The vivo brand has always adhered to the brand spirit of "dare to pursue the ultimate, continue to create surprises", with "technology" and "fashion" as the core, to create an extraordinary personal mobile digital life for consumers. Vivo smartphones mainly cover: the NEX series focusing on pioneering innovative experience, the X series focusing on trendy aesthetics and technology experience, and the Y series and Z series focusing on smooth performance experience. Photography and music are the brand genes of vivo. At the same time, with the industry's first "screen fingerprint" and other technologies, vivo is also constantly driven by unique creativity, giving technology richer humanistic care, allowing more consumers to experience "joyful enjoyment" Extraordinary" brand proposition.

2. Analysis of the company's business strategy

2.1 SWOT analysis model

1. Advantages

1. Brand advantage

(1) The appearance of the product is exquisite, the overall design is beautiful, and the workmanship and feel are excellent. The vivo brand mobile phone follows the trend of the times and continuously introduces new packaging to attract more customers and refresh customers.

(2) The price of vivo mobile phones is relatively low among the same products, which makes more customers feel that the quality is cheap.

(3) Powerful camera and music (HiFi) services: The well-known advertising slogan of vivo mobile phones is subversive and captures the horizon; the front 20 million soft light selfies brighten your beauty; make music come alive and so on. These slogans make people feel that vivo mobile phone is a mobile phone for young people. It is full of vitality and focuses on music and photography, which attracts many young people to buy it.

(4) The vivo mobile phone uses Smart Engine 3.0 on the system. The mobile phone will continuously optimize background applications, clean up and freeze infrequently used applications, and release more running memory, so that it can be used more smoothly. The charger of the vivo mobile phone uses dual-engine flash charging technology, which can effectively protect the battery life while ensuring the charging speed, making the battery more durable.

(5) Vivo also has many creative designs. Its gesture recognition is rich and customizable, such as drawing C in the off-screen state to open the dial, etc., it supports human eye recognition for intelligent bright screen, air operation, air wake-up, etc., a lot of fun.

2. Enterprise advantage

(1) As a large company with international reputation, vivo is a subsidiary of BBK Group, with strong strength and high brand awareness. It has been working hard in the mobile phone industry for more than ten years and has a good reputation.

(2) Leading technology. The technology of vivo mobile phones currently appears to be at the first-class level in China. Vivo has released a series of black technology products: invisible fingerprint design, DSP camera chip jointly developed, Hi-Fi solution equipped with custom DAC decoding chip and custom amp, these are the results of research and development by vivo. In addition, vivo has already started research on 5G technology as early as 2016, and has applied for more than 2,000 5G invention patents.

(3) Whether it is buying a mobile phone, repairing a mobile phone, or consulting some information about vivo products, the vivo customer service center can easily meet the needs of consumers and bring the best service to every vivo user. It is precisely because of this high-quality service and strong product strength that vivo has been recognized and favored by many consumers.

3. Local advantages

(1) Have a better understanding of China's market conditions, economic policies, customs and customs, and be better able to adapt to environmental changes in the Chinese market. It has a stable source of customers, and many sales and service outlets. Vivo mobile phones are well-known for being named after well-known variety shows such as "Let's Run" and "Ace vs. Ace", and have a good reputation in the minds of consumers.

(2) Government support. China is committed to transforming the mode of economic growth, vigorously developing service industries, high-tech industries, emerging industries, and energy-saving and environmental protection industries. At present, China is in a critical period of economic transformation. At the national level, efforts are being made to speed up the formulation of relevant policies to give strong guidance and support to the development of high-tech industries.

4. Strategic advantage

(1) Vivo has relatively complete retail channels, stores and sales in the third- and fourth-tier markets; in first- and second-tier cities, the relative number of specialty stores is not dominant. Therefore, after the rise of vivo in 2015 and 2016, the goal for a period of time is to "surround the cities from the countryside" and advance to the first-tier cities.

