Xiaomi ecological chain layout and its model value

The development of Xiaomi's business model has probably experienced three stages so far, namely, the windfall type, fan + community marketing for the first stage; transition type, the second stage of the triangular structure of the cell phone + MIUI + Xiaomi Mall; the third stage can be called the Ironman triathlon model stage, that is, the cell phone hardware as the center, the development and production of peripheral products, and at the same time the layout of the ecological chain.

Xiaomi began to layout the ecological chain in 2013, and by 2015, the ecological chain layout scope has been very broad. Roughly can be divided into the following levels: the most core layer is around the cell phone to develop the market, peripheral products such as headphones, small speakers, mobile power; and then outside the smart hardware, such as air purifiers, water purifiers, rice cookers and other white goods; continue to expand to the drone, robots and other high-tech products. Another category, may be difficult to understand the life of consumables, such as towels, toothbrushes and so on. Xiaomi's explanation is that the toothbrush is a very high technical content of the product, but also in line with the positioning of the millet ecological chain, while the towel is an ordinary daily necessities, but is conducive to improving user stickiness. Xiaomi ecological chain of the central idea is: the key point in the traditional consumer field can use technology to change the products and industries; millet retail consumer circle of concern, and with millet brand matching the industry and products, are millet ecological chain extended to the field.

Xiaomi and the ecological chain of enterprises **** the same goal is to create value for customers, differentiated products to meet the requirements of the same class of people's lives, formed by the customer demand for the product chain, the products provided must be a cost-effective products that can be purchased with eyes closed. If customers do not want to spend time to compare price and performance, they can rest assured to buy millet. In this, the Internet approach has improved production efficiency and reduced production costs. For example, a few thousand dollars of air purifiers, millet can do a thousand dollars or even less than a thousand dollars. In dealing with the relationship with the ecological chain of enterprises, millet adhere to the following principles:

Participation in the shareholding does not hold. For the ecological chain of enterprises, millet does not pursue the holding, the highest share ratio of 40%, most of the 20% or so. The purpose of doing so is to ensure that all enterprises in the eco-chain, even if they enter the millet system, millet will not do, independent management retained the original entrepreneurial spirit, millet willing to do support system. If the holding, the original entrepreneurial spirit will be covered.

This is the trick of millet management, but also millet is different from most traditional enterprises. How to give full play to the energy of the management team, to avoid the risk of absolute control, millet thinking has a reference significance.

Help not add to the chaos. Xiaomi can be empowered to ecological chain enterprises, but by no means to be absolutely obeyed. Ecological chain enterprises can use millet sales channels as well as brand, but this is not mandatory, just provide solutions. This includes what Xiaomi's idea of developing products is, how to make products simple, that is to say, Xiaomi's experience can be copied. But if the company has its own ideas, then millet will never interfere.

Recommendations are not decisions. What Xiaomi gives is advice, and the final decision is still the core team's own business. In addition to the decision-making relationship and equity relationship, Xiaomi's closest relationship with these companies is empowerment. Early on, millet in how to replicate their ability module to the ecological chain has a refining: most of the ecological chain of enterprises is a small business, it is difficult to build a complete supply chain, millet with the help of early cell phone integration of a supply chain, to these enterprises endorsement. When these enterprises look for supply chain alone, the negotiation position is very low, millet will provide help to empower these enterprises. The heat of the millet brand is more unattainable for startups, and millet can likewise copy the brand to you. Xiaomi's e-commerce channel can also be used for these enterprises.

Later, Xiaomi empowers more and more aspects, such as industrial design, product function positioning and competitiveness. Even the consulting and incubation function is distilled into the methodology of the seven words of the Internet - focus, extreme, word of mouth, fast - to train the managers of ecological chain enterprises. The Barn Academy then turns the team into one ecosystem enterprise and goes on to incubate other ecosystem enterprises.

Sales revenue. The products of ecological chain enterprises should be Xiaomi channels to market. When Xiaomi invested in ecological chain enterprises, it chose teams with strong R & D capabilities but insufficient sales capacity. Xiaomi gets sales profits, ecological chain enterprises get R & D and production profits. As for the way to share is very simple, each digesting the cost to obtain profits.

