http://www.businesskorea.co.kr/english/news/ict/7500-xiaomi%E2%80%99s-challenges-xiaomi-mount-serious-challenge-samsung-apple-100000-won-tablet
Xiaomi is the 4th largest smartphone maker in the world, which is also the first electronic company who has made achievements through online sales. By adopting the disruptive innovation idea (Clayton M. Christensen), Xiaomi has been developing its markets rapidly since it pushed out its first smartphone in 2011.
In the past, smartphone companies, such as Nokia and Motorola, had their products sold traditionally in electronic specialty stores. Though Google tried to sell its first smartphone Nexus One on internet in 2010, due to quality problems, it suffered great losses. Nevertheless, Xiaomi introduced its first smartphone with features of cheap price and high quality on internet and achieved huge success. According to Clayton, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances [1]. In this case, Xiaomi created a new market by offering online sale services, and has become one of the largest smartphone companies in the world.
However, I personally doubt the sustainability of current Xiaomi’s business mode. With the development of network marketing, more and more smartphone companies have copied the business mode of Xiaomi, starting selling their products on the internet with even lower prices and more functions. Consequently, Xiaomi has lost its advantages because its marketing strategy has been applied by many other smartphone companies. Besides, Xiaomi does not produce hardware itself, hence, it cannot launch revolutionary new products independently.
To conclude, although disruptive innovation brings a company benefits at the beginning, the disruptive innovated idea may be referred and utilized by other companies quickly. In my opinion, only sustaining innovation ensures constancy of a company.
Reference
- Christensen, C. M. (1997). The Innovator’s Dilemma. Harvard Business Review Press