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"Future enterprises must break away from price competition and move towards value competition; only then will you have the capital to survive" - Liu Chuanzhi.
"Business is a game, the rules keep changing, and those who do not adapt will be eliminated" - Li Ka-shing.
"One of the biggest issues in business is: maintaining the previous successful model unchanged, even for a year, is too long" - Pratt, CEO of HP.
"A dollar, through your company, becomes one dollar and ten cents after going around the circle. The business model refers to where this additional ten cents is added" - Robertson Steven, the most famous risk investment advisor in Silicon Valley.
The above four sentences vividly explain the significance of introducing business models in enterprises, the need for innovation in business models, as well as the simplest and most direct method to test whether a business model is on the wrong track. Without any doubt, the purpose of introducing a business model in an enterprise is to make a profit. Therefore, any mode built or adjusted with this at its center is correct and effective. Floor heating companies need business models, requiring continuous exploration, adjustment, and innovation to adapt to market trends and the times. However, they should not bind themselves to the concept of business models since business models are not the entirety of commerce.
Clearly: Profitability is the ultimate goal for floor heating companies to introduce business models.
Business models can bring profits and help enterprises achieve sustainable profitability. Profitability is the first issue every company should consider. Every major brand today has achieved continuous profitability through business models, gradually growing from "positive characters" into what they are now: Coca-Cola used to sell soda, Microsoft now sells software, Walmart was originally a grocery store, and Hai Di Lao started as a small hotpot restaurant. However, a business model is not the same as a profit model. A profit model is the channel through which a company earns money, while a business model is the value that a company can provide to its customers and the factors that enable sustainable profitability. Some people say that business models are things that only high-tech industries can "play with," and floor heating, being a low-tech industry with mostly small and medium-sized companies, does not need business models. In reality, regardless of whether it's high-tech or low-tech, if you want to succeed, you need to find a successful business model and quickly maximize its profitability. This also shows that the most direct and fast way to test whether a business model is on the wrong track is to see if customers are willing to pay and if the company is achieving profitable revenue.
Reflection: How to control the degree of innovation in business models?
Among all innovations, business model innovation belongs to the most fundamental innovation in enterprises. Without a business model, other management innovations and technological innovations lose the possibility of sustainable development and the foundation of profit. Mr. Yan Huiping, Chairman of Shanghai Huitiong Industrial & Trade Co., Ltd., stated: The topic of business model innovation is too broad. It relates to corporate culture, the concepts, thinking patterns, strategic vision of the company's boss, and the company's positioning, so it cannot be generalized.
Mr. Wu Zhiyuan, General Manager of Jiangsu Kening Comfort Home System Integration Co., Ltd., said: "Business model innovation cannot be copied, and it cannot be the same for all companies. The premise of business model innovation is to practice internal strength training, reducing total costs to the lowest. All operational methods and modes of execution, adjustment, and improvement of the company should revolve around reducing total costs, realizing maximum profitability through achieving the lowest total cost, thereby enhancing market competitiveness."
Mr. Guo Chunyu, General Manager of Chongqing Xinqin Times Warmth Equipment Co., Ltd., believed: Business model innovation is the product of full market competition, but all innovations carry risks and cannot change endlessly, otherwise there would be no end, and even the originally good things might be 'changed' away. The company needs to preserve and inherit its existing excellent models and maintain its own positioning. In short, all changes and innovations must return to the basic principle of honest operation.
Dr. Chen Mingzhe, the founder of Dynamic Competition Theory and world-renowned business strategy master, pointed out: "In fact, business models do not need to change for a very long time; they only need continuous adjustments and modifications, not fundamental changes."
Exploration: How can floor heating companies sustain profitability through business models?
This year's China Floor Heating Ten Thousand Mile Journey and Comfort Home National Tour Promotion Campaign has made more floor heating companies deeply reflect on the concept of business models, with innovators rising up, such as Sanmenxia Greentherm Heating Equipment Co., Ltd.'s alternative "work": Comfort Home System Experience Mobile Vehicle, and the joint establishment of "Nanjing Quiet Home Experience Store" by Mr. Huang Guocang, Chairman of Nanjing Tianmai Far-Infrared Floor Heating Technology Co., Ltd., and Mr. Ma Kaiyun, General Manager of the American Serenity Pure Water China Operating Center. The uniqueness of the floor heating industry determines that a single floor heating system is difficult to grow large and strong, while developing towards integrated comfort home systems is the best future direction. The continuous popularity of the Comfort Home System Experience Mobile Vehicle and the Nanjing Comfort Home Experience Store sufficiently proves that this path is feasible, customers buy it, and it will succeed. Of course, there are many ways to implement business models, and all roads lead to Rome. As for how specific floor heating companies obtain business model inspiration and use business models to profit, the author summarizes the following points based on the views of industry insiders:
Exchange
Mr. Wu Zhiyuan, General Manager of Jiangsu Kening Comfort Home System Integration Co., Ltd., believed: The prospect of discussing innovative business models for floor heating companies lies in exchange, like the frequent exchange meetings held by China Floor Heating Ten Thousand Mile Journey and Warm Century Media. Exploring business models cannot be done in isolation; communication between peers can spark ideas, and good inspirations come from such exchanges.
