MULTINATIONAL AND GLOBAL

COMPANIES.
Value-Chain.

Mtra. Alexandra Barrueta Sacksteder.

UNIVERSIDAD ANAHUAC MAYAB
JUAN CARLOS LOPEZ AGUILERA
 Identify the Value-Chain and Multinational Strategies.

Industry: Cellphone
Companies: Xiaomi and Huawei.

XIAOMI.
Xiaomi primary activities.
• Xiaomi Inbound logistics: involves the delivery and storage activities of raw
materials by the mobile internet company. Strategic relationships with
Taiwan-based manufacturers of various components is one of the main
sources of value for Xiaomi inbound logistics. Specifically, Xiaomi partners
with Inventec and Hon Hai for assembly, Wintek and TPK for screen
technology and Unicorn for PCB (printed circuit boards). Moreover, Taiwan
Semiconductor Manufacturing Corporation (TSMC) is the main processor
supplier for the company. Xiaomi also procures various electronic
components from nearby countries. For example, MOS and batteries are
mainly imported from Thailand.
• Xiaomi Operation: Refer to the processes of transforming raw materials into
ready products. The mobile internet company has established its presence in
70 countries and regions, and it is among the top 5 in 16 markets. Xiaomi
manufactures locally more than 75% of smartphones it sells in India. Location
of manufacturing units in China and India is one of the main sources of value
in Xiaomi operations. This is because the costs of human resources in these
developing countries are cheap. Along with proximity of manufacturing units
to the sources of raw materials, cost-effective human resources play an
instrumental role in sustaining cost advantage competitive edge of the
business. Moreover, Xiaomi sophisticates its manufacturing processes in a
systematic manner using advanced technologies and benefiting from
technological innovations.
• Xiaomi Outbound Logistics: practices were limited to the shipment of products
directly to end-users via couriers. At that stage the company was using only
online sales channels in order to save costs and maintain its cost leadership
position in the global marketplace. Increasing numbers of sales channels and
expanding geographical scope is expected to complicate Xiaomi outbound
logistics in the foreseeable future. This can create certain challenges for the
business.
• Xiaomi Marketing and Sales: practices are based on its cost leadership
business strategy. As discussed above, the mobile internet company was
initially selling its products using only online sales channels and later adapted
traditional offline sales channels as well. The company uses hunger
marketing strategy and flash sales frequently, making only limited numbers of
products available online for a short duration of time.
• Xiaomi Service: Xiaomi post-sale service was often criticized as poor. This
problem was rooted on company’s cost leadership business strategy,
because the mobile internet company was looking for opportunities to save
costs everywhere includin2g in customer services and post-sale services.
However, due to intensifying competition in home market and abroad, Xiaomi
had no choice but to pay greater attention to customer service aspect of the
business.
 HUAWEI.

Huawei primary activities.

• Inbound Logistics: It is important to develop strong relationships with suppliers

as their support is necessary to receive, store and distribute the product.
Without analyzing the in-bound logistics, Huawei can face various challenges
in product development phases. Analysis of in-bound logistics requires a
company to focus on every aspect of transformation from raw material to
finished product. Some examples of inbound logistics are retrieving raw
material, storing the inputs and internally distributing the raw material and
components to start production.
• Operations: The importance of analyzing operational activities raises when
raw material arrives, and Huawei is ready to process the raw material into the
final product and launch it in the market. Some examples of operational
activities are machining, packing, assembling and testing. Equipment repair
and maintenance also falls into this category. It includes both- manufacturing
and service operations. Analysis of operational activities is important for
improving productivity, maximizing the efficiency and ensuring the competitive
success of Huawei. The increased productivity can help Huawei to achieve
consistent economic growth, increase profitability and set a powerful basis for
competitive advantage.
• Outbound Logistics: include the activities that deliver the product to the
customer by passing through different intermediaries. Some outbound
logistics activities are material handling, warehousing, scheduling, order
processing, transporting and delivering to the destination. Huawei can
analyses and optimize the outbound logistics to explore competitive
advantage sources and achieve its business growth objectives. Because,
when outbound activities are timely managed with optimal costs and product
delivery processes put a minimum negative effect on the quality, it maximizes
the customer satisfaction and increases growth opportunities for the firm.
Huawei should pay specific importance to its outbound value chain activities
 when its offered products are perishable and require quick delivery to the end
customer.
• Marketing and Sales: At this stage, Huawei will highlight the benefits and
differentiation points of offered products to persuade the customers that its
offering is better than competitors. Only producing a high-quality product at
affordable costs and distinctive features cannot create value until Huawei
invests on the marketing and sales activities. The sales agents and marketers
play an important role here. Some examples of Huawei's marketing and sales
activities are- sales force, advertising, promotional activities, pricing, channel
selection, quoting and building relations with channel members. The company
can use the marketing funnel approach to structure its marketing and sales
activities. The marketing strategies can either be push or pull in nature,
depending on the Huawei’s business objectives, brand image, competitive
dynamics and current standing in the market. Effective and wisely integrated
marketing activities can develop the brand equity of Huawei and help it stand
out from the competition.