The creation and innovation of business models have never stopped, but little is known about business terms.

First of all, what is a business model?

Business model is a variety of trading relationships, trading structures and connection methods between enterprises and different participants in the market. It is a collection of objects, methods and ways for enterprises to create value (how to create it), transmit value (how to transmit it and to whom) and realize value (how to realize it).

In layman's terms, the business model is what way or way the company designs to earn money from which group of people. For example, product companies make money by selling products to target consumers, which is the simplest business model.

Business model is a simplified business logic. In the process of analyzing business model, we mainly pay attention to the relationship between enterprises and upstream suppliers, downstream users and other partners in the market, especially how the "three streams" among them-logistics, information flow and capital flow flow respectively, and whether enterprises are conscious and capable of integrating these "three streams".

Second, why do enterprises attach importance to the innovation of business model?

The design and innovation of business model is the transformation and reconstruction of the company's top-level strategy, and it is the direct embodiment and practical application of business logic in the company's top-level architecture.

Although business model is not a new word-it appeared as early as the 1950s. But it was not until the rise of the Internet wave in the late 1990s that the concept of business model became popular. From then on, people began to pay attention to and study the business model in business activities. Today, business model has become a term in the mouths of entrepreneurs and venture capitalists. Almost everyone is convinced that as long as there is a good business model, there is a greater guarantee of success.

Enterprises and entrepreneurs with lofty goals and dreams attach great importance to business model innovation and constantly try and make mistakes. This is not only to impress investors in enterprise financing, but also to realize the efficient integration and utilization of resources, build the core competitiveness of enterprises, and realize the stable cash flow income and long-term profitability of enterprises:

Realize the efficient integration and utilization of resources. Both start-ups and giant enterprises have limited resources. If we want to develop, we must break through the shackles and restrictions of our own resources, use and control external resources, integrate and use non-owned resources, and surpass resources, so as to reach the advanced state where resources are used by me and dominated by me, until I finally regard world resources as my ideal state.

Build the core competitiveness of enterprises. The integrated development of Internet and industry has produced a new business model in every industry. After an enterprise succeeds in a new business model, it will attract a lot of imitation and replication from other enterprises. In order to maintain success and avoid competition, we must constantly innovate business models to obtain sustainable competitive advantages and maintain core competitiveness.

Realize stable cash flow income and long-term profit of enterprises. Over the past 40 years, enterprises in China have experienced two stages: factor-driven and investment-driven, and started to move towards a higher level. In the future, China enterprises will no longer conquer the world by a single product or technology, let alone win in the fierce competition by an idea or a speculation. If an enterprise wants to survive for a long time, it must ensure stable cash flow income; In order to continuously expand the living space, it is necessary to ensure that enterprises can continue to make profits. All these require enterprises to constantly innovate business models, which is possible.

The future business competition is the competition of enterprise business model evolved from business logic. Its fierce and tragic degree is far better than before!

Third, how to innovate the business model.

If everyone walks on the road leading to the top of the mountain, it will be crowded, and if you are in it, you will be dragged forward, even in a dilemma, not to mention surpassing many opponents and reaching the top of the mountain first.

What if too many people want to reach the top of the mountain first or someone has occupied it? Of course, it is to find a road that few people walk or a mountain top that no one has climbed!

First of all, we should have an industrial map to help us understand the industrial environment and location of the enterprise. Only by figuring out what kind of environment and position you are in and which link in the industrial chain can you know which direction you want to go next and how to make adjustments and changes. If you just bury your head in the cart, you may eventually find that your road is getting more and more biased, and you can't reach the top of the mountain at all, or even retreat to the foot of the mountain.

After understanding their own strength and environment, enterprises should consider how to achieve their goals as quickly and better as possible at the lowest cost.

X-axis breakthrough This is what we often call forward integration strategy or backward integration strategy. To some extent, enterprises that are laid out in advance and stuck in the first place will have more advantages and greater chances of success if they break through the X axis, and the chances of success of the latecomers will double.

X-Y axis breakthrough. Since it is difficult for enterprises to break through directly on the X axis, we adopt circuitous tactics to build a trading structure through key nodes on the Y axis that can exert important influence or control on the X axis, so as to achieve overtaking in corners. It's like walking on the same mountain road, I can't go straight ahead, and then I found another road, surpassing the people walking in front of us and quickly reaching the top of the mountain ahead.

X-Z axis breakthrough. It is to use one point or several points on the Z axis to innovate the business model and destroy and reconstruct the main industrial chain on the X axis. It's like when everyone follows the same rules of the game and walks on the same mountain road, halfway through, I find that I can't surpass others according to the original rules, so I reformulate the rules with new technologies, new thinking, finance and other means, so that I can walk in front of others at once.

X-Y-Z axis breakthrough. This way is even more powerful, combining the advantages of the first two ways to make a breakthrough, not only finding a road that few people take, but also changing the original rules of the game, creating all-round superior conditions for reaching the top of the mountain in advance.

When enterprises find that the road ahead is crowded and cannot be directly surpassed, why not try a detour strategy and change the rules of the industry game? By innovating the business model, we should take the initiative of enterprise development in our own hands and let the industry follow its own way of playing, instead of struggling in the fierce competition of the industry. When we reach the top of the mountain, we can be in front, relaxed and uncomfortable!