A note on business model with reference to the Hong Kong blind box toy business

A note on business model with reference to the Hong Kong blind box toy business [information from perplexity.ai]

My question 1: "What is business model all about in strategic management, with reference to the blind box for toy business?"

The reply: "

A business model is a structural framework that outlines how a company operates, generates revenue, and adds value in the market. It includes details on how the business interacts with customers, suppliers, and other stakeholders to create and deliver products or services9. In strategic management, a business model serves as a blueprint for achieving business objectives by defining the processes and strategies for creating, delivering, and capturing value5.

1. : The unique value offered to customers.

2. : How the business generates income.

3. : Essential operations to deliver the value proposition.

4. : Assets required to operate the business.

5. : Collaborations that enhance the business.

6. : The main costs incurred by the business.

The blind box toy business model leverages the element of surprise and collectibility to drive sales. Here's how it aligns with the components of a business model:

• : The thrill of not knowing which toy you'll get, combined with the potential to collect rare items.

• :

  • : Selling blind box toys directly.

  • : Encouraging resale of rare or limited-edition toys.

  • : Partnering with brands or artists to increase appeal.

  • : Selling related accessories like keychains or plushies.

• : Designing and manufacturing toys, managing distribution channels, and creating engaging marketing campaigns.

• : Manufacturing facilities, distribution networks, and marketing teams.

• : Collaborations with popular brands or artists to enhance product appeal.

• : Manufacturing costs, marketing expenses, and distribution fees.

Strategic management in this context involves:

1. : Understanding consumer trends and preferences.

2. : Identifying competitors and differentiating the product.

3. : Managing supply chain risks and market fluctuations.

4. : Continuously introducing new and unique toys to maintain consumer interest.

5. : Implementing strategies effectively to achieve business goals.

By combining these elements, the blind box toy business model creates a successful strategy for capturing market share and driving profitability through strategic management practices."

My question 2: "What are the research gaps and research issues of the topic of business model in strategic management?"

The reply: "Research on business models in strategic management has evolved significantly, yet several gaps and issues remain. Here are some of the key research gaps and issues:

1. : There is a need for more comprehensive integration of business model research with other management disciplines, such as complexity theory, demand-side theories, and supply-side theories of strategy4.

2. : Further research is required to understand how interdependencies among activities within a business model contribute to competitive advantage, especially when resources and capabilities are not strongly differentiated4.

3. : The dynamic nature of business models, including how they evolve over time and adapt to changing environments, requires more in-depth study6.

4. : There is a gap in balancing quantitative and qualitative research methods in business model studies. More qualitative and process-oriented research is needed to complement existing quantitative studies3.

5. : Empirical evidence supporting the relationship between business models and strategies is lacking. More case studies and empirical analyses are needed to strengthen this connection2.

1. : Despite extensive research, there is still ambiguity regarding the precise definition and scope of business models in strategic management6.

2. : The debate about whether a business model precedes strategy or vice versa continues, with some arguing that a viable business model is necessary for strategy formulation2.

3. : How business models can be designed to be adaptable and flexible in response to changing market conditions is an ongoing issue5.

4. : Developing effective metrics to measure the performance of business models and their impact on strategic outcomes remains a challenge5.

5. : Researching how business models can foster innovation and ensure long-term sustainability in competitive markets is crucial5.

Addressing these gaps and issues can enhance our understanding of business models in strategic management and provide valuable insights for practitioners and researchers alike."

My question 3: "What has been the theoretical development of the business model theories over the last 25 years?"

The reply: "Over the last 25 years, the theoretical development of business model theories has undergone significant evolution, particularly with the advent of the digital economy and e-commerce in the mid-1990s. Here's an overview of key developments:

1. : The business model concept gained prominence as a tool to understand firm-level management in the digital economy. It was initially used to describe how companies could leverage technology to create new revenue streams and value propositions3.

2. : Early frameworks emphasized the value proposition, target markets, internal value chain structure, cost structure, and competitive strategy. The role of value networks in creating and delivering value also became a focus1.

1. : Osterwalder and Pigneur's Business Model Canvas (2005, 2010) provided a structured framework for designing and innovating business models. It highlighted key elements such as customer segments, value propositions, channels, key activities, key resources, key partners, cost structure, and revenue streams1.

2. : The concept of dynamic capabilities became crucial, emphasizing the need for firms to adapt their business models continuously in response to environmental pressures. This adaptation is essential for new ventures seeking scalable and profitable models2.

3. : Research began to focus on business model innovation (BMI) as a means to drive sustainability and performance. BMI involves changing existing business models or creating new ones to address environmental and social challenges45.

1. : With the rise of digital entrepreneurship, there is a growing interest in how business models can be scaled efficiently. This includes strategies like growth hacking to accelerate growth during the scaling phase6.

2. : There is an increasing emphasis on integrating business model research with other management disciplines, such as complexity theory and sustainability studies, to address broader strategic challenges.

3. : Developing metrics to assess the performance of business models and their impact on strategic outcomes remains a critical area of research.

Overall, the theoretical development of business models over the past 25 years reflects a shift from a focus on operational and functional aspects to a more strategic and dynamic understanding of how businesses create, deliver, and capture value in a rapidly changing environment."

