Xiaomi is a very interesting company, which is growing
in China.
Nevertheless, its business model has yet to prove its
validity in the home market, therefore threats to Apple are still seen as
weak.
We would like to hear your opinion, so please make
sure that at least one person of your group replies to the following questions
here on the blog.
Compare
Apple and Xiaomi strategies.
1. How important do you think has the external
environment been in pushing the two companies pursue their strategies?
2. Were the decisions taken by Xiaomi at the
functional, business or corporate level?
Moreover, it would be nice to see some statistics in
class, so it would be nice if each member uses vot.rs to see what the
general audience thinks.
Please go on vot.rs and enter the
following codes:
For
question 1: 38 96 43
For
question 2: 46 34 30
Group: WhatsApp
RispondiElimina1.The external environment has been of great importance in pushing the two companies pursue their strategies.
First of all it's important to say that Apple has the monopoly on the occidental market, while Xiaomi is selling its products on the Asian market (China, Hong Kong and Taiwan) and they have both different needs
On one hand, Apple desired to create an incredible,innovative and unique product, structuring strategies on differentiation. In a society in which everyone would like to be classy, fashionable and flashy at the same time ,an handset like the i-phone 5 is the perfect item to have in the pocket.
Apple is a closed system; that's why it decides for us news and various developments, while a very strong point on the Xiaomi strategy is to be led by their costumers, so to create a product that they can improve as they want (thanks for example to weib).
The asian market is not “scared by chinese products” and then they are able to create and model the perfect phone.
Probably Chinese customers need a cheaper handset with all the characteristics conformable with the Chinese government requirements.
That's the reason why the "low-cost"I-phone market strategy does not work in China; in fact 733$ to pay to get the I-phone 5c, is not a competitive price with respect to the one proposed by Xiaomi for its product.
2.The decisions taken by Xiaomi are mainly taken at a business level,because given a certain industry (in which the firm is involved ), they focused on how to achieve competitive advantages with respect to the competitors( low cost strategy, proposal of new services ). Xiaomi tried to offer a different product and to offer it in an innovative way,among similar products produced by the same big industry.
Apple thanks to it's worldwide popularity acquired a competitive advantage through which it still manages to set prices much higher than it's marginal cost and thus making big profits on all of it's component (iPhone included).
Instead the chinese Xiaomi, and many other emerging firms on the technological(technology) market which do not have this kind of advantage, pursue a different strategy setting the product's price close to it's cost, making small profits on the handset (Xia0mi's Miu, or another example : FUHU's Nabi from which it makes only 5 dollars revenue per handset) and making big profits only with the extra gadgets and apps.
group: BENZ
RispondiEliminaExternal environments have had a key role in defining both the companies’ strategies.
We must say that Xiaomi has taken Apple’s iphone as a real model, learning from it and to which adapt its product. Xiaomi’s phone does not really represent a new innovative generation of smartphones, but creates a true, solid alternative to Apple’s expensive and fashionable products. Xiaomi, in fact, is quickly introducing itself into a strongly close market, where just Apple and few other rivals have been present in the course of the past and present years. Xiaomi, furthermore, is making itself space and acquiring new clients by adopting quite a smart strategy concerning the external environment. People are surely willing to buy this phone due to the fact that it offers quite the same services and functions of the rivals, but at a lower price. This combination generates a highly competitive product.
We must say that probably Xiaomi’s system, which doesn’t benefit from the technology and deep experience as Apple’s iphone does, will face a disadvantage in terms of efficacy and reliability.
Xiaomi, though, does not represent a real threat for apple if we consider it worldwide. Xiaomi is not going to be successful globally, but its success will be limited and confined in its original market, China. It will be strongly appreciated by Chinese population also because it offers a highly active network to communicate with its users, where it is easy to express their preferences.
