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550ECONOMIC SCIENCES
STRATEGIC ANALYSIS OF XIAOMI IN RUSSIA: SWOT AND PEST ANALYSIS
Grigan N.
Master's degree student Shanghai University, SILC Business School
Abstract
Xiaomi entered the Russian market in 2016 and quickly gained consumer interest with its inexpensive but high-quality products. The article presents the results of SWOT and PEST analyzes of the company in the Russian market and offers recommendations for improving the company's work.
Keywords: strategic management, strategic analysis, PEST analysis, SWOT analysis
Modern economic conditions, which are characterized by the dynamism and complexity of the market environment, increased competition, rapid and unpredictable changes in legislation, have led to the development of a strategic approach to the management process. This approach enables enterprises to timely and adequately respond to changes in the environment of their operation and form competitive advantages, which in the long term will ensure the growth of the value of the business unit and the achievement of the strategic goal.
An integral key part of strategic management is strategic analysis. Strategic analysis is a way of exploring and transforming a database from the analysis of the environment into an enterprise strategy.
Effective strategic management is impossible without strategic analysis. The explanation for such a categorical statement is the fact that strategic management requires knowledge about the strategic position of the enterprise in the market and the specifics of implementing the strategy. This is due to the fact that changes in circumstances and their combinations both inside the enterprise and outside it demand appropriate strategy adjustments. Strategic analysis helps to choose the direction in which the company will develop. Without a strategy, an enterprise has no sound business plan and no single program to achieve the desired results.
Strategic analysis is the initial stage in the development of an enterprise activity strategy, which is based on research and assessment of the internal and external environment in which the enterprise is located, and makes it possible to find out what position the enterprise occupies in the industry at the moment and in what direction and how it needs to develop. It is strategic analysis that can help an enterprise realize its strategic vision. It is a method that enables the management of an enterprise to formulate a strategy to achieve an intended goal.
Companies invest huge amounts of resources (e.g., time, money, intellectual capital) in the acquisition and implementation of various strategic instruments. Research on the use of strategic analysis tools in various organizations has shown that managers prefer to use tools that are flexible, easy to learn and use, well tested and proven [1]. Moreover, modern tools and strategy methods promise to make managers more successful in the digital age. It is shown in [2] that Chinese managers in their work prefer to use such strategic analysis tools as: PEST - analysis (share of use - 59%), SWOT - analysis (58%), brainstorming (57%) and life
cycle analysis (51%). The study convincingly confirmed that managers in China prefer to use strategic tools to foster creativity and innovation.
Considering the above, we will conduct a strategic analysis of the Chinese high-tech company Xiaomi in the Russian market, using the two most commonly used strategic tools: SWOT analysis and PEST analysis.
PEST - analysis allows a comprehensive assessment of external factors that can significantly affect the business of the company in question.
Political factors
The extent to which politicians can intervene in the commercial environment is critical in PEST analysis. Commercial constraints and political stability are also imperative factors that can determine the success or failure of a business. There is a wide range of political factors that can affect an internet technology company. The political factors affecting Xiaomi's activities in Russia are as follows:
1. Xiaomi is a Chinese brand successfully promoted in the Russian market.
Since its appearance in Russia in June 2016, the company has been constantly expanding the range of products offered to Russian consumers. The company manufactures and markets a wide range of products: smartphones, smart home systems, smart vehicles, TVs, drones, robots and other goods. The Xiaomi brand is well known and recognized in Russia. So, in 2019, Xiaomi was recognized as the fastest growing brand and received the "Best consumer brand in Russia 2019" award in the field of consumer electronics. In 2020, the company was ranked 7th in the top 20 foreign companies in Russia.
2. Xiaomi has good support from the Chinese political system.
In China, there is an active state participation in business through various incentives and regulations. Xiaomi has benefited greatly from the political factors in China in general and the protectionist policies of the Chinese government in particular. The Chinese government is protecting local tech companies like Xiaomi by creating barriers to operating in the country for their international competitors. The head of Xiaomi, along with the heads of other high-tech companies, advises the government on international business policy. [3] This gives tech companies an enviable opportunity to influence local political factors that affect their business to some extent. On the other hand, while political factors benefit Xiaomi in its domestic market, the com-
pany is usually negatively influenced by political factors outside of China.
