Introduction: the company’s business model can be divided into product type, platform type, order type and project type from the two dimensions of standardization degree and scale effect. What are the differences in the financial and competitive characteristics of different types of companies? What are the decisive factors of core competitiveness?
I. product companies: with high standardization and scale effect, product power is the core and channel power is the bonus
The products of product-based companies show the characteristics of standardization and can form a strong scale effect. The core competitiveness of the company mainly depends on the two dimensions of the company’s product power and channel power. Companies with strong product strength have a relatively strong market position and better sales profitability, which can be comprehensively reflected in the sales gross profit margin. Product companies driven by channel forces often have a wide range of channel networks and carry out corresponding marketing to quickly clear inventory, which can be comprehensively reflected in the company’s inventory turnover rate.
Product power is the foundation of the company, and channel power is the icing on the cake. Referring to the great product companies in history, such as Coca Cola and apple, all conquered the market with their products. Relatively speaking, the channel power is not so important. If we only focus on the channel, but ignore the competitiveness of the product itself, the development prospect of the company will be greatly restricted.
II. Platform companies: positive feedback and scale effect are dominant, and customer scale and stickiness are the key
The main characteristics of platform companies are the positive feedback and significant scale effect of various stakeholders, obvious monopoly competition pattern and prominent cash flow. The profit methods of platform companies mainly include four categories: 1) charging transaction fees, typical companies such as Uber and didi; 2) Charge access fees, typical companies such as Red Star Red Star Macalline Group Corporation Ltd(601828) and Taobao; 3) Charge enhanced access fees, typical companies such as Facebook; 4) Charge for enhanced content management services, typical companies such as Tencent.
The core profit model of platform companies is to obtain a large number of users and realize them. Therefore, users are the decisive factor throughout the whole development process of platform companies. Reviewing the development process of various platform companies, we can find that in the early stage of the development of platform companies, the user scale is the focus that needs to be paid attention to, which determines the competitive position of the company in the industry. After achieving winner take all, taking various measures to improve the stickiness of users is the key to continuously maintain the position of the industry.
III. order company: performance depends on downstream customers and carries out technology and cost competition
Order oriented companies have a high degree of customization of products and services, and there is a certain scale effect. Production is determined by sales. There is little inventory pressure, but cash flow fluctuates greatly. It should be pointed out that order companies and product companies often overlap. Some companies have both customized products and standardized products. In addition, the order based industries dominated by cost competition are relatively scattered, and the order based industries dominated by technology competition are highly concentrated.
The prospects of order companies look at the downstream prosperity outside, and look at the advantages of technology, cost and channel inside. The boom change and demand change of downstream major customers are important factors affecting the performance of order companies. The core competitiveness comes from companies with technical barriers. Technical advantages bring high gross profit margin and form high barriers. The cost and channel advantages are difficult to maintain the ability to obtain orders for a long time.
IV. project-based companies: highly non-standard scale effect differentiation. Cash flow and project reserves are the key. Large advance investment in the early stage of project-based enterprises leads to large debt scale and generally high asset liability ratio. In addition, the project expenditure is continuous, but the collection time span is long, so the company’s cash flow fluctuates greatly. The operation of project-based companies is based on the project. After receiving the project, the production service is generally completed externally, which is difficult to have obvious scale effect. The business of project-based companies has the characteristics of discontinuity, uniqueness and one-time. Typical project-based companies are real estate, building decoration and film and television companies.
Cash flow strength helps project undertaking, and project reserves lock in future performance. Cash flow strength depends on external financing cost and ability and internal project payment collection speed, which is the core of the profitability of project-based companies, because the financing scale affects the expansion speed. The performance of project-based companies is affected by the quantity and quality of projects. Sufficient project reserves are the embodiment of strong downstream demand and company strength, and the key to improving the certainty of future performance.
Risk tips: changes in industry and company business models; The economic recovery is less than expected; Overseas Black Swan incident.
