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Project Report On Xiaomi Inc.
Project Report On Xiaomi Inc.
Learning
Submitted to
MS. Shreshta Bhattacharya
Submitted by
Ramakrishna Y
BATCH 1 SEM 5
17GSO101365
ACKNOWLEDGEMENT
Research work on Xiaomi Inc. is a combined effort, so one
should thank all that have helped in making the report
purposeful. Hence, We as of whole group members thank to
all that have been instrumental in helping us to prepare this
report. It is great honour to be assigned this topic. I am
immensely grateful to Ms. Shreshta Bhattacharya for her
continuous support and guidance while pursuing the project
and for taking pains to give her valuable inputs to the
structure of report and guidelines, the completion of this
project would not have been possible. We specially wish to
thank all other people directly or indirectly related with our
research & study and our friends, colleagues, and other
members of group as without their valuable support
successful completion of this report would not have been
possible.
INDEX
S.No Topics Page No
1 EXECUTIVE SUMMARY 4
2 OBJECTIVE OF THE STUDY 7
3 INTRODUCTION 8
4 CORPORATE MISSION AND VISION 9
5 ENVIRONMENT ANALYSIS – PEST ANALYSIS 11
6 INTERNAL & EXTERNAL ANALYSIS– SWOT 14
ANALYSIS
7 MARKETING OBJECTIVES AND GOALS 17
8 FOUR P’s OF XIAOMI – MARKETING MIX 18
9 COMPETITOR ANALYSIS 21
10 SEGMENTATION, TARGETING AND POSITIONING 22
11 PRODUCT LIFE CYCLE 24
12 CONCLUSION 26
INTRODUCTION:
1. MISSION:
Making Quality Technology accessible to everyone:
Xiaomi is a company which believes that high-quality
technology doesn't need to cost a fortune and create
remarkable hardware, software, & internet services for
and with the help of their users whom they call ‘Mi
Fans’.
2. Engaging Users or Fans helping them develop their
new Products: Xiaomi runs dedicated user forums, and
keeps in touch with their fans conducting many activities
and taking user feedback which helps them create their
next best products.
3. Creating an Internet Ecosystem through their
innovation in technology: With their innovation in
technology & services they’re winning hearts and
acquiring market share with their loss leader strategy,
they are creating an internet ecosystem linking one
product with another because they are having a huge
product line-up.
2. VISION:
1. To make Xiaomi an Indian Company: Xiaomi’s Global
VP, Hugo Barra has always showed Xiaomi’s dedication
towards India and its culture and want to make it an
Indian Company.
2. To lay more focus on After-Sales Service: Major focus
of the company is on providing the Customers better
after-sales service and to open 100+ own service centres
across the country.
3. To open 10,000+ Offline Stores by early 2017: Xiaomi
makes 90% of its sales from online and has existing
stores are in Tier I and Tier II cities, and would now enter
Tier III cities too, while increasing presence in the two
former categories, visioning to open 10,000+ offline
stores by early 2017.
Political factors:
1. In August 2014, just after launch when Xiaomi was accused
of sharing user data, like Phone no., IMEI no., Text messages,
contacts etc. to a server in Beijing, without notice of users, it
became an issue for the company. Which when investigated
came out to be a 4 month old report of even before when
Xiaomi started selling smartphones in India. It could have had
a political impact on its business. The Company for being on
the safer side shifted its servers out of Beijing.
2. Later in 2014, Xiaomi's smartphone Redmi note 4G's
imported was banned in India when directed by Delhi High
Court, following a lawsuit filed by Ericsson India, where
Xiaomi was using Ericsson's Standard Essential Patents
without paying out a royalty to the company in India. The
smartphone (after two successful flash sales) was
permanently discontinued to be sold in India.
EconomicFactors:
1.This November only, the Indian Government implemented
Demonetisation Policy which affected the online
smartphones sales. One of the sectors reeling from the
impact of demonetisation is that of feature phones and
affordable smartphones, which are priced under Rs 10,000.
Since most of these purchases are made using cash payments
even now, the initial impact was as high as 90%. Sales of
Xiaomi products, the Smartphones had a worse-hit and other
products too suffered from bad sales, ie. Powerbanks,
Bluetooth speakers, Mobile accessories, and Earphones.
Social Factors:
1. Lack of customer service centre: The main problem behind
Xiaomi is lack of service centre as compared with
Samsung. As in the todays era service has become a part
of a product so this is the factor which can create the
problem for Xiaomi to decrease in sales.
Technological Factors:
1.Xiaomi's line of smartphones which use Android,
support the cause for open source systems which are
being championed by many technology-savvy people, as
compared with Apple which strongly protects its
proprietary and closed system. Xiaomi has aggressively
offered “MIUI” which lets its users take the lead in
customising their own user experience with unparalleled
flexibility.