3. Tension between the United States and the European Union, on the one hand, and China, on the other, is only growing.
In January 2021, the administration of former US President Donald Trump expanded the blacklist of Chinese companies that, according to the authorities, are associated with the PRC military industry. Among them was Xiaomi. Americans are barred from investing in blacklisted companies because Washington suspects them of links to the Chinese military-industrial complex. American investors are required to dispose of the assets of these companies by November 11, 2021. Xiaomi said it did not agree with the decision. The company denies any connection with the Chinese military industry and assures that it will take measures to protect the interests of its shareholders in response to the sanctions. The inclusion of Xiaomi in the sanctions list led to a more than 10 percent drop in the company's quotes in January 2021. Moreover, Europe has joined the US sanctions, to the detriment of its economic goals. Therefore, Xiaomi decided to work more actively in the Russian market [4].
Economic factors
Economic factors have the most obvious impact on the profitability and overall attractiveness of a market or industry.
1. Increasing competition from other international companies operating in the Russian market.
Competition is intensifying due to the development of industry standards, the rapid adoption of technology and scientific advances in competing products, short product life cycles and consumer price sensitivity. In doing so, companies must compete on factors that include product price, features, relative price and performance, quality and reliability of products and services, design innovation, third-party accessories and software ecosystem, distribution and marketing opportunities, and corporate reputation [5]. In its competition, Xiaomi uses a business model that lowers costs and increases profits. At the same time, costs are reduced due to the abandonment of retail sales, the use of viral marketing and the attraction of partners for the production of hardware and software. And the profit, in turn, is created from the sale of mobile services provided for smartphone users.
2. Xiaomi offers quality at an affordable price for the price conscious customer.
Currently, the market for electronic devices is very competitive, there is an active struggle among manufacturers, and the focus is either on innovation or on the optimal ratio of price and quality. Xiaomi has chosen the golden mean - it produces and sells goods of the middle price category, using the most demanded segment of the market. Buyers, in turn, choose the brand's devices for a reasonable ratio between price and quality: often Xiaomi products have a better specification than competitors, and at the same time have a lower cost. The release of new models is not delayed, old models are supported for a long time, due to the release of updates for them. At the same time, the company's employees follow the following principles: be friends with consumers, offer them the best prices for products, prioritize innovation, offer the highest quality devices and adhere to an entrepreneurial spirit.
3. Decreasing purchasing power of Russian consumers and rising unemployment in Russia
The purchasing power of the population is often considered as one of the indicators of the well-being of the country as a whole, since it depends on many factors. It is influenced by wages, the development of the economy, and the standard of living of citizens in general. Given the economic crisis, which is developing due to instability in the oil market, as well as due to the coronavirus pandemic, there cannot be any positive forecast for the time being. And, naturally, this economic situation has the most negative impact on the purchasing power of the citizens of the country. Also, due to the pandemic, there is a noticeable increase in the number of unemployed in Russia. All this, in the end, can lead to an increase in demand for the company's products, which are distinguished by relatively low prices and high-quality goods.
Social factors (Social)
Social trends dictate work patterns and attitudes, tastes and preferences of consumers, as well as a specific type, form and volume of demand for a product or a service [6]. For Xiaomi, these social determinants will be:
1. In Russia, there is an increase in the number of consumers purchasing and using smartphones of various classes for various needs.
Russia in terms of population (146.17 million people) ranks 9th in the world as of January 1, 2021. It undoubtedly has a large purchasing power in the world of mobile phones, which are now an affordable commodity for the population of the country. And, although there are various obstacles in terms of social development (for example, lower incomes of the population, unemployment, social inequality), there is an increase in smartphone users in Russia. So, their number in 2020 was 106.23 million people. Experts predict an increase in the number of smartphone users in Russia to 114.61 million people in 2025 [7]. The growth in the number of users is driven by the ease of use of smartphones and their ability to make life much easier for consumers. This increases the size of the smartphone market in Russia and has a positive impact on Xiaomi's operations in Russia.
2. Western buyers find that almost any product labeled "Made in China" does not meet quality standards and criteria. However, Russian buyers don't think so.
It is possible that someone still has unfounded prejudices about the quality of goods made in China. The current state of affairs justifiably refutes this opinion. Xiaomi manufactures its products from high-quality components, choosing as partners the leading manufacturers, with whom top Western companies also work - including the leading manufacturer of processors Qualcomm. One of the factories that produces Mi-smartphones is famous for its quality and the minimum defect rate - Foxconn. For this it is appreciated, for example, by Apple! Xiaomi's own production is built to the most modern standards and guarantees perfect build quality. And one more quality that distinguishes Xiaomi products from other manufacturers: the company has been supporting its devices for a very long time, releasing updates for them. Providing customers with the highest quality products and services to gain the trust and loyalty of customers is the main principle of the company's employees.
