the author: cullen s
the moat mean to describe the competitive companies, are as easy to keep difficult to attack the castle, outside the towering walls, and protected by a moat, let competitors are unable to go across the heavy obstacles. So what is the moat of millet technology? This article comes from.
first of all, I think buffett, as defined by the moat is refers to the industry leading enterprises. From this perspective, millet is not discussed in “moat” theory of realm. I have been bearish on millet, but now I have to admit that within three years of the great success of millet and high growth, but it’s a pity that he is not currently in the industry leading enterprises, it is neither Coca-Cola beverage, nor say lenovo to Gillette shaving.
although millet now not form their own moat, but can be based on the theory of buffett’s moat simple analyse the millet in what could build their own moats?
buffett moat theory in general is the four aspects: the analysis of enterprise intangible asset, the customer switching cost, network effects and cost advantage.
can basically see the evaluation of enterprise intangible assets for the enterprise to create value and its sustainability. From this perspective, the current fan culture formed in the millet for its great value, but is there a sustainable sex remains to be the future. One is the bigger fan base, and the other is fans’ loyalty. Powerful intangible assets can make the enterprise have enough strong pricing power, from the current look, takes low-priced, high cost performance in the course of millet in its user base have no pricing power.
the customer switching cost is also highly relevant and user loyalty. Not just the phone, conversion cost is not high tech products. Even strong such as apple, samsung, is faced with a few product is ineffective after the loss of the possibility of the user. What’s more, millet.
of course, regardless of the intangible assets or the customer switching cost, I think the core is the product. Look from word of mouth, the progress of millet 2 millet 1 is very obvious, it is also a millet the foundation for the future sustainable development.
network effects of millet is a very interesting topic. “If the value of a product or service increases with the increase of the number of customers, so that enterprises can benefit from the network effect”, the power of the Internet platform will enlarge the network effect, taobao, I think is one of the typical case. Millet itself is not a powerful network platform, but millet are by far the most understand Internet phone companies, is also the most understand the Internet marketing of mobile phone companies. Strong network resources such as ali, 360 also had tried to enter the mobile phone field, but apparently great achievements and millet gap. After all, they are not focusing on mobile phone companies. In the present, does not seem to be than small meters have more network resources, and professional mobile phone companies. Millet using Internet platform are accomplished with this network effects, especially the brand and the operation of the enthusiasts DIY beautiful MIUI. So, from this point, it may become a moat of millet.
cost advantages perspective, generally speaking the most depending on size. Millet now though grow rapidly, but the volume is not large enough. Themselves do not have any core technology or components and millet, millet to in the supply chain cost advantage is bigger than a strong brand, in the short term is difficult. From the perspective of distribution network, millet, although need distribution, but compared with the traditional entity shop sales of mobile phone companies, actually the cost would be much lower, respect the obvious advantages.
why buffett rarely for high-tech enterprise, it is just because of the technology and technology products, brand change too fast, jiangshan generation have fell out, after the Yangtze river waves steady, so it is difficult to set up his moat high-tech enterprises. This situation is especially obvious in the United States, in China is relatively better, compared to the United States of high-tech enterprises, we are more driven marketing.
the place on put together is narrated, millet if can form a moat is more likely to be in the future are the most good at Internet marketing (including promotion, sales) that block.
written above is purely an outsider’s theoretical analysis, the accurate answer to the question may be given only lei jun can accurately.