2. Xiaomi's technology captures the heart of its customers
by allowing them more freedom than Apple’s IOS or even
the standard Android handsets. Thus Xiaomi capitalises on
user innovation, which is one of the main factors that
drives the Xiaomi fortune today. 3. Another strong point is
that Xiaomi promotes online shopping which erases the
cost for intermediaries
INTERNAL AND EXTERNAL ANALYSIS OF XIAOMI
- SWOT ANALYSIS:
STRENGHTS:
WEAKNESSES:
OPPORTUNITIES:
2.Retailing Directly:
Price:
Xiaomi sells its phones at a price that just covers the cost
of the device rather than its cost of production. Xiaomi is
focusing more on selling its phones at a low price today,
but gaining more in the future from selling contents such
as applications, services, and accessories. Moreover,
Xiaomi mostly sells its products online which can reduce
costs of opening stores, hiring staff, and inventory keeping,
and also may lessen the problems in communication when
dealing with distributors and retailers.
Place:
There are many countries outside China where the
smartphone market is dominated by Apple and Samsung.
This is the main obstacle for Xiaomi in expanding its brand
internationally. Xiaomi already has a strong base in
mainland China, Malaysia, and Singapore. Currently,
Xiaomi is expanding its market to India and the
Philippines. Despite its expansion into other markets, the
company’s main focus is still in China where its largest
consumer base is located. And second most focus in all
other developing countries in Asia Pacific, in which India is
on the top. Xiaomi mostly sells its products online instead
of opening physical stores. This is a win-win situation for
both the company and consumers. The company can save
a lot of money from building the stores while consumers
can easily access the products. Because the company
spends less money, the price of the phones will also be
cheaper.
Promotion:
Promotion of word of mouth. Xiaomi uses flash sales, a
mean of selling their product in limited quantities within a
limited period as part of their sales strategies. This
strategy enables Xiaomi to save money from doing
advertisement because it creates the anticipation and
urgency on consumers. Only limited quantities are
available in the market and they will be sold out quickly
which means many people have to wait for the next slot.
This strategy therefore makes people talk a lot all over
China including in the social media. This also grabs lots of
the consumer’s attention and makes the advertising less
important for Xiaomi in promoting the launch of new
products. Social media. Xiaomi uses social media not only
to broadcast messages to actively get in touch with its
customers, but the engineers from Xiaomi also use this
platform to routinely communicate directly with users to
get feedback. The engineers listen to the consumer’s
needs and refine the software to complete those needs
weekly. This distinguishes Xiaomi from other brands
because it shows that the company is always concerned
about its customers and immediately takes actions to
improve the products.
COMPETITOR ANALYSIS
Segmentation:
Xiaomi has followed the Demographic Segmentation
strategy and used factors like, Age & life cycle, Age stage,
Income, and Generation to target its customers. Xiaomi as
an Internet company has segmented the market to those
group of people who are tech savvy, mostly use e-
commerce platforms for shopping, and see electronic buys
as Value for Money i.e. Brand value is not the priority to
them, but VFM is. The consumers in Indian market wanted
Smartphones and devices to be distinguished with
customisations in the Android OS without compromising
with their budget. And, Xiaomi India gave a combination of
both, a better OS and high quality components in their
budget, and then the other consumer segment by word of
mouth followed.
Targeting:
Xiaomi targeted consumer who are tech savvy as well as
who are in the group of age 18-35 i.e. from students to
working class people, who wanted good quality products
and knew that market leaders like Samsung, LG, and Apple
were overpriced for the specifications they were providing
in their products. So, the targeted audience are: Students,
Working class people, Heavy internet & social media users,
who are driving the e-commerce market in India.
Positioning:
Introduction-
Xiaomi was founded in 2010 by serial entrepreneur Lei
Jun, who believes that high-quality technology doesn’t
need to cost a fortune. The company creates remarkable
hardware, software, and internet services for and with the
help of Mi fans. It incorporates their feedback into its
product range, which currently includes the Mi Max, Mi 5,
Mi Note Pro, Mi Note, Mi 4S, Mi TV, Mi Band, Mi Smart
Home gadgets and other accessories. With more than 61
million handsets sold in 2014 and products launched in
Taiwan, Hong Kong, Singapore, Malaysia, Philippines,
India, Indonesia and Brazil, Xiaomi is expanding its
footprint across the world to become a global brand.
Xiaomi entered the Indian market in July 2014 via flipkart.
Xiaomi launched its first made-in-India smartphone
named Redmi 2 Prime at a price of Rs.6999.
Growth- sales were up 33% year-on-year. But the lack of
growth between the end of 2014 and the first half of 2015
means dark clouds are gathering for Xiaomi, just as they
are for nearly every smartphone maker that isn’t Apple.
“Good enough” smartphones are becoming a commodity,
and to stand out, phone makers need to be reduce prices
or sell add-on products and services. There are several
specific factors behind Xiaomi’s stagnation. In China,
Xiaomi leads the Android hardware market, beating out
Samsung for market share in 2014.
CONCLUSION