Technological factors
Technological changes taking place in a company are driven by innovations, which, in turn, are developed by entrepreneurs who seek to go beyond existing constraints. Once new frontiers are broken, technologies become obsolete and competitive advantages are lost. From a business perspective, technology can be used to gain a competitive advantage through a variety of factors. Benefits may include cheaper manufacturing, efficient customer access, improved branding, product quality, and higher levels of business intelligence [6]. According to the latest report from the Boston Consulting Group (BCG), Xiaomi is ranked 24th among the most innovative companies on the planet.
1. Xiaomi company offers gadgets for the development and use of which the latest technologies are applied.
The rapid development of the Internet has brought a new future to the mobile phone industry, transforming them into miniature pocket computers. The Internet is becoming more and more accessible. Good access to technology and more people actively using social media have contributed to widespread use of smartphones. For Russia, the Internet penetration index is 76%. The number of Internet users reached 118.4 million. [8]. The company's developers have implemented all the advanced technologies in their innovative products to achieve their efficiency and functionality. The line of smartphones, even in budget series, is equipped with a fingerprint sensor, which increases the security of devices. In addition, most smartphones are manufactured in an aluminum case, which makes them mechanically
resistant to drops. In the mobile phone market, technological innovation is a key strategy for leading players. New technological features can give leading players an edge over their rivals.
2. Now Xiaomi phones are able to work with mobile communications of the fifth generation and participate in the work of the "Internet of Things".
Another key technological innovation for the Chinese mobile phone market to hit in 2019 is the introduction of 5G technology. Xiaomi Mi 10 and Mi 10 Pro, the company's flagship devices of the year, come with a 5G version. Xiaomi continues to promote the hardware & software & internet services model, adheres to the mobile internet phone development trend, and builds the smart terminals & mobile internet ecological chain. The company announced that the company's IoT platform has more than 800 smart appliances and 400 partners. IoT (Internet of Things) is the interaction of various devices, objects and systems with each other using communication technologies for the exchange of information, its processing and analysis. The Internet of Things allows you to: reduce operating costs; improve the level of customer service; receive additional income by expanding the portfolio of services; optimize the logistics supply chain; ensure the safety of production, employees, facilities. The company has recorded 85 million connected devices, making Xiaomi the world's largest smart hardware manufacturer.
The results of the PEST analysis are shown in Fig. 1.
Xiaomi
Political
Xiaomi is a Chinese brand successfully promoted in the Russian market
Xiaomi has good support from China's political system Tension between the United States and the European Union, on the one hand, and China, on the other, is only growing
Technological
Xiaomi company offers gadgets, for the development and use of which the latest technologies are applied Now Xiaomi phones are able to work with mobile communication of the fifth generation and participate in the work of the "Internet of Things"
Economic
Increasing competition from other international companies operating in the Russian market
Xiaomi offers quality at an affordable price for budget-conscious customers Declining purchasing power of Russian consumers and rising unemployment in Russia
P E
T S
Social
In Russia, there is an increase in the number of consumers purchasing and using smartphones of various classes for various needs. Western buyers find that virtually any product labeled "Made in China" does not meet quality standards and criteria. However, Russian buyers don't think so.
Fig. 1. PEST analysis by Xiaomi
After analyzing the external environment of Xia-omi in the Russian market, it is possible to detail the results of the PEST analysis and supplement them with an analysis of the internal environment while conducting the SWOT analysis. It allows us to assess the internal environment of the company, its strengths (S) and weaknesses (W). The SWOT analysis also assesses the company's external environment, its market opportunities (O) and threats from the external environment (T). Let's characterize the main factors studied in the course of the SWOT analysis.
Company Strengths
1. The presence of a strong leader in the company, a close-knit leadership team and experienced staff.
According to experts, Xiaomi is the most expensive startup in the world, which was founded in 2010 by an IT specialist Lei Jun and his associates. Given the company's rapid success in the electronics market, it has often been compared to Apple, and its founder has been referred to as "China's Steve Jobs." At the same time, the effective and forward-looking leadership style and teamwork of the company's managers have become one of the main factors in the phenomenal growth of the Internet technology company. Xiaomi invests a lot of resources in the training and development of its employees, resulting in the formation of highly qualified personnel motivated to achieve high results.
