Posts Tagged ‘IT’


Microsoft Corporation is a US-based global technology company with headquarters in Richmond, Washington. Founded in 1975, Microsoft’s mission is ‘to empower every person and every organization on the planet to achieve more’. Microsoft employs more than 130 000 people internationally. During the fiscal year 2018 the tech giant generated USD 110.4 billion in revenue and USD 35.1 billion in operating income. Microsoft produces a wide range of products and services related to productivity and business processes and to support digital work and life of customers. Some of its products and services have become highly popular in the global scale. For example, more than 135 million people use Office 365 commercial every month and Outlook Mobile is installed into more than 100 million iOS and Android devices worldwide. Similarly, Microsoft Teams is used by more than 300 organizations worldwide, including 87 of the Fortune 100 and nowadays there are nearly 700 million devices around the world with active Windows 10. In 2014, Satya Nadella replaced Steve Ballmer as CEO of Microsoft. Since taking over the top job, Nadella has focused on ‘humanising’ the company by improving its organizational culture and he also enhanced the coordination of efforts across the departments and groups of the company. Microsoft business strategy can be classified as product differentiation. The company develops advanced technological products and services and sells them for premium costs. Moreover, Microsoft business strategy is currently focused on “cloud-first, mobile-first”, growth through mergers and acquisitions and exploring business opportunities related to augmented and virtual reality. Recently, the multinational technology company has also included ‘tech intensity’ as one of the important pillars of its business strategy Microsoft Corporation Report contains the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and…


January 7, 2019
By John Dudovskiy
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Xiaomi does not publish annual CSR report.  It has been noted that despite its branding effort to resemble the minimalist style of Apple, Xiaomi does not show similar commitment in environmental responsibility.[1] However, the mobile internet company may start publishing CSR reports after initial public offering (IPO) of its stocks that is expected to take place in the foreseeable future. Official Xiaomi website declares company’s pledge “to reduce the use of hazardous substances in products.”[2] However the website does not disclose any data at all regarding emissions or any other environmental impact of Xiaomi products and services. According to German Federal Office for Radiation Protection (Bundesamt für Strahlenschutz) Xiaomi smartphone Mi A1 has “Specific Absorption Rate” of 1,75 watts per kilogram, which is the highest level of radiation of smartphones worldwide.[3] In general, there is a lack of information related to Xiaomi CSR programs and initiatives, as it is illustrated in table below. CSR aspect of the business Xiaomi performance Supporting Local Communities No information available Educating and Empowering Workers No information available Labour and Human Rights No information available Employee Health and Safety No information available Gender Equality and Minorities It has been noted that Xiaomi uses “yanzhi,” or physical appearance metric when hiring, leading to discriminaton during employee recruitment and selection process.[4] Energy Consumption No information available Water Consumption No information available Waste Reduction and Recycling MI INDIA maintains PRODUCT TAKE-BACK & RECYCLING PROGRAM. Xiaomi Authorised e-waste recycler can collect e-waste from customer’s location, or customers can also drop e-waste at any of company’s service centers[5] Carbon Emissions No information available Sustainable Sourcing No information available other CSR Initiatives and Charitable Donations No information available Xiaomi CSR Programs and Initiatives Xiaomi Inc. Report contains a full analysis of Xiaomi corporate social responsibility including Xiaomi CSR issues. The report…