Creativity
Greentherm's Comfort Home System Experience Vehicle demonstrated what Lu Xun meant by "originally there was no road, but when more people walked it, a road was formed." Greentherm pioneered integrating floor heating systems and core subsystems such as fresh air, central air conditioning, and central water purification onto a large truck capable of moving anywhere. This not only saved costs but also indirectly promoted what floor heating and comfort home systems are, making passersby remember the "Greentherm" brand.
Combination of Virtual and Physical Networks
"Physical network" refers to the company's marketing, service, and logistics network, while "virtual network" refers to the internet, including the company website, electronic shops, industry websites, and online malls. The virtual network is used to retain and track customers, while the physical network is used to promptly understand customer needs. The physical network emphasizes efficiency, while the virtual network spreads widely across all corners of the country to maximize customer acquisition and establish connections with customers. The combination of both results in acquiring and serving the most customers at the lowest cost.
Inverted Pyramid Profit Model
For floor heating and wall-hung boiler comfort home system manufacturers, inventory has always been a major headache. Frontline salespeople, in order to meet performance targets, tend to stockpile goods, ultimately leading to increased inventory. Under the new business model, salespeople should first secure orders before pushing production back to the manufacturing department, thereby adjusting the entire supply chain's pace and related services. The optimal result of this approach is achieving zero inventory, indirectly enhancing overall market competitiveness.
Service Must Be Done Even If It Costs Money
Ms. Wang Fang, President of Liaoning Floor Heating Association and General Manager of Liaoning Huayuan Heating Engineering Co., Ltd., highly approves of Haier's "service supremacy" model: "Even if it costs money, service must be taken to the extreme." Ms. Wang expressed: Huayuan adheres to an extremely responsible service principle, and regarding service, Huayuan practices what it preaches. For example, if it is agreed to arrive at the user's home within two hours, the worker will definitely not arrive even one minute late. Sometimes, even if it costs money, it must still be done this way because service is a value-added business, and doing a good job in service equals indirect profitability. Precise and meticulous service will yield high returns.
Transition from Workshop-style to Project Team System
Small enterprises operating with the strategic vision of large enterprises may not necessarily grow large and strong, but thinking like a small enterprise certainly will not allow them to grow large and strong.
"Currently, many floor heating companies have yet to escape the workshop-style management system where one person takes on multiple roles, making it difficult for them to adapt to intense competitive environments and ultimately leading to their elimination," said Mr. Huang Guocang, Chairman of Nanjing Tianmai Far-Infrared Floor Heating Technology Co., Ltd. He pointed out: "Currently, 10% of users in Nanjing are undergoing radiator renovations, and these users are potential customers that floor heating companies and comfort home system integrators aim to tap into. One could say we have a vast market prospect ahead. In this regard, I am more inclined toward the direction of project-based management for floor heating companies. Comfort home systems, as highly integrated systems, are not simply achieved by piling various products or subsystems together. To realize such a 'large' system and maintain it long-term, enterprises should possess a complete company management system, including clearly defined responsibilities and close cooperation among technical teams sharing knowledge, as well as clear organizational structures and production-sales-service processes—what we call the team cooperation system."
Editorial Note: Companies Should Not Over-rely on Business Models
It is an undeniable fact that today’s commercial society is no longer about product competition but rather about business model competition. Enterprises need to explore business models that align with market economy trends and suit their own needs. However, without certain internal strengths, including integrity, product quality, technical capabilities, service quality, and industry responsibility, all business models remain hollow shells. This is akin to learning acrobatics; even with the best methods, without solid and arduous practice and dedication, one cannot truly master the art, let alone surpass others. Business models should not be the lifeblood of enterprises; companies should not overly indulge or depend on them. Products or services can still survive independent of business models, indicating a healthy development state. After all, business models are not the entirety of commerce.
Extended Reading: Why does Saint象 Solid Wood Flooring dare to challenge Northern floor heating? Energy-saving smart floor heating in the era of tiered electricity pricing.
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