(2) The user-defined, product-focused, simple and focused strategy enables Vivo to have more resources to focus on single-point breakthroughs, and its long board is longer. Vivo finds ways to continue to please its target customer group - young people. This is because young people are not impulsive consumers, they have their own value judgments, and they need brands to give them a unique sense of value.

(3) Make celebrity endorsements to the extreme, whether it is overseas or domestic, vivo pays great attention to brand image. Examples include inviting many popular artists, sponsoring evening parties, etc., including signing a 5-year sponsorship contract with FIFA. And these have brought a higher brand premium to vivo.

Two , disadvantages

(1) The market share of the product is low. vivo only makes high-end models with high price positioning, and basically does not consider the low-end market. There are many competing brands of the same type with strong strength.

(2) Although vivo's technology is first-class in China, its original technology is still not enough. Compared with the independent research and development capabilities of Apple and Huawei, vivo has not done enough and just keeps up with the pace of foreign high-end mobile phones.

(3) Although BBK mobile phones have been famous for a long time, the time to change to vivo mobile phones is relatively short, and the advantages are not obvious compared to mobile phones that have been used for a long time.

3. Opportunity _

(1) With the continuous development of science and technology, the application scenarios with mobile phones as the center of personal networking will be enriched to a greater extent, which will promote the massive sales of peripheral smart devices and services, and also create new markets.

(2) With the arrival of 5G, the future 5G mobile phone market will drive a new wave of phone replacements around the world and promote the vigorous development of the mobile phone industry. As a leader in domestic mobile phones, vivo has taken the lead in 5G research and development and won the opportunity for itself. Vivo launched the research and development of 5G terminal test prototypes and participated in operators' scale tests.

(3) With the development of China's economy, the number of middle and high-end income groups continues to increase, and the income of residents has increased significantly. Improve the purchasing power of consumers. Now, many consumers have two or even multiple mobile phones at the same time, and the frequency of consumers changing mobile phones has also increased significantly.

(4) Domestic laws are gradually improving the mobile phone market, and the country is trying to speed up the formulation of relevant policies to give strong guidance and support to the development of high-tech industries, so the mobile phone industry has a huge market.

4. Challenges

(1) The competition among global mobile phone brands is fierce, and people tend to be alert to foreign mobile phone brands and distrust domestic brands. In the mobile phone market, well-known international brands have also been committed to developing branded mobile phones and occupying a certain market share. At the same time, Apple and Huawei mobile phones accounted for more than 70% of the transaction volume of my country's high-end mobile phone market. In addition, some domestic mobile phones are also growing rapidly, and the main target of domestic mobile phone market is the middle and low-end market of my country's mobile phone market, thus intensifying the competition in the middle and low-end mobile phone market.

(2) Insufficient mastery of core technologies and low innovation capabilities. For the realization of 5G smartphones, the biggest challenge lies not only in the difficulty of developing individual mobile phone software and hardware, but also in the integration at the system level. Taking the construction of the cloud, pipe, and end of the 5G system industrial ecology as an example, it is not only necessary to realize the integration of cloud functions for different business services, but also to consider the cost of pipeline infrastructure. At the same time, as the carrier for 5G to finally provide services to consumers, due to the richness of equipment types and powerful functions, diversity, complexity and compatibility are definitely a large project that consumes manpower and material resources.

(3) High-tech technologies are emerging one after another, and users are pursuing more and more. 5G mobile phones are extremely demanding on the improvement of the level of artificial intelligence, such as voice semantic recognition, image recognition, deep learning and other functions, all require software to be open and compatible.

5. SWOT analysis

1. SO strategy

Taking advantage of the rising demand for mobile phones, we will strengthen our advantages in camera pixels, music sound quality, playback time and appearance design, and seize market share. At the same time, use the government's policy support to continuously develop its own technical advantages in communication technology.

2. WO Strategy

You can choose to vigorously develop the 5G mobile phone business to make up for the shortcomings of domestic mobile phones in this area, and at the same time use the development of the 5G mobile phone business to complete the optimization and differentiation of your own products in terms of style, performance and service.