My question 4: "What are the issues related to the bind box for toy business reported in the public media over the past 15 years?"

The reply: "Over the past 15 years, several issues related to the blind box toy business have been reported in the public media:

1. :

   • Reports highlight the significant spending on blind boxes, with some consumers investing substantial amounts annually. This has raised concerns about addiction and financial management among young collectors13.

   • The uncertainty and surprise elements of blind boxes are often cited as factors that encourage repeated purchases, potentially leading to financial strain for some consumers13.

2. :

   • The blind box market has experienced rapid growth, particularly in China, with projections indicating a market size of RMB ¥25 billion by 202513.

   • Companies like Pop Mart have dominated the market by leveraging unique designs and collaborations with artists, which has raised competition among other toy manufacturers15.

3. :

   • The success of brands like Pop Mart is partly attributed to their strategic use of intellectual property (IP) and trademarks. This has led to discussions on how IP strategies can create global fan cultures and protect brand identities5.

4. :

   • Blind boxes have become a significant part of Chinese youth culture, with their popularity surpassing other hobbies like video games13.

   • The phenomenon has been linked to broader trends in consumer behavior, including a preference for novelty and stimulation among younger generations3.

5. :

   • Studies have analyzed the business strategies of leading companies in the blind box industry, such as Pop Mart, focusing on macroeconomic factors, strengths, weaknesses, opportunities, and threats (SWOT analysis)6.

6. :

   • The blind box industry has contributed to economic growth in sectors like retail and e-commerce, with significant sales figures reported during major shopping events18.

These issues reflect the complex nature of the blind box toy business, encompassing consumer behavior, market dynamics, and strategic management."

My question 5: "What are the issues related to the bind box for toy business reported in the Hong Kong public media over the past 15 years?"

The reply: "Over the past 15 years, the Hong Kong public media has reported several issues related to the blind box toy business, particularly focusing on companies like Pop Mart. Here are some key issues:

1. :

   • In recent years, there have been discussions about the need for regulation to protect consumers, especially young people, from the addictive nature of blind box purchases. This has led to regulatory guidelines being issued in China in 2023 to standardize the operation of blind box businesses18.

2. :

   • The blind box market has experienced rapid growth, with companies like Pop Mart and Miniso benefiting from collaborations with popular brands and artists. This growth has led to increased competition in the market, with various brands issuing their own blind box products13.

3. :

   • Reports highlight significant spending on blind boxes, with some consumers investing substantial amounts annually. This has raised concerns about financial management and the potential for overspending among young collectors23.

4. :

   • The success of companies like Pop Mart is partly attributed to their strategic use of intellectual property and collaborations with artists. This has led to discussions on how IP strategies can enhance brand appeal and protect brand identities4.

5. :

   • There have been instances of quality control issues, such as the scandal involving Pop Mart employees tampering with blind boxes to swap rare figurines. This incident highlighted the need for better quality control measures to maintain consumer trust1.

6. :

   • The blind box phenomenon has contributed to economic growth in sectors like retail and e-commerce. The market's potential for further expansion, both domestically and internationally, remains a topic of interest in the media68.

These issues reflect the complex nature of the blind box toy business, encompassing consumer behavior, market dynamics, and strategic management."

My question 6: "What are the business issues facing the blind box for toy business in Hong Kong from the business model perspective?"

The reply: "From a business model perspective, the blind box toy business in Hong Kong faces several key issues:

1. :

   • : There is a need for clearer regulations to protect consumers, particularly minors, from the addictive nature of blind box purchases. While Hong Kong may not have specific regulations like those in mainland China, companies must be aware of potential regulatory changes.

   • : Ensuring compliance with emerging regulations in the broader region can help maintain consumer trust and market stability.

2. :

   • : Companies like Pop Mart have dominated the market with their extensive distribution networks and popular IPs. Hong Kong-based businesses must differentiate themselves to compete effectively.

   • : As the blind box market grows, there is a risk of saturation, which could lead to decreased demand and profitability.

3. :

   • : The blind box model exploits consumer curiosity, which can lead to over-spending. Managing this aspect while maintaining customer engagement is crucial.

   • : Ensuring consistent quality and introducing new, appealing products regularly is essential to retain customer interest and loyalty.

4. :

   • : Acquiring or creating unique IPs is vital for differentiation and attracting collectors. This involves managing licensing agreements and developing proprietary characters.

   • : Protecting IPs from infringement is essential to maintain brand value and exclusivity.

5. :

   • : Implementing an effective omnichannel strategy that integrates online and offline sales channels can enhance accessibility and customer experience.

   • : Expanding into new markets, both locally and internationally, requires adapting business models to suit different consumer preferences and regulatory environments.

6. :

   • : Diversifying revenue streams beyond primary sales, such as through secondary markets or merchandise, can help stabilize income.

   • : Managing production and marketing costs effectively is crucial to maintain profitability, especially in a competitive market.

Addressing these challenges requires a flexible and innovative business model that can adapt to changing consumer behaviors and market conditions."

Reference: a collection of blog notes on using chatgpt for research purpose.