June 4, 2018
By John Dudovskiy
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Xiaomi ecosystem is vast and comprises 55 companies including 29 companies that have been incubated from the beginning by Xiaomi. The company sells a wide range of products from smartphones to kettles and gloves. [1] Moreover, ever-expanding corporate ecosystem has been placed at the core of Xiaomi business strategy. Usually, producing a wide range of products and services threats to compromise the focus on core products and services. However, Xiaomi claims to have addressed this threat in a proactive manner. Specifically, according to its official website, while the company focuses on its core products – smartphones, smart TVs and smart routers, Xiaomi invests in companies that produce other types of products without being involved in operational management.[2] Xiaomi Ecosystem[3] Smartphones are placed at the core of Xiaomi ecosystem. Moreover, smartphones are used to facilitate the sales and use of many other products and services. Xiaomi smart devices include Mi Water Purifier, Mi Air Purifier, Mi Induction Heating Rice cooker and other products. All smart devices are connected to Xiaomi IoT platform and can be managed though Xiaomi smartphone. In 2013, the electronics and software company announced its plans to invest in 100 hardware startups.[4] The company also sells a range of “non-smart” products, like towels, and suitcases. Increasing numbers of startups are currently joining Xiaomi ecosystem to gain support to grow rapidly. Xiaomi has experienced technical staff, engineers and product managers, who can play an instrumental role in fuelling the growth of small-sized companies. At the same time, joining Xiaomi ecosystem also has some drawbacks. Specifically, start-ups need to operate with low profit margin according to Xiaomi business strategy. Moreover, over-dependence on Xiaomi for branding and distribution can be mentioned as another drawback of belonging to Xiaomi ecosystem.[5] Xiaomi Inc. Report contains a full analysis of Xiaomi ecosystem. The report illustrates…


June 3, 2018
By John Dudovskiy
Category: Strategy
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Xiaomi McKinsey 7S model illustrates the ways in which seven elements of businesses can be aligned so that overall effectiveness can be increased. According to the framework strategy, structure and systems are hard elements, whereas shared values, skills, style and staff are considered as soft elements. McKinsey 7S model stresses the presence of strong links between elements in a way that a change in one element causes changes in others. As it is illustrated in figure below, shared values are positioned at the core of Xiaomi McKinsey 7S model, since shared values guide employee behaviour with implications in their performance. Xiaomi McKinsey 7S Model Hard Elements   Strategy.  Xiaomi business strategy is based on cost leadership. Company’s business strategy also integrates gathering and utilising a large fan base and aggressively increasing the ecosystem of products and services. Moreover, Xiaomi positions itself as an internet and software company rather than a hardware company. Accordingly, the sales of hardware are perceived as a means to deliver software and services in the long-term perspective.   Structure. Xiaomi has a matrix organizational structure. The electronics and software company has various business units that are managed independently.  Xiaomi organizational structure can also be also classified as flat. Despite its large size employing more than 18000 people in 70 countries, the company has only a few layers of management.   Systems. Xiaomi’s business depends on a wide range of systems such as employee recruitment and selection system, team development and orientation system and transaction processing systems. Moreover, there are critically important systems for the company such as customer relationship management system, business intelligence system, and knowledge management system. The mobile internet company aims to increase the efficiency of these and other systems via the integration of internet-based information technologies. Xiaomi Inc. Report contains a full analysis…


June 2, 2018
By John Dudovskiy
Category: Strategy
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Xiaomi value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the mobile internet company. Figure  below illustrates the essence of Xiaomi value chain analysis. Xiaomi Value Chain Analysis  Xiaomi Primary Activities Xiaomi Inbound logistics Xiaomi inbound logistics involves the delivery and storage activities of raw materials by the mobile internet company. Strategic relationships with Taiwan-based manufacturers of various components is one of the main sources of value for Xiaomi inbound logistics. Specifically, Xiaomi partners with Inventec and Hon Hai for assembly, Wintek and TPK for screen technology and Unicorn for PCB (printed circuit boards). Moreover, Taiwan Semiconductor Manufacturing Corporation (TSMC) is the main processor supplier for the company. Xiaomi also procures various electronic components from nearby countries. For example, MOS and batteries are mainly imported from Thailand.   Xiaomi Operations Operations activities within Xiaomi value chain analysis refer to the processes of transforming raw materials into ready products. The mobile internet company has established its presence in 70 countries and regions and it is among the top 5 in 16 markets. Xiaomi manufactures locally more than 75% of smartphones it sells in India.[1] Location of manufacturing units in China and India is one of the main sources of value in Xiaomi operations. This is because the costs of human resources in these developoing countries are cheap. Along with proximity of manufacturing units to the sources of raw materials, cost-effective human resources play an instrumental role in sustaining cost advantage competitive edge of the business. Moreover, Xiaomi sophisticates its manufacturing processes in a systematic manner using advanced technologies and benefiting from technological innovations.   Xiaomi Outbound Logistics Initially, Xiaomi outbound logistics practices were limited to the shipment of products directly to end-users via couriers. At that stage the company…


