Internet Enterprise Strategy And Profit Analysis On Product Portfolio

In the Internet economy,free has become the key to the product portfolio design of Internet enterprises as a marketing tool.As the unique products of Internet enterprises,information products have the characteristics of large investment in the early stage and close to zero marginal cost in the later stage.This feature directly leads to the essential difference between information products and traditional products.Internet enterprises use free products to attract customers and obtain traffic,and use value-added products to realize realization of traffic and value conversion,so as to achieve their own profits.Scientific and effective product portfolio strategy can promote Internet enterprises to survive and make profits in the increasingly fierce market environment.With the constant change of consumer demand,the enterprise’s product portfolio strategy also needs to be constantly followed up.Design the breadth,length,depth and stickiness of products to realize the effective combination of free products and value-added products,so as to adjust the product portfolio strategy to maintain a high profit rate in the context of market changes,is an important existing problem for Internet enterprises..In order to understand the application of the Internet enterprise product portfolio strategy in our country more accurately and put forward the effective measures which can be used for reference of concrete,this paper analyses the application of the product portfolio strategy for the influence of Internet companies and the product portfolio strategy used by Internet enterprises.The source of profit is divided into free products which contain completely free products and free functions of profitable products,and value-added products which contain value-added functions of profitable products.This paper discusses the bilateral effect between the free product and the value-added products and how to use it to design the value acquisition mechanism.To this,this article selects the Tencent.co,one of the leading Internet enterprises in our country carry out specific analysis,study the successful use of free products and forward-looking product portfolio strategy,in order to put forward some effective measures to apply to the whole industry,for the Internet enterprise how to build a composite system of its own products,value for mechanism design,avoid risks,win the market and realize the transformation to provide the reference..Taking case analysis as the research method,this paper selects Tencent.co as a typical case and seven companies including Alibaba group,Baidu,Tencent,Jindong,Net Ease,Sina and Sohu for comparative analysis to analyze the product portfolio strategy of China’s Internet enterprises.First of all,the analysis of Internet enterprises and its existing profit model under the product portfolio strategy to make a summary.Secondly,taking Tencent.co as the main case,this paper studies the product portfolio strategy of Tencent.co,and makes multi-level and multi-dimensional analysis on the product portfolio.By analyzing Tencent‘s data from 2001 to 2018 and exploring the actual effect of its product portfolio strategy,it is concluded that there is commonality of traffic conversion value in the design of product portfolio strategy of Internet enterprises.Internet enterprises have created cross-border network effect between value-added products and free products.Free products are not actually "free‖.As a user-centered enterprise,it still needs to think about how to use the cross-border network effect to improve its payment rate and turn existing active users into its own profits.However,there are some problems in this way of realization.In the later stage,there may be insufficient power,which may be controlled through the design of product portfolio strategy.Through the case study,this paper concludes that China’s Internet enterprises product portfolio strategy research and discussion for enterprises to prevent risks,improve efficiency,has strategic significance and operational feasibility.Therefore,some suggestions that can be considered in the innovation of Internet enterprise product portfolio strategy are put forward.First,the combination of virtual economy and real economy should be combined to explore new directions of value-added.Second,careful selection,effective use of traffic,find the profit point.Third,maintain industry stability,citizens’ privacy,standardization and civilization.