The characteristics of monopoly enterprises: patent, network, scale and brand
Successful enterprises are different, and each monopoly enterprise has its own unique place. But on the whole, they usually combine several characteristics:
1. Patented technology
Patented technology is the most substantial advantage of a company, which makes it difficult or impossible for your products to be copied by other companies.
For example, Google's search algorithm has better search results than other search engines. Ultra-short page loading time and ultra-accurate automatic query increase the robustness and defense of core search products. Also, recently, with the help of several patented new drugs in Pfizer, USA, it earned $13 billion in a quarter.
2. Network effect
Network effect means that a product will become more useful as more and more people use it, as do social software and communication tools such as Facebook and WeChat.
However, enterprises enjoying the network effect must start from a very small market. The initial users of Facebook were just a group of Harvard students-mark zuckerberg's first product was designed to register his classmates, not to attract the whole world.
3. Economies of scale
Undoubtedly, the bigger the monopoly enterprise, the stronger it will be, especially some products do not need repeated investment, and the marginal cost approaches zero. A good start-up should consider the potential for large-scale development at the beginning of design.
4. Brand Advantage
The most obvious monopoly of a company is its own brand, so building a strong brand is a powerful way to form a monopoly. The most powerful technology brand today is undoubtedly Apple.
the method of establishing a monopoly enterprise starts with occupying a small market
The combination of brand, scale, network effect and technology can create a monopoly company, but in order to make the company run, it is necessary to carefully select the market and carefully expand the scope.
Many start-ups have great ambitions. They want to occupy the whole world from the beginning if they want to be NO1 in a certain field, become a giant in a certain e-commerce, and so on. If you suggest to your boss to lock in a smaller regional market, he is not happy and feels that he has limited his development space.
many entrepreneurs don't realize that the development of the market should be gradual and strategic. The most successful companies will first dominate a specific niche market and then expand to similar markets. Their entrepreneurial stories are also very similar, and they are all gradually expanding from their core businesses. Advance can attack, retreat can defend.
Take Amazon as an example. Jeff Bezos's ultimate vision is to make Amazon the master of online retail, but he started with books, and after doing well in the field of book retail, he expanded to other vertical markets.
Therefore, the first step to establish a monopoly enterprise is to occupy a small market.
Start-ups are generally small, and they are not strong enough in personnel, capital and other aspects. Monopoly enterprises need to occupy a dominant and dominant position in their own markets, instead of falling into homogeneous competition in a vast market. Therefore, startups should start in a very small market. I would rather be too small than too big. Obviously, in a small market, it is much easier to gain a dominant position by intensive cultivation in a certain subdivision than in a big market.
the perfect target market for a start-up is a specific small group of people, and there are almost no other competitors competing with you. Of course, once you have successfully created or dominated a niche market, you should gradually enter a slightly larger related market.