Investment income. Xiaomi's investment income lies in a certain percentage of equity. With a high valuation of the business, there is bound to be investment income.

The biggest benefit for Xiaomi is the group to deal with the strongest players. Xiaomi's history is not long, the accumulation of R & D is not so long, and it has a long product line, it is not possible to establish a technological advantage in each field. But to meet the requirements of e-commerce, to meet the requirements of the retail model, the product line should be long enough, how to do? The way is to go alliance with technology enterprises, group to deal with competition. The ecological chain of enterprises itself is very small, millet through the group connection, the external technical resources to integrate the face of R & D capabilities of strong enterprises, so as to make up for their shortcomings.

The small is big. Ecological chain enterprises are very small and weak, mostly dozens of people in the technical team, such enterprises have R & D capabilities on the long board, such as unique technology, etc., but the short board is also very obvious, such as no integration of the supply chain capacity, no brand influence. Then, after entering the millet ecological chain, you can be small and big, with the ability of small enterprises to enjoy the platform of large enterprises.

Accelerator. After enjoying the ability of a large enterprise, you can amplify your own ability and accelerate your growth.

After entering the platform, there is still room for independent development. For millet, ecological chain enterprises can develop on the platform, and when it grows to a certain size, it can also go to independent development. This is also millet on the ecological chain enterprise of a few principles: investment does not hold, advice does not decision-making, help does not add to the chaos. In fact, the reason why these companies are willing to develop in the ecological chain, precisely because of the complementary capabilities, and did not lose their new development space and development opportunities.

Partnership. The ability to complement each other's products on the same consumer channel strengthens the partnership.

Some competition. The boundaries are not so strict, a company if not done well, it is likely that other companies have made similar products, the formation of a certain competitive relationship.

Experience replication. We are all at the same stage, in the same field, and we can learn from each other's experiences.

Xiaomi's expectations for the future of the ecological chain have at least two points.

Big data platform. All ecological chain enterprises, there is a *** same entrance, that is, in the millet phone have a *** same control of their APP. APP as a data interface, all the product data will be diverted to a unified data platform. If there are a lot of ecological chain enterprises, a family consumes millet ecological chain products, then the customer's activity mode, life scene and other information will have data retention. As an example, if you use a millet rice cooker, you may have data on what kind of rice your family eats, the hardness of the cooked rice, the origin of the rice, and the frequency of eating rice, etc., all of which will be passed on to the millet platform. The same is roughly true for data from other products. Once enough data are uploaded, they become meaningful. As for the value of the data, there is unlimited imagination.

A new generation of e-commerce features. If the rice cooker records and uploads the data on the consumption of rice in your home, the data on the amount of consumption, and the data on the frequency of consumption, it is likely that in the future, Xiaomi will be able to figure out 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, and once you place an order to buy, you will be able to meet you in a short period of time, which may be a new e-commerce model in the future. I have always believed that the new retail is not only a change in the channel structure, but also in the data guidance of the stocking model and the overall logistics summary.

What is the difference between light and light? What is the main reason for a business that is growing too slowly? In most cases, it's because there are resources in the business model that are difficult to acquire quickly, and that's "heavy". For example, when a company is looking for people, the business model is designed to have a high level of complexity in hiring, which requires a high level of competence to meet the requirements, and when expanding, it is always faced with a lack of staff replenishment, which is also a "heavy" model. That is to say, if the business model can not be achieved in a simple way to obtain the resources needed, is what I said "heavy".

For example, why did Ford beat the automakers of its time? It was because it found a light model, standardized a lot of work, and broke down the process of building a car into one simple action. Therefore, it was very easy for it to acquire human resources. A farmer could become a worker in Ford's production line after two weeks of training. Ford's model is to make the heavy lighter.

Similarly, LeTV's model is called heavy. It needs a lot of money to expand, and with tens of billions of dollars invested in financing, the model still doesn't work. Highly dependent on capital, once the obstacle of access to capital, its model will not go, the growth rate will slow down, the enterprise ushered in the survival of the situation.