Xiaomi’s decisions mainly cover the business level. The market, in which Xiaomi is penetrating will offer them a successful result, by adopting a low-cost-high-performance strategy. They have been adapting their product to the always-growing necessities of the population, which seems, always more, to appreciate technology. Technology demand is growing everywhere. This pushes the ”well-known” companies to evolve and create new products, but also favors the foundation of new companies, offering products at highly competitive prices.
GROUP: GO HARD OR GO HOME
RispondiElimina1. the external environment has been important for both companies.
Starting with Mi-3 we can see it's very fashionable and we already even know that the Mi-3 with pretty much more powerful than the iphone 5 so the Mi-3 processor should blow Apple's product away.
Lei Jun even went to saying that this new phone would be the fastest smart phone currently available.
Also we can see that xiaomi is also making other interesting products like the new super slim smart TV.
This company is proving to be pretty good at innovating but I think their current strategy isto remain in their current territory; The company probably knows that entering right now in the Us markets would probably be financial suicide because many Americans are comfortable with Apple because it is a brand they know, are used to thanks to itunes and can use easily to get their favorite movies,music etc.
passing to Apple, I think their strategy has been very smart and different; for an example, the company made very similiar versions of ipods(nano,touch,big,classic) , but all have performed very well because they have some characteristics which make them useful and unique (example nano can be stuck to a shirt, or the touch has apps on it).
They have also made big profits by releasing different versions of the same Iphone (5,5c,5s) but i still think that android systems have the upper hand on IOS, just for modding, accessability and customware.
The smartest thing by far that apple has done is pretty much creating the app market and releasing itunes, two fundamental products which are nearly used every day by millions of users.
2. Xiaomi's strategy i think was merely business, and we can even notice it just by seeing the two different prices of apple's product and Xiamois'.
The iphone costs about 700$ while the MI-3 about 400$, but the thing is Apple can be ''permitted'' to use this price point because when somebody says this brand it is instantely recognizable.
Honestely i did not even know about this other company so i did a quick research on it, but this explains that people living in the Occidental are not ready to use this product while the apple logo and business pretty much are considered an icon(thanks to the famous logo) as well as a franchise.
Group: Penguin Business
RispondiEliminaXiaomi has decided its strategy at the business level, focusing on the need of the country where it operates. China’s government, indeed, blocks the most part of applications and services coming from occidental developers for smartphones therefore leaving an open market for Xiaomi to fill with their own products. This strategy makes them have a strong competitive advantage in China which could be expanded in all those countries having similar regulations but could not be successful in western markets.
Xiaomi isn’t trying to compete with Apple in design or innovation but rather it creates a similar product exploiting the possibilities offered by the new markets. Apple instead needs to motivate clients in the asian markets to choose their product. The i-phone has a higher price which is explained by the fact that it has become a status symbol, gaining the reputation of “The Smartphone” but since most of its functionalities cannot even be used in China we wonder whether a reduction of less than $200 is enough to enlarge the number of its customers.
Group: Square
RispondiElimina1. The external environment has had the following effects on Apple and Xiaomi: according to the P.E.S.T.(E.L.) analysis we start with Technology. We believe that Apple has been more innovative, when they started their company the technology was not yet there, and they have had to develop it themselves. Whereas for Xiaomi the technology mainly already existed and they merely shaped it to their own needs. Since both companies started out with a focus on their own country the national economy was very important for the initial shaping of their strategy. Now that they are expanding into other countries they need to make adjustments to e.g. government procedures, which will have a large effect on their strategy. With regards to the demographic structure Xiaomi has had the advantage of a very large country with a very high population, even without the expansion to the international economy they already have a large market to sell their product. Apple is more dependent on expanding their market to countries outside of the U.S. As far as social structure goes what is important is the class structure since it will give an indication of how much people can spend on handsets, since there have been complaints about Apple being too expensive Xiaomi has the advantage here. Government has a large effect as well since it is still very controlling in China, which makes it hard for Xiaomi to get out and for Apple to get in. The U.S. offers more freedom which helps Apple in expanding. As we can see the External Environment has been very influential when it comes to the strategies, it's definitely important.
