Xiaomi is a Beijing-based company that primarily manufactures smartphones founded in 2010. After 5 years rapid growing in Chinese market, it became one of the largest smartphone vendors, depending on its cheap costs and advanced services. The way Xiaomi doing business is unique, customers can only purchase its products through online stores, it is known as direct business model. Xiaomi setups up this business model in order to maximize its profit and minimizing the cost for customers. The partnerships with Android and WOW made the company become competitive in smartphone market, by advantages of up-to date features and free internet. One of the benefits of the direct model is customizing, where promoted the value for the Xiaomi in the aspect of knowing what people’s demands in the market. The operations managers also limit the quantity of supply when the demands exceed the production possibility frontier to make the products more coveted, which can be called hunger marketing.
Xiaomi as a middle-class smartphone brand is now facing a serious challenge in current trend of global market that technology sector has churned out significant global companies and minted fortunes. The revenue of the company has shrunk by 75% this year compared to 2014, as people prefer to buy higher-class smartphones who have better quality when the income increases. Xiaomi needs to come up with some new operations strategies in order to meet the trends. For example, Xiaomi could launch a high-end smartphone to compete with Apple and Samsung’s products and retain the costumers they might lose. Personally, I believe that Xiaomi should focus of specific group of people, who can only afford middle-class cellphone and provide services that fascinate people.
Works Cited
“China’s Xiaomi Sees Revenue Double as Smartphone Sales Rise.” The Globe and Mail. Bloomberg News, 04 Jan. 2015. Web. 02 Oct. 2015. <http://www.theglobeandmail.com/report-on-business/international-business/chinas-xiaomi-sees-revenue-double-as-smartphone-sales-triple/article22284266/>.
Li, Yuan. “Xiaomi Confronts an Unnerving Time.” WSJ. The Wall Street Journal, 30 Sept. 2015. Web. 02 Oct. 2015. <http://www.wsj.com/articles/xiaomi-confronts-an-unnerving-time-1443643346>.