It seems that since last year, LeTV has been struggling in the quagmire of the capital chain. Friends from Jia Yueting Business School donated money to help others, and Sunac kept financing LeTV, selling buildings and layoffs to save themselves at home. However, it seems that the problem has not been solved. It is easy to cash out the crisis by car, suppliers block the building, and even lose the right to broadcast internationally renowned sports events, which can be said to be a storm in the city. We can't help but ask, what happened to LeTV in the process of transformation? What is the key to strategic transformation?
1. What happened during the transformation of LeTV?
Looking back on the development of LeTV for so many years, I have to say that LeTV is actually a very thoughtful company. As the first batch of China video websites, LeTV's earliest business, LeTV, is superior to ordinary competitors in terms of service quality and copyright quality. Therefore, although LeTV has not become the dominant player in the video field like Youku and Tudou, it can be small and refined, and it also has a large number of stable fans and customers. Letv's practice in video business can be described as no problem.
Later, due to the single industry operation prone to problems, LeTV also started its own road of transformation and upgrading. In August of 20 15, letv began to take a stake in Yulong coolpad, a famous domestic mobile phone manufacturer, and completed the control of coolpad within the next year through 3 billion yuan. However, the good times did not last long. Letv's mobile phone journey never seems to be smooth sailing. Although there have been some models with good sales, it seems that LeTV mobile phones have never had flagship models like Xiaomi and Huawei. As a result, Coolpad not only failed to surpass old rivals such as Huawei and Xiaomi, but was also surpassed by new rivals such as OPPO and VIVO. By the first half of this year, even the position of the former 10 mobile phone manufacturer could not be maintained, not only the ranking declined.
There is also an easy-to-use car and the same experience as Coolpad. Easy-to-use car, as the earliest online car sharing platform in China, can be said to have used the first single bonus of online car sharing in China. Easy-to-use cars have also soared in the air of enjoying the economy. However, the rapid merger of Didi, after killing Uber, gradually monopolized the online carpooling market, which made the easy-to-use car gradually fall into an embarrassing situation, the market share was gradually eroded, and it became more and more difficult for drivers to withdraw cash. Gradually, users find it easy to use the car.
Cool Easy is only a part of LeTV's strategic transformation, and it is also a very small microcosm, including LeTV Sports, LeTV Auto and so on. I think the reason why LeTV has such a problem is that the pace of transformation is too fast and the stall is too big, which eventually leads to a crisis in the development of the enterprise.
Second, how should the strategic transformation of enterprises turn?
With the rapid development of the Internet, a large number of enterprises put forward strategic transformation to get rid of the old problems of single business and insufficient income model in the past, but in fact, many enterprises are crossing the river by feeling the stones. This transformation of LeTV is an idea of crossing the river by feeling the stones. It is hoped that through diversified development, enterprises will embark on the fast lane of development.
However, the problem is that a company, such as LeTV, is a good hand in making videos. It is not necessarily a good hand in making mobile phones, televisions and online car rentals. Many problems have not been realized in the development process. According to the famous management scientist Fredmund Malik's book "Strategy", after any enterprise develops to a certain extent, it is bound to face transformation, but many enterprises will think of diversification, but fail to understand the deep connotation behind it. For enterprises, after choosing diversification, they actually need to master three keys.
First, liquidity is the key to the transformation and development of enterprises. When many people talk about enterprise transformation, they often say how many hot spots we have in the direction of transformation, how much traffic we can bring, and even how much profit we can generate in the future. But wait a minute, the first variable a company wants to control is not profit, but liquidity. What is liquidity? It means the ability to pay the necessary money at any time. Only in the market economy environment, you can pay the bill and you can survive. As we said before, LeTV, no matter how attractive your ecosystem is and how ambitious your strategy is, your suppliers and platform participants only look at real money. If you can't maintain sufficient liquidity and solvency, then even if the performance is excellent, it will inevitably be replaced.
Second, profit is a time variable that supports the growth of enterprises. If an enterprise wants to judge whether it can succeed, then profit is very important. Indeed, the task profit that almost everyone has received in the Internet era is no longer a key variable, because enterprises can cultivate the market by burning money, gain traffic by cultivating the market, and achieve financing through traffic and users. But the problem is, for start-ups, this game is a mode of delaying profit, and it can seize the market and realize business development by not making money in the early stage. For enterprises that need to be transformed, this kind of gameplay is very risky, because only from the perspective of profitability can we support the future development of enterprises. Take music as an example. Although LeTV has great development prospects, where is LeTV's profit model? This question has never been answered. Investors can pay for the potential of an enterprise in the short term, but in the long run, they can't be the big losers of this enterprise. This is the necessity of profit control.
Third, market positioning is the key to enterprise development. For enterprises in China, especially Internet enterprises, we have entered a single-domain winner-take-all market. In this market, only market share or market position is the key. If you ask China who was the first social software? Wechat is well deserved. Who is the second one? QQ is a veteran overlord. But what about the third one? It is difficult for many people to answer. This is the terrible thing about the winner-take-all for enterprise transformation. How to judge whether to open up a second battlefield after transforming into a certain field? There is a principle, that is, whether the field you are transforming has gained at least one defensive market position. What is a defensive market position means that you have at least a certain market discourse power in this market, can lead the development direction of the market, and will not be greatly impacted in a short time. For example, when LeTV entered the mobile phone market, Yulong Coolpad was an established mobile phone manufacturer, but it did not gain enough market voice and defensive market position in the mobile phone market. It is obviously unwise to make other layouts at this time.
From liquidity to profit support to market position, this is an evolutionary theory of enterprise transformation and development. Before the completion of this evolution, it was an adventurous behavior to easily open up the second battlefield and the third battlefield, but LeTV seemed to develop too fast, with vain internal forces and unstable foundations. I hope Jia Yueting can find the root of the problem as soon as possible and solve the current crisis.
Viewing Jiang Han, the official account of World WeChat from an economic perspective ID: jianghanwiew