2. A wide range of products produced by the company.
The main activity of the company is the production of smartphones, the models of which cover a wide range from budget to flagship solutions. The flagship line is divided into separate groups of basic, modified and extended smartphones. They can vary significantly in performance and price, but they have one thing in common - they are built using the latest technologies available to Xiaomi. In addition to smartphones, the company produces tablets, laptops, speakers, TVs and other electronics, thereby demonstrating a steady growth trend. Xiaomi produces a wide range of innovative products: smart home systems, gadgets for tracking human health, smart vehicles, drones and robots.
3. Creation of an effective trading network.
The Chinese company Xiaomi has carried out the scaling of the retail network in the Russian Federation.
By mid-July 2020, Xiaomi had about 30 own MiS-tore stores in Moscow, Nizhny Novgorod, Yekaterinburg, Novosibirsk and other cities. In addition, the company has entered into partnership agreements with major retail players. So, in July 2020, Inventive Retail Group announced the launch of a network of Xiaomi stores in agreement with the company. In total, the company plans to open about 60 Xiaomi stores in Russia. They will appear in shopping malls with the most advantageous locations for the brand. These stores will sell a variety of Xiaomi devices, including smartphones, tablets, laptops, wearable gadgets such as watches and bracelets, and various accessories. In the future, the partner of Xiaomi plans to open mono-brand stores with a larger area, where products from the brand's ecosystem will be sold, including products for the smart home. At the end of February 2021, MTS and
Xiaomi began to open joint stores, which will sell consumer electronics, home appliances, TVs, gadgets and accessories only from this Chinese manufacturer. In total, the company plans to open at least 200 branded stores in Russia.
4. Low price of products with their high quality due to cost leadership.
The company's products have won users over with their high performance, reliability and low cost. Even against the backdrop of a huge number of competitors in China, Xiaomi clearly wins in terms of cost. If we compare similar models of the company and other brands, then the former provides a better and more powerful product, or it also offers the same option, but at a lower price.
5. High brand awareness and value.
The Xiaomi brand, which produces inexpensive high-quality smartphones, is well known in Russia. Xiaomi is a young, but well-known brand. It is this customer focus that allows the company to maintain its high position in the ranking of global smartphone manufacturers. Most of the users are satisfied with the company, because it provides an opportunity to get excellent quality for an affordable price. Over the years, Xiaomi has invested in building a strong portfolio of brands. One of the solutions aimed at increasing brand value is the combination of Chinese companies Baidu and Xiaomi to develop systems based on the Internet of Things and artificial intelligence. Companies will create devices using computer vision, deep learning and other AI technologies.
Weaknesses
1. Weak competitiveness.
Despite exceptional performance for their prices, Xiaomi smartphones lag behind their global competitors Apple, Samsung and Huawei in terms of brand perception and customer experience. In Russia, Xiaomi controls 18% of the smartphone market, while Apple has 25% of the market and Samsung has 24% of the market. [9].
2. Lack of an effective marketing strategy.
Marketing of products in the company leaves
much to be desired. Despite the fact that the product is successful in terms of sales, its positioning and unique selling proposition are not clearly defined, which can lead to attacks in this segment from competitors [10].
3. Low level of technical support.
Experts point to poor after-sales service and customer support in the Russian market. Xiaomi's services in Russia, including after-sales support, are currently provided by third parties and dealers. This is a disadvantage in comparison with the global competitors of the company [8].
4. Weak advertising campaign.
Xiaomi's global advertising strategy is largely standardized with local specificities based on brand penetration and country factors. These differences can be observed in the local implementation of the Xiaomi advertising complex. The tools that Xiaomi uses in Russia are digital marketing (social media), sales promotion and direct marketing.
5. Low profitability of the company because of the pricing adopted in it.
For an internet tech company, low profit margins expose the brand to certain risks. For Xiaomi, there is a higher risk that a decline in sales will significantly reduce its bottom line, and this could lead to a net loss. In addition, low margins could limit R&D investment in an electronics and software company, jeopardizing its long-term growth prospects.
6. Lack of sufficient experience in the Russian market
Xiaomi, which is only 10 years old, lacks the necessary experience in the global market and this is a serious weakness for the company. At the same time, its main competitors, such as Apple and Samsung, have been operating in the Russian market for decades. This means that they have solid experience in dealing with various issues related to working in international markets, such as intercultural differences, regional characteristics, consumer preferences, access to distribution channels and international supply chain management.
