ONE PLUS BUSINESS

STRATEGY

TEAM 12
Aditya J Jangam 1RV17CH014
Bishal Dhar 1RV17CH
 STRATEGY
• After capturing 19 countries in established markets such as US, China and
Europe, OnePlus India journey began a year later in December 2014.
• Traffic trends [Sales data] showed that India ranked among top seven
countries. This, even when they had not launched their product in the
country.

• Amazon had global clout and presence and OnePlus became the first mobile
brand to exclusively launch on Amazon India at that time.
• The company sold 850K-950K units all across the world declaring revenues
of $300 Mn in 2015. (Trak.in) report.
 HISTORY OF ONEPLUS IN INDIA
• In India OnePlus was number three in the premium segment market
(smartphone above Rs. 30,000 price marks.)
• OnePlus brought ‘insane’ specifications, at a nominal pricing to grab
attention.
• The OnePlus One retailed in India for ₹22,000 and since then, the company
has increased the prices of its devices by ₹3,000 with every new launch. This
is the global strategy by the company.
• OnePlus 5 was essentially the most affordable smartphone in the market
sporting flagship level specifications.
• Amazon India had been the exclusive ecommerce channel partner of
OnePlus for the last four years. When the device went on sale on May 21 it
reported more than ₹100 crores in sales in less than 10 minutes of launch.
• OnePlus operates in the above Rs. 30,000 segment where only Apple and
Samsung are its competitors in terms of market share and popularity.
COMPETITIVE ANALYSIS
COMPETITIVE ANALYSIS
• Apple’s share in the
premium segment reached
its lowest ever 14% due to
decline in shipments for its
iPhone 8 and X series.
Additionally, the increase in
import duty and absence of
local manufacturing
impacted its pricing strategy
in India.
• Samsung captured 34% share
of the premium segment. Its
shipments declined 25% due
to decline in shipments of S9
as compared to S8 last year.
• One plus share is highest
reaching 36%.
 FOCUS STRATEGY
• OnePlus targeted younger users with
stylish and affordable Android-based
phones.
• OnePlus used penetration pricing
strategy.
• OnePlus positioned itself between l o w -
cost smartphone companies like Xiaomi
and high-end makers like Apple and
Samsung and significantly undercut the
latter on price, despite closely matching
them on features.
• By pricing the phone at a minimum price
of $299, this price point made the phone
attractive to a large population of the
market who was looking to purchase a
new phone or upgrade their current
mobile device. This is also a price where
people felt that they were willing to
justify.
 PRICING STRATEGY
• OnePlus didn’t spend money on advertising instead they sold phone
online
using community partners and online marketing.
• OnePlus offered devices with an industry leading design,
superior build quality, and top-of-the-line specifications at a
disruptive price.
• OnePlus kept its pricing strategy very competitive, the start-up
retained a small margin for itself in to keep its operations running
and passed rest of the savings to the customer in the form of low
prices.
• The business model was built around razor-thin margins and giving
as much value back to its users as it could in the form of lower prices.
• The prices of OnePlus devices were different in each country
depending on operating costs, taxes, and other factors. They set
the lowest feasible price for its devices in each geographical market.
 PRICING STRATEGY

• In the first nine months of 2015, OnePlus reportedly sold about 1.3
million units worldwide with 57% of the sales coming from the Asia
Pacific region. It planned to sell 5 - 7 million smartphones in 2016.
• According to data firm IDC’s stats, in Q1 2017, the average selling
price of smartphones in India was $155.
• Nearly two-thirds of smartphones were being sold in the country
from a China-based vendor.

• The price range averages between $100-200, according to IDC.

• Essentially one-third of the market in India is above the $200 price
mark,
and OnePlus is playing in that category.
 ONEPLUS’ COST-CUTING
• No physical stores or franchises (recently, they have started OnePlus
experience stores, but they are few and are not geared to sell). Retail
channels can cost anywhere from 20% to 40% of the final price of a flagship
device, so there is no retail channel cost.
• No major advertising or marketing costs, including no major celebrity
endorsements or expensive since beginning, slick TV advertisements. Online
marketing and fans help in spreading word through the word of mouth.
• First couple of iterations were produced on demand based on the invitation
model. So no inventory costs and overstock costs.
• Regain costs through premium and exclusive accessories charged at above
average rates. Except the processor of phone every thing is manufactured by
china itself, that is the reason for low cost One plus.
• OnePlus is a diversification initiative by Oppo. They are funding OnePlus,
providing exclusive tech (latest being dash charging based on Oppo’s
VOOC) and parts, and all the expensive R&D to make such awesome phones
without recouping the money through phone costs.
 LOW PRODUCTION COSTS
• The key to one plus low price smart phones are proper redistribution costs
that could benefit the users.

