Case Study of Xiaomi Essay

4908 Words Apr 25th, 2014 20 Pages
1. Executive Summary

The report was conducted to analyze from marketing strategies perspective why Xiaomi has made such a big success in smart phone business since it was founded in 201, and to make some recommendations for its further success.

The methods used in the report include external analysis (customer analysis, competitor analysis, market analysis and environmental analysis), internal analysis (performance analysis and determinants of strategic options) and analysis of strategic outputs. In addition, a survey which can be found in Appendix part was conducted in a focus group to help on the analysis.

The results from the analysis tell that Xiaomi has attracted a large number of very loyal customers by very accurate
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With zero advertising cost, these loyal fans helped to advertise for Xiaomi for free.

3.1.2 Innovative Supply Chain Strategy
Xiaomi is famous for its innovative supply chain strategy, which is “zero inventory cost, e-commerce, and zero marketing cost”. By collecting customer order first and manufacturing the corresponding number of handsets accordingly, Xiaomi is able to meet the zero-inventory-cost need. Also, instead of working with operators and distributors, Xiaomi use its official website as the main sales channel for all its products. This zero-cost sales channel enables Xiaomi to sell high-end smartphones at a relatively affordable price.

Also, Xiaomi use the “hungry marketing” strategy, by limiting the supply of Xiaomi handsets to attract more attention, and seek to work up a fever for a product that becomes contagious. There is no other way to purchase Xiaomi handsets except its online website, which resulted in more people rushing to join the line-up because they are afraid of failing to get one.

Strategic Weaknesses and Constraints:
3.1.3 Supplier Bargaining Power
Since Xiaomi is still a small scale company as compared to those large players in the current smartphone market, it is difficult for Xiaomi to bargain with those large suppliers for a lower price. Also, since Xiaomi use the same suppliers and OEMs with those large smartphone players like Samsung and Apple, the raw materials

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