Answer 1. The environment of a business is extremely changing.

The internal and external

environment comprise of all the factors that can affect the business in any way. Environmental scanning
refers to gathering information and monitoring these environments to identify future threats and
opportunities. For Ximi Brand, the natural environment, natural environment, societal environment and
task environment play an important role.

Societal Environment: The societal environment, also known as the macro environment influences the
company’s strategies and decisions. Following is the macro environment analysis for Ximi Brand:

1. Political: Political factors refer to the nature and level of intervention by the local and national
government.

Governance System: The Indian government is shifting its focus to improve its manufacturing facilities
through Make in India initiative. The government has taken an initiative to train workforce in
partnership with many independent companies. Ximi can choose skill development as a part of its CSR
program and train youths across India in two domains viz” Field Service Engineer and “Retail Sales
Associate. “ The company can focus more on rural electrification to increase its market share.

Economic Factors: With the advent of GST, the policies have become simpler. The consumer durable
goods may become cheaper as effective tax on many items has been reduced from 30 percent to 28
percent. The consumer financing options will be more affordable as retailers offer attractive financing
options. These factors may favor Ximi strategy in India.

Socio-Cultural factors: In 2019, the per capita income is expected to rise at a CAGR of 6.5 percent. The
number of working women is also increasing in the urban areas, which increases the demand for home
appliances. Also, the urban consumer has started to see consumer durables as lifestyle products. Hence,
demand for quality and low-priced washing machines and refrigerators with good after-sales service can
be high. Also, increasing nuclear families has raised the growth in demand for electronics like TV and
refrigerators.

Technological factors: With the rise of smartphone and internet availability to majority of the Indian
customers, it has become easy to communicate the value proposition of the company to customers.
With so many variants in the market providing differentiation based on technology, the replacement
cycles have shortened (from 9-10 years to 4-5) years. Product innovation and availability of new variants
of products well suited to Indian customer expectations will raise the demand for Ximi products.

Legal factors: Ximi should stay alert about introduction of new manufacturing and tax related policies
and regulations by Indian authorities. Introduction of stricter customs and trade regulations is also a
major factor that may affect the company.
3. Task environment: It is a set of conditions from suppliers, distributors, customers and competitors
that directly affect the organization. The following five forces can be assessed.

Porter’s five forces analysis

1. Competitive Rivalry: Continuous innovation leads to intense rivalry. Homogeneity in product and low
switching costs. By collaborating with competitors to increase the market size rather than just
competing for small market, Ximi can tackle the threat of competitive rivalry.

2. Threat of New Entrants: Highly capital intensive. Brand Loyalty is moderate. How Ximi can tackle this?
By innovating new products and services, the company brings new customers to the fold. By building
economies of scale in order to lower the fixed cost per unit.

3. Substitute products: Technology advancements. Buyer have high propensity to substitute. By

understanding the core need of customer rather than what the customer is buying, the company can
tackle the threat of substitute products.

4. Bargaining power of suppliers: Product differentiation is very low. By changing the input, firms
cannot differentiate on price. By experimenting with product designs using different materials, if prices
of one raw material go up, the company can shift to another.

5. Bargaining power of buyers: Use of internet to get all the information enables customers to be
powerful. Buyer’s switching cost is very less. Customers often seek discounts and offerings on
established products so if the company can come up with new products, it can limit the bargaining
power of buyers.

Conclusion: By analyzing the external environment, Ximi can gain a complete picture of what impacts
the profitability of an organization. They can identify game changing trends early on and swiftly respond
to exploit the emerging opportunities.
 Answer 2. A business model is a structure that explains how the company makes money, and how it
intends to achieve its goals. It is a company’s plan for making profit.

Pricing: Ximi can follow a price with rent pricing model to serve the middle-class customers aged
between 20-30 years, especially students and interns who are always on the move. They are likely to
hop from one city to another in search of jobs, travel and studies and cannot always afford to buy
expensive home appliances as they are staying on rent. The rental starts with a minimum period of 90
days. This is because the average probation period in most of the companies in India is three months.
Hence, a fresher/intern is likely to work with one company and stay at one place for atleast 3 months.

Target group: They ambitious younger generation place-hop from time to time for better career
opportunities. They don’t feel the need to be committed to a place, and they look for better living
standards and experiences. They don’t compromise on the way they are living life; for them it is a
matter of figuring out how they can get all that they want at a fraction of the cost and that is where
Ximi can come in.

