INTRODUCTION
Xiaomi Company established in April 2010 by Lie Jun and also several co-founders. The Headquartered of the Chinese multinational company situated in Beijing. The company quickly gained remarkable position in electronics market with its smartphones known for offering high end features at affordable prices. At a later time, Xiaomi has significantly extended its product such as variety of smart home devices, wearables and other consumer electronics. The essential elements of Xiaomi’s ecosystem strategy is to launch of its MIUI software a customized version of Android.
The history of Xiaomi company
2010- The company founded and launched its MIUI software
2011-Release of its first smartphone, the Mi1.
2014-Becoming the largest smartphone vendor in China.
2018- Public listing on the Hong Kong stock exchange
Recent years: Expansion into international market and diversification into product categories like electric scooters, smart TVs and internet of things(IOT) devices.
Different types of Xiaomi products
1. Smartphones
- Mi Series
- Redmi Series
- Poco Series
2. Smart Home Devices
- Mi Smart Home Kit
- Mi Security Cameras
- Mi Robot Vacuum
- Smart Lighting
- Mi Air Purifiers
3. Wearables
- Mi Band Series
- Mi Watch Series
4. Audio Devices
- Mi Earphones
- Mi True Wireless Earbuds
- Mi Bluetooth Speakers
5. TV and Home Entertainment
- Mi TV Series
- Mi TV Stick
6. Laptops and Tablets
- Mi Laptops
- Mi Pad Series
7. Networking Devices
- Mi Routers
- Mi Wi-Fi Range Extenders
8. Smart Appliances
- Mi Electric Scooters
- Mi Air Fryers
- Mi Water Purifiers
9. Personal Care Products
- Mi Electric Toothbrushes
- Mi Hair Dryers
10. Accessories
- Mi Power Banks
- Mi Phone Cases and Covers
- Mi Charging Cables and Adapters
DIFFERENT STAGE OF FUNDING
1)**Seed Funding (2010)**: – Xiaomi was founded in April 2010 by Lei Jun and seven co-founders. The initial seed funding round included investors like IDG Capital and Qiming Venture Partners.
2. **Series A (2010)**:
– In December 2010, Xiaomi raised $41 million in Series A funding. Major investors included Temasek Holdings, IDG Capital, and Qiming Venture Partners.
3. **Series B (2011)**:
– Xiaomi raised $90 million in Series B funding in December 2011. Investors included DST Global, Temasek Holdings, IDG Capital, and Qiming Venture Partners.
4. **Series C (2012)**:
– In June 2012, Xiaomi secured $216 million in Series C funding. The round was led by DST Global, with participation from new investors like GIC, Hopu Investment Management, and existing investors.
5. **Series D (2013)**:
– Xiaomi raised $90 million in Series D funding in August 2013. Investors included DST Global, Temasek Holdings, IDG Capital, and Qiming Venture Partners.
6. **Series E (2014)**:
– In December 2014, Xiaomi closed a $1.1 billion Series E funding round, bringing its valuation to $45 billion. This round included investors such as DST Global, GIC, Hopu Investment Management, All-Stars Investment, and Yunfeng Capital.
7. **IPO (Initial Public Offering) (2018)**:
– Xiaomi went public on July 9, 2018, on the Hong Kong Stock Exchange, raising $4.72 billion. The IPO valued Xiaomi at about $54 billion, making it one of the largest technology IPOs globally. Throughout these stages, Xiaomi’s valuation grew significantly, reflecting its rapid expansion and success in the smartphone and consumer electronics markets. The company leveraged these funds to innovate, expand its product lines, and enter new market.
MISSION AND VISION STATEMENT OF XIAOMI
MISSION STATEMENT :
The mission statement of Xiaomi also identifies the purpose of the organization existence, highlighting the services and the products it offers.
Components of a mission statement:
1.Customer satisfaction
The mission statement of Xiaomi has identified its target customer groups, and also identified their needs and demands
2. Based on core competencies
This is important for Xiaomi as the mission statement will highlight the different systems and processes as well as strategic tactics that the company uses to achieve its organizational and strategic goals.
