Competitor and Customer Analysis of Xiaomi 1

COMPETITOR AND CUSTOMER ANALYSIS OF XIAOMI

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Competitor and Customer Analysis of Xiaomi 2

Competitor and Customer Analysis of Xiaomi

Most businesses are attracted to the foreign market because of the opportunity to cut costs

and increase revenues. The lawsuit concerns Xiaomi, a smartphone maker looking to expand its

global market share. The Chinese mobile phone industry, with an extensive client base, is the

chosen target market. Various dominant players continue to throttle the success and growth of

the Xiaomi smartphone. Despite its status as the fifth-largest corporation globally and the fourth-

largest in China, it surpassed Samsung in 2014 to become the world's biggest smartphone

producer (Horwitz, 2016). However, according to a survey from IDC, Xiaomi smartphones were

overtaken by Huawei in 2016 as the most popular smartphones in the business. At 10.5 million

units shipped in Q2 of 2015, Xiaomi's yearly shipping decrease was 38 per cent (Horwitz, 2016).

Shipments from Huawei increased by 15% year over year over the same trade period to 19.1

million. To put it another way, Huawei's share of the global market grew from 15.6 to 17.2 per

cent. After being threatened by another brand's growth (Vivo), Xiaomi's smartphone held its

own.

Comparative Advantages and International Trade Opportunities.

High-Quality Smartphones

One of China's most popular smartphone manufacturers is Xiaomi mobile. The firm uses

a two-pronged investing approach. Xiaomi makes significant expenditures in the Mi 4 and Mi 3

smartphones, but it also has a unique, affordable line for its other items. Redmi Note, for

example, has several attractive features, but the pricing of these features varies from those

offered by other manufacturers and retailers. A 5.5-inch display and an octa-core CPU provide
Competitor and Customer Analysis of Xiaomi 3

excellent performance on the phablet (Horwitz, 2016). China is a significant market for its high-

definition televisions and routers.

The cost of Xiaomi smartphones is a critical factor in their success. The Redmi Note sells

for $ 154 and $170 in the United States and Australia. The pricing is lower than that of

comparable cellphones. Xiaomi has not cut the cost of its devices, which is an important

consideration. In terms of pricing, the company's flagship smartphones are comparable to

midrange models, even though they have the same high-end capabilities. In China, the MiTV

retails for $640 or AU$690, and it's a handy carrying case (Cendrowski, 2017). LG and Samsung

got into a spat about the pricing. Such pricing would make it impossible for their competitors to

remain in business. The goal of pricing products at these levels is to decrease profit margins

while simultaneously boosting inventory turnover and sales volumes.

The Influence of New Entrants

The smartphone market is still bloated due to the fierce rivalry thus far (Cendrowski,

2017). Even if there are already well-known enterprises in the market, new entrants continue to

join and stifle its progress. New entrants are reluctant to spend extensively to compete with the

more established businesses. New entrants' methods unsettle the loyalty of demand, supply, and

price strategy as Xiaomi smartphones adapt to fit into the current market dynamics (Horwitz,

2016).

Influence of Substitutes
Competitor and Customer Analysis of Xiaomi 4

Smartphones now have replacements, but they aren't absolute. While other companies'

cellphones still offer a mild danger, they are a factor to consider (USSEC, 2009). The

corporation must constantly adapt to the actions of its competitors in the industry.

Factors that Will Affect Total Revenue

Some individuals have accused Xiaomi devices of copying Apple's designs. Despite this,

the firm is still doing a lot of things properly. Redmi Note phablet and Redmi Phones are the

mainstays of the company's success (Cendrowski, 2017). Trade prospects and comparative

advantages in the foreign market are expected to fuel Xiaomi smartphones' exponential growth in

the future. The corporation intends to grow into new areas, including the United States, Europe,

and South America, including Brazil.

Mi Fans

For Xiaomi, its smartphones' success has helped build a fan base of consumers who are

willing to support the firm no matter what new products it introduces. Every product introduction

in the local market is attended by a group of people called "Mi Fans" (USSEC, 2009). To grow

this group beyond China, MIUI was created by the firm.

Price Elasticity of Demand

For the first time, Xiaomi is launching a low skimming price in a flash sale rather than

using the skimming pricing model like other market participants, who solely utilize flash sales

for this purpose. Since the low skimming technique doesn't generate huge profits like Apple and

Samsung's, Xiaomi can't take advantage of its price-skimming approach.

Factors That Influence Productivity

Many significant investors in the smartphone business claim to have decades of expertise

in developing brand identities. Quality, price, brand loyalty, and customer wants are just a few of

the things that keep the players on their toes. These variables influence the demand, supply, and

cost of Xiaomi smartphones. Xiaomi's Chinese market opponents are Vivo, Oppo, and Huawei

(Cendrowski, 2017). As the industry becomes more dominated by global giants like Samsung

and Apple, firms like these are scrambling to carve out a place for themselves in it. But Xiaomi

devices continue to fight back against their rivals and have a sizable market share. As the third-

largest smartphone manufacturer globally, Huawei is Xiaomi's main competitor. It directly

impacts Xiaomi's supply, demand, and price decisions.

Measures of Cost

Opportunity Costs

It is estimated that Oppo has 7% of the global market share, Apple has 12.5 per cent,

Huawei has 9.3%, Vivo has a 5.8% market share, and Samsung has a 20% market share. In

China, Oppo has a 17.5% share of the domestic market, Huawei has 15%, Vivo has 16.5%,

Xiaomi has 8.7%, and Apple has 7.1%. The remainder of the market accounts for 34.5%. IDC

released these numbers in the second quarter of 2016 (Cendrowski, 2017).

Externalities and Government Public Policy

Taiwan is home to the majority of Xiaomi's suppliers. Over time, the firm built up a

robust supply network and earned the reputation of being a reliable provider. Suppliers first

slashed their prices since they had already connected with their previous clients (Cendrowski,

2017). Consistency and trust had a dramatic effect on the situation. Suppliers' negotiating
Competitor and Customer Analysis of Xiaomi 6

leverage is still modest in today's market. In the smartphone market, which is very competitive,

buyers have a wide variety of items from which to pick, whether they like one brand or another

(USSEC, 2009). People have a lot more leverage in this circumstance.

References

Cendrowski, S. (2017, January 24). How China's smartphone 'Big Four' are fighting for global

customers. Fortune. https://fortune.com/2017/01/24/china-smartphones-oppo-vivo-

huawei-xiaomi/

Constantinides, E. (2016). The marketing mix revisited: Towards the 21st century

marketing. Journal of Marketing Management, 22(3-4), 407-

438. https://doi.org/10.1362/026725706776861190

Horwitz, J. (2016, August 16). Xiaomi’s once-admired strategy for winning China’s

smartphone market has backfired. Quartz. https://qz.com/758955/xiaomis-once-

admired-strategy-for-winning-chinas-smartphone-market-has-backfired/

Patrutiu, B. (2015). Content marketing: The fundamental tool of digital marketing. Bulletin of

The Transylvania University of Brasov. Series V: Economic Sciences, 8(2), 111-118

USSEC. (2010, February 26). Annual report pursuant to section 13 or 15(d) of the securities

exchange act of 1934. Wikinvest. Retrieved from

http://www.wikinvest.com/stock/CocaCola_Company_%28KO%29/Filing/10-K/2010/

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