2.Decisions made be Xiaomi were at a business level. They have been trying to gain a competitive advantage. By producing cheaper products to attract more customers. And they have been collecting reviews which shows an interest in the customers needs and will help them improve their products in the way the customers would like to see this done.
Group: Februaries
RispondiEliminaWe think that the external environment had a big effect on Xiaomi because in order to adapt to the Chinese market it had to charge lower prices for its products compared to its competitors. Apple surely gave to Xiaomi the main idea, where to start from, but they were forced by the Chinese market, in order to compete with Apple, to change some variables of their strategy.
Price was the main concern of Xiaomi's mission ,this was achieved also by selling their products via internet (avoiding store locations). Another concern, and also an innovative idea, is the way they receive feedback directly from their customers. They decided to exploit the power of the web, asking their customers to vote online making them protagonists of the product itself. Apple instead aims at giving their customers already a product with great features, and tends to be more close minded on what customers have to say. But we have to take into consideration that Xiaomi is working only at national level, while apple is spread worldwide, so receiving feedback from so many customers may be much more difficult to handle.
Apple has recently tried to adapt to a more affordable market, with their new product the Iphone 5c, which with its relatively "lower" price wants to attract other categories of clients.
For these reasons Xiaomi, according to us, is working at a business level.
Group: DANELVIC
RispondiElimina1. We think that the external environment has played an important role in defining both companies' strategies. Apple has gained worldwide importance throughout this last decade and Xiaomi is clearly trying to imitate their business model and strategy. The Asian company is focusing mainly on the neccessities of the Asian costumers. One of the elements of the external environment is the social structure. This is one of the difference between both companies.
The technology is another factor that influences a company's strategy. Nowadays Apple dominates the market and all the companies are clearly not at the same level. Xiaomi's goal is to try to compete with the American giant. As the mobile phone is a growing sector in the Asian market, Xiaomi has the opportunity to make a lot of profit since labor costs are much cheaper and the resources are plentiful.
Apple’s great achievement is to create a brand that is distinguised by high quality, uniqueness, great service and constant innovation. This way it is extremely difficult to compete with Apple as, from a social point of view, it has a better image than all of its competitors.
In conclusion, Xiaomi’s big challenge is to compete, not only with Apple, but also with other important companies such as Samsung. To do this, their strategy must be focused on product differentiation or a low cost business model.
2. In our opinion, Xiaomi’s decisions were taken at a business level due to the fact that they are achieving competitive advantage by emphasizing on low cost and on introduction of new products and services such as the Mi-3 handset. Xiaomi is becoming increasingly important because it is correctly satisfying a constantly growing market launching innovative products for a much lower price than Apple.
Group: ReJa
RispondiElimina1) The external environment was and is very important for feedbacks and critics. So it plays an important role in strategies of both companies.
With Steve Job's and his creative input, Apple became the name by introducing products that were easier to handle and didn't exist in that form on the IT-market. With their innovative software, Apple has established a competitive advantage to Microsoft in the computer industry. Apple didn't stop at this point but invented new products like the iPhone or the iPad.
Nowadays people are motivated to buy their items which have become exquisite and high-end products. Apple gains billion of profit each year and doesn't seem to reach the end of the ladder yet.
The fight for leadership with Samsung on the mobile phone market has got a new rival Xiaomi. This new company wants to overrule Apple by copying their products in all extensions. They are riding on the back of the cult of Apple.
Xiaomi has a competitive advantage in Asia because of the high rapid growth, by offering cheap mobile phones and continuing the hype of Apple in their marketing.
2) We see the strategy Xiaomi uses is clearly on the business level.
Business strategy is about actions taken to get a comparative advantage. Basically is about tactics to beat the competition. That’s exactly what Xiaomi does, trying to beat and even become bigger than it’s competitors.
