The Xiaomi eco-chain model is based on its own unique ability to find complementary resources that can be integrated outside the enterprise, thereby amplifying its own enterprise capabilities. On the one hand, it integrates those enterprises that complement themselves, and on the other hand, it promotes the platform of its own capabilities. Construction.
The development of Xiaomi’s business model has probably experienced three stages, namely, the slogan type, the fan + community marketing is the first stage; the transition type, the second stage of the mobile phone + MIUI + Xiaomi Mall triangle structure; the third stage can be called the triathlon In the project mode phase, it is based on the mobile phone hardware, developing and producing peripheral products, and at the same time laying out the ecological chain.
Xiaomi’s ecological chain layout
Xiaomi has laid out the ecological chain since 2013, and by 2015, the ecological chain layout has been broad. It can be roughly divided into the following levels: The core layer is to open up the market around mobile phones. The surrounding products include headphones, small speakers, mobile power supplies, etc.; and then smart hardware such as air purifiers, water purifiers, rice cookers, etc. Products; continue to expand to high-tech products such as drones and robots. There is another category, which may be life consumables that are difficult for everyone to understand, such as towels and toothbrushes. The explanation of Xiaomi’s relevant person is that the toothbrush is a product with very high technical content and also conforms to the positioning of the Xiaomi ecological chain. Although the towel is an ordinary daily necessities, it is beneficial to improve the user’s stickiness. The central idea of Xiaomi’s ecological chain is: the key points in the traditional consumption field can use technology to change products and industries; Xiaomi retail consumer layer is concerned about, and the industry and products that match the Xiaomi brand are all extended to the Xiaomi ecological chain. field.
What is the relationship between Xiaomi and the eco-chain companies?
The common goal of Xiaomi and eco-chain enterprises is to create value for customers. Differentiated products satisfy the life requirements of the same kind of people. The product chain is formed by customer demand. The products provided must be cost-effective products that can be purchased with closed eyes. . If customers don’t want to spend time comparing prices and performance, they can buy millet with confidence. Among them, the Internet approach has increased production efficiency and reduced production costs. For example, a few thousand yuan of air purifiers, millet can be done for a thousand dollars or even thousands of dollars. In dealing with the relationship with the eco-chain enterprises, Xiaomi adhered to the following principles:
Participation does not hold shares. For enterprises in the ecological chain, Xiaomi does not pursue holding, the highest share accounts for 40%, and most of them are around 20%. The purpose of this is to ensure that all enterprises in the ecological chain, even if they enter the millet system, Xiaomi will not arrange it. The self-employed business retains the original entrepreneurial spirit, and Xiaomi is willing to support the system. If you control, the original entrepreneurial spirit will be covered up.
This is the trick of Xiaomi management, and it is also the place where Xiaomi is different from most traditional enterprises. How to give full play to the energy of the management team and avoid the risk of absolute holding, Xiaomi’s thinking has reference significance.
Help not add chaos. Xiaomi can be given to the ecological chain enterprises, but it is by no means an absolute obedience. Eco-chain companies can use Xiaomi’s sales channels and brands, but this is not mandatory, just to provide solutions. This includes the idea of Xiaomi’s development of products, how to make the product simple, that is to say, the experience of Xiaomi can be copied. But if the company has its own ideas, then Xiaomi will never interfere.
It is recommended not to make decisions. Xiaomi gives advice, and the final decision is the core team’s own business. In addition to decision-making relationships and equity relationships, Xiaomi’s closest relationship with these companies is empowerment. In the early days, Xiaomi had a refinement on how to copy his own capability modules into the ecological chain: most eco-chain enterprises are small enterprises, and it is difficult to build a complete supply chain by themselves. Xiaomi uses a combination of early mobile phones to provide a supply. Chain, endorsing these companies. When these companies find the supply chain alone, the negotiating position is very low, and Xiaomi provides help to empower these companies. The popularity of the Xiaomi brand is even more unattainable for start-ups. Xiaomi can also copy the brand to you. Xiaomi’s e-commerce channel can also be used by these companies.
In the later period, there are more and more aspects of Xiaomi’s empowerment, such as industrial design, product function positioning and competitiveness. Even the method of refining the consulting incubation function into the Internet seven-character ———focus, extreme, word of mouth, fast, training the management personnel of the ecological chain enterprise. Barn College turns the team into an ecological chain enterprise and incubates other eco-chain companies.
What benefits can Xiaomi get from the ecological chain?
The Xiaomi eco-chain model has at least three benefits.
