A Detailed Analysis of Xiaomi's International Management Expansion

This report provides an in-depth analysis of Xiaomi's international management strategies, focusing on the challenges and opportunities encountered during its global expansion. The report begins by defining international management and highlighting key considerations such as cultural, legal, and regulatory factors. It then uses Xiaomi as a case study, examining the company's approach to entering various international markets, including China, the United States, and India. The analysis covers crucial aspects like language and cultural barriers, patent issues, intense competition, and after-sale service problems. The report also explores the impact of local regulations, government policies, and the need for diverse payment options. Furthermore, it discusses the significance of addressing cultural considerations, such as punctuality and gender forms, to cater to diverse markets. The conclusion summarizes the main challenges Xiaomi faces, including inadequate after-sale services, weakened research and development, and intensified market competition, emphasizing the need for strategic adaptations to ensure continued success in the international arena.

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Management
International management
4/21/2019
Student name

International management 1
International management is that aspect of management of the business operations of
the company which is mainly conducting business in more than one country and along with it
they also require familiarity with the other organizations and their set morals and regulations
in order to carry out various transactions which are involved in multiple currencies (Meyer, &
Peng, 2016). However, with every international business, there are many challenges, which
are connected to it, such as language and cultural barriers, tax codes and compliance issues.
Additionally, the pace at which the business will run in the market, the local competition,
impact of the new idea generation and lastly the adoption of the various advice and the best
practices which will work in bringing longitivity in the businesses (Knight, & Liesch, 2016).
In terms of considerations, at the time when business is going at international level
the company needs to take care of culture, legal and regulatory bodies; foreign government
considerations and lastly, various business cases, which include market personalities,
economic feasibility, market trends, financial cost patterns, and market forecasts, are
considered.
Moreover, all such factors help in determining whether the business will be successful
or not. As through this, the company’s product and service offerings are adding value or
meeting the desires of the local market are seen. Hence, it is extremely important to know
about the code of conduct of businesses along with the international market and must be
willing to invest significant time and energy in order to pursue an overseas business venture
(Lun, & Yazdanifard, 2014).
In relation to all the above considerations, Xiaomi’s is one of the well-known
companies that make and invest in smartphones, mobile apps, laptops and consumers
electronics. It released its first smartphones in 2014 and thus, by doing so, China has gained
its market share to become the country’s largest sellers of these smartphones. Hence, by the
continuous innovation in the market, the company with its unwavering focus on quality and
efficiency has grown internationally. Along with this, they also have built amazing products
at reasonable prices so that every individual can enjoy a better life through innovations
technologies. Hence, with such a great success currently, Xiaomi products are launched in
more than 80 countries and various regions all around the world and have a leading foothold
in numerous markets (Cunningham, & Fröschl, 2013).
However, earlier when the brand was launched they worked with the objective of
making good products but with cheap prices hence, this strategy was succeeded in China.

International management 2
Nevertheless, with time they were facing a decline in the domestic market due to the
increased competition. Hence, for Xiaomi going international has become an important part
of the company’s overall strategy. Hence, it was a major challenge and it was important to
consider time and effort for being diversified and obtain market-access qualifications.
Moreover, Xiaomi’s patent portfolio is less effective in comparison to its competitors.
Moreover, the risk of the lawsuits and the patent rights while tapping a new county at the
time of its expansion. Other related challenges such as various sales channels, output
capacity, and cross-culture management were the important factors, which needed to be
considered (Ernst, 2016).
While moving to the United States, Xiaomi’s one of the greatest challenges was the
language barrier. In terms of the United States, all companies over their apply English as
their primary language and currently, English is the world’s language for commerce. In fact,
by being internationalization the whole world adapts English at a much greater extent. Hence,
Xiaomi was one of the companies whose primary language is Chinese. Moreover, Apple one
of the well-renounced companies was also giving a cutthroat competition. As it is one of the
trustworthy companies to who people buy to prefer over the other brands. Hence, this
highlights that Xiaomi is facing intense competition with Apple Inc., which is the most
popular brand in the United States (Poikolainen, 2015).
Other than this, Xiaomi while moving international has to face many local regulations
and most importantly the intense competition of that particular country hence, for instance,
while broadening their base in Brazil; Xiaomi has to face intense competition with Samsung,
Motorola, and LG. Moreover, while entering the United States, the company needs to
confirm its patent portfolio; against it, the company has faced intellectual property disputes
(Raju, & Holm, 2017).
The biggest challenge, which Xiaomi’s faced, which was a halt to the rise of glory
was licensing and the issue of the lawsuit. As the cost of licensing and patents and fighting
against the lawsuits were having the potential to attack and have a huge impact over Xiaomi
bottom line. Other than this, being lost in translation was also one of the major hindrance
points in success. As a lack of international experience was a major, hinder in the overall
growth of Xiaomi Company (Shih, Lin, & Luarn, 2014).
Another challenge of Xiaomi that it sells all their devices directly to customers
online. As many markets accept it but, the US and Europe they are still being dominated by

