1. background of gonghe. com company

Republic. Com is an innovative and integrated enterprise of media resources supported by high-tech network, which was founded by Hangzhou Andewei Network Media Co., Ltd. in April 2006. Republican interactive media is a major business of the Republic. com。 Republican Interactive Media broke through the way that new media, represented by Focus Media, bought advertising space, reorganized the structure of advertising industry chain through "one-to-ten replacement" and "non-competitive alliance", integrated advertising media, advertisers and advertising audiences, changed rental purchase into resource replacement, obtained advertising space at zero cost, changed game competition into alliance win-win, and matched advertising supply and demand sides at zero distance to achieve zero loss. The characteristics of "30 breakthroughs" make "Republican Interactive Media" win the advertising position, and at the same time establish the huge cost advantage and customer advantage when competing with other media. June 5438+February 2006, Republic. Com received the first round investment of about100000 USD from Softbank China and CDH, and the second round investment of 20 million USD in June 5438+1October 2008. By the end of June 38+ 10, 2008, the number of affiliated outlets in Gonghe.com had exceeded 1 10,000, and its quarterly income exceeded 30 million yuan. In just over two years, Gonghe.com has become one of the typical representatives of new media from a start-up, largely benefiting from Gonghe.com's destructive innovation model. ..

2. Analysis model of this case

Christensen put forward a three-dimensional model of disruptive innovation, and studied the trajectory of disruptive innovation with performance, time and non-consumption as the axis. As shown in figure 1, the vertical axis represents product performance, the horizontal axis describes time, and the third axis represents new customers and new consumption environment. Different value networks can appear at different distances from the original chart along the third coordinate. The destruction of my new value network on the third axis is called new market destruction. In contrast, low-end destruction refers to the destruction of attacking the most unprofitable market at the lowest end of the original value network with the lowest service requirements. The low-end destruction is rooted in the original value network or mainstream value network, such as discount stores turning to department stores, Japanese cars and Korean cars entering the North American market. They adopted a low-cost business model and did not create a new market, mainly by destroying the original automobile market to gain development space. Although there are differences between new market destruction and low-end destruction, their common feature is that they bring the same annoying dilemma to the existing market.

Moreover, in practical application, many injuries are mixed, which is a combination of new market injuries and low-end injuries. The Republic Network is a typical case. The "30 Breakthroughs" of the Republic. Com solved the problem of high-priced advertising space well and won a great cost advantage for the company. The parity of new media also allows enterprises and even shops that have no conditions to advertise to join R&; V's non-competitive strategic alliance is a typical new market innovation. Because of the low cost, many enterprises that originally chose traditional media are willing to spend some money to try new media, from R&: From the cooperation between Lusheng and Tianchang in the early days of V League to Snowflake Beer later, more and more enterprises are using cooperative interactive media to promote it, which is a typical low-end destructive innovation. In the future, the development focus of the Republic. Com is to realize the transformation from the real platform to the Internet platform, form the triple play of Internet, wireless network and real merchant location media network, activate global media resources, become an international advertising alternative platform, realize the multi-resource alternative alliance with e-commerce website as the core and beyond the region, and become the "Alibaba" of the advertising industry.

(b) Comparative analysis of Gonghe.com and Focus Media cases.

In recent years, China's "new media" represented by Focus Media has developed rapidly. Not only did Focus Media successfully go public on NASDAQ in July 2005, but also "new media" such as Frame, Juzhong and Xicheng were cashed out at a high price because of Focus's success, and then "new media" such as Hangmei and China Television were listed on NASDAQ one after another, while many "new media" enterprises such as Guangyuan, WorldCom Warner, Yanhuang Health, Mutual Media and Touch Media received high investment in rounds of venture capital. However, all these "new media" did not jump out of the "focus mode", that is, they obtained (including renting or buying) media locations at high prices and then operated advertisements. This model is a destruction of traditional media, and Focus has achieved great success by this destructive innovation. But when there are more and more followers, this model also exposes its disadvantages. Although the "Focus Mode" has broken the monopoly of traditional media on the advertising industry by developing new media positions such as video media in commercial buildings and outdoor large LED media, its main advantage over traditional media is to obtain effective advertising positions at a lower cost, and then attract advertisers and occupy the advertising market at a relatively low price. This is a typical combination of low-end destruction and new market destruction. However, when more and more followers join the industry, the competition will become more and more fierce. The advertising space that was originally readily available has become very popular, and the cost of occupying a place is getting higher and higher. Whether it is in office buildings, hotels, supermarkets or hospitals, these places are limited. Many funds want to occupy this limited position, and price wars are inevitable. As a result, the cost of advertising space is huge, which has caused great hidden dangers to future operations.