Sales revenue. The products of the eco-chain enterprise apply the millet channel to marketing. When Xiaomi invested in the eco-chain enterprise, he chose a team with strong R&D capability but insufficient sales ability. Xiaomi is getting sales profits, and eco-chain companies are getting R&D and production profits. As for the way of sharing, it is very simple, and the cost of each digestion is profitable.
Investment income. Xiaomi’s investment income lies in a certain percentage of equity. If the company has a high valuation, there will inevitably be investment income.
The biggest benefit of Xiaomi is that the group should deal with strong players. Xiaomi’s history is not long, research and development has not been so long, and its product line is long, it is impossible to establish a technological advantage in every field. But to meet the e-commerce requirements and meet the retail model requirements, the product line should be long enough, what should I do? The solution is to form alliances with technology companies and organize groups to deal with competition. The eco-chain enterprises themselves are very weak. Xiaomi integrates external technical resources by means of group connection to face the enterprises with strong R&D capabilities, thus making up for their shortcomings.
Where are the benefits of eco-chain companies?
To do things together, you can’t benefit from it, but you have to win or win.
Take a small blog. Eco-chain companies are very weak, mostly technical teams of dozens of people. Such companies have long-term research and development capabilities, such as unique technology, but short-term is also obvious, such as the ability to integrate the supply chain, no brand influence force. Then, after entering the Xiaomi ecological chain, you can be small and big, and enjoy the platform of large enterprises with the ability of small enterprises.
accelerator. After enjoying the capabilities of a large enterprise, it is able to amplify its capabilities and accelerate its growth.
After entering the platform, there is still room for independent development. For Xiaomi, the eco-chain enterprise can develop on the platform, and when it grows to a certain scale, it can also develop independently. This is also the principle of Xiaomi’s eco-chain enterprises: investment does not control, it is recommended not to make decisions, and help not to add chaos. In fact, the reason why these enterprises are willing to develop in the ecological chain is precisely because of the complementarity of capabilities, and has not lost their new development space and development opportunities.
What is the relationship between eco-chain companies?
Partnership. Each other’s products can complement each other and strengthen the cooperative relationship in the same consumption channel.
There is a certain competitive relationship. The boundaries are not so strict. If a company does not do well, it is likely that other companies have made similar products and formed a certain competitive relationship.
Experience replication. They are all at the same stage, and in the same field, some experiences can learn from each other.
Xiaomi ecological chain future imagination
Xiaomi has at least two expectations for the future of the ecological chain.
Big data platform. All eco-chain companies have a common entrance, that is, there is an APP on the Xiaomi mobile phone that controls them together. As a data interface, the APP drains all product data to a unified data platform. If there are many eco-chain enterprises and one family consumes the Xiaomi eco-chain products, the information on the customer’s activities and life scenes will be retained. As an example, if you use a millet rice cooker, you may be able to transfer the rice, the hardness of the rice, the rice’s origin, and the frequency of eating rice to the millet platform. The data for other products is also roughly the same. Once there is enough data to upload, the data becomes meaningful. As for the value of data, there is unlimited imagination.
A new generation of e-commerce features. If the rice cooker records and uploads the data of your household consumption rice, the amount of consumption data, and the frequency of consumption, it is very likely that Xiaomi will calculate when you need to buy rice and what kind of rice you need to buy. Under the guidance of the data, Xiaomi can stock up for you in advance, you can buy it in a short time, you can meet you in a short time, this may be the new e-commerce model in the future. The author has always believed that the new retail is not only a change in the channel structure, but also a stocking model under the data guidance and an overall logistics summary.
The power of the millet ecological chain model
The author believes that the first strength of the millet model is that the mode is light.
What is the difference between light and heavy? If a company grows too slowly, what is the main reason? Most companies are “heavy” because there are resources in the business model that are difficult to obtain quickly. For example, when a company is looking for someone, the business model is designed to be highly complex, and people who need high ability can meet the requirements. When expanding, they always face insufficient staff. This model is also “heavy”. . In other words, if the business model can’t get the resources it needs in a simple way, it is what the author calls “heavy.”
For example, why did Ford beat the car manufacturers of the same period? It is because it finds a light model that standardizes a lot of work and breaks down a car-making process into a simple action. Therefore, it is very simple when it comes to obtaining human resources. A farmer can be a worker on the Ford production line after two weeks of training. Ford’s model is to lighten the weight.
Similarly, the mode of LeTV is called heavy. Its expansion requires a lot of money, financing hundreds of billions of investment, the model still does not work. It is highly dependent on capital. Once the capital gains obstacles, its model will not work, and the growth rate will slow down. The enterprise will usher in a life and death situation.
