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1. Introduction
Given the case study on Xiaomi clearly states the fact that Xiaomi within a short
period of time gained tremendous popularity across China and even in the oversea markets.
Brand’s success and popularity lies in the fact of constant innovation and increasing product
portfolio. Xiaomi maintained its pace of innovation and extended its series of products
starting from smartphones to music devices, headphones, TV, fitness kit, smart-watch etc.
The initial stage of Xiaomi seems to be challenging as the brand was even deprived from
adequate suppliers’ channels to sell and distribute its products but the scenario changed
overnight. Leveraging e-commerce channels Xiaomi penetrated Asian market with innovative
smartphone devices. However, it is worth stating that technology advances have made it easy
for all electronic goods manufacturing brands to make an equal presence in the market
through the same channels of distribution. Thus, this research report analyses and discusses
the future business scenario of Xiaomi and develops a suitable case for Business Innovation
Model.
2. Discussing the future that the corporation is facing
As put forward by Sjamsoedin and Saerang (2014), electronic goods sector
particularly in the developing nations under emerging economies have been competitive in
nature. The scenario clearly indicates the fact that the brand that gained success within a short
period came with innovative technology and features that customers have not experienced
before at an affordable price. For example, when Xiaomi entered the smartphone markets,
large brands like Samsung and Motorola back already were already dominating the market
but to differentiate itself in the crowd, Xiaomi launched a smartphone devices with unique
and innovative features supported by Google Android at the most cheapest price in the
market (Shih, Lin and Luarn 2014). Gupta and Dhillon (2014) argued that innovation at

affordable price is something that attracted the customers. Consequently, the brand within a
couple of years become the market leader in the smartphones category.
Particularly, in 2012, 500,000 phones were sold in 36 years. Nonetheless, in the field
of technology, market saturation is the most possible occurrence and here innovation works
as the remedy to prevent market saturation (Lee 2014). Thus, in the coming days, it can be
mentioned Xiaomi is most likely to face tough challenge in its core product category because
the markets that once given the maximum revenue are now occupied rival brands. The
competitor brands tap the market with similar offering at affordable price and this is where
the competition ignites. Glowik (2016) also mentioned that there can be a tough challenge in
all its product category because the newly launched product series such as smart TV in Asian
market is never a new product. There are several large brands like Sony and Samsung are
having large market share in all Asian markets. Thereby, the presence of such brands with
their R&D capability can certainly affect Xiaomi’s pace of manufacturing innovative
products. Thus, it can be mentioned that Xiaomi is most likely to face the innovation
challenge. The products that gained high range of customer attention and reached the peak
line of sales margin will go saturated soon (Rawal, Awasthi and Upadhayay 2017).
Developing a case for business model innovation
In order to retain its brand popularity and brand name in the market or retain its
growing customer base, Xiaomi needs to focus more on innovation. Presently, the
organisation has a strong and dominating market presence particularly in the Asian markets
like India, and therefore, it needs to tie up with widely popular and longstanding businesses
(Alverina 2019) For example, it can tie up with MoEFCC (Forest and Climate Change)
department because such as government agencies are in the need of innovative technology for
environment and weather forecast. In other Asian market, like in Singapore, the organization

can tie up with the Meteorological Service Singapore and such initiative can significantly
enhance the brand’s ability to stay active in the market. Xiaomi should pay attention to
innovative technology to help and run such agencies (Qi, Cheng and Wang 2020). This
innovative approach can be applied through a suitable business model.
Tie-up: Keeping the existing business model besides, the brand needs to create or
develop new business model. In this step, the organisation particularly needs to choose
among the large and longstanding businesses and thereby, after it can proceed once it decides
the kind of product the business wishes to develop through the new business framework
(Wan et al. 2016). For example, Xiaomi can manufacture Nowcasting technology and this
item should be manufactured in a way that the track radar echoes are more authentic. This
proposed product is an innovative attempt as it is next generation technology.
Business model Transformation:
The existing business model of Xiaomi needs to be expanded with the inclusion of
new offering. This means the existing business model needs to be innovated mixing up the
requirements after tying up with the suggested firm (Gu et al. 2017). Business transformation
must include the manufacturing network and thereby, there can be some changes in the
operation in relation to workforce management.
Business model Diversification:
This phase of the innovation model is just about keeping the additional business
model which is created after the tie-up. This means Xiaomi’s existing business model of
keeping the list of products at the peak and additional business model would help to keep the
demand of existing products as usual (Suwandhini, Suwarni and Usman 2019). Hence, the
additional model carries the base of diversification into technology based products for the
government agencies.