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Today’s brew is for Xiaomi,
Brew Date: 29th May 2015
Type: Served Hot – Redefine and Transform brew.

To understand the business model of Xiaomi, check out the following links:

The Brew will analyze Xiaomi on the following points:
a) Business Analysis
b) Improvisation to Business Strategy (Not required, the frameworks are all laid in the Business Analysis part)

Xiaomi defines itself as a Mobile Internet company dedicated to creating an all aspect user experience and one can as well argue that Xiaomi is actually the first “Internet of Things” company (though Xiaomi is by miles away from it, however the path it has taken seems promising and Atleast makes it a frontrunner in offering IOT solutions): where other companies are offering some sort of open SDK to tie everything together Xiaomi is integrating everything itself and one needs on Mi.com. It’s a complete vertical strategy altogether.

a) Business Analysis:
1) Though Xiaomi defines itself as a mobile Internet company along with having a Tech Competence, however its hardware strategy of offering great quality and at great price has been a runway success. And it is this strategy that it should continue following in all the segments of Consumer decision making behaviors (Not just electronics) which can ultimately align and converge, with in process competence build of being a Mobile Internet company.

The key success factor that Xiaomi has been following is a combined model of Disruption (Value chain disruptions, unlocking of the value and synergy with other vertical value chain players) in the existing operating model and innovation (pricing, technology, user experience, convergence etc). Precisely, that is what Xiaomi should continue doing, which will pose continuous challenge to other established players, and it will as well be a challenge to Xiaomi to replicate this success factor with an increased frequency.

However, there are 2 things that The Brew, insists Xiaomi to focus on consistently:

a) From its Operating Model, Xiaomi has been successful in setting disruptive ecosystems (in its hardware led strategy) and its ability to transfers and transcend additional value to products and experience.  Xiaomi should keep operating as an Ecosystem enabler company on the principles of disruption & innovation, getting together the elemental players which offer exponential value to be created and captured across. Xiaomi should as well focus on replicating the same model in its Internet linked strategy to create an ecosystem of apps, user interface and user experience enhancing the consumer experience and living experience.

b) Until Xiaomi is able to establish a strong independent organic competence (It does have a Tech Competence with UI and Experience, but its dependent on Xiaomi’s Hardware offering and being a Tech company which as well supplies hardware, it will ideally need an evolved, and robust Tech competence to stitch up its vision of IOT solutions company), Xiaomi should work towards rolling out SMART Solutions for Consumers in varied verticals (a mix of Hardware & Software), along the while its builds an independent tech ecosystem internally which stitches the visions of IOT enabling – complete solutions company.

2) Strategy of Non Linear Competence from its Business Model:
Currently, Xiaomi is in the business of providing Consumer Solutions through Innovations and disruptions, and its current wave of offering are in Consumer Electronics. It should continue on similar philosophy across while expanding its offerings and solutions vis a vis keeping a check on the ecosystem where further value can be created and successfully transferred to the Consumers.

Xiaomi should either lookup for those ecosystems where the value is yet to be realized or for those Consumer needs which are not realizing their intrinsic value of being a good solution.
3) Value and Brand Promise:
The USP of Xioami is Value Premise and a Great User Experience. Xiaomi will have to inculcate these 2 pillars across all the offerings and brand dimensions to stay consistent with the User and as well keep the Brand perception high. A shift in the balance to either of the side will either lead to Xiaomi to the edge of being a cheap smart phone or a high end classic, both can possibly be detrimental to our overall revenues and image, in the long run.

2 things importantly worked out in favor of Xiaomi, the Right Market Enablement Strategy – Targeting those market which work well with the value premise approach along and capitalizing on the fatigue experienced by the existing products while providing Consumption novelty. And Staying Close to Consumers to understand, evolve and adapt according to the user needs.

Staying Close to the Consumers can be converted in to an offering by leveraging the Tech competence and developing innovative solutions by offering Personalisation solutions converging in to framework of Xiaomi.

4) Convergence & Continuity
The Trajectory movement from Hardware firm to a Smart Solutions firm and then transforming to an IOT enablement solution will require Xiaomi to evolve its Tech competence and marrying this competence to its offerings, along with having a convergent and continuity approach.

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