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Transcript of XIAOMI
Manufacturing was the main
Everything you can think of
Copy of existing products
Xiaomi, Coolpad, Huawei joined
Higher purchasing power
High saving rate
Unique and unconventional business strategy
: “Xiaomi addresses a segment that has been underserved by major brands, which craves the coolness of the latest technology at affordable prices,” Sandy Shen, an analyst with Gartner Inc.
Chinese Mobile Phone Industry
: from £50 to £500
Low production cost in China
Flipping of iPhone
Communities built around brands, fans of brands
Evaluation of Xiaomi’s business strategy
James Robertson, Ka Yan Li, Komal Mehta,
Laura Olesk, Guillaume Trounson
Mobile Industry in China
- fans all over the world
- leader of Android
Xiaomi aims to ‘create remarkable hardware,
software and Internet services
for – and with
the help of – our Mi fans
Building business on services
Excellent customer experience
Loyal fans priority
High quality in focus
Fan-centric social media business model
Making customer needs priority
Customers’ feedback will be taken into account
Products modified according to customer criticism
‘Razor and Razorblade’ business model
Selling handsets at break-even prices
Long-term profit from selling accessories, online services, etc.
Also knows as 'Razor and Cartridge' model
A goal of
handsets to be sold
To begin exporting their handsets to
Russia, India, Turkey and Mexico
Most smartphones in China are reverse-engineered, poorer quality versions of other smartphones, made from cheaper materials
Good quality phone at a reasonable price
Doesn’t break easily, HQ screen, sound battery life
Selling the handsets near break-even was not a long-term strategy
Selling online only
, reducing cost of sales and externalities from retail stores and distributors
give consumers the opportunity to capitalize on special discounts
The power of social media e.g.
The sense of
Power of the
'word of mouth'
Creation of a
strong fan base
Lei Jun, has similar characteristics as Steve Jobs
Charismatic, energetic, confident
Stronghold based at
97% of shipments are local
Focus on becoming
No 1 in China
in an emerging market, before taking on developed markets
To meet the demand
Convincing investors to invest in plants and machinery
To improve production capacity
Revise communications strategy
Particularly with other countries
Align with Western mobile networks
Adjust their Interface to Western requirements
Sign cross-licensing agreements
To reduce litigation risks
Increase spending on R&D and licensing
To improve their portfolio of patents
of Current Strategy
Xiaomi has different strategic approach in order to compete with rivals.
Lack of customer groove-in/brand loyalty.
Xiaomi is more of an
Constant communication via social media with consumers.
Working with companies who have experience and understanding of dealing in foreign markets
Hiring of Hugo Barra
Experience on international markets
Low costs of production
Allows Xiaomi to sell its products at a lower price
Not internationalising from a position of weakness
Low-cost manufacturing & design
Fast decision-making speeds
Xiaomi's smartphone sales in millions of units
”Just for Fans”
the bigger, better Apple?
Source: China IDC @ Statista.com
China's Smartphone Shipment
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Mobile Phone Industry in China
Evaluation of Current Strategy
Recommendations for Strategy
“At first, their questions were, ‘How do you think we should go about expanding internationally?’ And that evolved into, ‘Maybe you should come help us.’”
Hugo Barra, the Vice President of Xiaomi Global
Business models adopted
Xiaomi's Market Shares in Comparison to other Brands
Competitiveness to Success
A Chinese electronics company
Most known for it’s smartphones
Along with 8 other founders
third world’s largest
World's most valuable technology start-up company
Uses social media to promote products
Expanded into other countries
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Xiaomi unveils new Android-powered 5-inch MI3, 47-inch smart TV in China.
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. Available at: http://www.mi.com/en/about/, (Accessed: 20 March 2015).
Reference for pictures
Xiaomi Mi1 S. No date. [Image online]. Available at: http://www.gsmarena.com/xiaomi_mi_1s-4929.php, (Accessed 10 April 2015).
Xiaomi Mi2 Specifications. No date. [Image online]. Available at: http://android-emotions.com/xiaomi-mi-2-specifications/, (Accessed 10 April 2015).
Xiaomi Mi3. No date. [Image online]. Available at: http://www.gsmarena.com/xiaomi_mi_3-5678.php, (Accessed 10 April 2015).
Xiaomi Mi4. No date. [Image online]. Available at: http://www.gsmarena.com/xiaomi_mi_4-6518.php, (Accessed 10 April 2015).
100% Committed to the Community.
[Image online]. Available at: http://miuiandroid.com/2013/09/23/official-statement-concerning-xiaomi-eu-and-shop/, (Accessed: 4 April 2015).
Lei Jun. No date. [Image online]. Available at: https://www.scmp.com/sites/default/files/2015/04/09/68418ffbjw1eqyefogjmtj216822oqkx.jpg, (Accessed: 4 April 2015).
Xiaomi’s Vision. 2014. [Image online]. Available at: https://www.facebook.com/xiaomichina/photos/pb.250677251634542.-2207520000.1428940569./780849965283932/?type=3&theater, (Accessed: 4 April 2015).
Hugo Barra. 2013. [Image online]. Available at: http://static4.businessinsider.com/image/52d024ddeab8ea4879f52b4c-1014-550/hugobarra04.jpg, (Accessed: 3 April 2015).
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