Xiaomi: Reinventing the Smartphone Business Model in China





Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

The case discusses Beijing-based Chinese electronics company, Xiaomi Inc. (Xiaomi), and its unconventional business model. Founded in April 2010 by Lei Jun (Jun), a serial entrepreneur and investor, in association with his friend Bin Lin (Lin), a former Google and Microsoft executive, Xiaomi was known to produce cheap smartphones with a nice build quality.

Xiaomi followed a unique business model where it sold its smartphones at cheap prices and later took advantage of the revenue streams generated by selling its software such as apps, cloud computing, and games. The company sold its smartphones at US$ 200 or US$ 300 whereas smartphones developed by Samsung Electronics Ltd.

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Issues

The case is structured to achieve the following teaching objectives:

  • Evaluate Xiaomi’s unconventional and innovative online business model.
  • Understand the need to reinvent the business model of a company amidst rising competition and changes in the business environment.
  • Understand the reasons for Xiaomi’s success in China.
  • Identify the challenges faced by Xiaomi and explore strategies that the company might adopt to overcome these challenges.
  • Examine whether Xiaomi can increase its dominance in the Chinese smartphone market and become a leading player in the Chinese smartphone market.
  • Examine the strategies Xiaomi should adopt to enter and make a mark in the emerging markets it plans to enter.
  • Examine the challenges Xiaomi could face in gaining a presence in the intensely competitive US smartphone market.

Contents
Introduction
About Lei Jun And Xiaomi
Launching The Miui Interface
Entering The Hardware Segment
An Unconventional Business Model
International Expansion
Criticisms
The Success
Challenges
Looking Ahead
Exhibit

Keywords

Xiaomi, Innovation, Smartphone, Online business model, Direct marketing, Social media, e-commerce, Flash sales, Word-of-mouth, Localization, Brand awareness, MIUI OS

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