7. Promotion channels and logistics become bottlenecks with increasing sales.
When planning its work in Russia, Xiaomi has to take into account the large size of the country, the uneven distribution of the retail network, and differences in consumer priorities. In this case, it is necessary to take into account the peculiarities of the company's work in a pandemic. All this creates certain difficulties for the planning and operation of logistics channels.
Opportunities
1. Formation of strategic cooperation with other companies in the Russian market
Formation of strategic cooperation with companies working in the field of e-commerce, information technology and related industries is a good opportunity for Xiaomi in the Russian market. This can be cooperation with retail chains present in the market, or companies engaged in R&D. It can also cooperate with logistics companies that form supply chains. The benefits that Xiaomi can derive from strategic cooperation remain great, and the company needs to take advantage of such opportunities more actively.
2. Increasing the efficiency of innovation and the efficiency of implementation of research and development results
Xiaomi has the ability to significantly improve the efficiency of innovation by making effective investments in research and development. To use this opportunity, the company needs to attract the best specialists and motivate them with the complex application of tangible and intangible motivation tools. The effect is also possible from joining efforts to develop and implement innovations with other interested companies operating in the Russian market. Significant efforts are also needed to improve the efficiency of the introduction of innovative developments in various areas of the company's activities.
3. Increase the presence in the cloud segment
This is one of the strategic opportunities for Xia-
omi. The company can focus on products and services with high growth rates, such as the cloud segment and artificial intelligence, taking into account the main trends in the global e-commerce and IT industries [10].
4. Adaptation of the MIUI operating system to the
peculiarities of the Russian market
Most Xiaomi smartphones have a modified Android MIUI Xiaomi user interface that significantly updates Android, includes features to improve battery performance, and is fully customizable. For greater success in the Russian market, Xiaomi needs to strengthen the development of the MIUI system adapted to the Russian market and accelerate cooperation with related manufacturers. The advantages of the MIUI system and the cooperation of manufacturers will create great benefits [11].
5. The ability to bypass competitors OPPO and Vivo, which have not yet entered the Russian market
Outside of China, few people know about these two firms, but domestically, they are the fastest growing companies in the market. The companies are subsidiaries of BBK Electronics and produce not the cheapest smartphones in China. BBK Electronics plans to enter the Russian market and expects that Vivo will occupy about 5-7% of the Russian smartphone market, while Oppo's share will be 5%.
6. Growth of smartphone penetration
According to the country rating of smartphone
penetration, Russia is among the top ten countries with the highest penetration rating and is ranked 7th. At the same time, the distribution of smartphones is 66.3%, with 95.4 million users [8]. And the numbers characterizing the penetration of smartphones are only growing. As the penetration of mobile phones in the country grows, the leading players are shifting their focus to selling more expensive high-value goods.
7. Active participation of the company in the development and implementation of the Internet of Things (IoT) and artificial intelligence
Xiaomi, in addition to the usual smartphones, also sells smart home and lifestyle products in the Russian market. And although this product is quite new for the Russian market, more and more consumers are interested in it. This leads to a steady increase in sales volumes.
8. Implementation of 5G technology in the company's smartphones
An important technological innovation for the Chinese mobile phone market, which has gained prominence in 2019, is the introduction of 5G technology. Xiaomi's flagship devices, the Mi 10 and Mi 10 Pro, come with the 5G version. At the same time, the demand for 5G phones will grow, which will help to increase their market value. With the arrival of this technology in Russia, we should expect an increase in sales of mobile devices using this technology.
9. Increase in the number of specialized stores and optimization of the retail network.
Xiaomi uses both direct and indirect distribution channels to effectively reach their customers in the consumer market. In most of its markets, the company sells its products and resells third-party products directly to consumers and small and medium-sized businesses through its retail and online stores, as well as through direct sales. The company's retail stores are usually located in high-traffic locations in shopping malls and urban shopping areas. Stores are designed to simplify and improve the presentation and marketing of a company's
products and related solutions. By increasing the number of specialized stores and optimally placing them in the sales area, you can influence the volume and efficiency of sales.
Threats
1. Possible saturation of the smartphone market
The saturation of the smartphone market is one of
the biggest threats to Xiaomi. To cope with this threat, Xiaomi needs to further explore the possibilities of expanding the Russian market. The possibilities for expanding the Russian smartphone market are in good agreement with the inexpensive prices for Xiaomi products.
