Tao Te Ching and Wuwei Management

Chapter 32 3 "All Things Work Together": Judo——Multiply and Quickly Copy

Matthew Effect: Profit is proportional to scale.

Everything works together.

——Chapter No.16 of "Tao Te Ching"

For any enterprise, its development should have the momentum of "everything grows together".The "judo" here is "multiplication for quantity, fast copying, and quality assurance".The development of an enterprise is a higher level of enterprise value demand on the basis of survival, and the ultimate goal is to make profits.Because development requires huge support costs, if you do not fully understand the reality of the survival of the enterprise, and blindly expand without a strategy and purpose, it will lead to the failure of profit expectations and the breakdown of cash flow. The best result is nothing more than "each leading the way Three to five years", and finally could not escape the fate of death due to "suffocation".

A reporter from the Beijing News once asked Shi Yuzhu a very sharp question: In the eyes of everyone, you and Ma Yun seem to represent two images.Ma Yun pays attention to social responsibility, and you are a profit-seeking entrepreneur.How do you balance the relationship between profit-seeking businessmen and social responsibility?

Shi Yuzhu's answer was: "I don't think there is any difference between Jack Ma and me. We are the same. From a fair point of view, if you classify him as good, then I should also be classified as good. If you classify him as bad In the same category, put me in the same category. Regarding social responsibility and profit-seeking businessmen, I think that as an enterprise, the pursuit of profit is the first. If you don’t make money, you are endangering society. I have a deep understanding of this. I The company lost money in 1996 and 1997, which caused great harm to the society. At that time, except for the bank, I did not get in. I got in all others. My losses were passed on to the common people and the tax bureau. Pass it on to the society, and the society is taking care of this hole. Therefore, I think that if a company does not make a profit, it is harming the society, which is the greatest immorality.”

The essence of business is to obtain the maximum benefit within the scope permitted by laws and regulations, and the ultimate mission of entrepreneurs is to make profits. It is a shame for entrepreneurs not to pay wages to employees.A business is like a big family. It must have money to maintain the family's expenses in order to maintain the normal operation of the business.Without the support of profits, all good ideas can only be regarded as fantasy.Therefore, the starting point and foothold of running an enterprise is profit. Only by making profit can the long-term and sustainable development of the enterprise be guaranteed. The ultimate goal of enterprise operation is to create the blood that enterprises rely on for survival—profit.If the enterprise does not find a profit model suitable for the enterprise in the strategy and specific implementation, then no matter how grand the strategy is, it may be empty words in the end, and even become a huge cost for the enterprise, bringing huge risks to the enterprise.Practice has proved that many corporate buildings have been crushed by this kind of strategy that contains huge risks.From this point of view, the rapid expansion strategy of enterprises can borrow the idea of ​​multiplication, through the rapid replication of successful and effective profit models that have been proven by enterprises, to achieve breakthroughs in volume and obtain scale effects.

Pursuing higher profits in the global industrial division of labor is the dream of every country and enterprise in the global economic integration environment.In fact, the material differences of current commercial resources are very weak and can be quickly imitated, but the understanding and use of resources can create different profit models.What determines the success or failure in the future battlefield is not how different the business resources of the enterprise are, but whether the profit model of the enterprise is unique.There are no first-class resources but a first-class profit model can still create miracles.Coca-Cola is invincible all over the world with a simple liquid, and the key lies in its profit model to continuously amplify its advantages; KFC and McDonald's rely on fast food to conquer the world, but also through the rapid copying of their profit models, the enterprises become stronger and bigger; Dell has neither outstanding hardware technology nor huge research and development capabilities. How can it continue to develop and continue to make profits?It relies on the unique full-value management profit model!It sets a good example of a good business model.Through the rapid replication of this model, Dell has established a huge business empire.

In the final analysis, the profit model is a process of understanding resources and designing the use model.Different enterprises have different foundations and execution capabilities. However, as long as the resource usage model is designed ingeniously to make it an effective profit model, the enterprise will have a foundation for expansion.

From the ultimate goal of business, a profitable model is an effective model.Although the profit models of different enterprises are based on different values, this model can be replicated as long as these values ​​are identified and resources are matched in a vector to enable enterprises to achieve profitability.In fact, this matching process can be improved with the continuous improvement of the enterprise's ability to bear costs, and finally achieve optimization, becoming a profit model based on the core capabilities of the enterprise.

But we must also see that today, in any industry, competition is becoming fiercer, while demand is growing slowly or even stagnating and shrinking.As more and more enterprises divide up and scramble for limited market shares and profits, regardless of the strategy of "differentiation" or "cost leadership" and which profit model they adopt, there is more and more room for enterprises to obtain profitable growth. smaller.In this case, how can enterprises stand out from the bloody competition?How can you start and sustain profitable growth?
Enterprise managers should be soberly aware that lingering in the "red sea" competition will become more and more difficult to create the future of the enterprise.If an enterprise wants to grow and develop, it must look for the "blue ocean" and open up a new market space with huge demand.Since the creation of the "blue ocean" is based on value-based innovation rather than technological breakthroughs, and is based on the reordering and construction of the existing market reality rather than guessing and forecasting the future market, enterprises can systematically and reproducibly The way to go about it is to enable businesses to start and sustain profitable growth.This is judo at its highest level.

At present, in our field of vision, not only Huawei, CIMC, Lenovo, and Haier are already growing bigger and stronger with "judo", but also a large number of companies that are not as large as them are also working hard The will is working tirelessly towards this goal.As long as there are such a group of enterprises and entrepreneurs, we can definitely expect that the Chinese version of Dell, Coca-Cola, McDonald's, and KFC will appear in front of the world.

If an enterprise makes a breakthrough in a certain field, becomes a professional company in this field, and forms a complete system of healthy development such as culture, brand, system, service, etc., then this enterprise must start to do multiplication, quickly copy the profit model, and realize Scale up.Because the opponents you are facing at this time may be some powerful investment institutions and groups or multinational companies and so on.Without a certain scale, there will be no cost advantage; without a certain scale, there will not be enough positions to retain talents; without a certain scale, the value of the corporate brand cannot be effectively exerted, and good development opportunities will be lost.So doing multiplication becomes an inevitable choice.Multiplication is often achieved through off-site expansion or chain franchising. The core value is quickly copied to each branch or franchise organization, and the value of the brand is realized through the growth and development of geometric progression.

(End of this chapter)