Research On Domestic Network Company's Profit-making Model And Profit-making Strategies

The rapid development of the Internet technology has promoted the worldwide application of the Internet and e-commerce. In 1993, Internet was applied into commerce, which gave birth to the Network Company. It is the specific creation in IT times and the carrier of the Internet information and products. It made every household have access to Internet.There isn't uniform definition of Network Company in the academic field. It is usually regarded as an enterprise which provides network products and service based on the Internet. The present thesis classifies Network companies into six types. They are respectively NSP, ISP, ASP, IDC and AIP. Simply speaking, Network companies can be divided into two categories, one is intangible products (information and service) providers like websites; the other is network facilities, that is material products providers like telecom companies. Relatively speaking, material products providers share the same properties with traditional enterprises. So, Network companies mentioned in the present thesis refer to the intangible products providers.Network companies share the basic features of any common company, such as of certain organization form, of certain customers and aiming at profits etc. Websites, as one of the main forms of Network companies, have their unique characteristics. Such as they provide service and they can be served as media. So, if we studying Network companies, we should pay attention to their differences from traditional enterprisesFrom the commercialization of Internet on, the way of Network companies headed are far from smooth. A few Network companies broke the conventional developing pattern, flourished within a short time and created fantastic network legends. While most Network companies are still can't making ends meet and struggling in difficulties. Why is there a considerable disparity? The reasons lie in not only the leading technologies owned by successful companies but also the core competitiveness of excellent companies, which mainly depends on the unduplicated profit making patterns by other companies.The time disparity between the emerging of Network companies domestically and overseas is not so considerable compared with that of network technology. In January, 1995, the General bureau of Telecommunication began to provide Internet access service for common users in Beijing and Shanghai, which marked the advent of the first network corporation.Within a decade, Internet in china has gone through rapid development. The 19th statistic report on the Internet development in china issued by CNNIC in January, 2007 showed that the number of netizens increases from 22.5 million in 2000 to 137 million; the number of computers soared from 8.92 million in 2000 to 59.4 million; the overall international line capacity ascends from 2799 MB to 256696 MB. The data indicate the Internet industry in china has taken shape preliminarily and fierce competition has emerged. But the Internet industry in china has been in the pioneering stage. The infrastructure facilities construction and the Internet software and service should be promoted; retail and e-commerce on the Internet is supposed to gradually expand; business reorganization has been intensified. Meanwhile, the Internet industry in china is stepping into the expanding phase.At present, just a few Network companies can make profits, such as Sina, Sohu, and Netease. They have made profits in several years on end. Some up-and–coming companies, like Xiecheng, Zhuoyue, Alibaba, etc surfaced one after another. They achieved IPO domestically and overseas. But the majority of Network companies are at wit's end and struggling for making ends meet. The factors influencing making profits are bilateral, one is the management, and the other is profit making patterns. Problems of the former kind refer to shallow company mission, financial speculation oriented target, management system dysfunction, highly centralized decision-making, arbitrary leadership, lack of enterprise culture and frequent brain drain, etc. the latter involves dislocation of profit making pattern elements, deficiency of suitable profit making strategies, etc. To find a good profit making pattern, the following problems must be solved: what products to provide to clients; which customers to orientate; how to provide these value; what key activities can provide value; where incomes come from; how to maintain advantages and what profit making strategies to adopt, etc. A good profit making pattern must ensure its every parts can make profits and it is endurable in itself.After analyzing the reasons mentioned above. In order to gain profits, companies must create value, that is, the value must be increased. In this part, the thesis first discusses value chain models of companies of traditional trade. A value chain refers to the serial activities in the completion of the final products from the raw materials in a trade or an industry, based on which, a new value chain model is then promoted in a Network company. Later, the author analyzes profit making patterns and their constituent elements. In this paper, the constituent elements are categorized into 5 parts, namely, profit point, profit source, profit subjects, profit lever and profit barrier. After analyzing every element, this paper make up a profit making pattern chart by means of E-R chart and a where—profit making elements seeking method.After study the construction of Network company's profit making model, to deal with the profit making problems, the present thesis puts forward some common profit-making strategies, mainly involving critical point crossing strategy, locating strategy and opening and controlling strategy, and illustrates some positive and negative cases to analyze these strategies, after analyzing the reasons mentioned above.In the case analysis chapter, we take WangSheng Technology Co., Ltd. as a case for empirical analysis, first analyzing the corporation's basic conditions, introducing its status quo, main products and service and their functions, as well as its structure and organization, next, analyzing its survival environment , competitive rank, competitive advantages and disadvantages among the comprehensive websites, then analyzing its profit making capability involving its main business and profit making strategies, and then designing its profit making pattern.In the end, the author draws a conclusion and makes out the further study points to the whole paper.