Operations: Ximi can tie-up with various vendors of home appliances to manufacture and offer the
vendor’s products on Zimi’s website/online store. Once the company receives a minimum of 100 orders
for home appliances (washing machine, refrigerators, ovens) it manufactures the products accordingly
and rents it out. The upfront investments are lower since the company manufactures the appliance only
when it receives the rental order for it. Thereafter, the inventory management is much better than
manufacturing huge number of appliances and then waiting for orders.

In this era of increased cost of living, this rent-based pricing model reduces the hassle of purchasing
appliances for middle-class customers who mostly have a limited income. Since, new-age customers
are working for 8- 10 hours a day; they don’t always have sufficient time to visit the physical stores, in
order to choose from a wide variety of option. Ximi can set up an online store that provides all the
details of the wide variety of their home appliances. The payment of rent may be done automatically
by a pre-authorized charge to a credit card or a bank account, and thereby reducing hassle for the
customers to initiate a payment month-on-month.
 Eco-friendly products: New-age consumers are more responsible towards the environment and opt for
energy-efficient appliances, which also reduce utility bills. To distinguish their products, Ximi will have to
increase focus on sourcing energy-efficient and eco-friendly raw material. Hence, this business model
also requires Ximi to form a network of raw material suppliers providing eco-friendly parts of various
home appliances like washing machine. The company needs to come up with physical stores to
demonstrate benefits of using eco-friendly products and partnering with social initiatives in order to
encourage customer to opt for eco-friendly products.

While purchasing home appliances like washing machine and refrigerators, majority of Indian customers
are conscious of benefits of environmental friendly products and place faith in energy efficient products
and appliances. In India, there are power shortages often, especially in the rural areas. With increasing
electricity bills and usual power cuts, Indian consumers wouldn’t mind renting eco-friendly washing
machines, refrigerators and other home appliances.

For instance, Ximi needs to manufacture washing machines that require fewer amounts of water just 50
liters as compared to 200 liters required by a conventional washing machine. They can manufacture
energy efficient refrigerators that include a digital inverter compressor. Also, a cooling retention
technology can keep freezer cool for six-to-nine hours during power cuts.

Marketing: Developing ways of providing physical evidence of product quality as well as online
demonstration videos of its potential can help Ximi to increase the customers. Introducing home-based
online subscription, loyalty programme and product benefit catalogues can help in simplifying process
for consumers.

Benefits to Customers: While the customers may have to pay the rent for a minimum of 3 months,
they get immediate access to use the products. They also enjoy the increased benefits as you improve
your products over time. Instead of purchasing new and improvised products every time, they can
replace the older product with the new home appliance (washing machine or refrigerator) while the
monthly rent remains the same. This allows the customer to experience the benefits of the products
without having to spend a huge sum of money to purchase the appliances. Adopting this approach
should be supported by analyzing the usage of customers undergoing the trial and receiving feedback
from those who fail to convert. No ownership means neither any upkeeps nor any maintenance cost.
Also, Ximi can provide free relocation across cities. They transport your appliances for a nominal fee.

Conclusion: Because Ximi will have continuous contact with your client base, it makes it easier to
market additional and complementary services. Upsells are usually easier with a subscription business
since the customer will be receptive to any added value you can provide. Once subscription fees have
become a part of consumers’ expected monthly budget, it is easier for them to see additional features
as more affordable. However, optimal pricing should take into consideration factors such as the costs
and competition. Customers should be provided with the flexibility to rent, return, or own the product
based their changing lifestyle.
Answer 3a). Functional strategy involves all the complex decisions on process, techniques and tools
that will render business strategy. Resource productivity involves major decisions on aligning human and
financial capital in the best way for a successful functional strategy.

Operational Strategy: In order to streamline its operations, Ximi should invest in a holistic subscription
billing platform for customer-centric business. A good payment gateway will help the customers using
credit cards as a mode of payment and enable Ximi to be in control of their business. The smart
subscription APIS can immediately notify the company in case of the payment failures due to card
expiry, insufficient funds and make them proactive as a team. This reduces to-and-fro between
customer and the company executive as they know exactly why the payment was failed and the
corrective steps that need to be taken. The company can be in more control of their business with
better cash-flow management and as the customer base expands, predictability of the revenue becomes
better with more customers adopting the subscription as an option. Hence, it uses predictive analysis for
inventory management.

Ximi can use machine learning to analyze the credit profiles of its customers. The company rates a
customer based on his or her CIBIL score and the individual’s history on the platform, among other
parameters. When customers close a rental deal, they are required to submit information about
themselves which is later used to derive the credit score.

