case study of XiaoMi

4678 Words Apr 23rd, 2014 19 Pages
1. Executive Summary

The report was conducted to analyze from marketing strategies perspective why Xiaomi has made such a big success in smart phone business since it was founded in 201, and to make some recommendations for its further success.

The methods used in the report include external analysis (customer analysis, competitor analysis, market analysis and environmental analysis), internal analysis (performance analysis and determinants of strategic options) and analysis of strategic outputs. In addition, a survey which can be found in Appendix part was conducted in a focus group to help on the analysis.

The results from the analysis tell that Xiaomi has attracted a large number of very loyal customers by very accurate segment
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This zero-cost sales channel enables Xiaomi to sell high-end smartphones at a relatively affordable price.

Also, Xiaomi use the “hungry marketing” strategy, by limiting the supply of Xiaomi handsets to attract more attention, and seek to work up a fever for a product that becomes contagious. There is no other way to purchase Xiaomi handsets except its online website, which resulted in more people rushing to join the line-up because they are afraid of failing to get one.

Strategic Weaknesses and Constraints:
3.1.3 Supplier Bargaining Power
Since Xiaomi is still a small scale company as compared to those large players in the current smartphone market, it is difficult for Xiaomi to bargain with those large suppliers for a lower price. Also, since Xiaomi use the same suppliers and OEMs with those large smartphone players like Samsung and Apple, the raw materials and delivery time will normally be arranged after those large players’ schedule, resulting in lack of product materials or delivery delay. With current increasing heat of Xiaomi smartphone, can the company still be able to meet its future market demand?

3.1.4 “Hungry Marketing” Strategy
Some media also criticized Xiaomi’s “hungry marketing” strategy, saying that Xiaomi use this strategy to deliberately limit supply in order to spur high anticipation and widespread hype from potential customers.

Also, this marketing strategy

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