This paper deals with the critical issues Xiaomi Chinese Company Limited faces and the strategies spearheaded for its success. Xiaomi is a Chinese company that started as a smartphone manufacturer in 2010 (Connection, 2022). It has grown into a billion-dollar company that further makes a consumer electronic empire, selling several products like keyboards, power banks, rice cookers, and Wi-Fi routers (Deng, 2022). It will also deal with the key players to deploy those strategies to eliminate the challenges Xiaomi Company is facing for achievement. Therefore, Xiaomi Company’s difficulties, which will be discussed in this paper, are market growth issues, internal environment challenges, competitiveness between the portfolio organizations, and inadequate resources.
The organization had developed into a multi-billion company. It is when in 2016, it began to face the challenges of its fall (Connection, 2022). Some of the challenges it faced before it was rebuilt are as follows. To start with the competitiveness of Xiaomi’s portfolio with other organizations. This challenge leads to an aggressive culture. There was a standard issue to deal with price battles in the market. This, therefore, forced an employee to negotiate the price with several suppliers before selecting one. It then resulted in a company vying for contracts and bidding at lower prices which created losses. The Company also faced the challenge from its rivals when a newly introduced commodity scattered in massive sales; suppliers had to rush to outdo its accomplishment by replicating identical commodities at a lower price. Other issues threaten Xiaomi’s success, like poaching of workers between the portfolio organizations (Connection, 2022). Besides, one of the vital apprehension was the coinciding of the product design of Xiaomi’s portfolio firms that were in font of making similar products.
Furthermore, Xiaomi Company faced the challenge of revenue growth of its merchandise that it had mired in China. It made the Company face a crisis of development since some hit products, such as vacuum cleaners and air cleaners, were reaching a saturation point in the market after taking a share of 33% of the local market (Connection, 2022).
On the other hand, some strategies were implemented and put into forceful action for the success of the Xiaomi Company. Besides, the Company’s rebuilding involved key players that ensured the Company went back to where it was before it went into a crisis zone. One of the chief players that spearheaded the rebuilding of the Company was Qu Heng. Qu was the successor of Liu De as the director-general in 2018 (Connection, 2022). The new director-general began to revive the Company to its flagging fortunes. The Company’s new boss played a significant role in tackling the growth plateau of the organization. He directed the Company’s critical resources to teams and units that had to optimize profits and value of the Company (Connection, 2022a). Qu also strategized the diversion of funds to a scaling up activities of the current hardware suppliers rather than investing in the startups business. The director-general prioritized the most potential, secure supplied chains and more cohesive-required skilled workers to allocate resources.
Furthermore, Qu dealt with other supply chain issues that affected the prosperity of the Company’s operations (Connection, 2022). He reorganized the project teams to develop supply chain ability and competence. Tight management was also applied to delivery planning and production performance of the Company.
Additionally, under the responsibility of the Qu, there was a reshuffling of the group’s multi-brand product portfolio. From 2019 to 2020, commodities across the teams were re-categorized into three groups: home-based appliances, mobile phones and related products like power banks and wearable devices, and gadgets like mini robots (Connection, 2022).
Furthermore, quality management was another improved initiative in the Xiaomi organization. It was strategized by ensuring that all environmental suppliers were classified based on the quality of their commodities (Connection, 2022). The categories were from class A to class D, from the best to the worst, respectively. Producers with high scores had greater chances of winning other projects in that Company. However, those organizations with low-quality performances had a low probability of being awarded new projects from the Company. The same strategy was applied globally, which led to a renewal of focus on the quality that progressed into a world-class smartphone network.
When the reorganization of the Company took place, a remarkable improvement was observed in the operations of the Xiaomi Chinese Company. The CEO of a sub-brand stated that the hardware manufacturers’ team was more focused on generating sound and more quality products (Connection, 2022). The habit of poaching workers by the portfolio Companies was banned, which helped ease the pressure on internal competitiveness. The Company continued to grow immensely as the top management team. The corporation was decisive enough to push firmly and forcefully into electric vehicles manufacturing, which helped regain the competition edge (Connection, 2022a). The idea of manufacturing electric cars was brought by the founder of the CEO, Lei Jun, after posing a question in an internal memo on how to create an intelligent surrounding around the vehicles.
Lastly, Xiaomi Company is further developing as it still has more strategies to remain competitive in the market. Since it is underway to create the new electric vehicle unit (Jiang, 2021). The Company has picked the leading organizations from the portfolio hardware manufacturers to start working on the auto supply chain to begin the project. Dream Technology, a vacuum manufacturer, incubated by Xiaomi, came together as a small team to support the research and development of the Company on car motors. Additionally, Segway manufacturer Ninebot and air purifier maker Zhimi have negotiated to team up on electric vehicles (Jiang, 2021).
In conclusion, Xiaomi has developed into a multi-billion company. In 2016, it began to face the challenges of its fall. Its rebuilding challenges were market growth issues, internal environment challenges, competitiveness between the portfolio organizations, and inadequate resources. The key players who rebuilt the Company were the CEO, director-general, company employees, and other collaborative enterprises. The strategy that initiated success was reshuffling the Company’s leadership, operations, and other management.
References
Connection, K. (2022, March 9). Amid internal challenges and fierce competition, Xiaomi forges ahead. Kasia. Retrieved April 11, 2022, from https://kr-asia.com/amid-internal-challenges-and-fierce-competition-xiaomi-forges-ahead.
Jiang, Y. (2021, August 10). Xiaomi’s venture into EVs is a rough road, but it might have what it takes to succeed. Kasia. Retrieved April 11, 2022, from https://kr-asia.com/xiaomis-venture-into-evs-is-a-rough-road-but-it-might-have-what-it-takes-to-succeed.
Deng, I. (2022, February 10). Xiaomi founder Lei Jun vows to challenge Apple with a sharpened focus on the global high-end smartphone market. South China Morning Post. Retrieved April 11, 2022, from https://www.scmp.com/tech/big-tech/article/3166577/xiaomi-founder-lei-jun-vows-challenge-apple-sharpened-focus-global.
Connection, K. (2022a, February 28). How did Xiaomi create a multibillion-dollar IoT consumer electronics empire? Kasia. Retrieved April 11, 2022, from https://kr-asia.com/how-did-xiaomi-create-a-multibillion-dollar-iot-consumer-electronics-empire
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