Human Resource Strategy: Since the company targets younger millennials aged between 22-35 years,
the company should invest in a millenial workforce that consists of student interns, newly-weds and
young office-goers. They bring fresh ideas to the workplace. To customers of their own age, millennials
bring familiarity. Young employees generate marketing strategies that appeal to their group. Since they
grew up using computers, portable devices, the internet and social media, they pick up technology
faster than other older employees. Millennials have less work experience since they might be just
entering the workforce. Hence, the new hire would start at a lower salary than more experienced
workers doing the same job. Lower salary leads to lower wage expenses and tax contributions.

Marketing strategy: Ximi should invest more in digital advertising and social media platforms. In India,
the younger millennials are a driving force in the growth of online shopping. The findings of the
millennial social media shopping habits can be used by Ximi to improve brand strategy. The millennial
generation in India is connected to the internet, via smartphones, seeking instant gratification for almost
everything—from information to entertainment to shopping needs. The younger generation in India
relies on Facebook and Google before they make a purchase. Strategies such as Organic and sponsored
posts, retargeting advertisements and a fully functional ecommerce store embedded into the social
platform.
User-generated content: The younger target audience trusts real people as opposed to influencers and
celebrities. Therefore, include user-generated content, for instance, repost real people's photos on
Instagram, ask for personal testimonials or even try a social media video featuring real consumers. This
will foster an honest brand-to-consumer relationship that is proven to increase revenue. Also, social
media can be a cheaper way of advertising and reaching out to the younger generation through
humorous and quirky content, responding to comments and customer service requests.

b. The following CSR activities can be undertaken by Ximi for the various stakeholders:

For customers:

Indian consumers are increasingly conscious of the environmental benefits of the products they use. The
companies can encourage customers to rent eco-friendly washing machines and refrigerators.
Customers in India cannot always afford expensive eco-friendly washing machines and refrigerators, and
take the cheap way out. Hence, they purchase from companies manufacturing cheap appliances which
results in more old appliances going to landfill sites and messing up the environment. However, Ximi
can render eco-friendly appliances on rent, which reduces hassle of investing heavily in appliances.
Customers use less amount of energy with the green appliance and this helps to combat higher
electricity bills. The new eco-friendly appliances are equipped with safety and health features. The
green refrigerators are equipped with their own carbon filter for the ice and water dispenser.

Employees: Ergonomic furniture can be incorporated for the millennial workforce. Millenials are health
conscious and they love a workplace that fosters a healthy lifestyle. The furniture should include desk
with adjustable height, active stools and chairs, ball chairs, perch stools to allow free movement while
sitting and provide comfortable posture as well. Ximi can experiment with different types of furniture
like bean bags, couches and adjustable chairs to ensure an active lifestyle. From the designing point of
view, Ximi can incorporate environment-friendly elements in design scheme of a workplace. They can
switch to eco-friendly lighting, building materials, paints and products. The company can encourage
practices like carpooling and cycling to get to work. Biophilic designing concept that includes indoor
plants to improve air quality and switching to large french windows attract more sunlight. All this makes
the workplace healthier, increases productivity of employees and retains younger employees, which in
turn benefits the company.

Investors/Shareholders: Ximi can use predictive analysis for inventory management and hence reduces
the waste. It will rent the appliance from the suppliers whenever there is an order from the customer.
The company won’t stock more inventory than needed. This not only creates less wastage and benefits
the environment but also helps the shareholders invest in a company having predictable monthly
revenue. Also, the minimum rental period is 90 days. A subscription service and that too of eco-friendly
appliances promotes customer retention with payment transpiring at a fixed interval of one month.
Hence, the customer lifetime value can be more precisely evaluated. Hence, the checkout process is
automated and inventory planning is streamlined. Also, the customers are required to submit certain
information about them which can also be useful in predicting the revenue from that customer. Most
companies invest in businesses with long-term customers, and a good way to demonstrate the viability
of your business is a list of happy subscribers.

Conclusion: Hence, Ximi should millennial-proof their work environment to increase employee
retention rate and execute a functional strategy targeting an environment-conscious generation that is
constantly-on-the-move, wary of investing large sums in appliances, living in a rented house and
doubtful of the utility, comfort and longevity of appliances. With their marketing strategies being
executed, the company can educate customers on unnecessary hassles with relocation, such as
shipping large household appliances. With their operational strategies including automated revenue
systems customers know exactly what they’re paying each month without any hidden costs. This creates
a seamless customer experience with strong relationships.