study covered in the fo...
study covered in the following pages includes the analysis of Xiaomi Company
that is one of the leading and most popular electronic consumer companies. It
produces smartphones and many other products and has it’s headquarter in Beijing
China. The study focuses on find out why the company has made such a huge success
since its inception in the year 2010. Its strategic plan changes and the
outcome of the changes are discussed at length. Recommendations and conclusion
of the company are also given.
strategy is one of the most crucial components in ensuring its success as well
as the going concern (Jia, 2015, p.23).
In order to effectively utilize limited resources, it is very important
to identify, set and follow the businesses long term direction a process which
calls for establishment of business strategy. The following literature is going
to take a critical view of business strategic plan (concepts and techniques) in
the context of Xiaomi Company. Xiaomi Company was founded by eight partners
back in the year 2010. The company was originally founded to run Google’s
android operating systems and make phone operating systems. The study is
organized in to various subsections including introduction, analysis, and a
statement of business issues, outcomes, recommendations and conclusion
of the company’s founders Lei Jun is termed as the 23rd richest
person in chain. The company mainly deals with designing, producing and selling
smart phones, laptops tablets and other consumer electronics. The mission of
the company states goes “born to fancier”. The statement elaborates the company
need to make its products more interesting and fancy. To clearly analyze the
company, the following features shall be includes business strategy, company’s
directions, external environment, five generic competitive strategies and
resources, capabilities and competitiveness.
This is the environments in which
the company operates and one which has great impact on the business operation.
It encompasses factors like competitive forces, industry dynamics, competitor
analysis success factor and industry outlook and profitability. These factors
are discussed at length in the following paragraphs.
rivalry- Smartphone industry is very competitive and flooded with a lot of many
available options to choose from when it comes to buying a smartphone (Yang and
Lie, 2016). There are so many superior companies in the industry among them
Huawei, Vivo Oppo and many others in Chinees market aiming at acquiring bigger
market share. They compete on every aspect like brand loyalty, consumers need,
quality and price. In the context of the
industry rivalry, Xiomi Company is facing a stiff competition.
of new entrants- presence of strong well established companies in the
smartphone industry with customers who are very loyal to their products makes
it impossible for new companies trying to penetrate the industry due to huge
capital outlay. According to Xie and Jia (2016) xiaomi therefore, being an
already well established company faces no challenge when it comes to new
there are so many substitutes for the smartphone like tablets, laptops and
other smartphones from competitors. However we can all agree that there is no
one of them that can be a total replacement for a smartphone (Li and Lee, 2016).
These electronics bear distinct features for the intended purpose. Although Xiaomi
faces a little challenge from the substitutes, it faces big competition from
powers of suppliers- over the year’s xiaomi company has developed and
maintained strong loyal suppliers mostly based in Taiwan. The supplier’s
relationship and bargaining power is very moderate currently In return
suppliers have helped to main an effective supply chain which is one if it’s
major key to success (Yang and Wos, 2017).
power of the consumers- presence of so many inter-changeable products in the
smartphone industry poses quite a challenge to Xiaomi Company. This calls for
the company to extend a degree of loyalty to the consumers to maintain them by
offering better quality products
rise of huawei, vivo and opp is bad news in the smartphone industry and even
worse to Xiaomi Company. A recent report by Cai (2016) depicted that there is a
very competitive market out there and Xiaomi needs to lower the prices and
introduce better feature in order to stand out. Following a research conducted
by Dong and Zhung, (2016) the chart below shows the analysis on the competitors
Company has grown into a giant smartphone in the industry since its inception
in the year 2010. It is currently making 36.1 billion yurn in terms of annual
sales. Factors like simplicity, ultimate, fast speed and world to mouth are
attributed to the success of this company among them.
the simplicity aspect the company embraces the beauty of simplicity. Xiaomi therefore
concentrates with launch of fewer products annually and offering the best it
can in terms of quality and price. Ultimate encompasses the need to do
something you are good at and reaching the perfection (Cai, 2016). Xiaomi’s products
are among the best and have got excellent features as compared to others. Fast
speed ensures that the company acts extremely faster in terms of responses to
the customers’ needs and specifications. Xiaomi collects data from the
customers and try to modify their smartphones to correspond to the customers’
opinions. In the word to mouth, xiaomi has targeted reaching its customers all
over by translating over twenty languages. This has helped to increase the
level of satisfaction to its customers.
