BM2207

QUIZ ON DEALING WITH

COMPETITION

Xiaomi
In 2010, Lei Jun founded Xiaomi, an electronics company based in Beijing, China. The electronics company
started as software and created MIUI ROM based on Google’s Android. The idea behind building MIUI was to
offer smartphone users more functionalities and a better User Interface (UI) than Android. In less than a
year, the company got the popularity it deserved.

In 2011, Xiaomi entered the hardware segment and introduced its first phone by launching the “Mi One
Phone.” Xiaomi positioned itself as offering quality technology at an affordable price. It is sold directly to
consumers through its website. Because of the company’s direct engagement with tech-savvy consumers, it
created a significant cost advantage and increased the speed at which Xiaomi could reach its consumers.
Demand outpaced production so much that the company could only open its e-commerce site one day per
week, and stocks sometimes sold out within minutes. The constant and instant sell-outs led to social media
storms, spreading the brand to an ever-wider audience, and stimulating further demand.

After gaining a foothold in the tech-savvy, value-conscious segment in the top cities, Xiaomi began to expand
into other segments — less tech-savvy consumers and those living in smaller cities. Many of these
consumers preferred an offline shopping experience, wanting to discuss their needs with a staff member or
get a demonstration. Xiaomi built an offline retail infrastructure to serve these new customers, setting up
hundreds of stores spanning major metros and small cities. Unlike other smartphone makers, Xiaomi set up
its stores in locations with high foot traffic, like malls, where its new target consumers were likely to shop.
Importantly, Xiaomi chose malls where existing high value at a reasonable price anchor stores could help
reinforce its positioning.

It also started offering different sub-brands (Redmi as an economical product line and Mi MIX for more
advanced tech seekers), always ensuring that the features-to-price ratio of each new phone was more
appealing than competing products. However, due to the Coronavirus pandemic, the smartphone company
saw a decline in the first quarter of 2020. Despite the decline, Xiaomi has been declared the only brand
among the top five (5) smartphone sellers to achieve comparatively sound sales in the first quarter of 2020.

Xiaomi also intends to keep its focus on developing 5G smartphones and thus improve its position in the
premium smartphone segment.

Questions (4 items x 5 points):

1. What are some of Xiaomi’s greatest competitive strengths?
In order to be competitive, Xiaomi relies on its low cost of goods and services. The point is, the key
reason why customers have chosen to buy their products and services from them is that it costs Xiaomi
very little. Furthermore, continued improvement of eco chain products. The strength of the brand must
also be underpinned by financial stability, experienced staff, a distinct product and intangibles such as
its value.

2. In your opinion, what other attack or defense strategy could help Xiaomi expand its market
share internationally? Explain.
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I think Xiaomi's strategy of defensive positioning is going to help increase its global market share. In
order to convince consumers that its brand alone has responsibility for anything, Xiaomi must do
more innovation. They should hold the most desired place on customers' minds in order to make that
brand as impenetrable as possible. Like the way people perceive their batteries life expectancy and
quality, they regard it as a sole battery capable of last up to one week.

3. Aside from the Coronavirus pandemic, what do you think are the potential challenges that could
halt Xiaomi’s globalization?

An example of a possible obstacle that might hamper Xiaomi's internationalization, I think, is the
prospect of strong competition or competitive rivalry in the sector. Smartphone and electronics are
extremely competitive, given the enormous number of major competitors that have been investing
considerable time and effort into creating their brand identities. These operators are competing on a
variety of various aspects, such as prices, quality, customer requirements and brand loyalty. The most
significant competitors in this area, notably on the Chinese markets, include Oppo, Vivo, Huawei and
other enterprises which compete with Xiaomi. Moreover, where Apple and Samsung remain dominant,
all China's companies are competing on a global scale for market share. However, there is no doubt
that Chinese smartphones and consumer products are highly sought after on the world market.

4. Compared with other smartphone brands, is Xiaomi a cloner, imitator, or adapter? Justify your
answer.

Xiaomi's a pioneer in this field. By absorbing and adapting trends from industry giants on the mobile
market Xiaomi has been able to innovate its products continuously. In this case, the elegance and
usefulness of Apple's operating system, which undergoes major changes to the device each time it is
updated, is decisive. During the shift to a new mobile device, all user data may be stored in your iCloud
account. Consequently, all your data and files will be transmitted directly to the new device by iCloud
while you are transferring devices. It's also well known for its safety, and Xiaomi's operating system is
much more open and flexible for the user, in addition to being completely configurable.

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Rubric for grading:

CRITERIA PERFORMANCE INDICATORS POINTS
Provided pieces of evidence, supporting
Content 3
details, and factual scenarios
Expressed the points in a clear and logical
Organization of Ideas 2
arrangement of ideas in the paragraph
TOTAL 5

References
Ahmad, D. (2014) A Brief History Of Xiaomi – China’s Tech Success Story https://www.gizchina.com/
2014/04/18/brief-history-xiaomi-chinas-tech-success-story/
Presthita, H. and Goswami, C. (2021) All You Need To Know About Xiaomi – The Popular Chinese Elctronics
Company. https://startuptalky.com/xiaomi-success-story
Yang, H., Ma, J., Chattopadhyah, A. (2021) How Xiaomi Became An Internet-of-Things Powerhouse.
https://hbr.org/2021/04/how-xiaomi-became-an-internet-of-things-powerhouse

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