【正文】 profitability could suffer as they wait for the spending power of the emerging middle class to increase. But there will be handsome rewards for those that can survive this battle of hypermarket proportions. Why Business Models Matter Joan Magretta, Why Business Models Matter(J), Harvard Business Review, May 2021, 80(5). ―Business model‖ was one of the great buzzwords of the Inter boom, routinely invoked, as the writer Michael Lewis put it, ―to glorify all manner of halfbaked plans.‖ A pany didn’t need a strategy, or a special petence, or even any customers–all it needed was a Webbased business model that promised wild profits in some distant, illdefined future. Many people–investors, entrepreneurs, and executives alike–bought the fantasy and got burned. And as the inevitable counterreaction played out, the concept of the business model fell out of fashion nearly as quickly as the . appendage itself. That’s a shame. For while it’s true that a lot of capital was raised to fund flawed business models, the fault lies not with the concept of the business model but with its distortion and misuse. A good business model remains essential to every successful anization, whether it’s a new venture or an established player. But before managers can apply the concept, they need a simple working definition that clears up the fuzziness associated with the term. 9 Telling a Good Story The word ―model‖ conjures up images of white boards covered with arcane mathematical formulas. Business models, though, are anything but arcane. They are, at heart, stories–stories that explain how enterprises work. A good business model answers Peter Drucker’s ageold questions: Who is the customer? And what does the customer value? It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost? Consider the story behind one of the most successful business models of all time: that of the traveler’s check. During a European vacation in 1892, . Fargo, the president of American Express, had a hard time translating his letters of credit into cash.‖ The moment I got off the beaten path,‖ he said on his return,‖ they were no more use than so much wet wrapping paper. If the president of American Express has that sort of trouble, just think what ordinary travelers face. Something has got to be done about it.‖ What American Express did was to create the traveler’s check–and from that innovation evolved a robust business model with all the elements of a good story: precisely delineated characters, plausible motivations, and a plot that turns on an insight about value. The story was straightforward for customers. In exchange for a small fee, travelers could buy both peace of mind (the checks were insured against loss and theft) and convenience (they were very widely accepted).Merchants also played a key role in the tale. They accepted the checks because they trusted the American Express name, which was like a universal letter of credit, and because, by accepting them, they attracted more customers. The more other merchants accepted the checks, the stronger any individual merchant’s motivation became not to be left out. As for American Express, it had discovered a riskless business, because customers always paid cash for the checks. Therein lies the twist to the plot, the underlying economic logic that turned what would have been an unremarkable operation into a money machine. The twist was float. In most businesses, costs 10 precede revenues: Before anyone can buy your product, you’ve got to build it and pay for it. The traveler’s check turned the normal cycle of debt and risk on its head. Because people paid for the checks before (often long before) they used them, American Express was getting something banks had long enjoyed–the equivalent of an interestfree loan from its customers. Moreover, some of the checks were never cashed, giving the pany an extra windfall. As this story shows, a successful business model represents a better way than the existing alternatives. It may offer more value to a discrete group of customers. Or it may pletely replace the old way of doing things and bee the standard for the next generation of entrepreneurs to beat. Nobody today would head off on vacation armed with a suitcase full of letters of credit. Fargo’s business model changed the rules of the game, in this case, the economics of travel. By eliminating the fear of being robbed and the hours spent trying to get cash in a strange city, the checks removed a significant barrier to travel, helping many more people to take many more trips. Like all really powerful business models, this one didn’t just shift existing revenues among panies。s headquarters in Bentonville, Arkansas, the cubicles have no doors, in order to discourage the passing of bribes. As they gain scale, big chains are also opening modern distribution centres. At the WalMart centre near Shenzhen, a vast effort is under way to link suppliers electronically to the retailer39。s, KFC and Tupperware, which lowers the initial level of capital investment. Avon is going further: having finally received permission to resume direct sales in February, the American cosmetics group has already recruited over 114,000 sales agents. Nor can retailers in small cities expect the same appetite for brands as found in more cosmopolitan Shanghai or Beijing. In general, the Chinese are brandconscious but not loyal. They are more interested in value and trying new things than Westerners are. McKinsey found Sony could charge a premium of up to 40% for televisions in developed markets, but even a 10% markup in China can put consumers off. And many Chinese are impulse buyers, susceptible