How? By producing a product at a lower cost than it’s competitor Apple. So Xiaomi uses mainly the cost leadership part of the business strategy.
Group: Coke does not joke.
RispondiEliminaThe strategy proposed is at the functional and business level, because of technological innovations, higher quality products (products differentiation), and direct sale online which keeps prices down.
In this moment Apple is not afraid of facing the Chinese handset competition because the I-phone has been sold worldwide since the beginning, and has a large competitive advantage due to the customers' loyalty to the brand, while Xiaomi's Mi3 handset still has a closed market, banished to China.
We think that Apple should be interested in its new Chinese competitor due to his fast growth and his possible future worldwide development. Nobody can deny that Mi3 is cheaper than I-phone 5s and even of the 5c, that is the “low cost I-phone 5”.
Prices are kept down thanks to a different strategy at the business level, adopted by Xiaomi: sales are only online, achieving cost leadership. The open source devices, instead of the I-phone closed system, held the firm to reach differentiation. Moreover customers can vote to express their ideas about feature to be included in new smartphones, and thanks to the contribution of open source devices, we can conclude that the strategical focus is on stakeholders. The Business Strategy is "is to make a profit from customers as they use the handset”," It is a classic internet business model: build an audience then monetise it later".
In conclusion, we think that Xiaomi has good probabilities to be inserted in the market, because Apple, Samsung, Huawei, Htc One, LG, ZTE, Lenovo's competitive advantage is temporary, due to technological obsolescence.
The proof? Blackberry's destiny: one year ago Blackberry controlled over 35% of young users between 16 and 24 years old. This year it is losing 960 million dollars from the missing sale of Z30 phones.
Group " Eataly "
RispondiEliminaThe external environment has been crucial to the development of both Xiaomi and Apple, although the two firms are developing themselves in completely different panoramas.
The Technology Market, and in particular the smartphones market, has been experiencing an enormous growth. This phenomenon is mainly attributable to the fact that nowadays, with the coming of the "Generation 2.0" and consequently with its great enthusiasm for the hi-tech products, more and more people own the latest cellular device.
Although the two companies may seem similar to each other, they hide indisputable differences. Apple, which entered in the smartphones market with the iPhone, has created a revolutionary product,featuring peculiar characteristics which, in turn, differ from those brought by Xiaomi with its Mi-3.
Going back to the initial question, it is important to say that both firms, in their respective backgrounds, have exploited the situation of the market they were about to enter in the most efficient way they could: they jumped into a fast developing market, taking a huge advantage of it.
About the second question, it is basic to say that the decisions taken by Xiaomi belong to the business level strategy and this can be seen pretty obviously throughout the article. More precisely, it focused its strategy on attaining a cost leadership condition, also because of the Nation in which it has been operating so far ( China ).
"Spanish team"
RispondiElimina1.How important do you think has the external environment been in pushing the two companies pursue their strategies?
Apple has no restriction, so they have more freedom than Xiaomi to develop their strategy. Thanks to the external environment Xiaomi had more restricted that their bigger competitor, is Apple, so what they should do is to have a strongest develop strategy. Due to Xiaomi is a Chinese company, they have a lot of restriction, that limit the information that they could receive from the external markets.
2. Were the decisions taken by Xiaomi at the functional, bussines or corporate level?
Is a functional strategy above to be focused on sales and R&D, to be update and innovating to be the first brand in the market.
group: GRASSHOPPER
RispondiElimina1. The external environment has vital importance in determining the industry's strategy. We live in a world which is developing continuously, always trying to improve their products. This can be easily seen in the technology market. Businesses involved in cellphone production are trying to compete with apple which actually is the monopoly of all cellphones, computers and other technological objects.
Other industries are trying to catch up with apple technology, although this is very difficult. Apple's monopoly over the market allows it to set high prices, and gain high profits. It is therefore very difficul for other businesses just like Xiaomi to compete with apple. These minor companies need innovative market strategies in order to compete with apple. They try to lower production costs, use advertizing and set lower prices for their phones to convince people to switch to substitute goods, rather than apple. This strategy allows Xiaomi to compete with apple, even though profits per unit produced are low. Thus, the external environment which is always looking for more efficient, innovative and cheaper phones is extremely important in determining the industry's strategy.
