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XIAOMI Case

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analysis

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By Yazan Inaim, Ala Abu Ali
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This study source was downloaded by 100000805604921 from CourseHero.com on 07-30-2021 11:47:23 GMT -05:00

https://www.coursehero.com/file/11625369/Xiaomi-Case/
 Situation Audit

- Well-known brand in China - S

- Innovative marketing approach –S
- Flexible and adaptable products –S
- Brilliant E-commerce business system -S
- Cost effective distribution strategy that could be a concern in other markets -W
- Not being able to meet services and maintenance requirements –W
- Extend the business to retailers.- O
- Motivate user experience and building strong brand - O
- Large competitors moving into low cost market -T
- Risky dependency on supply chain to meet consumer orders on time - T
- Weak business model which has one major distribution channel (E-commerce) - T

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- Huawei smartphone’s competition at low cost - T

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Problems

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- Adopting “Hungry Marketing” model, which increased XIAOMI product manufacturing cost and
make competing in price easy for competitors.
- Not being able to meet a proper after sale support and maintenance due to very few maintenance
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stores (29 stores) for whole china.

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Identification of Alternatives
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- Working on large scale manufacturing model to reduce product cost and being able to survive price
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competition with others.

- Open enough repair and service centers to meet a professional after sale services.
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Critical Issue
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- Zero inventories depend solely on a consistent supply chain, which is a single point of failure model,
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which also implies small scale production, this will affect product cost.
- When there is no proper maintenance station available to meet after sale demand, consumers will
start looking for other competitor products

This study source was downloaded by 100000805604921 from CourseHero.com on 07-30-2021 11:47:23 GMT -05:00

https://www.coursehero.com/file/11625369/Xiaomi-Case/
 Analysis

Alternative 1: Working on large scale manufacturing model to reduce product cost and being able to
survive price competition with others.

Critical issue: Zero inventories depend solely on a consistent supply chain, which is a single point of failure
model, which also implies small scale production; this will affect product manufacturing cost.

Analysis: XIAMO adopted Zero inventory model that affect its product manufacturing cost, Huawei Company took
advantage of high Manufacturing cost of XIAOMI phone to compete in price, our alternative advice to abandon
Zero inventory model or Hungry Marketing strategy in order to go in large scale production to reduce product
manufacturing cost.

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Alternative 2: Open enough repair and service centers to meet a professional after sale services.

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Critical Issue: When there is no proper maintenance station available to meet after sale demand,

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consumers will start looking for other competitor products
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Analysis: XIAOMI didn’t take into consideration the required need for enough after sale stations that cover the
rapidly increase in its sales volume, therefor; our alternative for XIAOMI is to meet the market need in terms of
maintenance and services.
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Recommendation

XIAOMI should start producing smart phones on large scale to reduce product cost and being able to
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survive price competition with others, also to use more sales channels along with Internet based e-
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commerce.

Finally, they need to follow up the after sales services by providing enough repair and support centers to
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meet a professional after sale requirements.

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This study source was downloaded by 100000805604921 from CourseHero.com on 07-30-2021 11:47:23 GMT -05:00

https://www.coursehero.com/file/11625369/Xiaomi-Case/
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