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HNA Group’s Business Strategy Case Study

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HNA Group’s Company Overview


HNA Group Co., Ltd. operates in aviation, holdings, capital, tourism, and logistics fields in China and internationally. The company operates airplanes on domestic and international airlines; engages in the development and management of real estate properties, including office buildings, businesses, hotels, and apartments; operates department stores, supermarkets, and other outlets; and owns and manages approximately 450 hotels. It also offers airport management, aircraft leasing, insurance, and investment banking solutions; tourism services, including aviation, hotel, tourism, finance, traditional tourism, and IT internet services; and Financial services, such as securities, banking, futures.

www.hnagroup.com

Country: Hainan

Foundations date: 2000

Type: Private

Sector: Financials

Categories: Conglomerate


HNA Group’s Customer Needs


Social impact:

Life changing: heirloom

Emotional: rewards me, attractiveness, provides access, fun/entertainment, wellness, therapeutic value, badge value

Functional: saves time, simplifies, reduces risks, reduces costs, quality, variety, sensory appeal, integrates, organizes


HNA Group’s Related Competitors


Hanwha Berkshire Hathaway Danaher Louis Dreyfus Dalian Wanda Group Jardine Matheson

HNA Group’s Business Operations


Affiliation:

Commissions are used in the affiliate revenue model example. Essentially, you resell goods from other merchants or businesses on your website or in your physical store. You are then compensated for referring new consumers to the company offering the goods or services. Affiliates often use a pay-per-sale or pay-per-display model. As a result, the business can access a more diversified prospective client base without extra active sales or marketing efforts. Affiliate marketing is a popular internet business strategy with significant potential for growth. When a client purchases via a referral link, the affiliate gets a portion of the transaction's cost.

Archetypes of business model design:

The business model archetypes include many business personalities and more than one business model linked to various goods or services. There is a common foundation behind the scenes of each unit, but from a management standpoint, each group may operate independently.

Best in class services:

When a firm brings a product to market, it must first create a compelling product and then field a workforce capable of manufacturing it at a competitive price. Neither task is simple to perform effectively; much managerial effort and scholarly study have been dedicated to these issues. Nevertheless, providing a service involves another aspect: managing clients, who are consumers of the service and may also contribute to its creation.

Brands consortium:

A collection of brands that coexist under the auspices of a parent business. The businesses in this pattern develop, produce, and market equipment. Their strength is in copywriting. Occasionally used to refer to a short-term agreement in which many companies (from the same or other industrial sectors or countries) combine their financial and personnel resources to execute a significant project benefiting all group members.

Cash machine:

The cash machine business model allows companies to obtain money from sales since consumers pay ahead for the goods they purchase, but the costs required to generate the revenue are not yet paid. This increases companies' liquidity, which they may use to pay off debt or make additional investments. Among several others, the online store Amazon often employs this business model.

Cross-selling:

Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Cross-subsidiary:

When products and goods and products and services are integrated, they form a subsidiary side and a money side, maximizing the overall revenue impact. A subsidiary is a firm owned entirely or in part by another business, referred to as the parent company or holding company. A parent company with subsidiaries is a kind of conglomerate, a corporation that consists of several distinct companies; sometimes, the national or worldwide dispersion of the offices necessitates the establishment of subsidiaries.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Enterprise unbundled:

Unbundling is a business practice that recognizes that a company may have three primary focuses: client connections, product innovation, and infrastructure. Moreover, three of these elements may coexist in big businesses, creating a complex model that needs significant resources to operate effectively. Thus, unbundling is a crucial idea for any enterprise's future success. Additionally referred to as deconstruction or disaggregation, this benign word refers to a dominating force that propels digital change into the heart of whole sectors.

Finance get makeover:

Expand your company, acquire money, overcome obstacles, implement your plans, and achieve more success. Financial modeling is how a business creates a financial representation of part or all of the firm's or security's economic characteristics. Typically, the model is defined by its ability to conduct computations and offer suggestions based on the results.

From push to pull:

In business, a push-pull system refers to the flow of a product or information between two parties. Customers pull the products or information they need on markets, while offerers or suppliers push them toward them. In logistics and supply chains, stages often operate in both push and pull modes. For example, push production is forecasted demand, while pull production is actual or consumer demand. The push-pull border or decoupling point is the contact between these phases. Wal-Mart is a case of a company that employs a push vs. a pull approach.

Layer player:

Companies that add value across many markets and sectors are referred to be layer players. Occasionally, specialist companies achieve dominance in a specific niche market. The effectiveness of their operations, along with their economies of size and footprint, establish the business as a market leader.

Low cost:

A pricing strategy in which a business provides a low price in order to drive demand and increase market share. Additionally referred to as a low-price approach. The low-cost model has sparked a revolution in the airline industry. The end-user benefits from low-cost tickets as a result of a revenue strategy that seeks various sources of income. Ryanair was one of the first businesses to embrace this approach.

Make more of It:

The business invests time and money in developing in-house expertise and development that may be used both internally and outside to sell goods or services to clients or third parties. AWS was created to meet Amazon's cloud computing requirements. They quickly discovered that they could offer their services to end-users. At the moment, AWS accounts for about 11% of Amazon's overall income.

Orchestrator:

Orchestrators are businesses that outsource a substantial portion of their operations and processes to third-party service providers or third-party vendors. The fundamental objective of this business strategy is to concentrate internal resources on core and essential functions while contracting out the remainder of the work to other businesses, thus reducing costs.

Performance-based contracting:

Performance-based contracting (PBC), sometimes referred to as performance-based logistics (PBL) or performance-based acquisition, is a method for achieving quantifiable supplier performance. A PBC strategy focuses on developing strategic performance measures and the direct correlation of contract payment to success against these criteria. Availability, dependability, maintainability, supportability, and total cost of ownership are all standard criteria. This is accomplished mainly via incentive-based, long-term contracts with precise and quantifiable operational performance targets set by the client and agreed upon by contractual parties.

Reverse engineering:

It is a legally sanctioned technique of duplicating a technology in which, rather than beginning from scratch, one starts with an existing product and works backward to determine how it works. Once the product's basic principle or core idea is established, the next stage is to replicate the same outcomes using other methods to prevent (legally prohibited) patent infringement. The cost of manufacturing is significantly lowered.

Reverse innovation:

Reverse innovation is a strategy that involves creating inventions in emerging (or developing) markets and then distributing/marketing them in established ones. For example, numerous businesses make goods in rising economies like China and India and then export them.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.

Why HNA Group’s Business Model is so successful?

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