1. GM522 - BLUE
OCEAN
STRATEGY
XIAOMI CASE STUDY OF
BLUE OCEAN STRATEGY
BY:
1. JOSHUA RAO
2. NASIF CHOWDHURY

2. STEP 1: OVERVIEW OF THE
INDUSTRY
 Chinese electronics company established in April
2010 and head quarter in Beijing, China
 World 5th largest smartphone manufacturers sold
70.8 million units in 2015
 Founder and CEO Lei Jun believes that cell phones
will eventually carry the PDA information
 The company has over 8000 employees and
working in 8 countries of the world
 Xiaomi has entered the market of Singapore,
Malaysia, Indonesia, India

3. Products
 Smart phones 3G
 Redmi 4G smart phones
 MI wifi router
 MI smart tv
 MI set top box
 MI talk
 MI power bank
 MI cloud

4. HIGH
"As Is" Strategy Canvas
Samsung
iPhone
STEP 2: THE “AS IS” STRATEGY
CANVAS
LOW

5. STEP3: NONCUSTOMER ANALYSIS
First Tier: “Soon-to-be” noncustomers
who are on the edge of xiaomi
smartphone , waiting to jump ship is
low income rural people
Second Tier: “Refusing” noncustomers
who consciously choose rural old age
customers
Third Tier: “Unexplored” noncustomers
who are in urban area executives and
high rank officials
Third
Tier
Second
Tier
First
Tier
xiaomi
Market

6. STEP 4: BUYER EXPERIENCE CYCLE AND BUYER UTILITY MAP
PURCHASE DELIVERY USE SUPPLEMENTS MAINTENANCE DISPOSAL
CUSTOMER
PRODUCTIVITY
 Wait in que
 System
Down
 No stock
 Low battery
life
 Time consuming
for service/repair
SIMPLICITY
 Complicated
functions
CONVENIENCE
 Go to sales
centre
 Need
booking
 Need to
purchase apps
 Need to go to
service centre
RISK
 High prices
 Too many
dealers
 Low resale
value
FUN AND IMAGE
 Standard user
interface for
all – Boring
 Low camera
quality
ENVIRONMENT
FRIENDLINESS

7. STEP 5: RECONSTRUCTING INDUSTRY
BOUNDARIES
 High Quality
 High Productivity
 Simplicity
 Durability
 Low prices
XIAOMI

8. A. LOOKING ACROSS ITS STRATEGIC
GROUPS WITHIN THE SAME INDUSTRIES
 Xiaomi has analysed from its competitors such as iPhone and
Samsung smartphones on how they offer their customers its
product and what do they offer.

9. B. LOOKED ACROSS COMPLEMENTARY
PRODUCT AND SERVICE OFFERING
 In the “before” stage, Xiaomi offers customers to
proceed with online purchase.
 In the “during” stage, Xiaomi has offered their
customers with a chance to customised their own
phone using MIUI.
 In the “after” stage, customers were asked for
feedback.

10. C. LOOKED ACROSS THE FUNCTIONAL
APPEAL TO BUYERS.
 Xiaomi’s current customers consist of customers who
are young and professional who requires productive
type of smartphone as they are heavy users of the
smartphone.
 Xiaomi has increased its productivity and functionality
of smartphone in order to be attractive to these groups
of customers.

11. D. LOOKED ACROSS TIME
 Understand customer’s pain points. Hence, providing
customers with better solution in which fulfils their
needs.
 Xiaomi affordable and value for money smartphone is
the visionary of its founders to look across time and
attract its noncustomers

12. STEP 6: FOUR ACTION
FRAMEWORK
ELIMINATE
• DISTRIBUTORS
• PHYSICAL STORES
REDUCE
• ADVERTISEMENT
• AFTER SALES
RAISE
• DESIGN
• BATTERY LIFE
• TECHNOLOGY
• CAMERA
CREATE
• DIRECT ONLINE PURCHASE
• MIUI USER CUSTOMISATION

13. VALUE INNOVATION
VALUE
INNOVATION

14. HIGH
"To be" Strategy Canvas
Xiaomi
Samsung
iPhone
HIGH
REDUCE RAISE CREATEELIMINATED
STEP 7: NEW STRATEGY CANVAS
LOW

15. STEP 8: SUCCESS STORY
 Xiaomi sold 61 million smartphones during 2014, up from 18.7
million in 2013 and has big ambitions, with CEO Lei Jun
announcing that it want's to become "the biggest phone company
in the world’
 70.8 billion units sold in 2015
 Revenue earned 20 billion US dollar
 300 million downloads from MIUI app store
 December 2015 profit increase by 30 %
 Xiaomi managed to break the world record for "most mobile
phones sold on a single online platform in 24 hours’’ through its
direct to customer site Mi.com
 Winner of Global Mobile Award (GLOMO) 2016

16. THANK YOU