Gome Strategy -- The Business Model of ZOHO in China's Chain Industry: The Business Model of ZOHO in China's Chain Industry

Author: Zhou Xibing
Publisher:
Publish Date: 2004-01-01
Features: Gome never profits from consumers or from markups. Instead, it gains profits by expanding its scale and squeezing manufacturers for better margins. This is because scale advantages allow Gome to secure lower purchase prices than its competitors, which is the key to its victory over rivals. In the era of global economic integration, the notion of "bigness is beauty" has long been abandoned, replaced by the principle of "fast fish eat slow fish." Businesses must focus on their core, competitive advantages and be ruthless in discarding what doesn't serve them. Successors have their own philosophies, just as success has its own reasons. Gome steadfastly adheres to its unique business principles, growing stronger along the way, and demonstrates its ambition in pursuing a "commercial marketing model" that seeks the "lowest total cost." Gome's rise has at least ended the era where manufacturers dominated pricing in the home appliance market. With its strong financial backing, Gome can negotiate with manufacturers on equal footing and seize pricing control in the consumer market. Gome has created a miracle in China's home appliance chain retail industry with its exceptional business philosophy.