3. Realistic and clear
This means that Xiaomi has used simple, string, and easily understood words and phrases in the drafting of its mission statement. Clarity is important so that the mission statement is understood by all relevant stakeholders of Xiaomi Company.
4. Motivational and inspirational
Xiaomi is motivational in that it works towards inspiring the employees and the workforce towards giving their optimal best performance towards the goal achievement of Xiaomi.
VISION STATEMENT:
The vision statement for Xiaomi is a document identifying the goals of Xiaomi to facilitate its strategic, managerial, as well as general decision making processes.
Components of the vision statement:
1. Concise
This means that the company has not used long dialects and dialogues to delivers its opinion ad stance to the public and relevant stakeholders.
2. Encompassing description
The vision statement should be a comprehensive statement identifying the company’s core strengths, which would enable it to achieve its futuristic goals
3. How to develop a vision statement
The company should identify the following t be able to guide its business decisions towards future success and progress to be able to develop a successful vision statement:
1. Look at the organizational history2. Look at the present3. Look at the future of the organization4. Identify loopholesThe process of critically assessing the past, present and future of Xiaomi is important for vision
PESTLE ANALYSIS
1) Political factor:
✓The main important political factor faced by China is,’Made In India ‘ concept
✓Xiaomi’s 65% of its components are manufactured locally
✓ It has a completely local leadership and has generated employment for 50,000 people in India.
2) Economical factor:
✓Xiaomi is an especially powerful position since it’s devices are often targeted towards the more budget conscious consumer.
3) Sociocultural factor:
✓ Many consumers believe that Chinese products are inferior to the alternatives,associating the ” Made in China” label with all round poor quality.
4) Technological Factors:
✓Key areas of focuses is continuous investment in innovation, quality control and supply chain management.
5) Legal Factor:
✓Xiaomi has faced severe legal issues in the past, like patent right infringement.
6) Environmental factors:
✓While designing the product they use recyclable and renewable materials which are not hazardous to the environment.
SWOT ANALYSIS
Strengths
1. Strong momentum in market:
✓Increased total sales, customer base and bargaining power.✓Portray good reputation
2. Advance specifications:
✓The products are known to have high quality specifications.
✓Xiaomi offers superior technology specifications at a reduced price.
✓Diversifying into various consumer electronic products like smart TV, fitness bands, airpurifier and water purifier.
3. Manufacturing Advantage
✓China has a huge manufacturing advantage.✓The country itself known for manufacturing and exporting the products.China is also one of the largest consumers in the Asian market.
Weaknesses
1. Pricing Strategy
✓Offers high quality products but sells at low price (chairman and CEO’s main aim)
✓Low net profit margin compared to overall revenue
.✓Xiaomi has the lowest net profit margin 1.8% compared to Apple 28.7% and Samsung18.7%
2. Poor brand image:
✓Comprises a limited number of products and services.✓The company advertising and marketing efforts are poor compared to other big brandssuch as Samsung or Apple.
✓Xiaomi products were viewed primarily as a budget option by consumers around theworld3. Lower marketing and advertising
✓Xiaomi allocates a limited marketing and advertisement budget for the promotion of itsproducts.✓The lower marketing budget helps the company offer lower prices to the customersinstead of marketing.✓It is suitable for customers but it is poor for marketing strategy.
Opportunities
1. China large market share
✓Large population leads to large demand.✓Xiaomi meets Chinese consumption concept – biased high quality and cheap.
✓Higher price significantly reduced Chinese consumers’ perception of economic value andefficiency
2. Product differentiation
✓Introducing highly differentiated products with innovative and creative touches.✓Enable the company to maintain its loyal customers with great service and lure newcustomers through other value-oriented propositions
3. Market expansion
✓E–commerce and online sales are the primary source of Xiaomi’s sales as online sales hasbecome so popular in many countries.✓Xiaomi should focus and expand on those countries where online sales are increasing andwell established or in the process of establishment.