2. Xiaomi adopted business strategy, attempting to gain competitive advantage over apple. Xiaomi tried to set lower prices on it's phones than apple to pursue people to switch to substitute goods. This strategy will allow xiaomi to compete with apple in the long run as more people switch to xiaomi products rather than apple.
Xiaomi has a wholly different view on its products compared to Apple. It has created a device to fit the needs of its clients and is having thus a great deal of success in a market such as the Chinese one where the legal restrictions limit the information via web. In this sense the government has morphed the environment into something unfavorable for a company like Apple, which has created a product that has a natural tendency to connect worldwide in an indiscriminate manner, and instead given an advantage to Xiaomi which was born within these restrictions and may well adapt to them in a, shall we say, Darwinian way. Strategically the two firms adopt similar behaviors in the functional level by reducing cost of production, and the corporate level as regards the choice of the industry in which to compete. The business level takes on a totally different look. With respect to marketing strategies has always focused on the superior quality and the easy to use software it adopts, while Xiaomi has given its products an affordable, useful and also aesthetically pleasant look. Through its pricing-at-cost policy it chooses to make profit not on the hardware but on the further modifications of the software each customer makes. By doing so everyone can reach the level of sophistication on their phone that they desire and can afford. What makes Xiaomi so successful is also what makes it unlikely to be a threat to Apple worldwide, it was born of a specific market and for it exclusively. It's difficult to foresee the American market flooded with Xiaomi products because the average American enjoys higher income and degree of freedom of communication. This people don't have the tendency to switch to a product that has to be personally worked on when they already have a perfectly functioning ready-made package that at times seems to rub itself and is recognizable worldwide . Xiaomi is specific and is successful on its target. Apple is global.
RispondiEliminaIn answer to question one we personally think that the external enviroment played an extremely important role for both Apple and Xiaomi to develope their stategies. The external enviroment really helped Xiaomi, in particularl, to develop their strategy as they had an opportunity to create a phone and other products similar to the ones put on the market by Apple, which would be appealing to costumers as the price makes it accessible to a wider range of people, as they are able to afford it, due to the fact that they adapted to the Chinese market of smartphones and electronics. Xiaomi was very smart in taking the iphone as an example as it is a very well known phone and the demand for it is very high regardless of its price, by making a phone, taking the Iphone as an example Xiaomi opened the way to demand from costumers who are interested in the Iphone but unfortunately are not abke to afford it, for various reasons.
RispondiEliminaIn response to the second question we believe that Xiaomi used a business strategy as we can easily tell from the article. It tries to get a comparative advantage over Apple by making a similar products at cheaper, more affordable, prices. The lowering of the price and the similarities between the two products attracts costumers shift preferences from Apple to Xiaomi.
1) External environment has surely had a huge impact on both Apple and Xiaomi since the first had to cope with an almost new market, the one of touch smartphones, the latter is tying to find its way in an overcrowded marked with extremely aggressive competitors. Geographical environment is also relevant, Xiaomi's growth in China might also be due to the country's willingness to have a strong Chinese manufacturer of hi-tech products.
RispondiElimina2)Xiaomi's decisions are taken at a business level since their main focus seems to be how to gain an advantage over established firms, trying to sell its product as an attractive and powerful entry level smartphone.
Group: CB
Eliminagroup: Ikea
RispondiElimina1) External enviroment is very important when talking about selling strategies and product development. We have to take in consideration the country in which the firm or the company develops its idea and product. China has a different social structure from America so Xiaomi is an innovator that sells products with an high tecnlological level at a competitive price despite of the social enviroment. Apple has more flexibility because the enviroment is more reactive to technological changes and because is a company that is spread worldwide with products that are sold directly to the consumers in the major part of the world. Xiaomi is expecially limited in the asian borders with costumers that are more attracted by this cheaper solution to the Iphone.
