Assignment on Corporate Entrepreneurship and Innovation

Innovation 1
Corporate Entrepreneurship and Innovation

Innovation 2
Contents
Introduction......................................................................................................................................3
Business model innovation..............................................................................................................4
Challenges and Opportunities..........................................................................................................6
External environment...................................................................................................................6
Competitors..................................................................................................................................8
Core Issues.................................................................................................................................10
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Innovation 3
Introduction
This paper outlines the future corporate entrepreneurship of the company Xiaomi that
manufactures smartphones and other electronic devices. The business model innovation of the
company will be discussed in this report. The sustainability in innovation is the most important
part of the innovative business so the points that help in maintaining sustainability in innovation
will also be discussed in this report. The business model innovation of Xiaomi relates with the
Internet of things (Rawal, et al., 2017). The company designs an ecosystem for the internet of
things and manage business innovation. The rapid use of Xiaomi was tied to different uses of
social communities and e-commerce. Xiaomi's works with the future retail strategy to improve
the ecosystem products in the market (Zheng and Yang, 2017). Xiaomi company now becomes
the Apple of China. The report will be discussed about the challenges and opportunities occurs in
the different products and services of the company. The last section of the report includes
different recommendations regarding the implementation of innovation in the company. The
future sustainability of innovation will also be described in the report.

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Business model innovation
The business model innovation of Xiaomi company revolves around the manufacturing of
smartphones, laptops, mobile apps, earphones and many more other products. The company
started designing an ecosystem for the Internet of Things. The ecosystem is made for companies
and compatible smart products (Li and Reimers, 2015). The Internet-based sales model will also
determine in this process that improves the overall growth of innovation in the company. The
company soon emerged an ecosystem of connected smart products so the product becomes a
remote control for many other products. For this particular process, the business model
innovation plays an essential role and this innovation improves the overall growth of the
company.
Xiaomi company follows the approach of the disruptive innovation model which helps to create
a new market and value network and disrupts an existing market and value network. The
displacing established several markets leading firms, several products and other services. As the
Internet of Things is too beneficial for the company as well as customers also. This innovation
provides several benefits to the customer (Raju and Holm, 2015). The disruptive innovation
tends to produce by outsiders and entrepreneurs in startups rather than the existing leading
market companies. The disruptive innovation is also responsible to increase the competition in
the market that’s why previously all the producers and other people of company discarded the
use of this model (Yanzhuang, et al., 2015). This innovation model is also managing all the risks
occurs in the growth of the company. This process displaced the already established competitors
and firstly start with the small market then moves forward towards the top of the products.
This business model innovation provides several benefits to the company and helps the company
in making the ecosystem for the Internet of Things. This designing increases the growth of the
company in the market and attract more customers towards the company. This is all need to do
due to the increasing competition in the market. As the market of Smartphones is increasing day
by day and other competitors attract the customer towards them. So, to maintain the interest of
consumers, the implementation of innovation in the products and services is more important. The
disruptive innovation uses the latest technology that directly affects the existing market or
industry functions. The main example of modern disruptive innovation is the Internet that
provides all essential services to the people (Luo and Child, 2015). This innovation model

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focuses on the new market and new value network and avoids the existing market aspects.
Xiaomi adopts this innovation model to create new things in the market like designing an
ecosystem for the Internet of Things. From this model, all of this process becomes easier and
improves the overall growth of the market.
This model of innovation also manages the future sustainability of innovation and maintains the
future of the Xiaomi market. The proper business model innovation makes a sustainable
development in a positive way and manages the organizational aspects and its stakeholders. The
sustainability also includes the need of the future generations and it is important to understand
the future needs to maintain the proper corporate entrepreneurship and innovative process in the
market.
Source: (Simon-torrance, 2015).

Innovation 6
Challenges and Opportunities
Xiaomi offers a wide range of products and services and also support the startups. These
products and services are responsible for the attraction of customers. The company also offers
affordable products and this increase the target audience of the company. The products of the
company are best with the best customer services. This process helps in gaining the attention of
the consumers and increases sales in the market.
Xiaomi also needs to maintain the class of products so that proper quality also maintained in the
sales of the products (Liu and Rieple, 2019). The smartphones made by Xiaomi are innovative
and cost-effective and it is available on a different platform that named as Xiaomi's Mi home.
The products of Xiaomi are unique from other brands.
Along with the improvement in the products and services, there are also several challenges and
opportunities occur in the market of Xiaomi. To analyze these challenges and opportunities the
several points are described below-
External environment
The external environment of Xiaomi includes the pestle analysis of the company that gives
information about the factors that affect the overall environment of the business. The proper
analysis is described below-
Political Factors
Several political factors affect the process of Xiaomi as this is the largest Chinese company. One
of the main factors is related to the laws of China made for trade and import activities. As the
tension between the US and China is a major political factor that affects the business of Xiaomi.
The government makes extra pressure on the manufacturers regarding the broaden of the market.
Economic Factors
The economic factor of China is an opportunity for the company as with the increase in
disposable incomes, consumers have enough money to spend on the devices. This makes the
better sales of Xiaomi (Jia, 2015). The demand for Xiaomi products also improves the economy
of China as this company is established in China itself.

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Social Factors
As per the Chinese brand, it grows many challenges in the market related to social aspects.
Several western consumers cannot rely on Chinese brands and also assumes that they are of poor
quality. This creates a struggle for the company which is too difficult to manage.
Technology factors
Several users get impressed with the technology used in the products of Xiaomi. The
technological aspects of products used to attract consumers. This shows the relatively competent
that also improves the overall growth.
Legal Factors
The legal issues of China not affected the company’s growth as the company is not involved in
any of the legal matters of China.
Environmental Factors
The major environmental issue in China relates to the increasing population and the production
of carbon dioxide. This affects the overall business market in China.

