In 2015, Xiaomi was the biggest smartphone maker in China ahead of household names including Apple, Samsung and local rivals such as Huawei. A year later in 2016, its valuation stood at $45bn, a massive achievement for an upstart technology firm launched in 2010, the same year Apple released the IPhone 4. But fast forward to 2017, Xiamo had fallen from 1st all the way to 5th rank in the Chinese smartphone market alone, behind Chinese rivals Huawei, BBK (which offers the Oppo and Vivo brands) as well as Apple and Samsung. Its valuation has fallen drastically to just $4bn in 2017, from $41bn less in just one year. From being the bestselling smartphone brand in China to fifth. What happened to Xiaomi?
As will be looked at shortly using Pestel and Swot, many factors both macro and micro have contributed to Xiaomi’s fall from grace. While some are internal weaknesses due to poor strategic decisions, certain macro threats haven’t favoured the Chinese smartphone maker.
Xiaomi Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Xiaomi and the Chinese smartphone industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Use our swot analysis example to gain an overall understanding of Xiaomi's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
- To apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.
Analyse the internal and external environment of Xiaomi and the Chinese smartphone industry using Pestel and Swot.
1.0 INTRODUCTION
Xiaomi is a Chinese privately owned electronics technology multinational currently engaged in the design, manufacture and retailing of smartphones, tablets, mobile apps, smart electronics as related software, accessories and third party applications. Key products include the Mi, Redmi and Mi Note series smartphones as well as Mi Pad series tablets. Launched in 2010, Xiaomi expanded exponentially in such a short period of time to become one of the fastest growing technology firms in the world, at one point overtaking both Samsung and Apple as number one in the Chinese smartphone market in 2014, less than 5 years after it was founded (Gilbert 2016).
This exponential rise led many to label it the “Apple of the East” a tag matched by its valuation which by 2016 was estimated at US$45bn (Gilbert 2016). But fast forward to 2017, Xiamo had fallen from 1st all the way to 5th rank in the Chinese smartphone market alone, behind Chinese rivals Huawei, BBK (which offers the Oppo and Vivo brands) as well as Apple and Samsung (Dunn 2017). Its valuation has fallen drastically to just $4bn in 2017, $41bn less in just one year. Just two years ago, Xiaomi was the bestselling smartphone brand in China as well being third largest in the world. What happened to Xiaomi?
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