• Rather than spending huge on a marketing budget, one plus is focusing

more on online platforms and community interactions.
• One plus instead of partnering with retailers and physically marketing their
smart phones, focuses more on online marketing and service. This will help
one plus in better reach of customers. Rather than working with retail
partners, one plus opted to sell its smart phones online.
• This step will help one plus to avoid huge margin offerings to retailers. One
plus was comfortable not making money for first 2 years and building brand
by gaining people’s trust that a great and reasonable priced product can be
bought online.
PRIMARY ACTIVITIES
• OnePlus is partnering with Servify, a Mumbai-
based tech startup founded in late 2015, to
provide pickup and logistics for after-sales
services of its smartphones.
• The company has also launched the OnePlus Care
app to enable customers to self-diagnose their
smartphones and avail free pickup-drop service
from their home or office, in case of a need to
repair their OnePlus devices.
• The free pickup-drop service is available across
Bengaluru, Chennai, Kolkata, New Delhi and
Mumbai.
• OnePlus’s
business model is built around
ecommerce—and getting them shipped to India,
 SALES AND MARKETING
• 3 million ‘Notify Me’ registrations were made prior to the launch of OnePlus 6
making it one of the most awaited smartphones of the year.
• A sales metrics shared by Amazon India suggest that OnePlus is on a strong footing
and India is likely to remain its biggest market. Despite being a premium brand, the
company’s penetration into tier 2 and tier 3 markets has increased from 28 percent
in 2016 to over 50 percent in 2018.
• One in two customers for OnePlus choose to trade in their old phones for a new
OnePlus phone and 40 percent of customers choose the ‘No cost EMI’ option, a sales
strategy that helped OnePlus expand its customer base in India.
• Social media promotions are one of OnePlus’s main tools for raising brand
awareness. The company has employed an unusual ‘invite policy’ that requires
people to receive an invite – either from a OnePlus employee or an existing phone
owner – to buy the product. The key aim is to allow OnePlus to match its inventory
levels to demand, but it has also given the business an ability to execute digital
marketing campaigns as tech enthusiasts scramble to get invites.
• OnePlus is expanding its current portfolio, OnePlus refreshes the flagship
smartphone twice a year.
 SALES AND M ARKETING
• If someone want ed to bu y the pho ne from an of flin e r ou te, i t can be done
through OnePlus Experience Stores in Delhi and Bengaluru. Though OnePlus
made some changes in its strategy recently when it tied up with Croma outlets
to expand the availability of the OnePlus 5 in the country.
• The OnePlus Experience Store also doubles up as a community hub where they
regularly host engagement initiatives, ex; Ted Talks, Popup events, etc., and
activities at the Store to deepen their engagement with the community.
Now, they are extending the experience store concept to other cities through
mini-experience zones that are conveniently located inside premium malls in
metro cities.
• They have recently launched their own e-commerce store to offer a more
personalized and convenient shopping experience to our users and are also
strengthening their exclusive service network to offer 1-hour service guarantee
to users beyond metro cities as well.
• Through its marketing campaigns, OnePlus aimed to take their customers on a
journey where they can experience the ‘Never Settle’ way of life. The
#NeverSettle hashtag proved that you don’t need necessarily need big bucks to
make an impact. If you have a great product, customers will be drawn to your
brand.
 • OnePlus offer more value than their rivals.
• It has an innovated unique supply-chains that have forgone the
warehousing-and-inventory-accumulation model and replaced it with a
direct-from-manufacturing-to-shipping model.
• Reviews and analyses often point to limited stock / unavailability as
shortcomings of this brands, when in fact, it’s the very basis for their
success.
• One Plus’s main contribution to the Smartphone Wars has been to cut out
warehousing time altogether, bringing smartphones to market as soon as
they are assembled, in whatever minimum order quantity is available.
OPERATIONS
• This model is somewhat unstable and doesn’t deliver a uniform customer
experience. It reaches ahead as hungrily as possible to the future,
optimizing the flows of technological development and capital.
• Apple must wait until
T1+ILT, or else it will
disappoint customers,
shareholders, and the
industry, by underserving
the product release.
• In contrast, Xiaomi or
OnePlus can bring phones
to market directly at T1.
• Strategically, this allows
them to sell a phone with
the same value as leading
flagships, for a significantly
lower price
 SUPPORT
ACTIVITIES

Oneplus follows focus

strategy cost leadership
support activities in value
chain.
 TECHNOLOGY DEVELOPMENT
• One plus was able to develop something which other Smartphone
companies were failing to develop.

• One plus was not only building a rough and tough Smartphone but also
focusing on the texture of its body.
• Sandstone was a texture for one plus one mobile device which created
uniqueness in the eyes of customers; they started adopting oneplus smart
phones as cool and tough.
• One plus 2 had 4 style swap colors such as cover bamboo, black apricot,
Kevlar, rosewood.
 GENERAL
ADMINISTRATION
• One plus planning to double the employee count
and laying its second R&D facility in India.

• One plus currently has 85 employees in India and is

planning to shut down its operations in Philippines
and hire 80 people more in India. They will
specifically cater to Indian queries.

• Earlier one plus had a centralized decision making

of finances, operations, human resource etc.
managed by headquarters in China.

• Now one plus will have a decentralized decision

making, better computerized integrated information
systems, and better risk management.

• This decentralization will happen as GENERAL

MANAGER-VIKAS AGARWAL believes that there
should be a local corporate culture to have a better
and fast growth in the market.
PROCUREMENT

• One plus is a key customer of

CYANOGENMOD which is an open
source operating system based on the
android platform.
• The version that one plus one runs,
the 11s is based on the Android 4.4.2
KITKAT and is custom built specially
for one plus one.
• The best part about using a
customized operating system is that
one plus will still have the best
android experience and the users will
not understand that it is actually a
custom-built operating system.
 CONCLUSION

Through analysis, the business strategy obtained for

OnePlus is COST LEADERSHIP UNDER FOCUS STRATEGY
during its initial phase and presently they are trying to
differentiate more in terms of technology by merging
with google and moving towards artificial intelligence.
https://www.marketingweek.com/2016/03/02/how -
oneplus-is-taking-on- the-mobile-giants/

REFERENCES -Focusing-
http://bwcio.businessworld.in/article/OnePlus
on-Expanding- Brand-Awareness-and-Educating-
Users/15-05-2017-118154/

https://inc42.com/startups/chinas -oneplus-india-
smartphone/

https://www.engadget.com/2018/01/11/oneplu
s-weighs-in-on- smartphone-strategy-and-the-
value-of-trust/
THANK-YOU ! ! !