3. ST strategy

Vivo mobile phones can continue to focus on music and photography, make music and camera phones bigger and stronger, and improve other functions of the product at the same time, maintain the uniqueness of the brand, and no longer be subject to foreign big-name companies in terms of technology.

4. WT Strategy

In order to reduce internal disadvantages and avoid external threats, vivo mobile phones still need to continuously strengthen their technological content to cope with the large-scale invasion of foreign manufacturers and the price war of domestic manufacturers. Continuously strengthening the technical content of products is the only way for BBK to establish its brand image and differentiate its products. Although this product still has no price advantage, it can lock the high-end market by improving the technical content.

2.2 McKinsey 7S model

McKinsey 7S Model (Mckinsey 7S Model), referred to as 7S Model. The 7-S model points out that the enterprise must consider all aspects of the situation in the development process, including structure (Structure), system (Systems), style (Style), staff (Staff), skills (Skills), strategy (Strategy) , Shared Values.

1. Common values

Vivo is a mobile phone brand focusing on the field of smart phones. Vivo works with fun-seeking, energetic, young and fashionable urban groups to create smart products with excellent appearance and pleasant experience. The core values of vivo are: Duty, Integrity, Teamwork, Quality, Learning, Innovation, Consumer Orientation.

1. Responsibility Duty is the attitude of seeking responsibility first when problems arise. Therefore, Vivo requires its team to maintain a normal mind, insist on doing the right thing, and strive to do things right.

2. Integrity Integrity means honesty, no deceit, and sincerity. That is to keep promises, keep promises, do what you say, and stick to it even if you encounter setbacks and pay the price. Integrity is also a responsibility, criterion and resource.

3. There is no individual success in the team without the success of the team. Vivo hopes that employees can maintain mutual trust and candid communication, integrate individuals into the team, and take the common vision as the highest goal. At the same time, the company respects the value of every employee.

4. Quality Quality is a pursuit of excellence. It must meet the needs of customers and be higher than the satisfaction of competitors. Constantly improving product quality is not only our value, but also our dignity.

5. Continuous learning BBK must become a learning company, and continuous learning "is always a spur to the company and employees. Actively learn, learn from and introduce the best practices that have been or are being carried out by world-class companies to improve and optimize our management and operating system.

6. Consumer orientation Vivo hopes to design products and provide services from the perspective of consumers to avoid doing things that seem to be liked by consumers. Through scientific and rigorous market research to fully study the needs of consumers, all work must be carried out with the real needs of consumers as the origin. And in the daily work within the company, we must adhere to the principle of internal customer orientation.

2. Structure

Strategy requires a sound organizational structure to ensure implementation. Organizational structure is the foundation on which the organizational significance and organizational mechanism of an enterprise depend. It is the form of enterprise organization, that is, the effective arrangement and combination of organizational elements such as enterprise goals, collaboration, personnel, positions , mutual relations, and information . Vivo's marketing department structure and the division of labor of each department are as follows:

The framework of the marketing department is divided into three parts: marketing, sales, and industrial design. Because BBK and dealers have been in business cooperation for many years, product maintenance and direct customer service to consumers are all placed inside regional dealers, promotion support, etc., but not directly. Connect with consumers.
The Product Strategy Department is responsible for researching and analyzing target consumers' needs for mobile phone functions. At the same time, they focus on the industry, competing product trends, positioning products and product line structure. They work closely with software designers. BBK has three software departments and three development departments. The software department is responsible for software research and development, including human-computer interaction, user experience and other groups; the development department should focus on the development of the large framework structure and system of mobile phone programs. The three groups competed with each other, and finally selected a solution as the flagship product. The Industrial Design Department is responsible for the development and research of product appearance and materials.
The strategy and research group and the network promotion group are independent and directly managed by the director of the marketing department. The network promotion team was originally under the brand management department, and gradually became independent. The network promotion team is responsible for the implementation of network communication, the management of official websites, Weibo and other self-media, but the annual plan of network communication and the communication strategy for new product releases are under the brand management department. The brand and communication group is responsible for formulation, and the network promotion group is responsible for implementation.
The brand management department is divided into four groups: brand and communication group, terminal offline group, graphic creative design group, and planning and project management group. The brand and communication group is responsible for brand research, docking with advertising companies, market research, and media placement. The terminal offline group is mainly responsible for the overall planning of terminal store opening, terminal holiday activity planning, and new product launch; the main work of the graphic creative design team includes the design of the company's print advertisements, in-store advertisements, product packaging, and leaflet design and other content; the planning and project management team is mainly responsible for the distribution of regional advertising materials, advertising placement, brand research and other project progress tracking.

