Study On Profit Model Of Midea Group

With the development of the Internet,big data and other modern information technology,the manufacturing technology of the home appliance industry is also relatively mature,and competition is becoming more and more intense.The development of China’s home appliance manufacturing industry has stabilised from a period of rapid development,the state’s supervision is also increasing,the home appliance industry is gradually developing towards health and intelligence,and more and more attention is being paid to the quality and safety of products.In order to stand out from the many home appliance brands and occupy a favourable market share,the traditional profit model of the home appliance industry is no longer sufficient to bring more core competitiveness to the enterprise,so the innovation of the profit model is the inevitable way to go.Midea Group is a household name in China’s home appliance industry,and in terms of the global home appliance industry’s operating revenue,in 2021,Midea Group’s operating revenue ranked first.As a representative enterprise of the home appliance manufacturing industry,it is of great practical significance to study its profit model and discover its problems as well as measures for improvement.This thesis takes Midea Group as a case study of its profit model innovation,using case study,comparative analysis and other research methods,firstly,based on the theory of the four elements of the profit model,the profit source,profit point,profit bar and profit barrier of Midea Group’s profit model are analysed,and it is concluded that it has adopted the target market multiplier profit model,technology leading profit model,channel leading profit model and low price high volume The profit model.Secondly,the important measures in the four elements of Midea Group are focused on the implementation from 2017 to 2021,so this paper collects the financial data of Midea Group,Gree Electric Appliance and Haier Zhijia in the past five years for comparative analysis,and makes a comprehensive evaluation of Midea Group’s profit model in terms of the stability,sustainability and cash collection of profit quality.Finally,the strengths and weaknesses of Midea’s profitability model are summarised,and specific suggestions for optimisation are given in response to its weaknesses.As a result of the study,the following conclusions are drawn:(1)The fact that Midea Group has been able to develop steadily for decades shows that its profit model certainly has merits.(2)The profit model of the Midea Group has a lot to learn from,focusing on intelligent home personalisation,establishing user interaction centres,focusing on the after-sales experience of customers and providing professional services.It has improved the disadvantages of the traditional model of stock accumulation and capital occupation,and saved the cost and time of transportation.The investment in technology research and development has been increased to produce smarter and higher-end products.(3)The analysis shows that the profit model of Midea Group also has many inappropriate places,such as the profit source is easily affected by the global economy and overseas exchange rate fluctuations,the unique brand characteristics of the profit point are not prominent enough,the profit barrier technology still needs to be strengthened and the restrictive nature of the channels in the profit bar.(4)In view of the problems in the profit model of Midea Group,we also put forward suggestions for optimisation and targeting,such as a reasonable distribution of domestic and foreign business ratios to avoid the impact of poor operation on one side,creating a star brand exclusive to Midea Group to strengthen the influence of the brand,strengthening the research and development of technology for the segment that wins with low prices to stabilise the leading position,and at the same time,for the occurrence of unexpected situations To have measures to deal with in order to maintain the normal business development of the enterprise.Through the systematic analysis and evaluation of the profitability model of Midea Group,we hope to provide reference meaning to other home appliance industries and promote the transformation of China from a large home appliance country to a strong home appliance country.