June 1, 2018
By John Dudovskiy
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Porter’s Five Forces is an analytical framework developed by Michael Porter (1979)[1].   Xiaomi Porter’s Five Forces consists of five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in Figure 1 below: Figure 1 Xiaomi Porter’s Five Forces   Threat of New Entrants in Xiaomi Porter’s Five Forces Analysis Threat of new entrants into the internet technology is low. There are entry barriers for potentially new market players. Economies of scale is one of the major factors and entry barrier for new companies. Xiaomi is able to offer its products for competitive prices because it purchases raw materials in bulk and benefits from the economies of scale to a large extent. Moreover, entry into the electronics and software industry requires formidable capital investments. Xiaomi was initially funded with USD41 million in 2010 and the company went through series of funding and debt financing of several billion USD to reach its current state.[2] It may not be easy for new market entrants to secure funding at such a scale to enter the industry. Additional range of factors that decrease the threat of new entrants to the industry include access to distribution channels and likely retaliation from existing market players such as Apple, Samsung, Xiaomi and Huawei.   Bargaining Power of Buyers in Xiaomi Porter’s Five Forces Analysis Bargaining power of buyers in technology and the mobile internet industry is significant. This is caused by primarily high level of competition in the global marketplace. Nevertheless, companies try to reduce buyer bargaining power through developing their ecosystem. For example, “all products belonging to Apple ecosystem are highly compatible with each-other and the purchase of one product belonging to the brand’s portfolio often leads to the purchase of other products. Gradually, it will come to the point that consumers…


May 31, 2018
By John Dudovskiy
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Xiaomi marketing communication mix explains the extent of usage of individual elements of marketing communication channels by the mobile internet company. Generally, elements of the marketing communication mix consist of print and media advertising, sales promotions, events and experiences, public relations, direct marketing and personal selling. Xiaomi Print and Media Advertising “Xiaomi once touted its avoidance of advertising as one of the keys to its early success—saving money on commercials helped keep the overall price of the phones lower. Instead, it relied on its upper executives and its “fans” to spread the word and attract new customers through social media.”[1] However, due to increasing competition from its local rivals Oppo and Vivo, The mobile internet company had no choice but to engage in certain forms of traditional advertising such as posters and newspaper advertising. Nevertheless, viral marketing remains as the most important form of marketing for Xiaomi. The internet technology company also uses celebrity endorsement from the likes of top Hong Kong actor-singer, Tony Leung, a 54-year-old best-known to English-speaking audiences for movies like “In the Mood for Love” and “Lust, Caution.”[2]   Xiaomi Sales Promotions Xiaomi uses the following sales promotions techniques: Flash sales. Flash sales refer to sales of products and services online at a heavily discounted price for a short period of time. Xiaomi uses flash sales extensively, especially in India. Customer Loyalty Scheme. Reward Mi is a customer loyalty program that rewards loyal customers with exclusive benefits such as priority passes a.k.a F-codes and discount coupons which can be redeemed on selected products across Mi Store.[3] Seasonal sales promotions. The electronics and software company announces sales promotions on notable occasions as Christmas day and anniversaries of notable days for the company. Point of sale materials. The company uses point of sale materials such as posters and…


May 30, 2018
By John Dudovskiy
Category: Marketing
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Xiaomi segmentation, targeting and positioning is needed to indentify the target customer segment for the company and to develop products and services that are attractive to this segment. Segmentation involves dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products. Positioning refers to the selection of the marketing mix the most suitable for the target customer segment. Xiaomi uses mono-segment and imitative types of positioning. The internet technology company uses mono-segment positioning, appealing to the needs of a single customer segment. Specifically, Xiaomi targets a customer segment that want to use smartphones and other technology products, but have limited budget to make such a purchase. Xiaomi also uses imitative type of positioning by closely imitating the products of market leaders such as Apple and Samsung. The electronics and software company has even earned the nickname “Apple of the East” due to its close imitation of Apple products and Apple product presentation. The following table  illustrates Xiaomi segmentation, targeting and positioning: Type of segmentation Segmentation criteria Xiaomi target customer segment     Geographic Region 70 countries and regions globally Density Urban and rural   Demographic Age 18 – 65 Gender Males & Females Life-cycle stage Bachelor Stage young, single people not living at home Newly Married Couples young, no children Full Nest I youngest child under six Full Nest II youngest child six or over Full Nest III older married couples with dependent children Empty Nest I older married couples, no children living with them Empty Nest II older married couples, retired, no children living at home Solitary Survivor I in labour force Solitary Survivor II retired Occupation Students, employees, professionals Behavioural Degree of loyalty ‘Hard core loyals’ ‘Soft core loyals’ ‘Switchers’ Benefits sought Cost attractiveness Personality Easygoing, determined and ambitious personality types User status non-users, potential…