3. Strategy

(1) Product strategy

Vivo products are mainly aimed at young people and female groups who like fashionable appearance. The appearance design and functions are in line with their target user positioning. With the help of charging, selfie, music functions and other functions that users are most concerned about, the user experience is improved, and the core selling points are constantly made to the extreme. With the help of expressions such as "camera phone" and "music phone", "front 20 million, soft light dual camera", clearly point out the product advantages that users are concerned about, and use core functions to drive sales. In terms of product names, the combination of English letters with "vivo" is helpful for its overseas promotion strategy.

(2) Price strategy

Although the price of vivo mobile phones is lower than that of foreign brands such as Apple mobile phones and Samsung mobile phones, it is still relatively high compared with domestic mobile phones such as Xiaomi with the same configuration. High, using high prices to invite popular stars. Sponsoring popular entertainment programs further increases the cost of mobile phones. The high basic cost leads to high prices for mobile phones with the same configuration.

(3) Channel Strategy

The substantial growth of vivo mobile phone sales in 2016 was mainly due to the outbreak of its offline sales, which is inseparable from the accumulation of more than ten years of offline channel resource layout, a large number of agents and a large number of sales personnel. In terms of maintenance, many distributors are even old partners of Dangche BBK Group and have a certain shareholding relationship. In the era of the continuous popularization of the Internet, the detailed introduction of products is used to guide customers to promote the achievement of purchasing behavior.

(4) Promotion strategy

Vivo's promotional measures clearly reflect its customer-centric philosophy. In view of the fact that the main groups of customers are young people and female groups, popular stars are selected for advertising, and a large amount of advertising coverage is carried out to promote consumption with the help of fans. At the same time, vivo's variety show sponsorship has also played a significant role, sponsoring a series of variety shows such as Running Brothers Fifth and Happy Camp. Through the use and promotion of mobile phones by stars in variety shows, increase the exposure of mobile phones among the target population.

Four. System

The company management system is the basis and guidelines for managing the company formulated by the company through certain procedures in order to standardize its own construction, strengthen corporate cost control , maintain work order, and enhance corporate brand influence.

Vivo requires all employees to abide by the company's rules and regulations. By giving full play to the enthusiasm and creativity of all employees, the company constantly improves the company's operation and management system, implements various forms of responsibility system, and continuously strengthens the company's strength and improves economic benefits. The company encourages all employees to study science, technology and cultural knowledge assiduously, and provides employees with conditions and opportunities for learning and further education.

The company implements the distribution system of "post salary system" to provide employees with income and welfare guarantees, and provides employees with an equal competitive environment and opportunities for promotion. In addition, the company implements a post responsibility system, implements attendance and assessment systems, and evaluates first. Recognize and reward contributors.

5. Style

Vivo's corporate culture is to provide consumers with high-quality products and services, to create a harmonious and respectful working atmosphere for employees, to provide a fair, reasonable, reciprocal and mutually beneficial cooperation platform for business partners, and to invest in shareholders. Equity has a return above the social average return. And hope to become a healthier and longer-lasting world-class enterprise.