Threats
1. Covid 19
✓Affects raw materials supply, disrupts the electronics value chain and causing aninflationary risk on products.✓Employees are forced to work from home- massive loss in opportunity for manycompanies who have international dealers
2. High competition
✓Many competitors are coming up with affordable products with handsome specifications.✓Huawei is one of the main competitors of Xiaomi because they both have the costefficiency advantage and produce advanced consumer electronic products
3. Limited customer service
✓The customer support service of Xiaomi is deficient.
✓Technical issues of the smart devices and electronic products are bound to happen.✓When any of the problems arise, the customer support service of Xiaomi should be thereto resolve them.
MARKETING OBJECTIVES AND GOALS
1 **Innovative Product Development**:
-Continuously innovative and released cutting-edge technology products across various categories.
2. **Cost Leadership**:
– Maintain cost efficiency to offer high-quality products at competitive prices.
3. **Global Market Expansion**:
– Increase market share globally, especially in emerging markets
4. **Strengthening Online Sales Channels**:
– Optimize e-commerce platforms to streamline distribution and increase sales
5. **Building a Strong Ecosystem**:
– Develop an interconnected ecosystem of devices and services.
6. **User-Centric Approach**:
– Prioritize user feedback in the development process.
7. **Sustainability and Corporate Responsibility**:
– Implement sustainable practices and engage in corporate social responsibility initiatives.
8. **Enhancing Brand Recognition**:
– Increase brand visibility through strategic marketing and partnerships.
9. **Advancing AI and IoT Integration**:
– Invest in AI and IoT to lead in smart, connected living solutions.
10. **Financial Stability and Growth**:
– Achieve steady financial growth and stability through diversified revenue streams.
11. **R&D Investment**:
– Increase investment in research and development to stay ahead of technological advancements.
12. **Customer Support and Service**:
– Enhance customer service and support to ensure high customer satisfaction
13. **Partnerships and Alliances**:
– Form strategic partnerships and alliances to strengthen market position
14. **Product Diversification**:
– Diversify product offerings to reduce dependence on any single product category.
15. **Quality Assurance**:
– Maintain high standards of quality assurance in manufacturing and production.16. **Local Manufacturing**: – Expand local manufacturing capabilities to reduce costs and improve supply chain efficiency.
MARKETING MIX
1) Product:
✓Xiaomi’s prices are lower than their two big competitors Apple and Samsung
✓Presenting good quality phones at lower price drives Xiaomi to top spot.
✓It has one of the best UI for their phones, MIUI which is fully customizable.
2) Price
✓ Xiaomi sells its phones which just covers the cost of device rather than cost of production.
✓ Selling it through MI India and flipcart.com.eliminates extra costs.
3) Place:
✓Xiaomi has already a large customer based in China, Malaysia and Singapore
✓It is expanding it’s market to India and Philippines and places which are dominant by Apple and Samsung, mainly in all other developing countries in Asia Pacific region.
4) Promotion
✓ Promotion of word of mouth ✓ It uses flash sales that enables it to reduce advertising costs because it creates anticipation and urgency on consumers.
MARKETING STRATEGY
- Competitive Pricing:
- Xiaomi’s cost-effective pricing strategy offers high-quality products at affordable rates, attracting price-sensitive consumers and capturing significant market share.
- Product Innovation:
- By continuously investing in research and development, Xiaomi creates innovative products that cater to evolving consumer needs. Its extensive product range, including smartphones, smart home devices, and IoT products, appeals to a broad customer base.
- Flash Sales and Limited Editions:
- Xiaomi uses flash sales and limited edition products to generate urgency and exclusivity among consumers, driving immediate sales and garnering significant buzz and media attention.
- Strong Online Presence: Extensive use of online sales channels allows Xiaomi to reduce distribution costs and reach a wider audience. Its e-commerce platforms and partnerships with online retailers are pivotal in driving sales, especially in emerging markets.
