With the development of the Internet, more and more companies know the importance of focusing on the business model, but what exactly is a business model, there is no clear definition. Here I will talk that the business model in my understanding.
what is the business model
Some people say the business model is the profit model, how to make money. Some say the business model is the operation mode, how to provide better service and operate a product. Some people say business model is p2p, O2O, but I think these are not comprehensive, business model is when you know at the age of 3 what you want to live at 70. Some people say that the business model is the strategic model, this is not right, there is a difference between the two, the business model is standing in the industry’s perspective on the problem, is the innovation and integration of thinking, while the strategic model is the perspective of enterprises, is the competitive choice of thinking, the business model contains a strategic model, profit model, operating mode. And if that’s difficult to understand, come to see beauty deals atomee.
The Core of Business Model
The core of the business model is to break the rules, for example: Gillette’s famous “razor + razor” model, Gillette is using low-margin razors to drive sales of high-margin blades, and then the example of Gome and Suning appliances, why can Gome and Suning become a monopoly in the field of domestic appliances, some people may say that is Low prices, but other department stores also get low prices, so why don’t they have a monopoly? That’s because Suning doesn’t make money from electrical appliances at all, they invest in real estate with the money they make from thin margins on appliances, and then make money in real estate to keep the prices of their appliances low.
As an employee, some people save the little money they earn, while others invest in real estate to earn more money, and then invest the money they earn in real estate to increase their own value.
Importance of the business model to the product
Some people say that the business model is the boss’s consideration, it has nothing to do with our products. Although the business model is made by the boss, we must deeply understand the business model. A deep understanding of the business model helps us to grasp the design direction of the product.
The Three Abilities of Business Model
How do we have these capabilities if we need to understand the business model as a product? For example, Atomee beauty deals.
- Have to think like an investor. Before making a product, we need to look at the whole picture to see if our product design will conflict with the company’s business model.
- Have a disruptor’s innovative mindset. In the case of industry saturation, we need to subvert the industry, when the antivirus software flying around, 360 antivirus software to take the lead to implement free, someone may ask how to make money 360 antivirus free ah? This is the root of 360’s disruption of the industry, implanting personalized advertising and personalized service.
- It has to have the planning mindset of an operator. Business model is like a map, only with a clear route we know how to go. A clear business model can help us with market positioning and user segmentation.