Marketing Assignment: Competitive Advantages Of Xiaomi In China
Question
Task: Analyse the case study of “Xiaomi, Inc.: The Rise of a Chinese Indigenous Competitor by Mary B. Teagarden and Carolyn Fifi” through this marketing assignmentand answer the two questions below in essay form, using appropriate frameworks and readings from the Business in Emerging Markets course, evidence from the case, and relevant outside sources.
1. How have the market and non-market environment of China shaped the competitive
advantages (and weaknesses) of Xiaomi
2. How well do the capabilities that Xiaomi has developed in China translate into the
market and non-market environment of India
Answer
Introduction
In an intensive competitive market of China Xiaomi, an indigenous company dared challenging Apple Inc. and Samsung to reach a large number of consumers with a variety of smartphone and digital products. The marketing assignmentfocuses on exploring how the company gained competitive advantages along with facing some weaknesses in China due to the market and nonmarket of the nation. It is worth noting that after entering and empowering the smartphone market of China the company has also worked efficiently in India to reach common people with less money to use expensive smartphones. Hence, this essay is also going to explore the way of Xiaomi to translate its capabilities developed in China into the Indian market and non-market environment.
Importance of market and non-market environment of China in shaping up the competitive advantages (and weaknesses) of Xiaomi
China is far away from other nations such as the Soviet Union and Japan in the case of lifting its people out of poverty by differing the established Western norms. Primary reason for such a success is strengthening the key dimensions of national economic competition, including geopolitical rival, supplier, competitor, and market. China has become successful in portraying itself as the leader in all the four dimensions mentioned above. For example, China plays an important role in manufacturing products such as steel, smartphones, electronics, and cars. At the same time, it has presented itself as the biggest supplier in the world business with the output of 25% of the global manufacturing sector (Panigrahi, 2019). Whether it is a non-market or market environment, China has become successful in gaining the traction of presenting a new societal and economic model by showing a new path to an established and better economy.
Even after the occurrence of COVID-19 pandemic, this nation has focused on concerns such as human rights, business ethics, trade deficits, national security, and self-sufficiency. In such a condition, Xiaomi has become successful in gaining competitive advantages through the cheap costs of the services and products. The Eco-chain of China has also helped in shaping up the aggressive vision of Lei Jun, the Chairman, CEO, and founder of Xiaomi through his constant and intense focus on the technical field. Retaining the world-class executive talent is the most important aspect in gaining success in the distribution practises and innovative marketing approaches. This organisation has also gained competitive advantages in the China market due to having a pragmatic and dynamic supply chain management system by using ambitious staffing practises (Chhabra and Metkar, 2020). It has never failed to attract world class talent to execute the task of reaching a large number of people in the form of developing and selling software for mobile devices.
The company has never failed in creating the most efficient team from the founding days of the company in the form of hiring Hong Feng, Wong Jiangji, Wang Chuang, Lie De, Zhou Guangping, and Hugo Barra along with Lin Bin with their intense knowledge in world class execution of business along with innovation and technology. Conscious improvement regarding core technologies in the smartphones of the company has always helped in improving the condition regarding iteration of software of Xiaomi by gaining the attention of customers. Most importantly, this organisation has never failed to make a routine update of the smartphones on every Friday by adding some interesting and useful features along with fixing former problems.
Most importantly, the fanbase of Xiaomi is the most important and strongest aspect of the company that helps in completing the task of boosting the popularity in China. Along with that, the company comes with the supply chain dynamics that helps in manufacturing smartphones fast enough to meet the expectations and needs of the consumers. The users get the opportunity to post their suggestions and honest reviews on the website of Xiaomi that helps the company to boost its morale regarding manufacturing models. For example, the manufacturing model of the company is developed by considering the customer demand. This organisation uses a personal website to take orders from the consumers directly, and once the company gets sufficient orders it purchases components of smartphones from the global suppliers. Xiaomi does not face any problem regarding managing excess inventory as they order components for smartphones only after getting sufficient orders from customers.
At present, the company has become one of the largest manufacturers of smartphones by expanding in 90 countries, and this has become possible only by gaining sufficient experience developed in the domestic market between 2010 and 2013. Value innovation principles are the most important strength of the company that focuses on continuing in a conscious feature choice to improve the incremental technology improvement. However, this company also comes with some weaknesses in the products, including the weak research and development in comparison to other competitors such as Apple and Samsung. At the same time, quality issues also affected the reputation of the company, creating an urge for after-sales service in different areas. However, there are not sufficient service centres of this organisation. Most crucial issue regarding the after-sales services in this organisation is that the company focuses on providing direct online and hotline services to the customers (Tabassum and Ahmed, 2020). However, these approaches often fail to meet the needs and demands of the customers regarding after sale-services. Primary reason for such a fact is the market and non-market environment of China that intrigues the competitive advantages and weaknesses of the company. For example, intensified market competition has always created a tough environment for Xiaomi that has also created an opportunity for the company to utilise the best executive leadership of the company. At the same time, the company has never failed to gain advantages in the competitive forms by providing the consumers cheap and useful products.