Many companies either do not have breakthroughs in R&D for a long time, and grow slowly; or when they change from a single business to a multi-business expansion, they can't get the operational talents, and grow slowly. Once a certain resource or a certain type of talent bottleneck, it limits the speed of business expansion.

In business operations, the most difficult to quickly obtain the resources are usually two, one is technology, and the second is the operational talent. Many companies want to transform their employees into business-oriented talent, but it is very difficult to do. Need to mobilize the enthusiasm of the staff, let him take the willingness to operate, but also to take the risk of operation, but also to form the decision-making ability, this training process is very long. But millet integration of ecological chain enterprise team, both brought millet needs technology, but also has the entrepreneurial spirit of business-oriented talents. Xiaomi through such a model to integrate the eco-chain enterprise talent, precisely in the difficult to obtain resources with a light model.

The second powerful thing about the Xiaomi model is openness. Openness is the key to determining whether a business model has power.

Openness of capabilities. Xiaomi adopts an open stance towards ecological chain enterprises, looking for problem solvers for their own short boards, and then empowering Xiaomi's established marketing capabilities, supply chain capabilities, product capabilities, etc., so that the ability to open up and complement each other, and specialize in finding complementary enterprises to open up the ability platform. Most companies have accumulated their core competencies in their growth and can be copied to more areas. If the ability is copied to more fields and businesses, it does not require much additional cost, but the application to more fields enhances the profitability. Xiaomi replicates its capabilities to a team that complements it one by one, without much increase in cost, but with much greater profitability.

Openness to interest. Xiaomi does not care if it has to control the business. Once you want to control the enterprise, you enter the heavy mode, capital shortfalls can not be avoided, not to mention that not every enterprise can be successful. Xiaomi does not emphasize interests and equity control, but more emphasis on complementary capabilities. The interest pattern is open, the key to success of the enterprise does not lie in how much investment, but in the precise understanding of the business of the operating team.

The third powerful thing about the Xiaomi model is the release. It is open to the outside world and releases internally. The young people who work at Xiaomi are extremely active in discussing issues, never worrying about whether it's part of their job or not, but thinking about what to do about it, and they take the initiative to push forward.

Historically, each stage of the rise of a new enterprise, compared to the previous enterprise, is a human release. Back then, the U.S. General Motors defeated Ford, because of the release of General Motors to managers, managers have more power to participate in the company's affairs, more decision-making power, which is exactly what Ford did not have. Later, the Japanese Toyota to contain the General, not only the release of managers, but also the release of grass-roots employees, so that grass-roots employees more involved in the management.

The author believes that a core of millet culture is release. Traditional enterprises have a clear list of authorization, what can be done what can not be done, are clearly defined. But millet has not authorized list, as long as not clearly prohibited, can make decisions. Everyone in millet has the right to decide a lot of things, and it is the grassroots that are driving the top.

The author believes that most companies can introduce the millet ecological chain into their own production and operation.

Enterprises in the development, more or less will form a unique ability, can be based on these capabilities, outside the enterprise to look for complementary resources that can be integrated to amplify their own, especially for those who have a certain foundation in an industry chain. Enterprises should first sort out in which areas they have formed core competencies, so that the advantageous competencies can help enterprises with weak competencies in these areas, and can also support those teams with weak competencies. After the formation of complementary, the complexity of the enterprise's management system does not increase too much, but can quickly activate these eco-enterprises, to obtain more rapid growth.

This way of thinking amplifies the ability of the enterprise. On the one hand, it goes to integrate those enterprises that are complementary to itself; on the other hand, it also promotes the construction of the enterprise's own capability platform. The eco-chain in turn promotes the enhancement of enterprise capabilities. For example, when doing docking with eco-chain enterprises, the partners hope that the ability to replicate, requiring you to be clear about what their own capabilities are, what the model is, how the ability platform is formed, what kind of ability they have, and so on. In this way, it promotes the sorting and improvement of the original system.

At the same time, to do the integration of capabilities, it is necessary to determine whether the ability is built on the organization. If it is built on the individual ability, then in the introduction of new elements will encounter trouble. The judgment of how to integrate is based on the fact that it should be conducive to sorting out one's own capabilities, and it should be conducive to building the capabilities on the organization.