Staying alive is the core strategy of every company
Date：2024.12.19 11:15Views：
Author | He Jijian
Founder of Huahui International
Senior strategic consultant with over 20 years of management experience in Huawei and IBM
Recently, I have been in contact with many start-up entrepreneurs, as well as the founders of some leading companies in the industry that have gone public. In these conversations, a frequently asked question is: "In this long-cycle market environment, what kind of strategy and management should companies rely on to truly go through the cycle and achieve sustainable development?" ”
This is a question worth pondering. In today's unpredictable economic cycle, rapid technological change, and rapidly changing consumer demand, startups face an uncertain environment. From "living" to "living well" to "building a long-lasting business", each stage has a different focus, but the most fundamental foundation is always how to ensure the sustainable survival of the enterprise in any environment.
With "staying alive" at its core, this article combines theory and practice to explore how to find a way to survive in a complex market and lay the foundation for development.
In a highly competitive business environment, startups need to face challenges such as resource scarcity, market changes, and high-pressure competition from day one. While many entrepreneurs have ambitions to "overtake the curve" through innovative products, business models, or financing channels, overly idealistic blueprints often miss the most fundamental problem: if a business cannot survive, even the greatest vision will be lost.
"Alive" is not just a state, it is a strategic choice. In an environment of limited resources and an uncertain future, the ability to survive is the starting point of all corporate strategies. From the global technology giant Amazon to the start-up dark horse Pinduoduo, all of them have finally achieved the leap from survival to development by prioritizing survival in a challenging market environment.
Through in-depth analysis of specific cases, this article will explain why "staying alive" is the core strategy of every startup company from multiple dimensions such as the essence of survival, practical strategies, risk management, and transformation and development, and discuss how to find a breakthrough to survive in the volatile market environment.
Elon Musk's "first principles" believe that the key to solving the problem lies in returning to the most basic truth, which for businesses is to "live". Without survival, there can be no growth, innovation, and vision.
Maslow's Hierarchy of Needs' Corporate
PerspectiveIn Maslow's Hierarchy of Needs, physiological needs are the basis of all human behavior. From the perspective of the enterprise, "survival" is the physiological needs of the enterprise, and only after the survival problem is solved, the enterprise can pursue a higher level of development goals, such as influence or brand loyalty. This is especially true for startups, where survival is the first hurdle in the face of market pressures.
Case 1: Uber's Survival BattleThe
rise of Uber is a symbol of innovation, but its survival story is equally challenging. In the course of its global expansion, Uber has been repeatedly thrust into the limelight due to regulatory and labor disputes, and even suffered a license revocation crisis in London. Uber has been able to stabilize its core market by adjusting its driver welfare policies, strengthening local operations, and actively engaging with the government. It is this ability to flexibly adjust that allows Uber to "survive" in the fierce market competition.
Case 2: Amazon's Founding PhaseWhen it was founded in 1994, Amazon was just an online bookstore. In order to survive, Jeff Bezos focused on "rapid expansion and ensuring cash flow" in the early days of his business, and chose to continuously invest in areas with faster returns. In the first few years of the company, he forwent short-term profits and focused on constantly adapting to market changes, which eventually established himself as an e-commerce powerhouse on Amazon.
Startups can't do everything with limited resources, so they must prioritize addressing the "immediate need". At the heart of decision-making at this stage is speed and flexibility.
Case 1: Meituan's Resource Allocation and Survival
StrategyMeituan chose to enter the market with group buying business in the early stage, but soon found that the profit margin in this field was limited. To this end, Meituan quickly shifted its resources to the food delivery business and grabbed market share through cash-burning subsidies. In the face of huge cash flow pressure, Meituan successfully "survived" by relying on efficient resource allocation and rapid iteration, and finally grew into a super platform for local life services in China.
Case 2: Netflix from DVD rental to streaming Netflix, which was founded in 1997, initially focused on the DVD rental business. When streaming technology gradually emerged, the company quickly transformed into a streaming service provider. This decision has helped Netflix find a new track in the fierce market competition and become a leader in the entertainment industry.
Case 3: Starbucks' "Local Survival"
StrategyStarbucks faced the problem of consumers' unfamiliarity with coffee culture in the early days of entering the Chinese market. In order to survive, Starbucks adjusted its strategy to not only launch tea-based beverages that suit the tastes of Chinese consumers, but also partnered with local brands to carry out marketing and gradually cultivate consumption habits, eventually becoming one of the most successful coffee chains in the Chinese market.
In a complex and volatile market environment, startups can't find the best strategy overnight, but need to explore the most suitable development path through quick trial and error.
Lean Startup ModelThe
Lean Startup model proposes that through the "build-measure-learn" cycle, companies can quickly validate market assumptions by running in small steps, reducing resource waste, while continuously adapting to market demand.
Case 1: ByteDance's globalization
pathByteDance's success lies not only in its technological leadership, but also in its ultimate pursuit of rapid iteration. From the domestic Douyin to the international version of TikTok, ByteDance has achieved rapid growth on a global scale by continuously optimizing algorithms, constantly iterating product functions, and accurately capturing user needs. This ability to adapt quickly is the key to surviving in the fierce competition.
