Xiaomi Ansoff Matrix

Xiaomi Ansoff Matrix is a marketing planning model that helps the mobile internet company to
determine its product and market strategy. Ansoff Matrix illustrates four different strategy
options available for businesses.  These are market penetration, product development, market
development and diversification.

Xiaomi Ansoff Matrix

Within the scope of Ansoff Matrix, Xiaomi uses all four growth strategies in an integrated
manner:
1. Market penetration. When using market penetration, companies focus on selling existing
products to existing customers. Xiaomi successfully uses market penetration strategy in its home
market in China. According to Q1, 2018 Smartphone sales results in China, Mi Smartphone’s
ranked third with the local market share of 12,8% after Huawei (20,8%), Oppo (18,5%), iPhone
(18,2%) and Vivo (14,6%).
2. Product development. This strategy option involves developing new products to sell to
existing markets. Xiaomi has ever-increasing product portfolio ranging from smart phones to
water purifiers and tooth brushes. Product development strategy is likely to be continued by
Xiaomi. This is because Xiaomi positions itself as a “company that provides innovation to
everyone at every level — from smart phones and technology to IoT connected smart products to
the basic everyday tools like power banks, backpacks and pens”.
3. Market development. Market development strategy is associated with finding new markets
for existing products. Xiaomi started market development in 2014, only four years after the
company was founded. In mid-2013, the company hired Hugo Barra away from Google and
Android to work on international expansion. Since that time, the electronics and software
company has established its presence in rapidly developing markets such as India, Singapore and
Russia. The mobile internet company also has plans to enter US market.
4. Diversification. Diversification involves developing new products to sell to new markets.
Xiaomi is engaged in an aggressive diversification strategy. Xiaomi ecosystem is vast and
comprises 55 companies, including 4 unicorn companies. Companies within the ecosystem
produce a wide range of products and services such as TVs, set-top boxes, robot vacuum
cleaners, headphone and even towels and rice cookers.