Contents**:Noteman (ID: notesman).Business MindsetIn this complex world, there is one constant truth:Everything has a cycle.Editor-in-charge|Ken KanekiTypography|May.
7933rd In-depth Good Essay: 6065 Words |15 minutes read
Just like the change of day and night, the cycle of the four seasons, every thing and every industry cannot escape the iron laws of this universe. Once upon a time, the Internet swept the world like a wild west wind, bringing unprecedented changes and opportunities. But now, it has also entered a mature and stable stage, and the growth rate has dropped to less than 10%.
Schumpeter, an economist during World War II, introduced the concept of "innovation" for the first time by proposing the theory of economic management. In order to clarify the meaning of innovation, he constructed three business cycles, known as the "Schumpeterian cycle". This theory is now widely accepted.
From this point on, how to advance from one cycle to the next has become a method that countless entrepreneurs are looking for. Some enterprises find the answer that suits them, quickly realize the cycle crossing, and then continue the development trend;There are also companies that have been repeatedly trying feasible solutions, and finally missed the opportunity and had to say goodbye to the times.
Kodak, which once swept the world in the film era, finally made a digital camera. But too much time and the reluctance of decision-makers to do traditional business have made this company a thing of the pastOn the other hand, Fujifilm, a former competitor, entered the field of digital cameras early, and with its own research and development in imaging, it firmly occupied a significant market share, which is regarded as a successful case of the transformation of traditional business to the digital age.
And, of course, Microsoft. As a well-deserved king of the personal computer era, the later Microsoft almost missed the mobile Internet era, and lagged behind its competitors in the fields of smart terminals, search engines, social networking, and e-commerce. At the end of 1999, Microsoft's market capitalization hit an all-time high of $600 billion, and since then it has been declining, and by 2013 its market value had fallen by more than half, leaving only $220 billion.
By 2014, Microsoft officially announced the "cloud first" strategy, giving up the main revenue from Windows, and letting the cloud service Azure replace Windows as Microsoft's new growth engine. Microsoft's stock price has also swept away the decline, rising rapidly since 2014, doubling its market value in just three yearsBy December 2018, Microsoft's total market value exceeded $850 billion, surpassing Apple to become the world's most valuable company at that time.
Again,In the mobile phone industry, where the involution is the most serious, there is a brand that has achieved high-end market development and gained a firm foothold by constantly going through the cycle. It's vivo.
Data shows that after more than 20 years of development, vivo has changed from a regional private enterprise to a global enterprise, with 60+ countries and regions officially shipped, and the number of global stock users has exceeded 500 million.
At present, vivo Group is like a steady ship, breaking the waves, and its revenue performance is stable and improving, continuing to grow, showing strong market potential. It is worth noting that, based on years of technology precipitation, vivo's annual flagship product - vivo X100 series shines in the market, this product has achieved a cumulative sales of 1 billion yuan on the first sales day, breaking the first sales record of all new machines in vivo's history. Crucially, compared with the previous generation X90 and X90 Pro, the sales of the X100 series have increased by 740%, a figure that has attracted widespread attention in the industry.
This means that while other brands are still fighting for market share, vivo has quietly achieved high-end transformation, not only growing against the trend in the market, but also winning the recognition of users and the industry.
Ray Dalio, author of Principles and founder of Bridgewater, said: "Everything works on the principles that lie within, that is, a series of cause and effect relationships that determine the direction of the world. If you find out the cause and effect, it's not all of them, but preferably the vast majority. Then you undoubtedly have the key to unlock the treasure chest of this world. ”
Therefore, the success of vivo's high-end and the fact that the market is growing against the trend has made practitioners from all walks of life begin to think: everything has a cycle, and the cycle governs everything, so how can it go through the cycle?
1. If you want to go through the cycle, you must first attribute it correctly
In the field of economics, the S-curve is often used to describe the life cycle of a firm, and it is a manifestation of the universal law of life cycle. From the early exploration, to the middle inflection point, and then to the homogeneous growth after the inflection point, the living system basically conforms to the change of the S-shaped curve.
The so-called leadership through the cycle requires leaders to be able to see through the curve of the life cycle, from the previous to the next life cycle.
