products, it can also be used as a distinction between users. For example, the income of new users can use the above formula, and the income of old users can use old users * repurchase rate * customer unit price. Then when you see this formula, you will know that this family pays more attention to old customers.

Therefore, the income formula is not a simple multiplication of several data. Just like 100 can be decomposed into 5*20, 25*4, or 2*25+ 10*5, and so on. The income formula is the same. In the same situation, there can be thousands of ways to write it. The key is what core indicators you need.

Usually, most growth companies have relatively static indicators, and only one core driving indicator brings growth to the company.

For example, the e-commerce company I just mentioned, under normal circumstances, the unit price and conversion rate of customers will be relatively stable, so they will eventually work hard on traffic.

Excellent companies can always predict the ceiling of each indicator, and then look for new growth indicators before the power of existing indicators decays.

Well, these are some understandings of the income formula. To sum up, there are three main points:

1. The granularity of the income formula should not be too large, otherwise it will not bring guidance and see the problem;

2. There are many ways to write the income formula. The key is to see where your focus is and what your core driving indicators are;

3. Each indicator has its own upper limit, so it is necessary to predict and find new growth indicators before this.

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Then let's talk about the strategic positioning of the company. This positioning is mainly aimed at homogeneous companies. That is to say, if the business models of the two companies are the same, which one is more powerful?

It is necessary to compare the strategic positioning of the two companies. We also mentioned some above. Different income formulas, different emphases and different driving indicators are different strategic positioning.

For example, when Ctrip was the only one, it grew up alive under its nose wherever it went. The reason for this is that their strategic positioning is different.

Although they are all related to tourism, Ctrip regards online travel as the target market, which is a fast-growing market with great uncertainty.

Where to go is to lock the target market in a relatively unchanged resource. No matter how many tourists, hotels and air transport capacity can be greatly improved in a short time, right?

Therefore, through this difference and different strategic positioning, it is difficult to catch up and surpass Ctrip.

In other words, as long as your business model is greatly improved, you can become a latecomer even in a highly competitive industry.

Of course, we should also know here that a good business model cannot reflect competitiveness. Take mobike as an example, the business model is good, but the final result is not so good.

Why? Because the threshold is too low, you find a good business model, although others know it, and then know that the threshold is still very low, so many people flock in, leading to vicious competition.

Therefore, in addition to seeing whether the business model itself can make money, we should also consider its threshold, otherwise it will lead to both losses because of too fierce competition.

Well, about strategic positioning, we can sum up two points:

1. Under the same product, different strategic positioning may have different effects.

2. A good business model is not necessarily successful, but also depends on whether the threshold is high.

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