Strategic Analysis: Xiaomi's Poland Market Entry and Expansion

This report provides a comprehensive analysis of Xiaomi's potential market entry into Poland. It begins with an executive summary outlining Xiaomi's current market position and the rationale for expansion into Poland, driven by challenges in the Chinese market. The report analyzes the Polish market, including an overview, external environment assessment using Porter's Five Forces, resource competency analysis, and a SWOT analysis of Xiaomi in Poland. It then recommends specific strategies and tactics for market entry, including basic, generic, and entry strategies. The report highlights Poland's favorable smartphone penetration rate and GDP per capita, making it a promising market for Xiaomi. The report also considers competitive factors and the potential for Xiaomi to leverage its strengths to gain market share. The analysis emphasizes the importance of understanding consumer behavior, competition, and adapting to the Polish market. The report concludes with recommendations for Xiaomi to successfully launch and grow its business in Poland. The report also includes an analysis of Xiaomi's past performance in other markets like India, and key issues like competition, processor shortages and patent issues. The report provides insights for Xiaomi's expansion into the Polish market, with a focus on leveraging its strengths and addressing potential challenges.

International Business
Strategy

Table of Contents
1. The Purpose.................................................................................................................................3
2. The Scope.....................................................................................................................................3
3. The Disadvantage.........................................................................................................................3
4. The Summary...............................................................................................................................3
5. Geographical area selection.........................................................................................................5
5.1 Selected countries.............................................................................................................5
6 Overview of Poland market..........................................................................................................7
7 Critical analysis on Poland............................................................................................................8
7.1 External environment analysis.........................................................................................8
7.1.2 Porters 5 forces............................................................................................................11
7.2 Resource competency analysis.......................................................................................12
7.3 Key success factor..........................................................................................................13
7. 4Xiaomi SWOT in Poland................................................................................................13
8. RECOMMENDED STRATEGIES ..........................................................................................14
8.1 BASIC STRATEGY......................................................................................................14
8.2 GENERIC STRATEGY.................................................................................................14
8.3 ENTRY STRATEGY.....................................................................................................15
9 RECOMMENDED TACTICS....................................................................................................15
RECOMMENDATION ................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

EXECUTIVE SUMMARY
With the development of smartphone market in China :
China is considered as an important part of Xiaomi's journey as they are having their
own production plant their and team work there is also considered very effective. But due to
increase in no. of smart phone companies in China, competition of Xiaomi has increased
immensely because of which their growth in China's market has stopped. With the launch of
Oppo and Vivo smartphones, Xiaomi has came down. Thus it has been advised to Xiaomi that
they should start expanding themselves at other countries as well so that they can maintain their
position in he market and gain profits as well.
Xiaomi is has gained success in market of china and India because of good supply chain
and Manpower. Both these services are easily available in both the countries so Xiaomi was able
to supply its products at a faster rate and people were liking it also. In India, Xiaomi is among
the third largest smartphone brand in the top 30 countries in India. They are giving strong
competition to Samsung.
Now, It has been suggested that Xiaomi should be launched in Ukraine as after tasting
success in India and China, it is said that Xiaomi will be a success in Ukraine as well. It is
assumed because every third Ukrainian is considered to be using a smartphone and with this
development Xiaomi can easily place themselves in market of Xiaomi.
Xiaomi's Low cost and High feature product benefits:
Ukraine country is situated in Eastern Europe. This country is very developed in
technology. People residing there are very techno friendly and very smart phones for their
working. Every third person posses smartphone. Initially there is vast market of iPhone.
Xiaomi is a mobile manufacturing company whose plant is situated in China. As labour
in China is cheap and resources are available easily it proves to be beneficial for company. This
generates good revenue for Xiaomi.
Xiaomi can easily track the market of Ukraine as these days there people are more attract
towards android. Xiaomi provides phone at lower price and with good quality as comparison to
Lenovo, Samsung. Operating system of Apple phones are ios, which is not much liked by
consumer in Ukraine.
To establish in Ukraine market company can launch its mobile with discount or
exchanges offers. As people are dynamic they will try new company. Company have to provide
3 | P a g e