Innovation 8
Competitors
The competitors of Xiaomi are also a great challenge for the company in the Chinese market. As
there are several competitors available in China that decreases the growth of Xiaomi. To manage
this challenge, Xiaomi uses its business model innovation that saves the future sustainability of
the products. The competition is one of the main challenges for every company. As Xiaomi
works on the designing of the ecosystem so they have no fear of competition as this is the main
factor used to attract customers (Wu, 2015). The major competitors of Xiaomi are Huawei,
Motorola, Apple, Oppo and many others.
The major competitive advantage of Xiaomi is based on the cheap cost of the products and
services. The consumer's attraction is continuously increasing in Xiaomi due to cheap products
and services. The other main competitive advantage of Xiaomi is the constant optimization of
products through eco-chain (Gupta and Dhillon, 2014). The competitive advantages of Xiaomi
improve the growth of the company.
The other major reason to improve the growth is the use of business model innovation that
implement innovative ideas in the products that attract the consumers (Mallinson, 2015). The
designing of the eco- system is one of the major factors for the growth of the company. The other
competitors of the company cannot follow this method so they cannot affect the business of
Xiaomi.

Innovation 9
Source:
(economist, 2015).
Core Issues
There are several other core issues that affect the business of Xiaomi and create several
challenges in the overall management of the business. As the proper implementation of
innovation includes several issues that try to affect the innovative ideas implemented in the
business. The corporate culture faces many challenges in innovation as innovation is the basic
concept that is responsible for the proper growth of the company (He and Pedraza, 2015).
The main issue of the company relates to the online sale of smartphones. As this model accepted
in many markets but the countries like the US and Europe cannot open the business market for
this model. In these countries, the model only sells by the online process. This is one of the major
core issues that affect the growth of the company.
The other core issue of the company relates to the competition in the global market of
smartphones (Davidson, et al., 2017). As many brands are coming in the market that affects the
sales and business of the Xiaomi. The company needs to maintain business strategies for facing
the competition and started using innovative ideas in the manufacturing of smartphones or other
devices. The competition is the biggest problem for the business and it directly affects the
number of consumers and sales of the overall business. The adopting of various strategies is the
only solution to this issue that affects the growth of the company in the global market.

Innovation 10
Source: (walk the chat, 2019).

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Recommendations
The company facing many issues in the business of smartphones. To manage these issues the
company needs several recommendations These recommendations help in the growth of the
business. The company started using the innovative ideas that include the designing of an eco-
system that maintains the future sustainability of the products (Rieple and Kapetaniou, 2017).
These innovative ideas are responsible for the proper management of the business and also help
in managing the issues faced by the company.
It is recommended that company uses the business model innovation so that the future
sustainability of the products can be maintained and this enhances the value of the products and
makes a proper chain in the market (Johannson, et al., 2015). The proper innovation model
followed by the company used to attract a large number of consumers that are responsible for the
improvement of sales.
The company needs to measure the potential innovation that also helps in evaluating the
performance of the company in the market. The company needs to maintain a flexible working
environment so that employee's motivation can be maintained (Zhihong, et al., 2015). This
recommendation helps in improving the sales of the products in the international market and also
enhancing the growth as compared to other competitors.

Innovation 12
Conclusion
From the above report, it is concluded that the Xiaomi company facing several challenges in the
business market that create many problems. The company needs to use innovative models for
implementing innovative ideas in the business. The company follows the disruptive innovation
model that helps in the growth of the company. The report concludes the several aspects related
to the business model innovation that helps in the management of the company aspects. The
concept related to the designing of the ecosystem has been discussed in this report. This is a
major aspect that adopts by the company. The information related to the products and services of
Xiaomi has been discussed in the report.
The challenges and opportunities of the company have been briefly described in the above
information that gives reliable information related to the management of challenges. The
decreasing of challenges leads to the growth of the company in the global market. The different
recommendations have been described in the above report that includes the proper concepts that
need to be followed by the company for attaining proper growth.

Innovation 13
References
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challenges and global opportunities. Strategy & Leadership, 45(3), pp.30-37.
Gupta, S. and Dhillon, I., 2014. Can Xiaomi shake the global smartphone industry with an
innovative “services-based business model”?. AIMA Journal of Management & Research, 8(3/4),
pp.2177-97.
He, X. and Pedraza, R., 2015. Chinese social media strategies: Communication key features from
a business perspective. El Profesional de la información. 2015; 24 (2): 200-9.
Jia, J., 2015, August. A Theoretic Revelation of Strategic Positioning, Value Co-Creation and
Innovation Performance. In 2015-1st International Symposium on Social Science. Atlantis Press.
Johannsson, M., Wen, A., Kraetzig, B., Cohen, D., Liu, D., Liu, H., Palencia, H., Wagner, H.,
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limitations and conditions of success. Acta Astronautica, 115, pp.173-184.
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of Xiaomi. International Journal of Design, 13(3), pp.125-138.
Luo, Y. and Child, J., 2015. A composition-based view of firm growth. Management and
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Mallinson, K., 2015. Smartphone Revolution: Technology patenting and licensing fosters
innovation, market entry, and exceptional growth. IEEE Consumer Electronics Magazine, 4(2),
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Raju, M.A.U. and Holm, J.R., 2015. The role of Business model innovation and leadership for
start-up growth: A case study of Xiaomi.
Rawal, P., Awasthi, A. and Upadhayay, S., 2017. Creating a Hunger Driven Smartphone Market
by Xiaomi. International Journal of Engineering Science, 11250.

Innovation 14
Rieple, A. and Kapetaniou, C., 2017, August. The role of business ecosystems in the building of
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