2. Possible increase in the cost of the resources
used
The rise in the cost of the resources used can be considered a serious threat to Xiaomi. After all, a hightech electronics and software company has chosen a cost-leadership business strategy and operates with a very low profit margin [12]. Unlike its main competitors, any slight increase in resource costs for Xiaomi will inevitably affect the cost of products, thereby jeopardizing Xiaomi's competitive advantage.
3. Possibility of scandals related to corporate social responsibility
For Xiaomi, there is a potential for corporate social responsibility issues that could jeopardize the long-term prospects for business growth. Due to the cost leadership business strategy that Xiaomi is pursuing, the company is trying to cut costs wherever possible. Accordingly, there are attempts to reduce costs, including the cost of human resources. At the same time, the company may face ethical problems that can escalate into scandals.
4. Dangerous competitors OPPO and Vivo may enter the Russian market
In the event that OPPO and Vivo enter the Russian market, the existing market equilibrium will be upset and a possible redistribution of segments between market participants will occur. And this may not be in favor of Xiaomi.
5. Growth of intensity of competition in the industry
Strong profitability in the industry has boosted player numbers over the past two years, putting downward pressure not only on profitability but also on overall sales. New technologies developed by a competitor or newcomer to the market can pose a serious threat to the industry in the medium to long term. Competition is also intensifying due to advancing industry standards, rapid technology adoption and advances by competitors, shorter product life cycles and consumer price sensitivity.
6. A high degree of government participation in the telephone industry
As known, in Russia there is a high degree of state participation in the telephone industry. In the country, electronics suppliers are facing this challenge as the government recently passed a new law requiring Russian software to be installed on all smartphones from 2021, which is expected to be delayed due to the Covid-19 crisis.
7. Instability of pricing policy
High quality mobile phone brands have taken over the domestic mobile phone market thanks to price reduction measures. While they cannot sell at low margins like Xiaomi in the short term, Xiaomi's margins will continue to weaken in the near future [5]. Since the company operates in many countries, it is subject to fluctuations in exchange rates, especially given the unstable political climate in a number of markets around the world, including the Russian one. Xiaomi's pricing strategy in the Russian market helped Xiaomi to increase its market share, but also led to low margins and increased foreign exchange risks in the market.
8. Anti-Chinese sentiments in the West and all kinds of sanctions
The possible growth of anti-Chinese sentiments on the part of the United States and the European Union, the introduction of new sanctions may negatively affect the company's activities. Certain inconveniences will be created by the ongoing, and even intensifying, coro-navirus pandemic, which affects consumption, government policy and global trade.
Let's summarize the factors discussed above in the SWOT matrix (Fig. 2).
Based on the results of SWOT and PEST analysis, the following recommendations can be proposed to improve the efficiency of Xiaomi in the Russian market.
Xiaomi should continue to promote the company's "hardware and software and Internet services" model, adhere to the development of mobile Internet phones and build an ecological chain of "smart terminals and mobile Internet".
Continue investing in startups that create smart home devices in order to create an ecosystem that can be controlled from a Xiaomi smartphone.
Xiaomi should consider the Russian market geographically, and not according to general statistics, which most often characterize only the western part of Russia. This will create a flexible pricing strategy, taking into account the specifics of demand and the financial capabilities of the local population. It will then be possible to adjust prices for each local market so that it remains profitable while maintaining price and quality competitiveness due to the price sensitivity of the markets studied.
A possible step for Xiaomi could be the modernization of the operating system, the optimization of MIUI for applications that are often used by Russian consumers. Currently, not all owners of Xiaomi smartphones in Russia are satisfied with the operating system of the devices.
To ensure brand awareness for Xiaomi, it is advisable to develop and effectively implement an advertising mix that includes: digital marketing, social media, sales promotion, direct marketing, public relations, personal selling and traditional advertising. At the same time, when distributing forces and resources between various elements of the advertising complex, it is necessary to take into account the peculiarities of the region where the events are planned. Moreover, if in the middle and lower segments in Russia there are enough classic advertising and billboards in places where the target audience is concentrated, then hidden advertising is needed for promoting more expensive devices.