good after sales services so that it increases the goodwill. Xiaomi can advertise by showing good
battery battery back, camera feature, storage, etc at reasonable price. Company can launch
phones by special discount for college going people or professionals as they require phones
more. Company should give good discounts to distributors so that they also insist consumer to
buy Xiaomi phones.
CONCLUSION:
This is the time when Xiaomi have to advertise in the market of Poland. As there are few
company of mobile phones such as Simplus, Virgin Mobile Polska, T-Mobile Polska, etc. hence
there is monopoly of these companies in the market. Xiaomi can launch there mobiles in market
of Poland with discounted or reduced price.
It provides them benefit of create existence in the market. If this company company does
not enter in market there are chances that Oppo, Vivo, Huawei can grab the opportunity. It is loss
of opportunity in the market for Xiaomi. At this time it is easy to create interest for the brand in
mind of public. But if Vivo, Huawei, Oppo enter and create existence in Poland than it is tough
for Xiaomi and it requires more fund for advertisement.
4 | P a g e

1. The Purpose
The objective of given study is to facilitate information to Xiaomi administration for its
development in Europe potential market.
2. The Scope
This report has wide scope as a number of research tools has been utilised such as Porters
5 force model, External auditing tool and various other frameworks that provide immense
information on the subject matter (Astrachan, 2010).
3. The Disadvantage
In order to gather information, use of already available data is done which limits its quality due
to absence of any primary content which is more reliable.
4. The Summary
It is analysed from the sales slump that took place in October 2017 that Xiaomi might come
across a close rivalry in order to hold total increased revenue in market. It was identified when
the total digital sales of the referred organisation reduced by 10% and due to which company has
to do compromise with the phone components.
If Xiaomi is compared with other organisations in the same field than it falls on third position
with having business of USD 46billion. It has achieved this value due to its effective strategy of
providing quality services at reduced cost. In year 2014 it experienced a massive growth 2275%
and therefore it become a part of top five tech – companies.
Apart from this the referred organisation also use the technique of promoting income through
flash sales which resulted into purchases of more that 2 million smartphones by customers in a
same day. Its expansion in the total market share was a result of great efforts taken by Hugo
Barra's who is the vice chief of the business taking place at global level. In Indian market it falls
at the 2nd position in the same industry (Birkinshaw, Brannen and Tung, 2011).
Given beneath is tabular presentation of smartphones at international level:
5 | P a g e

There was tough competition in the technology industry due to expansion in applications and
resources still Xiaomi manage to survive and maintain its top five position since 2014.
However due to close rivalry given by OPPO in 2016 the refereed business enterprise lost its
fourth position and experienced downfall in its entire market share with reduction of 1.3% in
total part of potential market. A scandal took place in Samsung which positively effected OPPO
and other company but Xiaomi failed to grab this opportunity too as it does not found any
positive change in its revenue likewise other in the same field (Cantwell, Dunning and Lundan,
2010). When total change in the revenues of different companies was compared than statistics
showed that both Huawei and OPPO were successful in increasing their sales by raise in their
total market share.
Figure 4.2 Revenue of different organisation dealing in smartphones
According to the above table profit generated by distinct telecom operators varies from
one another. It is observed that although the total market coverage of Xiaomi was less it was
capable of resecvng equal benefits like that of Huawei and OPPO. It received 0.128 income
according to profit ratio which is 3rd best in ratio in same.
6 | P a g e