- Community Engagement: Xiaomi fosters a loyal customer base through active community engagement. By encouraging user feedback, hosting fan events, and maintaining a strong social media presence, Xiaomi gains insights into consumer needs and preferences, enhancing brand loyalty.
SEGMENTATION, TARGETING AND POSITIONING OF BANGLADESH
✓Segmentation and Targeting
*Geographic: City and town living people
*Demographic: Both male and female
*Psychographic: Middle class and upper middle class
Dynamic and enthusiastic people Behavioural: Loyal customer
* These segmentations are targeted in BD by Xiaomi to increase their sale. Then the positioning is applied
*Positioning
✓ The marketing mix of Xiaomi varies based on the country and region it is operation in.
The comparison of the 4P’s on the country:
*Product
Variety: moderate level of variety in Xiaomi products
Service: After sale service is average
Warranty: There is warranty of products
* Price
Price : Higher because: Heavy import duty
No local manufacture
Discount: are rarely available
*Place
Channel: Both offline and online
Presence in other e-commerce sites also
Website: Buy from website is not available
Local production: No local production or assembling
* Promotion
Social media: highly dependent
No heavy marketing
Model: No model based advertising
Print: TV- Rare presence in TV or print media
PRODUCT LIFE CYCLE OF XIAOMI
A product life cycle is the length of time from a product first being introduced to consumers unit it is removed from the market.
The product life cycle of Xiaomi products can be analyzed through the typical four stages:
**Introduction**:
1) Product Launch
✓ Xiaomi launches a new product, often through a high-profile event or online announcement.
2)Marketing Efforts:
✓ Significant investment in marketing to create awareness and attract early adopters.
3)Limited Availability:
✓Products are often sold in limited quantities initially, sometimes through flash sales to create a sense of urgency and exclusivity.
**Growth**:
1)Increasing Sales:
✓As awareness grows, sales start to increase rapidly.
2)Expanding Distribution:
✓ Xiaomi expands the availability of the product to more markets and through various sales channels, including online and offline retailers. 3)Product Improvements:
✓The company may release software updates or minor hardware revisions to address initial feedback and improve the product’s appeal.
**Maturity**:
1)Peak Sales:
✓The product reaches its peak sales volume. It is now well-known and widely available.
2)Market Saturation:
✓ Xiaomi may focus on differentiating the product from competitors and adding value through software enhancements or bundling with other services.
3)Price Adjustments:
✓ Prices may be adjusted to remain competitive, often through discounts, special offers, or bundling with other Xiaomi products.
**Decline**:
1)Decreasing Sales:✓Sales begin to decline as newer products are introduced by Xiaomi or competitors, and consumer interest wanes. 2)*Phase-Out:✓Xiaomi may start to phase out the product, reducing production and shifting focus to newer models. 3)Support Continuation:✓ The company continues to provide support and updates for existing users but with less frequency.
CHALLENGES FACED BY THE XIAOMI COMPANY
Some key challenges include:
1. **Intense Competition**:
Xiaomi operates in a highly competitive market with major players like Apple, Samsung, and Huawei. Competing with these well-established brands requires continuous innovation and significant marketing efforts.
2. **Market Saturation**:
In key markets like China and India, smartphone penetration is already high, making it harder for Xiaomi to grow its customer base. This saturation forces the company to explore new markets and diversify its product offerings.
3. **Supply Chain Issues**:
The global semiconductor shortage has impacted Xiaomi’s ability to manufacture products. Ensuring a stable supply of components is crucial for maintaining production and meeting consumer demand.
4. **Regulatory and Geopolitical Risks**:
Xiaomi faces challenges due to varying regulations across different countries. Additionally, geopolitical tensions, particularly between China and other nations, can lead to sanctions or bans, affecting its global operations.
5. **Innovation Pressure**:
As a tech company, Xiaomi must constantly innovate to stay ahead. This includes investing in research and development to create cutting-edge products, which requires substantial financial resources and talent.
6. **Profit Margins**:
Xiaomi’s business model relies on offering high-spec products at competitive prices, which can lead to thin profit margins. Maintaining profitability while keeping prices low is a continuous balancing act.
