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Explore the essence of business from an entrepreneur's perspective
01
When I read the Boston Matrix, combined with the market competition and changes in today's video broadcast era, as well as the experience of visiting many student companies, I have some new thoughts.
Many entrepreneurs have a long-cherished wish, that is, they hope that the business and products they have worked hard to build can be used by users for a long time, and they can bring themselves a steady stream of income and maintain stability.
But the reason why it is called a long-term wish is that everything has a cycle, especially when the wheels of the times keep moving forward, the decline of hundreds of billions of companies is a very common thing, and the heavier the ideological baggage, the faster the decline.
Therefore, in order to cope with the possible disruptive changes in the market and allow enterprises to cross the cycle, operators and academics have come up with many methods.
For example, Bruce · Henderson created a method for analyzing and planning enterprise product portfolios, the famous Boston Matrix, and the Boston Consulting Group gradually became a top consulting firm based on the Boston Matrix.
Of course, from our current perspective, the Boston Matrix is not difficult to understand, and many companies are using its principles even if they don't know what the Boston Matrix is.
How does it work?
02
The core of the Boston matrix is to find the latitude of two judgments.
One is the "market share" that represents the competitive strength of the enterprise, the higher the market share of the product, the greater the ability to create profits.
The other is the "sales growth rate" that represents the gravitational force of the market, the higher the sales growth rate, the more funds and resources are needed to achieve market share in order to maintain sales growth.
Starting from these two dimensions, the company divides its products into four categories:
The first is the star product: the sales growth rate is fast, the market share is high, just like the star, it may become the company's cash flow product, need to increase investment.
The second is Taurus products: the market share is high but the growth is slow, such products have obviously passed the hottest stage, but the market share is stable, and it can bring cash flow to the enterprise without increasing investment, and become the backing to support other products.
The third category is problem products: fast growth, but low market share, which means that the prospects of the product are good, but because of insufficient marketing or company investment, the market has not really been opened.
The fourth category is skinny dog products: slow growth, low market share, and no way to bring benefits to the enterprise, such products should be eliminated as soon as possible.
Generally speaking, the product growth stage is from a problem product to a star product, and then to become a Taurus product.
With the verification of data and models, enterprises will know which products to invest their funds in, which products have problems and need to be improved, and which products should be abandoned.
One of the biggest inspirations for many entrepreneurs is that the Boston Matrix has a reference standard for judging, and there is no need to be an entrepreneur who is superstitious about his own products.
During my visit and exchange, I have met many product-based entrepreneurs, they are extremely confident in their products, and they are like a few treasures when introduced, of course, from the company's point of view, of course, we must maintain confidence in our products.
But if you can't open the market for a long time and don't bring profits to the company, you can use the Boston matrix to re-evaluate your products from a more vivid perspective, whether you don't pay attention to marketing, and how to reallocate resources.
Similarly, if the company's profits are dependent on Taurus products, it is necessary to lay out in advance and find the next star product.
03
Of course, we often say that any business model only helps us to open our minds and make better decisions and judgments.
The Boston Matrix also has its limitations, that is, it is easy for people to pay too much attention to the product and ignore the business itself, including the changes in the industry and market.
What if the company's products have shrunk? The customer has no problem with the product, but what if the demand is reduced?
At this time, what should the company do?
This is actually a phenomenon that I have observed during my recent visits and exchanges, some of the customers we have cooperated with in the past have gradually reduced their demand, from tens of millions to millions, 100,000, or even no longer needed, no matter what products you have, I don't want them.
At this time, it doesn't make much sense to just dwell on the product itself, no matter how good the product is, the industry changes and the demand shifts, and it won't help.
So, this reminds us a little bit, what's behind the product? It is a requirement, an object of service, and an application scenario.
When we think about how to do product layout, it is also important to think about the direction and logic of the business.
Sometimes, it's not that the product doesn't work hard, it's that the times have changed, and the company has to find new business and new service objects.
04
So, what kind of way and logic should enterprises use to transfer to new business, and how to give birth to new star products?
This will test the improvement of the two basic capabilities of product extension and global marketing.
In the past, many enterprises have served a certain type of customer for a long time, and habitually limited their products to a certain scene and a certain field according to the requirements of customers.
For example, some of our students have served real estate companies in the past, whether they are doing supporting facilities, advertising, or design, they are all benchmarking real estate, and when they introduced to me, they also emphasized that we are a company focusing on real estate.
Of course, there is no problem in focusing on a certain field, it is in line with the STP principle we are talking about, and the market is segmented, so that you can set yourself in a more advantageous and professional segment.
However, when the demand in this field changes significantly, enterprises must explore the capabilities behind the products.
My brand and my field can focus on a certain area, but in all my businesses, I have to add categories according to the application scenarios and determine the main category direction.
I'm going to understand the data, which businesses are in greater demand over a certain period of time? What projects are these customers working on? Where will they use the product?
At this time, from the actual needs of my customers, I can find a variety of application scenarios, which is a new opportunity for enterprises to migrate the capabilities behind the product.
Just like the projector we talked about a few days ago, the projector is a product, and home projection is also an application scenario, but when the demand for this scene is reduced today, the industry is saturated, and at the same time, the product itself is difficult to meet the higher requirements of users in a short time and at a low cost, it is obvious that this has become a pseudo demand.
But what are the capabilities behind the projection?
It is the technology and production capacity of lenses, optical machines and complete machines accumulated by enterprises in the research and development process, and can such capabilities be applied to other fields, such as the on-board projection scene of new energy vehicles?
The answer is yes, of course.
Of course, where does such demand come from? How do I know which use cases are available?
This is the global marketing capability that enterprises must have in today's video broadcast era.
Because only through global marketing, especially the use of video-based content and live broadcast construction scenarios to establish accounts on the global platform and obtain traffic and data, enterprises can get stable inquiries and leads, and have clearer user portraits and market insights.
For example, if we make statistics on the data and inquiries in the past period of time, which industries or that type of scenario are obviously increasing in demand, we will further track the user to understand his detailed needs and determine whether the product can meet them.
At the same time, we can also focus the entire content promotion on these scenarios and applications, observe the changes in data and inquiries, and judge whether it is possible to continue to grow in the future.
This is to obtain different needs through the Internet, determine the potential application scenarios that the product can expand, and at the same time test whether the business layout is really effective through the content of global marketing.
In the competitive landscape of the video broadcast era, we should not only care about the iteration of products, but also understand that the product is one centimeter and the application is one kilometer; How is it applied when the user is one centimeter and the demand is one kilometer.
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Editor-in-Charge | Luo Yingfan
The pictures are all from the Internet
This article does not constitute any investment advice, the stock market is risky, investment should be cautious
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