6. Employees and Skills

When implementing the company's strategy, employees need to master certain skills, which depends on strict and systematic training. Strategy implementation also requires adequate manpower preparation, which has been proved to be the key to strategy implementation. Therefore, vivo has put forward the following requirements for employees and skills:

Vivo employees can receive generous year-end bonuses and travel expenses every year; vivo employees also live in single-person apartments, which not only have a large space, hot water and air conditioning, and employees can even choose the type of apartment; Free shuttle. And this also well reflects vivo's "people-oriented" corporate philosophy!

The core values of vivo are: Duty, Integrity, Teamwork, Quality, Learning, Innovation, Consumer Orientation. The employees also uphold such a sincerity, love life and work actively.

2.3 Porters 5 forces model

1. Bargaining power of suppliers

(1) The strength of the supplier

Suppliers of smartphones can be understood as including mobile phone OEMs, design companies and operating system manufacturers, chip and processor suppliers, mobile phone industry casings, button electroacoustic product suppliers, and so on. There are many suppliers for various components of smartphones in the market, and the suppliers are relatively large, it is difficult to jointly control the market, and the degree of concentration is lower than that of buyers. The smartphone industry is very important to component suppliers, but not so important to OEMs. The key components of smartphones, such as CPU chips, are crucial to the smartphone industry.

Due to the relatively good product specifications of vivo mobile phones, it strives to create room for product differentiation, and its requirements for electronic component suppliers are relatively strict. Various suppliers flock to it, hoping to establish cooperative relationships, and give priority to providing new products and new technologies to grab orders.

(2) Relationship between vivo and suppliers

Vivo has established a complete supplier selection and fair value judgment process to ensure that vivo selects the supplier that best suits the interests of vivo, and obtains the fairest value for procurement, while ensuring that all suppliers are given equal opportunities to win Huawei's business. The Purchasing Department of Vivo has developed a supplier evaluation process to provide regular feedback to suppliers. The process includes a formal performance evaluation by the relevant expert panel. Supplier performance will be evaluated in terms of key aspects of technology, quality, responsiveness, delivery, cost and fulfillment of contract terms.

Vivo emphasizes win-win cooperation and regards suppliers as partners. Even when vivo’s shipments were only second- and third-tier customers in the past few years, it has received technical and supply support from many suppliers who are almost first-tier customers. Maintaining a good relationship with suppliers is positively reflected in the mobile phone market. Vivo can give priority to new products and new technology support from suppliers, and strengthen the competitiveness and selling points of its mobile phone products.

The bargaining power of buyers

In the details of China's smartphone sales in March this year, the sales volume of Vivo has increased significantly, reaching 5.059 million units, surpassing Xiaomi and Apple, and becoming the second largest mobile phone brand in China after Huawei. The direct purchasers of Vivo smartphones can be roughly divided. There are two categories: telecom operators and individual consumers.

(1) Carriers are not the final consumers. They will push mobile phones to their customers through marketing methods such as phone fee subsidies. Their orders are huge and they have strong bargaining power. Therefore, operators are obviously in a strong position in the business, often exerting pressure on prices, payment methods, and delivery dates.

(2) For individual consumers, vivo products are mainly aimed at young people and female groups who like fashionable appearance, and the appearance design and functions are in line with their target user positioning. With the functions that users are most concerned about, such as charging, self-timer, and music functions, users can improve their leisure time. Experience, the core selling point will continue to achieve the ultimate.

However, vivo has not established itself as an excellent brand image in its mind, and most consumers think that vivo is still a low-end brand. Many consumers buy vivo products because they are cheaper than similar products. Consumers have many other brands to choose from, and consumers who need to upgrade their consumption tend to choose foreign brands when purchasing again. Therefore, consumer brand loyalty for vivo smartphones is not high.

The ability of potential competitors to enter

Mobile phone manufacturing products have always had the characteristics of large capital investment, rapid technological update, high customer demand, and fierce competition in the industry. my country's smartphone market is quite open and market-oriented, so as long as there are funds, technology, and a good brand and reputation, they can occupy a place. Therefore, for Vivo, there are mainly three types of threats from new entrants.

