Group 5

Value
Chain
The case of Apple and Xiaomi
Target Apple
Xiaomi Market
 Strategy
Xiaomi Apple

Cost Leadership Strategy Premium pricing strategy

(Price-Strategy)
Apple

Market Segmentation

Xiaomi
APPLE
Young to middle aged consumers,
mostly female. TARGET
MARKET
Middle to high economic status.
Varies depending on the particular
product.

XIAOMI
Tech savvy customers, who are in age
group of 18 to 35 years.
Working/middle class.
Want products with good quality &
affordable price.
 Positioning

Xiaomi operates as a high-tech, yet

Apple
affordable brand with impressive
features

Apple positioning its brand to create an

emotional connection with its customers
Xiaomi
through exceptional experiences
STRENGTHS
Impressive growth rate
Cost advantage
Unique Android OS and strong
brand following
Protectionist policy of Chinese
government

WEAKNESSES
High R&D expenditures
Projects with no outputs
Sunk costs & financial crisis
STRENGTHS

Significant brand awareness

and market influence
Excellent marketing
strategies
Toptier R&D department
designing processers

WEAKNESSES
High R&D expenditures
Projects with no outputs
Sunk costs & financial crisis
Core competence
Loyal, large user-base

Technological innovation

Low labor cost/

affordable prices
Core competence
Globally popular premium brand

Rapid innovation

The ecosystem of
complementary products
Core competence
Access to user information

Marketing strategies & business

management

International
distribution network
 VALUE CHAIN ANALYSIS

Inbound Logistics Inbound Logistics

Strategic relationships with Apple sources their high-quality

Taiwanese manufacturers of materials from different
various components. countries, such as America,
China and European countries.
Xiaomi also procures various
electronic components from Their raw materials are
Thailand. assembled by Foxconn in China.
 OPERATION
Apple
Apple prefers to outsource manufacturing of
Location of manufacturing units in China
its hardware to other companies in China or
and India is one of the main sources of
other Asian countries because Apple does
value in Xiaomi operations
not have any manufacturing facilities.

Manufacturing plants setup in Tamil Nadu

Also, the labour cost in Asian countries is
and Andhra Pradesh
much lower.
OUTBOUND LOGISTICS

Apple
Selling through physical stores (Apple
stores) and e-commerce channels.

Xiaomi
There is no official shopping website, mainly
sold through retail websites; distribute products
mainly through e-commerce channels
 MARKETING & SALES

Apple Xiaomi
Xiaomi solely relied on WOM and
There are seven major
forums; no advertising or
sales channels marketing expenses and selling
through flash sales
 SERVICES

Apple has exceptional Poor post-sales

customer services service due to cost
leadership strategy
Thank You
For Watching