Xiaomi Case Study: Leveraging Institution Environment and Resources for Growth

XIAOMI CASE STUDY 1
XIAOMI CASE STUDY
Name
Tutor
Institution
Date of Submission

XIAOMI CASE STUDY 2
From an institution-based view:
Q1. How has Xiaomi been able to leverage the institution environment in China to
challenge global players such as Samsung and Apple?
Understanding business environment is key for an organization to gain a competitive edge over
the rivals. This makes it easy for a company to compete with other global players in the market.
Understanding the institutional-based view of doing business also positively influences the
outcome of a business. Lei Jun understood this so well and before starting the Xiaomi company,
he had a good command of the China business environment such as the values, norms, and
culture of Chinese people. Chinese people are known to be loyal and honest. Therefore, Lei Jun
utilized these attributes in order to gain a huge following. Xiaomi developed products that had
great features and retailing at lower prices compared to its rival Apple and Samsung. Xiaomi
understood that the domestic market of China is budget-conscious, thereby cheaper products
would greatly sell. Through this it was able to build a community of fans. By engaging with its
potential customers and obtaining their views regarding products they want, Xiaomi was able to
develop customer-tailored products. Xiaomi has hugely invested on social media as a platform
for communication. Additionally, one-on-one interactions with customers during product
launches or creation of product awareness and offers in parties in various nightclubs in China,
has enabled it to leverage the Chinese business environment. As a result, it was able to penetrate
into every corner of China either physically or through use of online sources.
Xiaomi had a diverse knowledge regarding the local market in China; it had both local and
distant experience, and was familiar with the operations of technology industries in China. The
fact that Lei Jun was a software engineer and having worked in the software industry for long in
China, meant that he had enough experience and he understood the culture of Chinese people.

XIAOMI CASE STUDY 3
Xiaomi took advantage of suppliers used by Samsung and Apple thereby establishing a great
reputation for itself. Its use of already established manufacturers such as Inventec and Foxconn
and chip suppliers such as Qualcomm and NVidia that are connected to giant companies such as
Samsung and Apple gave them a leeway to capture a large market. Xiaomi rode on the fame of
these companies to make itself known in the Chinese business environment. Also, before
development of a system or product, Xiaomi made sure it has performed market research
concerning the applicability of the product and also involved skilled personnel that have diverse
knowledge regarding the same matter. For instance, it recruited tech enthusiasts who tested the
MIUI operating system before they could use it. Also, Xiaomi was familiar with the local laws,
regulations, and rules governing the Smartphone industry in China. In China, the government has
huge control over the operations of businesses. Hence, Xiaomi had to follow the legal principles
governing the Smartphone industry in order to avoid some uncertainties such as losing their
license or rights to operate.
Q2. What obstacles would it have to overcome to similarly succeed in India or Brazil?
The external environment significantly determines the success of an organization in a foreign
country. This is due to differences in cultures, norms, languages, and regulations. Xiaomi entry
into India and Brazil is faced with challenges of political, economic, and legal instability. The
instability makes Xiaomi not to have stable operations in India and Brazil. It faces challenges
such as global recession, disruption of global businesses, and anti-globalization protests. Given
that India and Brazil are developing countries, they are dedicated to protecting and nurturing
their domestic industries rather than welcoming foreign investors. This means that they are not
very welcoming to new foreign investments. Also, differences in culture and norms between
these countries is a great hindrance to success of Xiaomi. For instance, China embraces