Strengths
Xiaomi
Weaknesses
The presence of a strong leader in the company, a close-knit leadership team and experienced staff
Wide product line of the company Creation of an effective trading network Low product price with high quality due to cost leadership
High brand awareness and value
S w
т O
Weak competitiveness
Lack of an effective marketing strategy
Low level of technical support
Weak advertising campaign
Low profitability of the company due to the
pricing adopted in it
Lack of sufficient experience in the Russian market
Promotion channels and logistics become bottlenecks with increasing sales
Threats
Opportunities
Possible saturation of the smartphone market
Possible increase in the cost of resources used
The possibility of scandals related to corporate social responsibility Dangerous competitors OPPO and Vivo may enter the Russian market Growing intensity of competition in the in-
High degree of government involvement in
the telephone industry
Instability of pricing policy
Anti-Chinese sentiments in the West and all
kinds of sanctions
Formation of strategic cooperation with other companies in the Russian market Improving the efficiency of innovation and the efficiency of implementation of research and development results Increased presence in the cloud segment Adaptation of the MIUI operating system to the peculiarities of the Russian market Opportunity to bypass competitors OPPO and Vivo, which have not yet entered the Russian market
Smartphone penetration growth Active participation of the company in the development and implementation of the Internet of Things (IoT) and artificial intelligence
Implementation of 5G technology in the company's smartphones Increase in the number of specialized stores and optimization of the retail network
Fig. 1. SWOT Matrix for Xiaomi
Xiaomi should focus on offline sales, but at the same time, it needs to increase its influence on the Russian Internet, social networks such as VKontakte and Odnoklassniki, as well as on popular online video channels. It is advisable to involve popular Instagram blog-gers for work.
Considering that the majority of Russian consumers are interested in a necessary device with the Internet connection, but tend to buy a smartphone in offline stores, it is important for them to personally hold the device in their hands before paying money. This suggests the need to open offline stores in remote regions of Russia.
In order to solve the problems that Xiaomi faces in the Russian market in terms of brand perception and quality of customer service, differentiated marketing should be used more widely; as well as to increase the number of corporate events and giveaways, as well as expand the number of Mi stores in Russia.
To support the promotion, we can recommend Xiaomi to create a network of service centers and organize online technical support in most regional centers.
The study showed that there is still significant market potential that can be explored and used by Xia-omi to improve its performance in the Russian market.
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INNOVATIVE DEVELOPMENT OF ENTERPRISES IN THE POST-INDUSTRIAL MANAGEMENT
SYSTEM
Fostolovych V.,
Dr. PhD, Associate Professor of the Department of Accounting and Taxation in the branches of the economy Faculty of Accounting and Auditing of Vinnytsia National Agrarian University, Ukraine
Hurtovyi O.
4th year student Faculty of Economics Vasyl' Stus Donetsk National University, Ukraine
Abstract
The article examines the place of innovative development of enterprises in the post-industrial management system of enterprise development. The possibility of realization of the innovative direction of development in the direction of digitalization of technologies and technological processes in business is investigated. The institutional environment and its ability to implement an innovative direction of society development in Ukraine are studied. The intellectual potential and human capital that will guide business activity in the direction of business digitali-zation are analyzed. An assessment of the rating of doing business according to Eurotablo is presented. The dynamics of the index of economic globalization of Ukraine is estimated and the indicators of the rating of the global index of innovations in 2019 of Ukraine and some other countries are studied. A qualitative assessment of Ukraine's innovation potential in the dynamics over the years. The place of innovations in modern business is substantiated.
Keywords: Households, innovations, innovative technologies, digitalization, transformation, human capital
Post-industrial development of society is characterized by the transition of elements of activity, life, economic activity of enterprises and organizations, organization and conduct of business, performance of household functions in digital format. The main functions of physical action can be implemented using devices or elements that work by transforming analog data into digital format, provoking a "digital revolution" in the system of society (at the private level), in the system of organization and implementation of business (business level) and in the management system of all elements of the system at the regional and state levels. It is impossible even today to imagine the activities of the state and structures of all hierarchical levels of
government without the use of digital technologies that determine the available resources and take into account the need for them, allocating the share needed for implementation to accumulate capital. That is, digitaliza-tion permeated both the activities of individuals, the functioning of society and the economy as a whole. Today, it has become quite acceptable not only to do business through the process of organizing and conducting business in digital format, but also a holistic digital business. Both the financial crisis and the spatial isolation caused by the pandemic have prompted the whole world to quickly adapt to integrating elements of digital technologies into absolutely all spheres of life. That is, all over the world, and in Ukraine in particular, a rapid
