Research On The Impact Of Light Asset Operation Model On ReaI Estate Firms' Performance

The asset-light operating model refers to the enterprise's asset-light asset operating model,which refers to the outsourcing of manufacturing,retailing,and distribution of products,and focuses on the core business of product design,development,and marketing.The asset-light operation of real estate companies is the input of real estate companies actively reducing the value-added construction links,outsourcing their own business housing construction,architectural decoration and decoration,commercial housing retail and other related businesses,focusing on the design and development of brand management and commodity housing products.,marketing and other core business with high added value.Asset-light operations have brought positive impact on China's real estate companies,and have also brought a variety of new challenges.This article takes Vanke Group,an early implementation of the asset-light operating model in the real estate industry,as an example to study the impact of light asset operations on Vanke Group's business performance,as well as the challenges,risks and responses it poses,and to implement light assets for more real estate companies.Operation provides reference.The manufacturing,retail,and distribution businesses are outsourced and their focus is on core businesses such as product design and development and marketing.The asset-light operation of real estate companies is the input of real estate companies actively reducing the valueadded construction links,outsourcing their own business housing construction,architectural decoration and decoration,commercial housing retail and other related businesses,focusing on the design and development of brand management and commodity housing products.,marketing and other core business with high added value.Asset-light operations have brought positive impact on China's real estate companies,and have also brought a variety of new challenges.This article takes Vanke Group,an early implementation of the asset-light operating model in the real estate industry,as an example to study the impact of light asset operations on Vanke Group's business performance,as well as the challenges,risks and responses it poses,and to implement light assets for more real estate companies.Operation provides reference.The asset-light operating model refers to the enterprise's outsourcing of its manufacturing,retail,and distribution businesses,and its focus is on core business such as product design and development and marketing.The asset-light operation of real estate companies is the input of real estate companies actively reducing the value-added construction links,outsourcing their own business housing construction,architectural decoration and decoration,commercial housing retail and other related businesses,focusing on the design and development of brand management and commodity housing products.,marketing and other core business with high added value.Asset-light operations have brought positive impact on China's real estate companies,and have also brought a variety of new challenges.This article takes Vanke Group,an early implementation of the asset-light operating model in the real estate industry,as an example to study the impact of light asset operations on Vanke Group's business performance,as well as the challenges,risks and responses it poses,and to implement light assets for more real estate companies.Operation provides reference.In the past ten years,Vanke Group has always been a heavy asset operating model,capital-intensive,single financing structure and financial risk.Prior to the implementation of the light asset operating model,Vanke faced the dilemma of slowing growth in sales revenue and decreasing sales margins year by year.In order to get out of the predicament,Vanke has clearly pointed out the direction of assetlight operations and adopted a series of related measures,including the implementation of a cooperative development approach of “ small-cap trading ”,promotion of real estate finance,implementation of a business partner system,and“+Internet”.Operating model,etc.Comparative analysis shows that the light asset operating model enables the company to obtain greater scale expansion with less capital investment,improve the company's profitability,increase the added value of the brand,and increase the operational flexibility.From 2010 to 2016,Vanke's assets increased from 215.64 billion yuan to 830.67 billion yuan,an increase of 285%,and the net assets increased from 54.59 billion yuan to 161.68 billion yuan,an increase of 196%.At the same time,Vanke's debt ratio after eliminating prepayments has been maintained at a stable and controllable level.After Vanke implemented the light asset profit model in 2014,the net operating cash flow increased by as much as 207%,and the cash pressure was greatly eased.In addition,comparing the Vanke Group's return on assets,invested capital return rate,inventory turnover rate,and return on liquid assets to the development of the company's Rongsheng,the Vanke data before the implementation of the light asset operating model is not as good as Rongsheng's development.In the following years of the asset operating model,Vanke's situation has been significantly improved,andall indicators have outperformed Rongsheng's development.Under the asset-light operating model,Vanke's asset turnover accelerated,asset return rate improved,and cash flow conditions improved significantly.With stable financial risks,profitability,growth capacity,and financial performance have improved significantly.Light asset management has optimized the capital structure of the company,eased the financing pressure of the company,improved the financial performance of the company,released a large cash flow for the company,and provided a good mechanism for the rapid expansion and leap-forward development of the company.Of course,everything has two sides.The asset-light operation mode brings about a more positive effect to China Vanke Group.At the same time,it also brings many risks to the company's operations,such as: brand indiscriminateness,resource dilution,and the cultivation of potential competitors.Reliance on project partners;project operations are difficult to control,product quality lacks effective control;excessive light asset operations are prone to bubble economies;forced into the price war;These risks need to be strictly managed and carefully controlled during the implementation process.Since the light asset operating model was born,there have been many examples of successful use in information technology,apparel manufacturing,pharmaceutical manufacturing and other industries.In recent years,many real estate companies in China ' s real estate industry,which focuses on heavy asset operations,have also announced the transition to a light asset operating model.Vanke Group's case shows that real estate companies should fully understand the advantages and disadvantages of light asset operation mode and heavy asset operation mode in the process of transitioning to light asset operation mode,identify their own core competitiveness,and define their own core expertise.Good brand management,value chain positioning,customer relationship,good business outsourcing,training competitive advantage;try to introduce multiple project partners,implement strict standardization management,and strictly control risk.The asset-light operation mode and the heavy asset operation mode have their own advantages and disadvantages.The real estate company should be fully aware and cautiously selected.