If the mode of simply spending money to obtain media positions and then operating is called "new media 1.0", then, unlike the followers of "focus mode", "cooperative interactive media" takes the lead in becoming the "new media 2.0" mode that can obtain valuable media positions without high price, relying on the brand-new R&V theory.

According to r&; V theory, create interactive media, replace unique organizational model with resources, and integrate multi-party interactive media of urban business circle alliance. Through the principles of "one-to-ten replacement", "non-competitive alliance" and "one-kilometer business circle", an innovative channel media position organization dedicated to discovering, integrating and operating resources has been formed. Focus Media Cooperation Interactive Media Cooperation Mode Focus Media and the providers of advertising space are both ordinary.

Strategic alliance is managed and sold by Focus Media.

Advertising space and video broadcasting rights of each advertisement publisher

There is no cooperation between them. Alternative Alliance of Business Circle ——R&V Non-competitive Strategic Alliance

All franchisees and their networks are R&; V noncompetitive

Strategic alliance. In the position provided by any franchisee, similar competition is excluded.

Commercial advertisements, commercial video media, store terminal video media and other major advertising spaces.

Body, apartment elevator print media (original frame media),

Outdoor large-scale LED color screen media, mobile phone wireless advertising

Media and Internet Advertising Platform (formerly Ye Hao Advertising Network)

Network), online interest advertising media, Focus Direct DM.

Media and database marketing channels are high-quality and high-end CBD business districts in cities, such as fashionable restaurants and high-end shops.

Ways to get jobs in beauty salons, cafes, car 4S shops, sales offices and other service places to rent or buy electricity from commercial buildings, shops and apartments.

Put video media on ladders and other places. "One-to-ten replacement": each merchant provides its own position.

Place special advertising cabinets for other businesses to place video advertisements.

Broadcast and promotion can be the same on 10 different businesses.

Publicity. Merchants use their idle space through the principle of "one to ten replacement"

Source replacement 10 times the resources, has greatly exceeded its own potential population,

Market, Advertising Location and marketing opportunities. At the same time, cooperative interactive media obtained

The remaining video playing rights of each advertising platform. The profit model of the common customer group of non-competitive enterprises in the target audience mass media "one-to-ten replacement" is played by selling videos of various advertising platforms.

The right to become a media channel provider and gain advertising revenue.

Benefit. First, by selling the redundant video playing rights of various advertising platforms.

As a media channel provider, gain advertising revenue; Second, obey the rules.

The expansion of the model, charging management fees to new franchisees, through the establishment of business.

Home alliance, get management fee income; Third, through the integration of business circles

Alliance market resources to obtain value-added service income. From the comparative analysis of table 1, we can see that there are many essential differences between cooperative interactive media and focus mode. From the media form, the advertising media of Focus Media and Republican Interactive Media are all LCD screens, but the difference is that the public is buying seats and the Republic is changing positions. Focus media and crowdfunding media play video advertisements by buying seats, which, like the previous media, have the shortcomings of limited resources and high cost. Cooperative interactive media has found a new way to obtain a large number of advertising spaces for free through "one-to-ten replacement". Merchants have the demand for advertising promotion, but due to the limitation of financial resources and experience, they can't achieve their own propaganda purposes through advertisements in general media (newspapers, television, magazines and radio stations). Although the cost of distributing leaflets or discount coupons on the street is low, the actual utilization rate of leaflets and discount coupons is very low due to lack of pertinence. Republican Interactive Media offsets the admission fees of franchisees through "one-to-ten replacement". Not only do you not need to buy a location, but you can also sell the remaining video broadcasting rights and become the creator and publisher of media channels, which is the biggest difference from Focus Media.

In the new media 1.0, represented by Focus Media, security guards and cleaners watch elevator advertisements most in commercial buildings and residential areas, not just the target customers who take elevators during commuting and lunch time. Outdoor large-scale media, mobile phones and Internet advertising platforms also lack pertinence. The "one-to-ten replacement" of cooperative interactive media exchange is not only the venue, but also the common customer base of non-similar competitive enterprises. Exchanging places between people with common interests is equivalent exchange. According to different industries, by dividing industry grades and categories, different people and their consumption levels (high-end consumption, middle-end consumption and low-end consumption: the amount of each consumption and consumption habits) are distinguished, so that the target customers who receive publicity are more targeted and the advertising effect is greatly improved. For new customers, Republican Interactive Media will provide them with matching outlets, while for some customers with climbing psychology, we should persuade and educate them through past cases to help customers choose enterprises with common target customer groups and put an end to invalid advertisements.