Huge potential of emerging markets is another crucial aspect of the market that helps in creating a rapid and continuous growth in the smartphone business. Marketing through the internet has helped the company in China to reach the large number of people that has helped the organisation in creating a different and new dimension of success. Along with that the company has also become successful in creating revenues from application downloads, software, and services in the emerging markets.
Controlling position of the telecommunications operators has also been identified and mentioned in the common frame of the Chinese market that have affected the lower prices of the smartphones. This company has become one of the common players in the field of smartphones helping the common people in the third and fourth tier cities in China. Hence, meeting the needs of the growing middle class has become the highest priority of the company, and this aspect has only helped in creating the entire land to reach a new dimension. In the global market, the smartphone manufacturers from the country, including Xiaomi, Lenovo, and Huawei started to gain competitive advantages. Therefore, the emergence of local companies in China has created a new dimension in the smartphone manufacturing market. Most important reason for identifying such a fact is that the outlook of this industry has created a new dimension for the company such as Xiaomi that has only created a new aspect for winning the race of the large companies in creating the highest sales through building brands from the local brands. Even after having fragmented aspects in the marketing sphere the smartphone market has become the most important aspect in the sales of the continuous growth of sensitivity and responding to the needs and demands of the consumers. This company also has the opportunity to improve the entire condition regarding after-sales services in China by creating sufficient forums and communities online to provide sufficient and quick services to the common people. This aspect will help in the improvement of the company regarding the repairing phone of the rural customers (Thomas and Devi, 2021). Creating wutg tge kick retail outlets is another essential approach of the company in improving the condition regarding managing the indicators of ensuring quality of services. The quality of product and quality of service have a keen relationship in the terms of need for creating better aspects for the customers to get the best services.
Excellence of translating the capabilities that Xiaomi has developed in China into the market and non-market environment of India
Localised product and specifications is the most important aspect that helped the company in reigning the smartphone. High-quality user interface is one of the most important capabilities of Xiaomi that it has developed in China and created a better impact in the Indian market. It has also been identified in the case of iami that the company has never failed to update the quality of the smartphone. Most importantly, creating monopoly in the case of decreasing the price in the newer smartphones is another crucial aspect in the comapny. People with lower income in India can also buy smartphones due to its cheap and low cost (Aldashova et al. 2020). For example, this company has a range of smartphones from INR 5000 to INR 30000. The display, memory, processor, and the camera quality of the smartphones of Xiaomi are also clear and better in the form of high-quality specifications. MIUI, the user interface of Xiaomi is the most important and efficient platform and feature of the company that helps in decreasing the price of smartphones, and this capability is also developed in China. At present, the company is gaining more revenue in India due to having efficiency in regular updates of the products.
MI website is another strong aspect of the company that has helped in gaining trust of the customers in the form of creating direct connection and communication platforms. The website took help from the experience in China, and after some time working with companies such as Amazon India and Flipkart the company developed its own e-commerce website in India to reach the customers directly and effectively. This company has introduced flash sales that reflect the limited stock and particular time for selling the smartphones from the company. The company has created an approach to reach the emotions of Indian buyers by creating the slogan of “made in India” to influence the Indian people to buy this product from a positive point of view. However, it is worth noting that the products are only assembled in India, and the parts are imported from foreign suppliers similar to the strategy of the Chinese market. This company does not fail in utilising the capacity and capability of its global suppliers in meeting the needs and expectations of the local customers.
The company becomes successful in gaining revenue and reaching the customers with a low price as this organisation does not spend much in the research and development compared to its biggest competitors Samsung and Apple. Most importantly, the company has also become successful in reaching the needs of the customers only through the implication of high-quality products by implying the newest innovation and technology. The advertisement strategy of Xiaomi is another attractive part of creating differentiation from the competitors through the highly competitive pricing.
It is also essential for the organisation to consider the essential factors that have helped Xiaomi to target the market of India. For example, the huge potential market of India has attracted driving approaches in Southeast Asia. For example, the fast and large-Bowing market for mobile technologies and smartphones. Primary reasons for such a factare that the second largest cell phone market of the world is India, and primarily, this aspect has affected the executives of Xiaomi to select this place for new investment and expansion (He and Sun, 2021). However, it is also worth noting that the demand preference in the Indian market is not very much different from the demand preference of the Chinese markt. For example, the entrance of Xiaomi has created different aspects and approaches for the Indian consumers to buy featured and updated products with the stylish design and good quality at a lower price. Hence, this approach of the company is the most attractive aspect for the consumers to feel attracted towards the product of the company. However, the path of the Indian market was not free from issues that have affected overall business approaches and the standards of the expectations of the consumers from every level of the Indian consumer market. After-sales service problems and the quality problem are not new for the company that have affected its popularity in the company. Riamruiyl, this company has faced the issue even in China. For example, the company provides a quick service to the consumers while delivering any product as per order. However, it does not have sufficient service centres that could help the consumers after facing any problems after buying any product. Due to this reason, the company always faces issues regarding managing the loyalty of consumers. A customer after buying any product cannot return to the company to buy any product a second time after not getting sufficient support and services from the company at the time of facing a problem. In such cases, it is also essential to consider the factors such as not getting high quality products.