Case 2: Didi Chuxing's flexible operationDidi
Chuxing quickly occupied the market with "cash burning subsidies" in the early days, but soon faced financial pressure. By adjusting its operational strategy, the company has focused on high-demand business lines, while actively expanding new models such as carpooling and express cars, opening up more possibilities for survival.
Case 3: Airbnb's Market
ExplorationIn the initial stage, Airbnb did not have a fixed profit model. The founding team experimented with users and gradually refined the platform's features, such as the Host Rating System and booking security. Today, Airbnb is a leading player in the sharing economy.
Listening directly to the voice of the customer is an important way for startups to adjust their direction. Customer feedback is not only a channel to find problems, but also the best tool for enterprises to improve products and create word of mouth.
Case 1: IKEA's market adaptabilityAfter
entering the Chinese market, IKEA quickly found that Chinese consumers were not keen on DIY furniture assembly. In order to meet the local demand, IKEA has increased its home delivery and installation services, while optimizing the product design to be more relevant to the aesthetics of Chinese consumers. This customer-oriented adjustment has enabled IKEA to gain a firm foothold in the Chinese market.
Case 2: Pinduoduo's "social grouping"
modelPinduoduo did not take the route of traditional e-commerce as a big brand in the early days, but developed a unique "grouping" function by analyzing consumers' shopping habits and focusing on lower-tier cities and price-sensitive users. It is this customer-oriented strategy that has helped Pinduoduo rise rapidly.
For startups, team collaboration and execution often determine whether the company can respond quickly at critical moments and seize the opportunity to survive.
Case 1: Xiaomi's Teamwork and Ecological LayoutAt
the beginning of its establishment, Xiaomi relied on the strong execution of the founding team and an accurate grasp of market trends to quickly launch cost-effective smartphones, and seized the market through the trinity of "hardware + software + Internet service" ecological model. This kind of teamwork and innovation ability has laid a solid foundation for its survival and development.
Case 2: SpaceX's Rough Start
SpaceX faced the dilemma of three failed rocket launches and depleted funding in its early days. On the verge of bankruptcy, teamwork and execution helped the company complete its fourth successful launch, which not only ensured survival, but also won a contract with NASA and paved the way for subsequent growth.
Uncertainty is the norm in market competition, and startups cannot avoid it, and can only find opportunities in volatility through flexible risk management mechanisms.
Case 1: Zomato's Survival
BattleZomato, an Indian catering platform, faced the invasion of international giants in the early stage, and successfully occupied a dominant position in the Indian market by relying on precise localization strategies and multiple rounds of financing. This strategy of actively embracing risks has allowed Zomato to find a breakthrough in the midst of uncertainty.
Case 2: Zoom's Expansion and Risk Control During the
epidemic, the number of Zoom users skyrocketed, but it also exposed security risks. The company quickly took steps to strengthen data encryption and user privacy protection during the crisis, successfully turning the situation around and sustaining rapid growth.
2) Resource allocation: balance under limited resources
How to allocate limited resources is a difficult problem that startups must face. Focusing on the most critical areas is the key to success.
Case 1: Tesla's Battery and Production OptimizationTesla
was questioned in the early days due to high production costs, but the company chose to focus its limited resources on battery R&D and large-scale production. With continuous technological advancements and supply chain optimization, Tesla has gradually become profitable and established a leading position.
Case 2: OYO's Expansion and Reflection OYO Hotel
Chain in India quickly captured the market through large-scale expansion, but overly aggressive resource allocation led to tight capital chains and inefficient operations. Nonetheless, OYO managed to avoid bankruptcy by cutting non-core businesses and optimizing management to regain investor trust.
As companies move from start-up to stable operations, they need to combine the concept of "staying alive" with a long-term strategy to ensure healthy development while continuing to survive.
Case 1: Netflix's Content Revolution
After Netflix gained a foothold in the streaming market, it not only increased user stickiness but also created unique brand value by investing in original content such as "House of Cards". This strategic transformation from "alive" to "alive well" has laid the foundation for its long-term development.
Case 2: Huawei's globalization strategy
After emerging in the domestic market in the early days, Huawei broke through bottlenecks through its globalization strategy. On the one hand, the company adheres to technology research and development, and on the other hand, cooperates with local operators to open overseas markets with pragmatic strategies, and realizes the leap from survival to internationalization.
Case Study: Shopee's Expansion
Shopee initially focused on the Southeast Asian market, and expanded rapidly with localized operations (such as multi-payment methods and multi-language support). On this basis, Shopee has gradually explored globalization opportunities and opened up a new track for sustainable growth.
3) Continuous optimization: adapt to the market's dynamics
Continuously adjusting and optimizing the operating model is the only way for the company to move from survival to development.
Case Study: Coca-Cola's Product DiversificationIn
the context of rising consumer health awareness, Coca-Cola gradually adjusted its business focus, expanding from carbonated drinks to sugar-free drinks and functional drinks to ensure that its brand can continue to adapt to market changes.
"Alive" is not only the bottom line of the enterprise, but also a strategy that must run through every stage.
From Uber to Meituan to ByteDance, their success proves that survival is not static, but a dynamic process achieved through rapid learning, flexible adaptation, and teamwork.
For all entrepreneurs, no matter how uncertain the environment is, only by surviving first can they have the opportunity to calmly cope with future challenges and finally realize the leap from survival to long-term development.
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