Many companies have not made breakthroughs in research and development for a long time, and their growth has been slow. When they move from a single business to a multi-business expansion, they cannot obtain business talents and grow slowly. Once a certain resource or a certain type of talent has a bottleneck, it limits the speed of business expansion.
Xiaomi uses the light model to concentrate on the core resources, but adopts an open attitude in the difficult to obtain and the links that cannot be established in the short term. This is the power of Xiaomi.
In business operations, the most difficult resources to obtain quickly are usually two, one is technology, and the other is business talent. Many companies want to transform their employees into business-oriented talents, but it is very difficult to do. It is necessary to mobilize the enthusiasm of the employees, let him assume the willingness to operate, and also bear the risk of management, but also to form decision-making ability. This training process is very long. However, Xiaomi’s integrated eco-chain enterprise team not only brings the technology that Xiaomi needs, but also has entrepreneurial spirit. Through this model, Xiaomi integrates the talents of the ecological chain enterprises, which is precisely the use of light models in the resources that are difficult to obtain.
The second strength of the millet model is openness. Openness is the key to determining whether a business model has power.
Ability to open. Xiaomi adopts an open attitude towards eco-chain enterprises, seeks problem solvers for their own short-boards, and empowers Xiaomi’s existing marketing capabilities, supply chain capabilities, product capabilities, etc., to achieve openness and complementarity, and to find complementary companies. Competency platform. Most companies have accumulated their core competencies in growth and can replicate to more areas. If you copy your capabilities into more areas and businesses, you don’t need to add too much cost, but if you apply to more areas, you can increase your profitability. Xiaomi copied his abilities to a team that complemented it, and the cost did not increase much, but the profitability was greatly enhanced.
Open interest. Xiaomi does not care whether it is necessary to control the enterprise. Once the company is to be controlled, it enters a heavy mode, and short-term funding cannot be avoided, not to mention that every company can succeed. Xiaomi does not emphasize interest and equity control, but emphasizes complementarity. The pattern of interest is open. The key to success is not the amount of investment, but the precise understanding of the business team.
Release managers and employees
The third strength of the millet model is the release. It is open to the outside world and released internally. Young people working in Xiaomi are extremely active in discussing issues. They never worry about whether this is a matter of fact, but rather what to do in this matter. They push forward on their own initiative.
In history, the new enterprises that have emerged at each stage are a human release compared with the previous ones. At that time, the US General Motors defeated Ford because of the release of GM’s management personnel, the management has more power to participate in corporate affairs, and more decision-making power, which is what Ford does not have. Later, Toyota Toyota curbed GM, not only releasing management personnel, but also releasing grassroots employees to allow grassroots employees to participate more in management.
The author believes that one of the core of Xiaomi culture is release. Traditional enterprises have a clear list of authorizations, and what can and cannot be done is clearly defined. However, Xiaomi has a list of unauthorized authorizations, and can make decisions as long as it is not explicitly prohibited. Everyone in Xiaomi has the right to decide a lot of things, and the grassroots are pushing the top.
The Enlightenment of Xiaomi Ecological Chain to Traditional Enterprises
How do traditional enterprises learn from the Xiaomi ecological chain?
The author believes that most companies can introduce the Xiaomi ecological chain into their own production and operation.
Enterprises in development are more or less unique in their ability to find complementary resources that can be integrated outside the enterprise to amplify themselves, especially those that have a certain foundation in an industrial chain. . Enterprises must first clarify in which areas they have formed core competencies, enable superiority to help companies with weak capabilities in these areas, and support weak teams. After the formation of complementarity, the complexity of the management system of the enterprise has not increased much, but these ecological enterprises can be activated quickly and achieve faster growth.
This kind of thinking is magnified by the ability of the enterprise. On the one hand, it integrates those enterprises that complement themselves; on the other hand, it also promotes the construction of the company’s own capability platform. The ecological chain in turn promotes the improvement of corporate capabilities. For example, when connecting with an eco-chain enterprise, the partner wants to copy the ability, and asks you to know what the ability is, what the model is, how the capability platform is formed, what kind of capabilities, and so on. In this way, it has promoted the combing and improvement of the original system.
At the same time, to do capacity integration, we must judge whether the ability is built on the organization. If it is built on personal abilities, you will have trouble importing new elements. The basis for how to integrate is that it is conducive to clarifying one’s own ability and to help build the ability in the organization.