It has also been identified in the case of Xiaomi that the company does not focus on the research and development to improve the product quality and services quality that can help; the customers to create direct connection to the company. In this case, the customers need to get after-sales services only because of not having the high-quality product as per the expectations. However, increased brand awareness has the potentiality to improve the condition of Xiaomi in India while facing any issue regarding meeting the expectations of the customers. At the same time, the company also faces issues regarding not having sufficient centres for the servicing of the products (Zhao and Yi, 2021). Therefore. This issue can also be resolved without facing any problem after localising the product and services. In This case, creating an operating system for India can also help the company to improve overall conditions related to attracting Indian customers. Improving the user experience is the only factor in this aspect that has a keen relationship with the improvement of the revenue and the growth of the company.
The standard of international brands such as Samsung and Motorola can be achieved only through the fluency of the phone system along with the high definition. This company has never failed on providing high quality services and products to the customers while buying the products as per their capability of buying smartphones. Pricing of products between 5000 and 30000 INR in India is the highest competitive price that provides good quality products with higher features in a cost-effective way (Tan and Prabhu, 2020). Mobile internet users and people with the understanding of smartphones are the target of the company. Most importantly, this company does not spend blindly in the field of research and development without understanding the technology and innovation. Understanding the innovations in product details along with having the needs and demands of consumers is the most important thing and factor within the field of creating and selling smartphones. Expanding the business in India was the most important factor for Xiaomi to analyse and gaining competitive advantages as per the high-quality services that were available at Xiaomi to help the people of China. It is no different in the case of India that can help the company in improving its entire condition regarding making direct sales to the customers of India. Most importantly, innovation and technology are the most important aspects in the long run for the company that has attracted the customers.
Conclusion
Xiaomi has been working in the smartphone business and the digital market around one decade in China, and this company has already started to expand its business all over the world. Due to this reason, the company is already present in 90 countries. Primarily, this company has become successful in attracting a large number of people only because of its efficiency in innovation and technology. Along with that, the aggressive marketing approach and planning of the CEO of the company with the most efficient executive team has changed the entire aspect creating a different dimension for the marketing environment of China and India. India is one of the most important markets for the company that has helped the founder of the company to become a part of daily life of the people of India through innovation and technology. Most importantly, this company has also become successful in creating a different dimension in the aspects of managing the business by resolving the marketing problems with the regular update of the smartphones by fixing the existing problems.
Reference list
Panigrahi, C.M.A., 2019. A Case Study on Marketing Strategy of Xiaomi. International Journal of Management, Technology, and Social Sciences (IJMTS), ISSN, pp.2581-6012.
Tabassum, R. and Ahmed, S., 2020. Xiaomi invades the smartphone market in India. Decision, 47, pp.215-228.
Chhabra, H. and Metkar, A.B., 2020. Marketing without Advertising–A Case Study of Xiaomi Mobile in India. Available at SSRN 3641446.
Thomas, C.G. and Devi, A.J., 2021. Study and Analysis of the Influence of UX in MIUI–A Case Study on Xiaomi. International Journal of Case Studies in Business, IT and Education (IJCSBE), 5(1), pp.155-168.
Aldashova, G., Zhakupova, B., Spankulova, L., Orazgaliyeva, A., Balginova, K., Mussirov, G., Kydyrova, Z. and Onlasynov, E., 2020. THE ROLE OF MANAGEMENT STRATEGIES FOR START-UP GROWTH: A CASE STUDY OF XIAOMI TECHNOLOGY COMPANY. Marketing assignmentAcademy of Entrepreneurship Journal, 26(1), pp.1-10. Tan, S. and Prabhu, J., 2020. Xiaomi India: From Underdog to# 1 Smartphone Brand. University of Cambridge, Judge Business School.
Zhao, W. and Yi, L., 2021. Product innovation logic under the open innovation ecosystem: A case study of Xiaomi (China). Technology Analysis & Strategic Management, pp.1-17.
He, S. and Sun, S., 2021. A Study of Brand Communication Strategies of Xiaomi. International Conference on Economic Management and Cultural Industry (ICEMCI 2021), pp. 488-496.
