XIAOMI CHALLENGES GLOBAL SMARTPHONE LEADERS.

Case study: Xiaomi.

Group Members

Yvonne Mbugua AD103920

Brian Matheka AD100945

Victor Muthama AD104514

Atem Amos Ring AD104239

INTRODUCTION

Xiaomi is a smartphone company based in China. It was established in 2010 by Lei Jun, a serial
entrepreneur who thinks that high-quality technology does not have to be expensive. Xiaomi is
extending its worldwide presence to become a global brand, with over 100 million devices sold
in 2017 with goods released in Taiwan, Hong Kong, Singapore, Malaysia, Philippines, India,
Indonesia, and Brazil. Xiaomi is growing its worldwide reach in order to become a global brand.

Xiaomi has had great success in China in recent years, and at the same time, Xiaomi has been
actively expanding the India market, which is why the xiaomi firm is focusing on the Indian
market. And it necessarily faces various problems in different countries. As a result, this paper
goes into further detail about what causes such issues and how to address them.

BACKGROUND

Xiaomi was founded in 2010 and produces not only hardware but also software. The Beijing-
based firm is referred to as "The Apple of China," but Xiaomi prefers to be compared to Amazon
since they produce strong hardware that they sell at cost and rely on their services and content to
generate the majority of their income.

Xiaomi provides stylish and high-spec handsets at low costs, allowing them to chip into rivals'
market share and become China's most popular smartphone brand. With models retailing for far
less than other brands, it remains a source of envy on the streets of Beijing and, more recently,
India.

From the study given above:

1) How has Xiaomi been able to leverage the institutional environment in China to
challenge global players such as Samsung and Apple?

Xiaomi’s C.E.O and founder Lei Jun developed an innovative business model to reach
consumers while reducing costs. His strategy was not only to spend on advertising but to sell the
phones exclusively online. Lei Jun, building on his experiences in e-commerce and social media
in his early years, he developed an innovative online market and distribution channel. Initially
targeted tech savvy IT engineers and college students via a forum created by Xiaomi. He also
developed an online pre-selling/ pre-order model to reduce expenses for inventory. Xiaomi’s
phones would be limited in numbers and would be bided on online by eager customers. This
made Xiaomi one of the most popular smartphone brands at affordable prices surpassing market
giants like Apple and Samsung in Beijing or Shanghai.

2) What obstacles would it have to overcome to similarly succeed in India, Brazil or

Africa?

First, Xiaomi would have to come up with new distribution channels, let’s say physical stores
across the countries. They would also require protection against infringement rights (IPR).
Xiaomi's primary expertise in India should be localized. First and foremost, develop a separate
operating system for Indians exclusively. Xiaomi's operating system in China is MIUI, which is
a Chine seized version of the Android operating system. MIUI is based on Android, but it differs
from Android in that it offers a more attractive interface, faster performance, and a slew of added
functions. Because MIUI is fully user-driven, it is updated every Friday based on MiFans'
recommendations and community feedback. Improve user experience in response to consumer
demands, attract customers, and grow a fan following. Xiaomi should develop a customized
version of its operating system for the Indian market; this differentiating technique must entice
Indian buyers.

From a resource-based view acquired from the above study;

1) What resources has Xiaomi been able to create to enable its growth in China? Do
you believe it has a sustainable advantage in China?

Xiaomi's LOGO is a "MI" form, which stands for Mobile Internet and denotes that Xiaomi is a
mobile Internet firm. Furthermore, Xiaomi's inverted logo is a Chinese phrase "" lacking a dot
stroke, implying that Xiaomi is attempting to alleviate consumers' concerns. Xiaomi's tagline
"Born for fever" successfully merged the two qualities of "cheap price" and "high-cost
performance" and strongly etched them in the thoughts of customers when it was first
introduced.

Prior to 2014, China's mobile phone market was in the process of transitioning from feature
phones to smartphones. Xiaomi depended on low-cost goods to win the favor of many domestic
mobile phone customers at this time, and Xiaomi smartphone sales soared. However, in terms of
sustainability, with the large environment of China's smartphone market being saturated at the
time, tiny and medium-sized mobile phones' survival space was shrinking, and their
competitiveness could not be assured. As a result, Xiaomi's ability to do foreign business is
critical.

2) What obstacles to transferring resources to India, Brazil and Kenya is Xiaomi likely
to experience, and how do you suggest overcoming them?

In early 2014, Xiaomi began to internationalize and reach the international market. Xiaomi said
in April 2014 that it will reach India, Russia, Brazil, and ten more countries in Asia, Europe, and
the Americas within a year. However, real development was significantly slowed, and it did not
arrive in Brazil until July 2015. Xiaomi withdrew from the Brazilian market in less than a year
due to the excessive tariff problem (Zhang, 2016).
To expand its impact on international markets and build on long-term development, Xiaomi
should opt to strengthen its own supply chain, construct factories, open more experience stores,
and establish official e-commerce platform direct sales models.

Distinct nations and marketplaces have different political and economic systems, as well as laws
and regulations that govern them. It is difficult and risky to duplicate the home model and join
the new international market without a thorough study, appraisal, and judgment of the market.
After deciding to join the foreign market, conducting market research, selecting the appropriate
market, and entering in the proper manner are all important steps.

CONCLUSION

This case study is very important and significant in the sense that it helps us understand the
underworking and process as well as the nature of competition in china for a company to make it
and succeed in the market. Xiaomi has proven that with skills and creativity. One can easily
make it in the business world by first establishing a footprint in your country before venturing
abroad or go global. This is a lesson that can be adopted by all companies that are looking to gain
a prominent ground in the world business cycle while embracing technology in the process

Rapid yearly growth rates have enabled Xiaomi to pass Apple and claim second position in the
ranking of the world's leading smartphone providers for the second quarter of 2021 as Samsung
remains at the top. Xiaomi has been nicknamed “the Apple of China” owing to similarities in
product design and retail shops that include bright lighting and enthusiastic staff dressed in solid-
colored T-shirts with the iPhone manufacturer.

Xiaomi has had great success in China in recent years, and at the same time, Xiaomi has been
actively expanding the India market, which is why the xiaomi firm is focusing on the Indian
market. Creating quality smartphones and selling them at affordable prices is what propelled
Xiaomi to success throughout China, and the same technique would later serve as the company's
secret weapon in winning over Indian consumers