A particularly typical example is Xiaomi. This company started with an Android system UI skin and then launched products such as mobile phones and tablets. Subsequently, they became unstoppable, and Xiaomi’s product line covered computers, home appliances, wearable devices, cars, robots, and even various daily necessities such as shoes, suitcases, toys, and towels.
Some consulting companies have criticized Xiaomi for being wrong. They believe that Xiaomi’s approach violates the basic principles of positioning theory, that is, the brand should focus on the industry and use different brands to seize consumers’ minds for different markets. In their view, using the same brand on different categories of products will make it difficult for consumers to “position” their minds. At the same time, using a brand of a certain product category on other product categories will also confuse consumers. They will feel that your brand is not doing its job properly. Moreover, in the new product category, this brand may not necessarily be the representative brand of this product category in everyone’s mind. Therefore, the original brand will not add points to new products. The consequence of doing so is often not worth the loss. They kindly reminded Lei Jun to correct his strategy. However, Xiaomi continued to maintain rapid development in the following ten years. The facts proved that these consulting companies were wrong.
But in fact, this may not be an error in positioning theory itself, but people’s misunderstanding of positioning theory. These consulting companies mechanically restrict “positioning” to industries and products. But in fact, companies such as Apple and Xiaomi are actually “positioning” users. From the surface, it seems that these companies’ product layouts are like hammers in the east and hammers in the west. But if you carefully analyze the user groups of these companies’ products, you will find that their user groups are actually highly consistent.
It is generally believed that Apple’s products are aimed at mid-to-high-end users. Therefore, it is obvious that there is a big difference between Apple Pay and Alipay in terms of payment services. Apple seems to rarely engage in payment-related promotions. It emphasizes security and convenience to users. These are exactly the characteristics that mid-to-high-end users care about.
Xiaomi’s advertising slogan at the beginning clearly reflected their user group at that time. Xiaomi’s advertisements often emphasize that their products are the first products owned by young people. Obviously, their target user group is young people in their growth period. And this group is usually a group of people ignored by traditional large company marketing.
From a product perspective, these companies’ product layouts seem to have no rules at all. But from a user perspective, everything becomes very clear. The layout of these companies’ products is all provided around the needs of the same user group. In fact, not only Xiaomi and Apple but also many other companies such as Google and Disney are also like this. Their product layouts today are no longer limited to the original industry market but are built around user groups. This is a new management paradigm. However since user-managed companies are a newly emerging management model. That is to say some traditional product-managed companies have transformed into user-managed companies in today’s market environment? So why is this?
Before answering this question we must first think about two facts. First enterprise business model changes are usually forced. If the original management method is adapted to the market environment then there is actually no need for enterprises to change at all. In other words something “terrible” must have happened forcing changes in enterprise management mode.
Secondly there is still a significant difference in the frequency of user-managed companies appearing in different fields or industries. In high-tech fields such as the Internet and software this user-based management model is very common but this model does not only appear in IT industries such as the Internet.
In 2018, MUJI opened its first self-branded hotel globally in Shenzhen. The design style of the hotel was like its store, and most of its supporting facilities and consumables also used their own products. Most hotel guests were also fans of MUJI who recognized the brand’s classic minimalist life philosophy.
MUJI’s product designer Naoto Fukasawa once said that from the beginning, they had an idea of “discovering needs rather than inventing goods”. In fact, apart from our familiar grocery stores, MUJI had already opened restaurants, coffee shops, bookstores, flower shops, etc. before operating hotels. In 2020, they also opened long-term apartments and their first fresh market in Shanghai.
MUJI’s approach is another typical business case from traditional product management business models to user management business models. Obviously user companies do not only appear in IT industries but also appear in other industries although objectively speaking their relative frequency is relatively low.
These phenomena remind us that user management mode is just appearance and there is a real reason behind it. There is a force that is changing the enterprise survival environment and forcing enterprises to compete in new ways. This force is science and technology. As Mr. Deng Xiaoping pointed out: “Science and technology are the primary productive forces.” It is productivity that has promoted the transformation of production relations. And what is different from before or more accurately what we have ignored before is that today’s technological development is increasingly showing exponential acceleration.