Republic. Com does not charge advertising fees to Republican interactive media merchants. Instead, it obtains media access qualification in the form of merchant resource replacement, has specific advertising space, and puts customized composite cabinets in the media space provided by merchants. This zero-cost, high-quality advertising form makes the Republic. Com takes advantage of similar new media in cost.

From the profit model, different from any other media in the past, Republican Interactive Media places advertisements at zero cost and does not charge advertising fees to franchisees. Its profit model is mainly to sell the remaining video broadcasting rights of various advertising platforms, the management fees of franchisees and some value-added services.

In addition, R& interactive media; V Non-competitive strategic alliances have high industry barriers for new entrants and are not easy to replicate. Focus Media has a large number of followers. As long as it has funds, anyone can catch up with Focus quickly. For example, mass media, which once shared the world with Focus and was acquired by Focus, is a typical example. Although Republican Interactive Media also has some competitors, it is difficult to form a strategic alliance network like Republican Interactive Media because it started late. Existing franchisees not only provide sufficient advertising space for cooperative interactive media, but also ensure the publicity effect for corporate customers. The bigger the business circle alliance, the more non-rival enterprises, and the greater the impact on potential target customers, especially large enterprises with customers all over the country. Therefore, even if followers reduce the advertising cost, without the support of advertising space and alliance network, it is still not attractive to potential franchisees.

(C) Problems and challenges in the implementation of disruptive innovation in public networks

Problems in 1.

Since the advent of new media, it has attracted the majority of business owners with its low price and wide audience. However, the propaganda function of new media is still controversial. Many enterprises dare not rashly turn all their advertising investment to new media, and more are just small-scale attempts. Especially in the business circle replacement of cooperative interactive media, small and medium-sized shops are mostly involved in alliance replacement, and large enterprises are not involved enough, and they all stay on buying video broadcasting rights. However, in the advertising market, it is these big enterprises that invest the most and create the most value. How to improve the influence of new media and make the destructive innovation spread from non-consumers to mainstream users or public networks, and even the whole new media is an urgent problem to be solved.

2. Challenges faced

The success of new media lies in its good market positioning, which meets the unsatisfied market demand in the past-low cost and high efficiency advertising. However, with the development of digital network economy, the channels that can challenge traditional media and provide advertising services for enterprises are more diversified. The emergence of Web2.0 and digital TV provides more choices for business owners. If we call Gonghe.com New Media 2.0, then digital TV may be New Media 3.0. The popularization and application of digital TV will surely start a new round of media war. How to deal with the challenge of new media 3.0, whether to seize the digital TV position quickly or find another way, are all powerful challenges that Gonghe.com must face in the next few years.

(D) The conclusion and its enlightenment to small and medium-sized enterprises to implement destructive innovation

The research focus of this case is how emerging small and medium-sized enterprises like Gonghe. Com wins competitive advantage through destructive innovation. Republic. Com combines low-end innovation with new market innovation, establishes Republican interactive media, reorganizes the structure of advertising industry chain through "one-to-ten replacement" and "non-competitive alliance", integrates advertising media, advertisers and advertising audiences, realizes zero-cost resource replacement, successfully opens up new market space and achieves remarkable results.

From the case of Comnet, we can see that the growth potential that a new business model can stimulate through destructive innovation also gives us some enlightenment.

At present, the focus of innovation in domestic small and medium-sized enterprises is how to improve their innovation ability. However, due to the limitation of funds and scale, it is difficult for a considerable number of small and medium-sized enterprises to achieve major technological breakthroughs in a short time. In terms of strategic cooperation, due to the influence of funds and scale, no suitable strategic partner can be found. Destructive innovation has created opportunities for SMEs to surpass mature large enterprises. Destructive innovation often begins with low-end users and non-users, who have low profit margins and are not attractive to mature enterprises. Mature enterprises can easily ignore this market, which is the best entry point for SMEs to enter the market. The whole network is based on R&; V League's destructive and innovative business model has met the advertising needs of small and medium-sized shops, thus occupying a place in the advertising market that was almost monopolized by news media in the past. R & ampv Alliance regards the product itself as a kind of resource for the other party to use, and realizes the value appreciation at almost no cost. This destructive way of resource integration will bring in new resources and redistribute them in a snowball way, so as to realize the integration and utilization of resources and open up another road for the innovation of small and medium-sized enterprises. At present, as a manufacturing base, China has a large number of traditional manufacturing industries and a large number of emerging service industries. Facing the surging network economy, we should reflect on how to seize the enormous energy generated by industrial cross-cutting and industrial alliance, develop new destructive and innovative business models, and promote China's industrial upgrading and independent innovation.