In accordance with the "mission", we will establish "main business" (what).
The company serves the target customers with its mission and assumes the responsibility of creating value for customers. What can create customer value and meet customer needs is the main business of the enterprise. Generally speaking, the main business is the solution that the enterprise provides to the target customers to meet their value needs, including products, services, projects, cooperation, and so on.
If the strategic goal is to accumulate in the way of "doing addition" on the vertical timeline, so as to realize the corporate vision; Then, the main business is to continuously focus on the horizontal space in the way of "subtraction", and strive to provide the best solution for the target customer, so as to achieve the corporate mission.
1) Subtraction of the main business: cut the business content that is inconsistent with the mission.
If the mission of a department store is to "provide opportunities for ordinary people to buy the same things as the wealthy", then the main business of the department store should be to select products, expand categories, and provide consumers with cost-effective and optimal solutions to meet the needs of the target customer, that is, the ordinary people.
Therefore, between non-well-known good products and luxury goods, the company should choose the former, and by constantly helping ordinary people, select non-well-known good products and send them to the front, meet the needs of consumers, gain consumer trust, and then establish the company's brand image. In the end, the majority of ordinary consumers, as long as they hear the company's name, can associate it with "high quality and low price", and they will habitually patronize this department store when they have daily shopping needs.
Compared with luxury goods, or other well-known products with high brand premiums, the pricing of non-well-known products is relatively low, the profit margin of a single product is small, and the shipment volume is low when it has not been recognized by the majority of consumers in the short term, so for department stores, in the short term, non-well-known good products are naturally less profitable than luxury goods.
But even then, it is necessary to cut the business content that is not in line with the mission, otherwise the company should not try to establish a unique brand image in the minds of consumers. For consumers, "Who are you?" "What does it mean to me? If a company can't answer these questions with its own practical actions and continuously strengthen the credibility of the answers with practical actions, then the company is dispensable and of little significance to consumers.
Provide opportunities for ordinary people to buy the same things as the rich", some people may be reminded of Wal-Mart with this sentence, which is indeed the mission of Wal-Mart, but Wal-Mart has begun to engage in things outside its mission and choose to sell luxury goods.
Customers who choose to buy luxury goods on the Walmart platform recognize the luxury brand and have nothing to do with Walmart; And those customers who choose to buy non-well-known products on the Walmart platform recognize Walmart's preference and trust Walmart's brand. Only by adhering to the latter strategy can we continue to accumulate intangible brand assets for the company and implant the perception of Wal-Mart's value in the hearts of consumers - preferred, high-quality and low-priced.
Walmart should change its strategy for a reason, but no matter what the reason, the conflict between strategy and mission goes against the underlying logic of corporate operations. The driving force behind decision-making is worth pondering, and it is not difficult to see which of the "shareholder value" and "customer value" is put in the first place through the behavior of the enterprise to implement the decision-making.
If an enterprise no longer attaches importance to its mission and no longer takes customer value as the core driving force, in the long run, the "value network" will inevitably be unbalanced. Even if some decisions will increase the benefits in the short term, if they are not controlled, they will affect the brand image, and the long-term development will be severely damaged.
With high quality and low price as its corporate mission, there is also Xiaomi.
In July 2018, Xiaomi went public. Before the listing, founder Lei Jun finally officially confirmed Xiaomi's mission: always adhere to making good products that "touch people's hearts and are kind", so that everyone in the world can enjoy the beautiful life brought by technology!
Previously, many people questioned Xiaomi and questioned that they would do everything, but in fact, before officially confirming its mission, Xiaomi has silently conveyed its value orientation with actions: Xiaomi is only committed to providing high-quality and low-cost products. I believe that even if Lei Jun did not officially announce his mission, many consumers will be able to interpret what Xiaomi's mission is.
Only by focusing and focusing on the requirements of the mission can we enhance the ability to create "differentiated value", establish our own core advantages, and obtain a solid market position.