7. **Brand Perception**:
Although Xiaomi has built a strong brand, it is often perceived as a budget-friendly alternative to premium brands. Changing this perception to appeal to higher-end markets can be challenging.
8. **Data Privacy Concerns**:
As with many tech companies, Xiaomi must navigate concerns over data privacy and security. Ensuring compliance with international data protection laws and maintaining consumer trust are ongoing issues.
QUESTIONNAIRE OF XIAOMI COMPANY
### General Company Information
1**What is Xiaomi’s mission and vision?
**Answer:** Xiaomi’s mission is “to relentlessly build amazing products with honest prices to let everyone in the world enjoy a better life through innovative technology.” Their vision is to be the most user-centric mobile internet company, aiming to constantly exceed expectations through innovations in software, hardware, and services
2. **How has Xiaomi evolved since its founding in 2010?
**Answer:** Since its founding in 2010, Xiaomi has grown from a small startup into a global technology leader. . The company has since diversified into a wide range of products, including smart home devices, wearables, and lifestyle products, while also establishing a significant international presence.
3. **How does Xiaomi differentiate itself from competitors like Samsung and Apple?
**Answer:** Xiaomi differentiates itself through its cost-effective pricing strategy, high-quality products, and a robust ecosystem of interconnected devices. Unlike Apple and Samsung, Xiaomi relies heavily on online sales and community engagement to keep costs low and build brand loyalty
### Product Strategy
4. **What innovative technologies has Xiaomi introduced in its products?
**Answer:** Xiaomi has introduced several innovative technologies, including the Mi MIX series with its bezel-less design, advanced camera technology in the Mi series, fast charging solutions, and the integration of AI in its devices for enhanced user experiences.
### Marketing and Branding
5. **What are the core elements of Xiaomi’s marketing strategy?
**Answer:** Xiaomi’s marketing strategy focuses on social media engagement, community building, and word-of-mouth promotion. They often launch products through flash sales and online events, creating hype and anticipation among their fan base.
6. **How does Xiaomi utilize social media and digital marketing to engage customers?
**Answer:** Xiaomi uses social media platforms like Facebook, Twitter, and Instagram to engage with customers, announce new products, and gather feedback.
### Business Strategy and Performance
7. **How has Xiaomi’s financial performance been in recent years?
**Answer:** Xiaomi has shown strong financial performance in recent years, with consistent revenue growth driven by its smartphone and IoT products.
8. **What are Xiaomi’s key goals and objectives for the next five years?
**Answer:** Xiaomi aims to strengthen its position in key international markets, expand its IoT and lifestyle product lines, and continue investing in R&D to drive innovation. They also plan to enhance their offline retail presence and improve their AI and smart device ecosystem.
### Innovation and R&D
9.**How much does Xiaomi invest in research and development annually?**
**Answer:** Xiaomi invests a significant portion of its revenue into R&D, which amounted to approximately 7.6% of their total revenue in recent years. This investment supports their continuous innovation in technology and product development.### Market Position and Competitiveness
10. **What are the main challenges Xiaomi faces in the global market?
**Answer:** Xiaomi faces challenges such as intense competition from other major tech companies, fluctuating component costs, regulatory hurdles in different countries, and the need to maintain its brand image while expanding rapidly
CONCLUSION
Xiaomi employs a unique business model and innovative strategies that are revolutionizing the smartphone and technology sectors. The company has effectively incorporated crowdsourcing into its product development process and has eschewed traditional marketing methods, opting instead to fully engage with online communities and leverage social marketing.
This forward-thinking approach has catapulted Xiaomi to global prominence, amassing a significant following. In just six years since its inception, and within two years of entering the Indian market, Xiaomi has become the world’s third-largest smartphone manufacturer and the most valuable technology startup, with a valuation of $46 billion.
Through its pioneering marketing and business models, Xiaomi is reshaping the global mobile phone market and is on track to achieve the top position in the industry in the near future.