In the transition period between the old and new cycles, those irreplaceable underlying technologies and architectures, as well as the business ideas and industrial synergies behind them, can make the entire ecology coexist and prosper.
In times of rapid change, many people see pragmatic people as stupid. In fact, these pragmatic stupid people are not innovating, but when the "previous round of paradigms" is still relatively profitable, they begin to lay out the "next paradigm" that is not very profitable or cannot make money.
In this regard, vivo has its own insistence.
From the perspective of development history, vivo has gone through the cycle again and again, and in the past 28 years, it has only done one thing, which is to focus on communication. From intercoms to feature phones, to smartphones, and smart phones in the next era of the Internet of Everything, it has always been very focused. In this process, we continue to deepen our own capabilities, go deep into the chips in the upstream of the industry, and then integrate the ** chain in the downstream to drive the development of the industrial chain.
In fact, even if it is the expansion and technological innovation behind, vivo is constantly expanding its capabilities in terms of depth and breadth. From the sudden improvement of photography capabilities, to the optimization of the underlying system, to the research and development of 5G, 6G, and AI large models, vivo has been making a fuss about its core business, and even working hard many times.
The problem is that the alternation of the old and new cycles is not so continuous, it is an intermittent development, and this discontinuity is the replacement of the old paradigm by the new paradigm.
The most critical part of this process is the window of opportunity to switch between the old and new paradigms, known as the chaotic period. Because it is not clear to see, the old paradigm has matured, the growth has been the ultimate growth, or even no growth, it has become more and more fierce market share support, more and more fierce ** war, at this time the new force is not clear, the new paradigm A and B, no one knows which one will win.
So at this time, how should enterprises choose?
Jia Jingdong, vice president of vivo brand, clearly expressed vivo's views on this matter in the recently concluded "vivo living room" roundtable dialogue activity, that is, "the premise of going through the cycle is to bury one's head in the cause, and in the technology industry, it is to do science and technology in a down-to-earth manner, and make everything deep and thorough."
In his opinion, even if you are a "stupid person", you must have a direction to work hard, which is the "right cause". As long as this "cause" is obtained, combined with the persistence of long-termism, the enterprise may realize the crossing of the cycle.
So what is the "right cause"?vivo has its own perception of this. From a narrow point of view, the so-called "right cause" is actually to deduce the core needs of users from the user orientation, and use these needs to guide the direction of their own research and development.
This is the user-oriented strategy that vivo has always adhered to.
In a broad sense, the so-called "correct cause" includes the judgment of industry trends, the sublimation of its own management theory and the integration of the resources of the entire industry.
1.Vivo judges that there are still tenfold growth opportunities in the mobile phone industry
Although the mobile phone market has entered the red ocean, in fact, the opportunity still exists. Hu Baishan, executive vice president and chief operating officer of vivo, believes that the development trend of the mobile phone industry is determined by nothing more than two points:One point is whether the purchasing power of consumers has declined, and consumers without money are unable to support the development of the entire industry;Another point is whether the technological development of mobile phones can arouse consumers' desire to consume.
Judging from the current state of economic development, we have passed the most uncomfortable stage of economic development after the epidemic and have gradually entered the recovery. The explosion of the domestic mobile phone market in 2023 also shows that consumers' support for the mobile phone market still exists, and there will be a larger range of ** due to technological breakthroughs.
AI has become a new direction of scientific and technological development at this stage, and mobile phones, as the first in vitro "organs" of human beings, can be used as both AI capability output terminals and AI training collection terminals.
In this regard, Hu Baishan believes that "our AI technology, even large models, represents the brain, which has been trained by so many users on mobile phones, and the brain is becoming closer and closer to the brain, with unlimited imagination."
Wang Gao, a professor of marketing at China Europe International Business School, also believes that the best use case of real AI is on the mobile phone, "It can become my companion, I can chat with it, and it will also develop a lot of applications for you, which is a huge second curve full of opportunities for mobile phones."
Therefore, vivo is sure that in this context, if we grasp the ability of technology research and development, the brand will actually get long-term development opportunities.
2.Innovation and persistence in business ideas
User-oriented, "long-track competition", "underlying innovation", "steady evolution" and "differentiation strategy" are the five key words of vivo's high-end breakthrough strategy, which are actually the upgrade of vivo's business philosophy.