Xiaomi is losing their external market because many of their competitors are copying their
success formula of online business. This is one of their advantages which is not going to sustain
for long period of time. This company do not focus on physical stores, their main concentration
is on online stores. Their is no doubt that Xiaomi has around 50% market share in online sales of
smartphone but still they are behind their main rivals like OPPO because this company has
strong offline modal of sales and they ave decent online sales. They surpassed Xiaomi because of
strong offline sale (Carroll and Shabana,2010). This organization is also facing issues related to
processor which are needed for manufacturing Mi6, competitors of Xiaomi is also asking huge
number of process from same supplier and this is the prime reason that supplier is failing to
deliver desired number of processors. This enterprise also have to cope up with the matter
regarding patent. Because of this issue they get restriction for selling their smartphones in India.
In order to find solution of this problem they had buy patent from Microsoft, this ultimately
increased cost of production. Xiaomi is also dealing with other internal problems. Hugo Barra,
one of the most important person in the team of global expansion left this organization. This
made a negative impact on their market growth and they faced trouble at the time of entering in
new market.
5. Geographical area selection
5.1 Selected countries
In Europe there are a number of countries among which three major one were selected
which were UK, Romania and Poland.
The selection of various geographical area was done on the basis of less complexity in operations
so that business can be operated easily. Survey was done and those areas who count less than
thirty six which shows that it is supportive for Xiaomi to operate there. Apart from this factor the
political condition of same also played a major role in making choice of country selection. It was
found that all the three selected places has comparatively more stability in the external
environment which is mostly influenced by continuous and uncertain political changes
(Casadesus-Masanell and Ricart, 2010). It shows if company is operating in this area than it will
come across less uncertainties and therefore there will be less risk of having loss in business.
Below 5.1
7 | P a g e

Xiaomi should enter in Poland because this country has scored 4.0 points, it is more than
UK (3.8) and Romania (3.3) also. Key factor in this list is Smartphone-Penetration-Rate, this is
one area where Poland is favourable. This mean that Xiaomi has capacity to grow in this country
and they will get desired number of customer for their smartphones. This same factor is
unfavourable in UK and it can become demerit for Xiaomi. Another criteria in this list is GDP-
INCOME-PER-CAPITAL, this is also favourable in case of Poland but if this company will
enter in Romania then they may end up by earning limited amount of profit because people in
this country prefer cheap smartphone and their purchasing power is also low (De Wit and Meyer,
2010). In UK, consumer do not care about affordability, they see brand because they have ability
to pay more due to high income. Uncertain avoidance is the third criteria where Poland will lie in
section of favourable. Consumer in UK like change but they only prefer fancy products, this is a
demerit for Xiaomi. Population-Of-Age shows that customer based in Poland is enough for this
company, they may have to spend huge resources for selling their products because if scatter age
group i.e. 25-54.
8 | P a g e

6 Overview of Poland market
Xiaomi is a very large association who is trying to increase their benefits by entering into
new market that is Poland because of its positive favourable market as it consider as world 24th
largest and Europe sixth largest smartphone marketplace. Thus, below diagram is going to
express the forecasting user of smartphone in Poland.
From the above report it has been summarised that smartphone is having a very strong
place in Poland due to its effectiveness as numerous of individuals are using it. Thus, it is
identified that additionally around 4.7 million are using smartphone which is seen as a 28%
percent development by coming of 2021, in almost 4 years duration from 2017.
Therefore, consumers living in Poland having positive towards Xiaomi. It disclosed at
that time when Samsung is seen as a current market follower has dominated almost 35% of
market share with minimum to middle end, J-series cell phone which seeks the attention to frugal
polish (Doz, 2011). It signifies that selected organization having a clone strategic tactic partly
which develop in domestic market by handling cost conscious polish. Additionally, Xiaomi get
succeeded in replacing apple as a second position from Poland which is a positive sign for an
association. Hence, Xiaomi is having a very strong or skilled in e-commerce selling in home
9 | P a g e

