Industry leader's confusion

Amazon, Apple, Procter & Gamble, Facebook, etc., brought up the best in these different industries worldwide. Perhaps what people see more is how successful they are, but few people know that the leaders of these respective industries are shouldered behind the success. What kind of cost and risk, and how to overcome the strategic confusion.

Although each giant's road to success is not the same, their costs and risks in the process of constant innovation and leadership are somewhat similar. For any industry, leading companies must in the early stages of development must have a huge amount of technology, human resources and other resources for technological innovation and market cultivation. The risks of nurturing market competitive advantages and corporate inputs must be faced by any industry leader. A fallacy. Or successful, or failed, this is an unknown number.

As a leader in the field of global e-commerce, Amazon's development experience is the ultimate proof of this trajectory. Since its establishment in 1995, the free cash flow of the “pathfinder” of the Amazon industry has been declining year by year. From the net outflow of US$180,000 in 1995 to the net outflow of 6.91 million in 1997, the amount in 1999 was as high as US$378 million. . It goes without saying that during this period, Amazon has been burning money to explore the way. Until 2002, Amazon realized operating profit for the first time in the whole year. Nowadays, Amazon has become the second largest Internet company in the world after Google, and has achieved a successful counter-attack.

Amazon eventually became a typical enterprise that continued to innovate and become successful, but it was not 100% sure to be an industry leader. There is still a leader that has not been recognized by the market and is gradually overwhelmed by the risk of market change. Like Apple's ambitious launch of Lisa products that year, despite high hopes and anticipation to subvert the market, it eventually had to bury thousands of dollars in Utah's junkyard. Obviously, such costs cannot be forewarned.

In fact, as leaders, they not only have to bear the loneliness and risk that they lead alone, they also need to know how to deal with the follow-up companies. Once the entire market has matured from the cultivation period, the leaders will face the current situation of being followed and plagiarized by industry companies. How to emerge from this situation through strategic innovation and continue to maintain the status of the leader becomes another major problem. Just like the world’s hottest social network Facebook, global companies have been contending to imitate since its inception, while Facebook has continued to expand new strategic areas through acquisitions, etc., transforming into a super-marketing tool, always leading Industry development direction.

Do not pay, blindly follow the trend of imitation, plagiarism, do not see the hope of transcendence; do lead, pay a huge price, after years of treks, and finally dawn, but there is also the risk of death. Whether it is born as a follower or dead as a leader, I believe many leading companies will choose the latter, because the goal they have set from the beginning is to be a leader.

In the current smart home market, where we see a thriving scene, we also see such a company, that is, Haier, its dedication and persistence as a leader is exactly the same as Amazon. Since the beginning of research and development of smart products in 1999, Haier has launched smart home appliances such as smart air conditioners and smart refrigerators in the R&D process in the past 15 years. It has played the role of an industrial evangelist and awakened the intelligent transformation of the entire industry. Today, the smart home market is gradually maturing. With the market's increasing awareness of smart products, Haier’s smart road has been verified by the market.

As people began to get involved in this area, Haier quietly began exploring new strategic models. After the U+ operating system was released recently, the industry agreed that Haier seeks to transition from a smart home hardware solution provider to an integrated platform operator. Within Haier's planning framework, industry players will integrate innovations around user needs on a unified platform. According to estimates, in 2015, 10 million households are expected to enjoy U+ smart life. By 2018, this figure will reach 100 million, and the entire ecosystem will realize an income of 300 billion yuan.

According to a research report released by Juniper, a well-known American market research company, the smart home market will grow from 25 billion U.S. dollars (about 152.7 billion yuan) in 2012 to 71 billion U.S. dollars in 2018 (about 433.6 billion yuan). Through this figure, it is not difficult to find that the Haier U+ ecosystem will account for nearly 70% of the total, and it will be the largest piece of the smart home market.