Xiaomi Technology’s Profit Model In The Financial Management Environment Of Value Network Case Studies

The value network is the extension of the value chain,which is the key form of enterprise business model development and value creation.Compared with the traditional value chain,value net not only pays attention to the close cooperation between the upstream and downstream industrial enterprises,but also pays attention to the horizontal layout and diversified operation of enterprises,which can effectively expand the profit source and profit point of enterprises.In the Internet era,domestic giants such as Alibaba,Jingdong,Huawei and Xiaomi are self-centered value network platform enterprises radiating outward.Therefore,this paper mainly takes Xiaomi Technology Company as the research object for case analysis,analyzes its profit model under the value network financial management environment,explores its value creation path,and summarizes mature experience,in order to provide basis and guidance for the development of other similar enterprises.On the premise of summarizing relevant literature at home and abroad,introducing concepts and theories related to value net and profit model,this paper understands the development process,business layout and ownership structure of Xiaomu company through field visits and Internet surveys,and analyzes the composition of its value net.Then,from the financial perspective,combined with the relevant financial index data of Xiaomi from 2017 to 2021,the company’s profitability,debt paying ability and operating capacity were analyzed.From the non-financial perspective,the profit model of Xiaomi company under the value network environment is analyzed from five aspects:profit point,profit object,profit source,profit leverage and profit barrier.It is found that Xiaomi company has accumulated a large number of Xiaomi users through cost-effective smart phones and AIoT smart hardware.Then,with the help of upstream supply chain enterprises,Xiaomi integrates software services among different hardware devices of Xiaomi,including mobile phones,computers and AIoT intelligent hardware,and builds an ecological platform with rich categories and excellent experience.Through the Xiaomi ecological platform,Xiaomi’s Internet business can provide Internet value-added services to more consumers.In turn,the excellent experience of Xiaomi’s ecological platform attracts consumers to buy Xiaomi’s hardware products,and such a virtuous cycle greatly improves the profitability of Xiaomi.Then,specific development suggestions are put forward for the challenges Xiaomi may face in the future,including strengthening R&D investment and independent innovation research and development,strengthening supplier management and developing Internet business to expand profit sources.