For a long time, vivo has insisted on finding the core needs of users through user orientation, and then turning them into long-term R&D routes and product strategies, highlighting the strong momentum of its own development through competition on the long track. Of course, in this process, vivo's research and development is not carried out on the surface, but goes deep into the underlying system of the entire mobile phone development to innovate. In the process of innovation, it also adheres to the strategy of steady evolution and differentiation.
Hu Baishan believes that when a product does not solve user problems, there is no "cause" to talk about business closed loop and mental closed loop, "so we put the user's experience in the first place, whether it is to enter a new category or enter a new country, after completing the experience closed loop, we can consider the business closed loop and mental closed loop."
In his opinion, if you want the brand to rush to the high-end and stand firm, you must do a good job of closing the loop of users' minds. "After having a closed loop of experience and business, the ultimate goal is to pursue the brand to leave a deep impression in the hearts of users, so that the product can be sold at a premium." In order to achieve a "closed loop of mind", the research and development of enterprises must be considered from the system.
The emergence of blue technology is a good example.
Previously, vivo has insisted on investing in the research and development of imaging systems for a long time. It has even iteratively made a very high-quality, powerful independent chip, and jointly developed a related imaging system with Zeiss, so as to establish an extremely powerful image of vivo mobile phone image in the minds of consumers.
However, in the later research process of consumers, vivo found that consumers' requirements for mobile phone performance are becoming more and more systematic, and single-point breakthroughs are no longer the core of the current mobile phone technology development.
Therefore, after combining the various needs of consumer feedback and industry development trends, after a long period of large investment, in 2023, vivo will launch the self-developed image chip V3 and the "blue technology" including the self-developed blue heart model, the self-developed blue river operating system, the blue crystal chip technology stack, and the blue ocean battery, which systematically empowers the product and improves the user experience of consumers.
3.Adhere to industrial synergy
vivo has shifted from pure self-research to a large number of collaborations, reducing costs, and going through the cycle together through symbiosis. Industry synergy through the cycle, paired growth, symbiosis and win-win.
For example, vivo does not develop its own chips, but builds a chip technology stack through the understanding of users, and uses relevant predictions and prospects for chip consumption, as well as functional cognition, to create a Dimensity 9300 that meets consumer expectations with MediaTek.
Hu Baishan said that vivo believes that the geese will go far, and actively play the role of the head goose, help the coordinated development of the domestic ** chain, and lead the collective prosperity of the industrial chain. The prosperity of the mobile phone industry is not only a manufacturer and an industry, but the collective prosperity of tens of millions of first-class chains behind it. What position the mobile phone industry achieves, what is the position of the industrial chain behind it.
Jia Jingdong, vice president of vivo brand, said: All industries, and even our lives have ups and downs, and there are cycles, as long as we grasp the essence of the problem and do what should be done well, we can be calm.
2. Rooted in the industry, systematic innovation, and collaborative through the cycle
Learning to attribute correctly is only the first step, in the face of the new cycle, what can an enterprise do, how much space, whether it can be done, lies in the desire and strength of entrepreneurs, and how much industrial willingness the enterprise has, so as to achieve a new round of transformation and upgrading.
In this process, how to mobilize the power of the industrial chain and how to achieve symbiosis and co-prosperity with the industry is the focus that all enterprises should pay attention to.
From vivo's R&D to production, it has formed a symbiotic relationship with the industrial chain, which can be summarized into the following three points:
1.Altruism
vivo does not try to build a closed ecosystem, but embarks on a path of fully open innovation. Because the system is open, it can allow more excellent enterprises to participate, create together, and form creativity.
The reason why vivo can go through the cycle in the mobile phone market is the core technology of hardware and software integration and the coordinated development of the industrial chain.
For example, vivo established the vivo communication research institute in 2016 to start 5G research. In 2019, vivo took the lead in launching 6G pre-research, and has worked with global industry partners and research institutes to accumulate a large number of research results in a number of potential 6G core technologies.
In addition, vivo is an important member of the IMT-2030 (6G) promotion team of the Ministry of Industry and Information Technology, actively participates in 6G research, leads the writing of a number of technical reports, develops a number of 6G prototype verification prototypes, and participates in a number of 6G technology tests.