May 30, 2018
By John Dudovskiy
Category: Marketing
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Xiaomi marketing mix (Xiaomi 7Ps of marketing) comprises elements of the marketing mix that consists of product, place, price, promotion, process, people and physical evidence. Product Xiaomi mainly focuses on hardware, software and internet services. The company’s  product range is vast and includes laptops, mobile phones, tablets, smart TVs, power banks, smartwatches etc. Xiaomi also manufactures and drones, sells water purifiers, vacuum cleaners and even rice cookers.  Xiaomi products such as cellphones, TVs, TV boxes, and speakers have received more than 145 industrial design awards altogether.[1] Continuous expansion of ecosystem of products and services is placed at the core of company’s business strategy.   Place Xiaomi is headquartered in Beijing, China and has offices in Asia-Pacific, India, and Brazil. The mobile internet company has established its presence in 70 countries and regions and it is among the top 5 in 16 markets. These markets include Turkey, Malaysia, Mexico, Thailand, Philippines, Russia, Singapore, Indonesia, Brazil, India, and Vietnam. The mobile internet company opened its first offline retail store in February 2016 and by the end of 2017 had more than 155 stores.[2] In March 2017, the company established a new sales channel called Xiaomi kiosks to reach districts without Mi Home Stores and towns and villages with limited e-commerce access[3]   Price Xiaomi pricing strategy can be described as economy pricing. Accordingly, the internet technology company sets its prices low, keeping marketing and promotional costs to a minimum.  Flash sales are integral component of Xiaomi pricing strategy.  The electronics and software company uses the flash sales to announce the sales of its smartphones at a greatly reduced price. Xiaomi flash sales last only for a short duration of time. For example, in India “a flash sale for the Redmi 1S model in September 2014, around 40,000 pieces were sold out in just…


May 29, 2018
By John Dudovskiy
Category: Marketing
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Xiaomi marketing strategy has been traditionally minimalistic due to the cost leadership business strategy pursued by the company. Accordingly, the mobile internet company only engaged in social media marketing, saving on advertising costs and passing this cost advantage to customers in the forms of products with low price tags. However, “Oppo and Vivo have grown in China by using the exact tactics that Xiaomi once avoided. Both companies spend heavily on offline advertisements and celebrity endorsements, plastering billboards on subways and bus stops across China’s second- and third-tier cities.”[1] This has caused a shift in Xiaomi marketing strategy and starting from lately the internet technology company has started to use traditional marketing communications channels as well. Moreover, Xiaomi marketing strategy nowadays also includes product placements and Xiaomi holograms in fiction triller Anon (2018) can be mentioned as an example. As s privately-owned company, Xiaomi does not disclose its annual marketing budget. Xiaomi 7ps of marketing focuses on price element of the marketing mix to a greater extent compared to other elements. Accordingly, the brand’s target customer segment represents price-conscious consumers who want to own the latest smartphones with advanced functions and capabilities for affordable cost. Hunger marketing strategy is one of the integral components of Xiaomi marketing strategy. The electronics and software company appeals to emotional needs of their target customer segment by selling only limited amount of products for a limited duration of time. In other words, the company creates the shortage of supply in purpose, creating a buzz in the market and evoking desire in customers to own a MI brand smartphone. Xiaomi Inc. Report contains a full analysis of Xiaomi marketing strategy. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix…


May 28, 2018
By John Dudovskiy
Category: Marketing
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