Iflytek is one of the most successful companies in the field of speech technology, which provides vast services in the technology industry under the adoption of business to business activity. However, under the particular case, it has been determined that thebusiness is still in a stagnant stage due to the fact that it has weak operations in the international markets as well as it has low profit margins as compared to the market giants. Therefore, under the certain reasons, it shows that Qingfeng Liu (chief executive officer of IFLYTEK) was considering a change in business model under which the business would introduce the business to customer segment in order to increase the size of operations and subjected to expansion of the entity.

Under the stage of average performance, Liu was also suggesting a shift of business to business operations into a wide range of customers’ demand. For that, he determined the use of external sources that could improve and achieve the overall mission of the company in the future. In order to analyze the business scenario, he implemented different industry analysis in which all the domestic competitors had been identified in terms of financial performance as well as their particular mission and vision.

Moreover, the industry analysis shows that IFLYTEK was still behind those selected competitors in terms of business expansion and more reliable and innovative products and services. On the other hand, the new emerging players in the market would tend to decrease the company’s overall performance through providing the similar products matched with the new technologically innovative products and services. The situation also illustrates the poor implementation of the new technology in which many large companies like IBM and Nuance were in a competitive position against the other market players.

Therefore, it did not allow the new emerging players like IFLYTEK to increase the business operations accordingly.Thus, with the current scenario, it has been analyzed that thefirm should focus on the business expansion in the market where there would be more concern for the particular customers or the end users instead of using the other businesses as the unique buyers of the products. So, with the consensus, Liu was focusing to increase the product expansion criteria with the use of B2B as well as B2C model. This would allow to increase the overall company’s performance in terms of more financial image and strong ability to invest for the new products and services overtime.

In addition to this, thecompany would also be able to increase the business models through additional investments collected from the other sources like shareholders or the debt amount. From the case, it is identified that thebusiness already holds 70% of the domestic market in the field of speech technology but lack of internationally recognize organization. Therefore,it is concluded that in order to improve the business activity in terms of expansion and introduce the new business model of B2C, the company should go for the strategic alliance and to balance the growth rate for both in the domestic as well as international market.

Problem Statement

From the situation, it has been identified that thecompany was struggling to get into a strong position within a particular market. However, the problem was the inability to consider the competitive position against the international market giants due to the lack of funds available for the business expansion, as well asthe traditional model of business to business was not providing the accurate results as compared to the company’s mission and vision.

On the other hand, the limited earnings and steady growth rate allowed Liu to suggest a business expansion in terms of more operations in the domestic as well as international markets. For that, he was trying to introduce the business to customer model in which the finished products and services would be delivered to the end users. Therefore, the introduction of new business model would be needed to increase the size of business operations and to earn more profits in order to compete against the domestic as well as international markets.

This would also allow the business to include the existing model in terms of business alliances in which the steady growth rate would be increased to a more moderate one but the situation showed that themarket would not be able to enable the company to pick the standards quickly due to the situation of monopolistic competition. Thus, under these highlighted problems, the chief executive officer (Liu) could makethe decisions regarding to solve these problems quickly through the use of external sources of fund to increase the size of business in the near future. ……………………………………………………………

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Posted on June 17, 2017 in Case Solutions

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