market because it has been assessed that almost 67% of Poland general public are addicted
towards internet whereas more than half population are prefers online services for buying
products. Therefore because of this they get succeeded in maximizing company sales as well as
trends also. However, around 79% customers who are using smartphones use electronic payment
system due to which it increase the sales by e-commerce that is highly beneficial for selected
organization.
7 Critical analysis on Poland
7.1 External environment analysis
Macro factors are not controlled or managed by an enterprise due to its complexity in
nature but still have a greater influence on development of an association (Foss and Knudsen,
2013). Thus, PESTLE analysis is implemented on Xiaomi under Poland smartphones sector
which is highlighted as follows:-
Factors Circumstances/facts Influence on industry Opportunities or threat to
firm
Political
and legal
Governing bodies is
responsible for designing
various necessary rules
and regulation which is
followed by company
while running their
business entity. Thus,
European union is going
to enforce one of the
effective act such as; data
protection rules in almost
2018 because device
used for interaction
process like smartphone
requires obeying
maximum data security
It has been observed that
producer of smartphone is
trying to improve security
or safety features of
cellphone because of legal
rules. Therefore, it resulted
in maximization of
production cost and affects
an association.
Maximization in
smartphone demand due to
affordable price. However,
these phones are consist of
sufficient size of screen
and potentiality to enjoy a
streaming video on
Xiaomi can easily gain
maximum share in Poland
market by having highly
secure smartphone at
reasonable price and
attractive performance.
Ease for smartphones of
selected firm to perforate
as petition get maximized.
10 | P a g e

need.
Advisory bodies of
Poland has strict towards
TV and radio licenses. In
fact, involves
accumulating fees to
privately owned TV box
(Grant, 2016).
demand with qualitative
sound.
Economic Stability in economy
development of Poland
resulted in sustainable
income development to
population.
It has been determined
that economy of Poland
is growing in a fastest
way with almost 14% in
a year. Therefore, it
resulted in boosting of
digitization requirement.
Maximization in demand
of smartphones encourage
customers to buy it more.
Manufacturer of
smartphones get aware
about advanced technology
and started adopting e-
commerce channel for
selling their product or
services.
Due to maximization of
demand it become easy for
Xiaomi to sell their
product or services.
Loosing benefits from
online sales resulted in
good for selected firm.
Social and
cultural
Disposable income get
maximized from almost
2004. In fact, quality and
brand are consider as
most indispensable factor
for customers while
buying process. Whereas
discounting on products
are also seen as
necessary for selling
Producer of smartphone
attentive towards their
product quality and offer at
minimum cost (Holburn
and Zelner, 2010).
Instead of this, producer of
smartphone is making
business relations with
financial organization in
order to facilitate
Generally, it is analysed
that Xiaomi is consider as
a very appropriate in
manufacturing low price
phones with high quality.
Management team of
Xiaomi needs to identify
local partners to offer
instalment strategy which
is beneficial for both
11 | P a g e

goods.
Most of the customers in
Poland will buy
reasonable goods as
mainly they spend on
utilities. Therefore,
instalment strategy is
very helpful while
purchasing electronic
items.
customers by offering
instalment facilities.
customers as well as
organization.
Technologic
al
Poland banks are using
advanced technology due
to which this nation is
consider as more modern
in electronic payment as
compare to European
union (Hood and
Birkinshaw, 2016).
Companies of Poland are
greatly familiar with big
data technology for
assessing marketplace.
Designer of smartphones
start adopting online
services with electronic aid
system.
Along with this, they also
begins analysing and
promoting modern phones
with the use of big data
technology.
Xiaomi become highly
familiar with online
selling service.
After becoming more
friendly with big data
application Xiaomi they
can easily figure out
requirement of users.
Referred enterprise is
known for its high quality
products at affordable
price.
Environme
ntal
Maximum air pollution. Producer of smartphone is
trying to minimize the
carbon footprint by
acquiring greener in supply
chain and production.
Xiaomi is producing
maximum smartphones in
china and distributing
across international
boundaries. Thus, it has
been denoted as “Made in
China” always signifies as
surrounding unfriendly
12 | P a g e