Internet companies engaged in hardware, such as Google, Baidu, and 360, have launched their own customized smartphones, but they have not been very successful due to various reasons.
The second category is that some mobile phone ODM companies launch their own brands. For example, the domestic mobile phone ODM company Ruijiake has launched its own brand of green orange mobile phones. The division of the four giants of "China Cool Union" has been completed, so the second type of entrants can only achieve partial development in some niche markets.
The third category is mobile phone manufacturers such as Xiaomi Mobile Phone and Smartisan Mobile Phone, which partially subvert the original model. They use eye-catching marketing strategies and partially subvert the original marketing model of smartphones. They have certain influence on specific consumption. Attractive, but its target customers do not completely overlap with Huawei, so the threat it brings is relatively limited.

4. Substitution ability of substitutes

The figure below shows the overall scale of China's mobile phones in 2019. The annual shipments reached 368.6 million units. Among the top five shipments, apart from Huawei, the other manufacturers are OPPO (17.8%) and vivo (17.0%) , Xiaomi (10.5%), Apple (7.5%), vivo ranks third in the Chinese market.

In the past year, the cumulative shipments of OPPO mobile phones were 65.7 million units, and the cumulative shipments of vivo mobile phones were 62.7 million units. Apple's shipments are only 27.5 million units, which shows that OPPO and vivo mobile phones are performing very well in the Chinese market.

However, the shipment volume in overseas markets is obviously inferior to that of Huawei and Xiaomi. This is the problem that vivo will face going abroad in the future. After all, overseas markets do not have as mature offline channels as China.

5. Current competitiveness of competitors in the industry

Vivo's main competitors in the mobile phone industry are foreign mobile phones and domestic mobile phones: in foreign countries, Apple, Samsung, and these two brands are the most widely known in the world. In China, brands such as Meizu, Lenovo, HUAWEI, Coolpad, Mi, VIVO, OPPO, and Tianyu (K-Touch) are in China. much attention. The figure below shows the proportion of smartphone shipments in the first quarter of 2020:

Here are a few advantages of competitors in the mobile phone industry:

(1) The main advantage of Apple's mobile phone: Apple's biggest advantage is its technical advantage. It has its own mobile phone system: IOS system. One of the main reasons for Apple's huge success is its ability to attract developers. Apple phones have millions of users, and developers have created more than 300,000 apps to profit from Apple's growing user base. The iPhone software design is beautiful, simple and humanized, and the emphasis is on the perfect optimization of software and hardware.

(2) The main advantages of Samsung mobile phones: Samsung Group is one of the largest enterprise groups in the world, and Samsung Electronics is a leader in the digital electronics industry. The Samsung Group itself has sufficient funds and strength. Samsung’s R&D investment is higher than that of Google and Apple, and it has a R&D system all over the world. Secondly, chips, memory, batteries, screens, etc., key components of mobile phone R&D and manufacturing, Samsung has a layout, and shortens the supply chain within its own system. On the one hand, it can reduce the cost of hardware, and on the other hand, it can ensure the rapid supply of products.

(3) The main advantages of Xiaomi mobile phones: The biggest advantage of Xiaomi is that it adopts the online sales method. Xiaomi.com, the official sales website of Xiaomi mobile phones, will become the most important sales channel for Xiaomi mobile phones for a long time to come. At the same time, logistics is mainly undertaken by Rufengda, a subsidiary of Xiaomi Technology Vancl. Xiaomi mobile phone has chosen e-commerce sales, and relying on resource advantages, with the help of the platform and logistics of Jinshan Xiafanke Eslite. This also saves Xiaomi from expensive promotion costs and channel costs, giving Xiaomi an advantage in terms of price. In addition, the functions of Xiaomi mobile phones are mainly designed for the user experience, and the functions of mobile phones are constantly updated and improved.

Vivo business model analysis- SWOT model/McKinsey 7S model/Porter's five forces analysis model

1. Company description