As of 2023, vivo has released 6G 6G including "6G Network Architecture", and participated in the 2023 Global 6G Development Conference together with upstream communication manufacturers as a pure terminal manufacturer to provide suggestions for the development of 6G technology.
These pre-researched technologies are shared with industry chain partners.
Technology strategy expert Zhou Zhangbao believes that vivo is right to do this, because "technology companies should do something more basic to drive the progress of individual and social productivity, to really make the social mode of production, lifestyle change, rather than do something particularly superficial."
In fact, many of vivo's industry chain partners have been with us for more than ten years, most of them have grown from more than one billion to tens of billions, and many have even been listed.
Hu Baishan said: "Under the same conditions, vivo gives priority to the domestic ** chain. ”
2.Industry collaborative innovation and concerted efforts
vivo pays attention to the R&D system guided by user needs. In fact, it can form a symbiotic relationship with the industrial chain, which will obtain the demand of the market and drive the release of core capabilities through its own research and development, so that the whole industry chain can jointly develop technology around these needs, form an overall technology improvement, and then create products that can better serve the needs of users, and promote the performance of vivo mobile phones to climb steadily, becoming an important force for its development.
For example, since 2020, vivo has established a global strategic partnership with ZEISS. Over the past three years, the two companies have carried out in-depth joint research and development in the fields of ZEISS optical lenses, T* coatings, portrait lenses, natural colors, etc. These R&D results have been successfully applied to 20 products equipped with vivo ZEISS joint imaging systems, bringing an excellent mobile imaging experience to nearly 15 million users around the world.
In this regard, Hu Baishan said: "vivo takes user experience as the core, feeds back technology with the market, participates more in technology development in advance, invests a lot of money and manpower from the demand stage, adheres to long-term joint research and development with industry chain partners, promotes technological progress and popularization, leads the progress of industry standards, and promotes industrial collaborative innovation." ”
Professor Wang Gao said that vivo is very focused on doing things, and resources are not allocated to other places, "because of this, but more looking forward to the future."
3.The culture behind industrial synergy: duty and peace
Jia Jingdong, vice president of vivo brand, said: Culture is the cornerstone of everything we do, and it is also the biggest core competitiveness of the company.
vivo believes that in the face of consumers, it is more intuitive, that is, to focus on their original intentions and passions, and constantly pursue and realize it. Jia Jingdong believes that the result is not the most important thing, the most important thing is the process. "The reason for burying one's head is very simple, vivo is very concerned about doing the right thing, if something is not right, the harder you work, the more wasteful. So, first of all, we have to think about what is the right thing, and then we have to do it as right as possible, which is the simplest explanation of our culture."
In a certain case, not publicity, exaggeration, chasing the wind, but doing your own things in a down-to-earth manner is the embodiment of vivo's duty and ordinary heart culture. Wang Gao, a professor of marketing at China Europe International Business School, said, "You are down-to-earth, not submissive, but have pursuit, fire in your heart, and light in your eyes, so this team is driven by vision and goals, but the work is very down-to-earth."
In fact, this is also a kind of thinking quality that vivo, or a highly competitive industry such as consumer electronics, must have in order to survive in a long-term anti-cyclical manner. Corporate culture is given a very important meaning by vivo, and many executives say that corporate culture is the value of vivo's main output.
After all, according to vivo's experience, when mobile phone brands break through to the high-end, they need to create top-level products while also forming a handshake with consumers to form a value shake, so that high-end consumers can understand the culture and value of the company.
3. Summary
Isn't vivo a microcosm of the "economic confidence sample" that will pass through the next cycle?
Hu Baishan thinks that the reason why enterprises can survive through the cycle to the present is "essentially to continuously solve social problems, and the better the social problems are solved, the better the enterprise will develop."
Therefore, the core of all the development of vivo is to form a value symbiosis in a certain sense with the development goals of the industry and even the whole society.
Only the collective innovation and breakthrough of the industry in the underlying technology can truly make manufacturing a creation, truly creative, and support enterprises through the cycle and support the upward development of the industry.
And this may be the law of passing through the cycle that vivo brings to all entrepreneurs.