Introduction and Objective (Xiaomi)

1. Introduction:

Xiaomi is a Chinese electronics company founded in 2010 by Lei Jun. The

company creates a wide range of products including hardware, software and
Internet services. Xiaomi is already distributing its products in numerous
countries such as Singapore, Philippines, India, and Brazil. Xiaomi grew at a rather
quick pace, already in 2012, Xiaomi generated more than billion annual revenue
and in 2017 it became the world’s largest IoT (Internet of Things) platform (in
terms of the number of connecting devices).Xiaomi is an internet company with
smartphones and smart hardware connected by an IoT platform at its core.
With the vision of being friends with its users and being the “coolest company” in
the hearts of its users. Xiaomi is committed to continuous innovation, with an
unwavering focus on quality and efficiency.
The company relentlessly builds amazing products with honest prices to let
everyone in the world enjoy a better life through innovative technology.
Xiaomi is currently the world's fourth-largest smartphone brand, and has
established the world's largest consumer IoT platform, with more than 213.2
million smart devices (excluding smartphones and laptops) connected to its
platform. Currently, Xiaomi products are present in more than 90 countries and
regions around the world and have a leading foothold in many markets. Xiaomi is
focused on being the most user-centric mobile internet company, and we aim to
constantly exceed expectations through innovations in software, hardware and
services. Many of our employees were initially fans of Mi products, before they
decided to join us. Our team is not only passionate about technology, but also
relentlessly pursues perfection to break tradition and push boundaries, all just to
ensure that our products remain unique and offer an unparalleled user
experience.

2. Objectives:
 To be a premium among affordable mobile phone
 To increases sales
 Maintain strong brand name.
 Consumer Insights

 Demographic:
o Age: 18 – 65
o Gender: Male and Female
o Life-cycle stage:
 Bachelor Stage young, single people not living at home
 Newly Married Couples young, no children
 Full Nest I youngest child under six
 Full Nest II youngest child six or over
 Full Nest III older married couples with dependent children
 Empty Nest I older married couples, no children living with them
 Empty Nest II older married couples, retired, no children living at home
 Solitary Survivor I in labor force
 Solitary Survivor II retired
o Occupation: Students, employees, professionals

 Psychographic:
o Social Class: Lower class, working class and middle class
o Lifestyle: Struggler, Mainstreamer, Aspirer, Explorer

Four P’s of Xiaomi Marketing -

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 base in China, Malaysia and Singapore. It is
expanding its market to India and Philippines and places which are dominated 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.

Research Data

SWOT Analysis

Strengths of Xiaomi – Internal Strategic Factors

 Successful track record of developing new products – product innovation.

 Highly successful product
 Strong Free Cash Flow – Xiaomi has strong free cash flows that provide resources in the
hand of the company to expand into new projects.
 Highly skilled workforce through successful training and learning programs. Xiaomi is
investing huge resources in training and development of its employees resulting in a
workforce that is not only highly skilled but also motivated to achieve more.
 Successful track record of integrating complimentary firms through mergers &
acquisition. It has successfully integrated number of technology companies in the past
few years to streamline its operations and to build a reliable supply chain.
 Strong Brand Portfolio – Over the years Xiaomi has invested in building a strong brand
portfolio. The SWOT analysis of Xiaomi just underlines this fact. This brand portfolio can
be extremely useful if the organization wants to expand into new product categories.
 High level of customer satisfaction – the company with its dedicated customer
relationship management department has able to achieve a high level of customer
satisfaction among present customers and good brand equity among the potential
customers.
 Strong dealer community – It has built a culture among distributor & dealers where the
dealers not only promote company’s products but also invest in training the sales team
to explain to the customer how he/she can extract the maximum benefits out of the
products.

Weakness of Xiaomi – Internal Strategic Factors

 Financial planning is not done properly and efficiently. The current asset ratio and liquid
asset ratios suggest that the company can use the cash more efficiently than what it is
doing at present.
 Organization structure is only compatible with present business model thus limiting
expansion in adjacent product segments.
  There are gaps in the product range sold by the company. This lack of choice can give a
new competitor a foothold in the market.
 Limited success outside core business – Even though Xiaomi is one of the leading
organizations in its industry it has faced challenges in moving to other product segments
with its present culture.
 Not very good at product demand forecasting leading to higher rate of missed
opportunities compare to its competitors. One of the reasons why the days inventory is
high compare to its competitors is that Xiaomi is not very good at demand forecasting
thus end up keeping higher inventory both in-house and in channel.
 The marketing of the products left a lot to be desired. Even though the product is a
success in terms of sale but its positioning and unique selling proposition is not clearly
defined which can lead to the attacks in this segment from the competitors.
 Days inventory is high compare to the competitors – making the company raise more
capital to invest in the channel. This can impact the long-term growth of Xiaomi

Opportunities for Xiaomi – External Strategic Factors

 The market development will lead to dilution of competitor’s advantage and enable
Xiaomi to increase its competitiveness compare to the other competitors.
 The new taxation policy can significantly impact the way of doing business and can open
new opportunity for established players such as Xiaomi to increase its profitability.
 Economic uptick and increase in customer spending, after years of recession and slow
growth rate in the industry, is an opportunity for Xiaomi to capture new customers and
increase its market share.
 New environmental policies – The new opportunities will create a level playing field for
all the players in the industry. It represents a great opportunity for Xiaomi to drive home
its advantage in new technology and gain market share in the new product category.
 New trends in the consumer behavior can open up new market for the Xiaomi. It
provides a great opportunity for the organization to build new revenue streams and
diversify into new product categories too.
 The new technology provides an opportunity to Xiaomi to practices differentiated
pricing strategy in the new market. It will enable the firm to maintain its loyal customers
with great service and lure new customers through other value-oriented propositions.
 Government green drive also opens an opportunity for procurement of Xiaomi products
by the state as well as federal government contractors.
 New customers from online channel – Over the past few years the company has
invested vast sum of money into the online platform. This investment has opened new
sales channel for Xiaomi. In the next few years, the company can leverage this
opportunity by knowing its customer better and serving their needs using big data
analytics.
Threats Xiaomi Facing - External Strategic Factors

 Imitation of the counterfeit and low-quality product is also a threat to Xiaomi’s product
especially in the emerging markets and low-income markets.
 New technologies developed by the competitor or market disruptor could be a serious
threat to the industry in medium to long term future.
 New environment regulations under Paris agreement (2016) could be a threat to certain
existing product categories.
 The demand of the highly profitable products is seasonal in nature and any unlikely
event during the peak season may impact the profitability of the company in short to
medium term.
 The company can face lawsuits in various markets given - different laws and continuous
fluctuations regarding product standards in those markets.
 As the company is operating in numerous countries it is exposed to currency
fluctuations especially given the volatile political climate in number of markets across
the world.
 Liability laws in different countries are different and Xiaomi may be exposed to various
liability claims given change in policies in those markets.
 Intense competition – Stable profitability has increased the number of players in the
industry over last two years which has put downward pressure on not only profitability
but also on overall sales.

The Campaign
1. Direction :