Exploration of canvas-based Chinese family office business model
Along with China's economic takeoff in the past four decades, a number of prominent family businesses and high net worth individuals have emerged in mainland China. The investible assets holding by high net worth individuals are still increasing year by year, while the first generation of entrepreneurs has generally reached the retirement age. Given the demands of wealth management and inheritance, the intergenerational succession issue will become more and more important. In recent years, more high net worth individuals and families have adopted or are considering using family office as a major tool for intergenerational succession and wealth inheritance. In general, the market prospects of Chinese family office industry are promising with great development opportunities. In Europe and America, family offices have gone through a history of more than 100 years, a sound wealth management model has been built on the basis of a mature wealth trust mechanism. On the contrary, this concept was only introduced to China more than a decade ago, and the whole industry is still in its infancy. In terms of business model, there is huge room for improvement because the design and calculations of various business elements that have not been researched. The practical exploration of Chinese local family business has to be raised to a high level of academic research, and the theoretical wisdom should be used in turn to guide the family office practice. However, despite huge amount of business model theory studied both at home and abroad, the theory is barely used to analyze the Chinese local family office. In terms of research direction and research conclusion, the existing studies mainly focused on how to describe various elements of the business model, rather than to explore the internal structure and logic of business model. Although the start-up family offices regard business model theory as a tool, they do not know how to follow the instruction and where to start from (how to analyze the various elements, e.g. customer, business, resources, finance, etc.); and the mature family offices could not use business model theory to improve its current operation. Based on this circumstance, the thesis focuses on the business model of local family offices in China. By using business model canvas as a tool, the thesis conducted two research to deeply analyze the current situation of Chinese local family offices. Research One was from industry level (a macro perspective). We sent questionnaire to 35 family offices. The results were shown as descriptive statistics analysis, mainly including 9 elements of business model canvas (key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure, revenue). Research Two was from organization level (a micro perspective). We used case study method by selecting a local Chinese family office for in-depth interviews. This research tried to find the potential problems and improvement directions of the target family office. The analysis mainly focused on client module, business module, key resources, and key partners. A clearer understanding of the business model of Chinese local family office was built based on the result of Research Two: the client module should always be the core of family office business model, no matter whether the office is at a start-up stage or a development stage. The design of key activities should be in line with customers’ demand and the level of customer relationships. As the core, client module determines the relationship among key partners, the allocation of key resources, the content of key activities, and the level of value proposition. It then influences the balance of cost and revenue of the family office, and ultimately leads to the long-term profitability of the family office. Based on the results of Research One and Two, the thesis further analyzes the opportunities and challenges of Chinese local family business industry, gives suggestions respectively from client module, business module, resource module, and finance module. Finally, it also proposes two strategic directions for future strategic planning: family inheritance trust service and family business equity governance plan.
Advisor: Chou, Daisy; He, Xiao
Degree Name: Doctor of Business Administration
Degree Discipline: DBA department
Publisher: University of Otago
Keywords: family office; business model
Research Type: Thesis