International management 3
carriers and beliefs in long term contract deals. If we compare it with google even, Google
has its limits overselling devices directly to its customers’ via online sources. Hence, being
online always has certain limitations and hence, people at the end up paying a lot more in the
long term with contracts. However, with the list of challenges, Xiaomi can win over the
international market entry because of its low price and listening to their customers and hence
this generates brand loyalty (Gupta, & Dhillon, 2014).
Another international country which Xiaomi was targeting India. As the main reason
for targeting India because over time Xiaomi profits in China remain stagnant as many other
competitors come in their way of success. Hence, in order to keep their sale higher, they
targeted India, as there was a huge potential market to tap. Another reason is similar demand
preferences was forecasted as Chinese people have. As people out there having a higher
demand for the high-cost performance smartphones, therefore, lost cost mobile phones with
the good quality and stylish designs are expected to attract many customers in India (Shih,
Lin, & Luarn, 2014).
However, there are certain reasons and challenges, which are being faced by the
Xiaomi, were the fierce competition and in order to improve this company has to focus over
competence. The major issue was the low brand awareness, as brand awareness is one of the
major tools for the company opera in a new market. Although it was well known in China in
India, overseas it was less known in comparison to Apple and Samsung. Another issue and a
challenge which Xiaomi faced by being in India was a lack of patent reserves and the
standards-essential patent. Due to the lack of these patents rights, Xiaomi was being sued.
Hence, because of this issue, Delhi high court forbade Xiaomi Company to sell their
smartphones in India
Lastly, Xiaomi also faced a challenge in concern to the quality problem as well as
after sale service problem. Around there were 6000 problems which mainly includes paint
loss, standby time issue, and issues related to camera were found. Hence, this has mainly
affected customers’ satisfaction negatively. Such quality issues cannot be avoided hence; this
generated the highly dissatisfied customers. Other than this tangible service center were also
not there. Many issues were being solved through official websites; this was all because of
the different language and the cultural background. Hence, the after-sale services pressure
was increased and at the same time the cost of the handset too (Wanqiang, 2016).

International management 4
Hence, by considering all the aspect the main cause of the problem of Xiaomi was
inadequate after sale services to an ultimate customer, a weakened research and development
system in caparison to the other foreign competitors were there. Lastly, there was a major
threat to Xiaomi was of intensified market competition. As due to apple, Samsung, HTC are
the strong competitor of Xiaomi Company. As all these companies were strong with their
capital, technology, brand recognition and lastly their loyal customers which resultant a
higher challenge for the Xiaomi company to expand.
In terms of considerations Xiaomi considerations, the legal and the political
environment restrictions which are imposed by the local government. As similarly, Xiaomi in
India is also being affected by government policies. As the initiatives made in India such as
Made in India, and digital India has reduced the dependency on expensive products from
China. Hence, through these amendments made by the government has reduced the rely on
overseas technology and efforts to increase local production and investment by China (Peng,
2016).
Other than this, Xiaomi has also started addressing cultural considerations while
expanding in India. As due to a rapid increase in the technological aspect, customers are more
over the technologies in order to save their time and efforts. Hence, Xiaomi executives were
considering the gender forms in Indian culture. The language is also one of the major aspects
were to be considered by Xiaomi company (Wanqiang, 2016).
Moreover, the concept of punctuality also one of the mandatory aspects which are
needed to be considered in an international market, different ideas on being time also often
leads to the misunderstandings or the negative cultural perceptions. Likewise, if we consider
the United States culture is very different from China in terms of punctuality, business
meetings and much more (Backaler, 2016).
Other than this, the company should also consider the foreign government
regulations likewise, satisfying the required licenses and securing access to the local
infrastructure. As at the time of new point of production, Xiaomi needs to integrate the new
entity into its existing supply chain and along with it, the company should access the
advantages and the challenges of the human capital and technology, which are unique, top the
market such as India (Tsing, 2011).

International management 5
Along with the Xiaomi, the company should also consider the local challenges and the
various opportunities for addressing and capitalizing them into a new market. Such as- India
and various other countries like Brazil, United States. Hence, for this, the company leader
needs to consider or determine the local state strategy and the set global brand strategy to
attract more of customers (Backaler, 2016).
Lastly, Xiaomi should consider and offer diverse payment options as payment these
days have become increasingly contactless. Like Xiaomi, the company is selling its products
more on an online basis and hence the payment system is done on an online basis. Hence, it is
important for the company to know about the diverse ways of payment. Hence, in addition,
the company need to be set up international banking methods for card payments. Hence,
Xiaomi customers should feel free while paying to the company. Technology aspect should
be kept in mind as every country while doing business has its different ethics. Hence, a
regulatory mechanism such as customs laws, import and export restrictions, corporate laws
are also to be considered. Hence, these regulatory mechanisms underline the technological
maturity and openness of the market (Peng, 2016).
Hence, from the above discussion, we can conclude that Xiaomi Company is one of
the well-renounced companies, which while going international needs to take care of the
various aspects such as legal and governmental aspect. Moreover, certain cultural
considerations, foreign government regulations, aspect of punctuality are to be considered by
Xiaomi while going to international. Other than this, certain challenges such as language
barrier, intense competition, licensing and lawsuits issues are major drawbacks challenges
which effect the company set strategies and success at large.

International management 6
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