Resources capability and competitiveness
this subheading various factors like competitive advantage, internal strength,
weaknesses, opportunities, threats, value chain and value proposition will be
discussed in details. Some of threats includes presence of a hunger market
(where the company releases a few product) and intensified market competition
from the competitors. Xiaomi has maintained healthy supply chain with the
suppliers although it is facing a challenge in that it is very costly to
monitor the same. Opportunities available for the company include presence of
new markets and new products and services. Constant growth in the income level
is another great opportunity in that it creates ready markets for the targeted
consumers. Xiaomi Company has a good internal strength in that it has been able
to maintain very skilled workforce, availability of products differentiation
and the fact that it has unique products gives it a competitive edge. Xiaomi
also has some weaknesses in the supply as it has few supply outlets stationed
in the market. patent issue is another
major weakness for xiami.
Five generic competitive strategies
Best cost provider - the provision of
relatively low price smart phones helped Xiaomi Company become a sensation in
the china markets. Although the competitors quickly copied the cheap price
strategy and according to shifted to targeting wealthier consumers with its
expensive devices to fend competition from competitors.
differentiation- since innovation is one of the key to ensure success in the
products. Xiaomi Company has taken a tweak in Smartphone features and capture
newest experience in the technological world. It has also targeted massive
consumers by developing other MI products such as TVs’, power banks, headphones
and boxes. Finally, to successfully reach the German market, Xiaomi Company has
developed an operating system adapting both English and German languages.
cost provider- Xiaomi Company made its first Smartphone in the year 2011 and
has since that time continued to introduce many more products in the
electronics industry which are of high quality and highly affordable.
strategy- Xiaomis’ mainly focused on the Smartphone production. It also focused
on providing low cheep products targeting china market
differentiation strategy- Xiaomi Company is quickly taking a change in most of
its strategies after realizing the competitors are following same principals.
It has switched to providing expensive products to reach wealthier consumers as
the competitors concentrate with low income earners. It has also widened the
market size by targeting global markets that have less competition.
description of business issues
Xiaomi Company was not the only prayer in the china market. The presence of
other superior companies in the electronic industry geared the need to shift to
other less saturated markets. This resulted to a haste to grow supporting it’s
the growth by “get big first and get better later” philosophy. The company
therefore penetrated to bigger markets like India, Russia and USA in an effort
to satisfy its expansion urge.
Company suffered a major setback in the initial success of the smart phone
brand. The success was hindered by presence of substitutes and stiff
competition from the market. The surged the need to branch out to other range
it is commonly known” choices have consequences”. Perhaps, when the xiaomi
company resolved to expand its market, it was not aware of the delaying hurdles
that could act as a stabling block to the process of expansion. One of the
major drawbacks was the lack of patents. This as a result made it produce infringed
models of Erickson eight in India. A ruling regarding the patent issue by Delhi
High Coat blocked importing selling and marketing their phones in India as it
featured some of the patent features of Ericson eight company. The same patent
setback was experience in the US in regard to some of its models. In totality
the lack of well established patent portfolio affected the company delay.
marketing research analysis should be conducted first in the targeted areas to
pinpoint out some of the mandatory requirements. The research would help in
pointing out some of the likely setbacks to be experienced in the market. The
company would therefore prepare enough to eliminate the current hurdles that
would hinder the furtherance of the business in future.
analysis of the consumers should also be of first priority to help point out
the needs and special specifications that the consumers would be looking for in
order strengthen and fasten the marketing process.
plan of the company is essential in ensuring the long term success of the
company and should be safeguarded like other valuable assets. Xiaomi Company
intensified in the marketing and expansion strategies, which made attain recommendable
success. Just like any decision has repercussions, the change of strategic plan
has both positive and negative results. The
positive results are associated with increased sales and extensive market base
whereas the negative ones come as challenges. The expansion plan for Xiaomi
Company has not been fully met and it is now targeting markets in the US an