Case Study On Business Model Innovation Of VIPKID Company

The scale of China’s online education market is gradually developing and expanding.The epidemic of COVID-19 in 2020 has prompted a rapid growth of online education.After the epidemic has eased,General Office of the State Council has issued a "double reduction" policy in 2021,which aims to reduce the burden on students and carry out more complete monitoring and management on education,which has a great impact on the entire education industry.VIPKID is a Chinese famous English online education brand with 7 years’ history.During the rapid development of communication technology and mobile Internet,it independently created an online education platform and hired thousands of foreign teachers from North American to provide Chinese students with one-to-one online English teaching services.VIPKID has been recognized by the capital market since its establishment and has experienced vigorous growth,but it is also facing the dilemma of a business model that it has not been profitable for many years.Under the background of the promulgation of the "double reduction" policy,VIPKID is in urgent need of transformation.This thesis adopts the method of case analysis.It firstly introduces the basic overview of VIPKID,then introduces the development background of the entire online education industry and the characteristics of the business model of the main competitors,and then discusses the existing business models and bottlenecks of VIPKID after rapid development.The thesis uses Wei Zhu’s six elements theory of business model to analyze VIPKID’s business model from positioning analysis,key resource capacity analysis,cost structure analysis,and profit model analysis,etc.Combined with the transformation and innovation direction of online education industry under the "double reduction" policy,countermeasures and suggestions are given to the development of an innovative business model for VIPKID from changing the company’s positioning,re-integrating its key resources and capabilities,optimizing its profit sources and creating favorable cash flow.The promulgation and implementation of the "double reduction" policy has brought new opportunities and challenges to business model innovation in the education industry.This thesis can guide the education companies on how to adapt to the changes and develop sustainably,which is beneficial for VIPKID to develop innovative business models,solve the bottleneck of the company’s development,enhance its comprehensive competitiveness,and increase the company’s profit.At the same time,it also has a reference to the development of similar online education companies.