2) The intent of Xiaomi is to have a competitive advantage over Apple in selling technological products thata are useful in everyday life provide valid substitutes in the technological market. The strategy adopted is focused on the advertising sector expecially in the firm's presentation of the product that remembers Steve Job's strategy: a familiar approach. The company is seen as a part of people actions in everyday life. Lei Jun is following the same strategy and the company is also called the "Apple of the Est". To reach other countries Xiaomi concentrates selling online and even if the prices are more competitive than the apple's smarthphones the Xiaomi hardware is equally good. The business strategy takes in count consumer's perspective and it is concerned with offering services as a way to earn money.
Group: TRIPLE A
RispondiElimina1) We consider the fact that business does not operate as an isolated entity but is aimed at creating economic networks through the influence of many exogenous factors. Xiaomi may be considered as a 'follower' of the pioneer Apple, but -we believe- only in China market. It is true that Xiaomi offers a final product with similar characteristics of Apple's iPhone at lower competitive prices, indeed favoring domestic economy. It enters in an industry already known by Chinese (technology, of course!) and we think it may be considered as a 'leading edge' of Chinese economy. The reasons may be the following:
-Westerly people, for example, may not focus their attention on a product with the same characteristics and design already offered by the original product of an accomplished firm like Apple, even if offered at lower prices.
-Xiaomi will be launched worldwide, but with a software which we don't know exactly if it is compatible with international standards. Actually developing sophisticated softwares able to reach the efficiency of Apple's products is kinda difficult if we think at high costs in the R&D sector.
The consumer will be attract by lower prices, but at the same time he/she will be wary of the lack of Apple's brand and discouraged of the purchased. He/she will prefer higher prices but with a quality/design/a customer-firm relationship yet prominent in their sector. (We can just think about the customer service offered by Apple, in substituting defective iPhones with new ones; about the design, which is costly and hard to reproduce).
The conclusion is that, nowadays minds are 'monopolized' by the Apple's brand (also as a consequence of the 'peer effect'), and it seems difficult to trust newbie firms, because even by paying less customer's satisfaction will not be the same as having in hand the unique and original Apple-phone (and its design/materials).
2) The decisions taken by Xiaomi are at business level because we can really see how he develops the product by selling it at lower prices, by giving it the same characteristics as Apple's iPhone and having (in China) an absolute advantage over others' smartphone developers.
group: G3
RispondiEliminaThe answer to Apple? No. The two companies are incomparable. Even if both operate in the same industry, the the environment determines two completely different strategies which to my view cannot be regarded as purely competitive. Apple, delivering its customers not merely a product but rather a complicated kind of service of interconnected multimedia network has a completely diverse plain of operation from Xiaomi, the company, which, by now presents itself as an occupant of completely other niche of cheap and nonexclusive (in terms of user experience) smartphones. As the fenomenon of its own entourage, Xiaomi appearance and predicted success are indeed justifiable. However outside China, despite globalization, the ambiance of the market is strikingly different in all the comparable points: higher wealth, demand for exclusiveness (mainly derivative of wealth concentration), the habituals and prestige.
As the article puts it, Xiaomi extracts its profits from the factors that are inherent to their local market: legal framework, specifications of demand. To our view, such conditions are not as stable as they might seem to be due to China's desire to propel further growth, making its economy more accessible to other big economic players. Moreover recent civic and professional union struggles to improve the workers' conditions might heavily undercut the availability of cheap labour thus putting the cost-saving strategy under pressure.
Having said all that the best prospective seeable in the future of Xiaomi is the one of bleak second-best if comparable to Apple at all. Although this doesn't imply the absence of positive profits and seizure of the proper market niche for the Chinese company, there are no reasons to regard the producer as an Apple competitor in the nearest future.