After breaking into the smartphone market in China and becoming a leading brand, Xiaomi saw its sales stagnate and then decline. The market disruption strategy that empowered Xiaomi’s rise was losing momentum. Competitors aggressively countered its every move, targeting its core consumer segment. Xiaomi urgently needed a new strategy to reignite growth and develop a sustainable competitive advantage. The case describes the changing market landscape, its product portfolio, distribution systems, partnerships, brand architecture, promotion and pricing. Xiaomi has to decide whether to remain focused on smartphones — on which its success and its reputation have been built — or transform itself into an IoT ecosystem encompassing a variety of product categories. The firm needs to thoroughly understand the pros and cons of either path, and formulate a detailed implementation plan for the chosen strategy.

Estimates suggest that four to five billion people live in poverty. Businesses engage with the base of the pyramid (BOP), typically through corporate social responsibility (CSR) efforts. Such efforts are laudable but are limited by their budgets. An alternative model would be to engage with the BOP as a sustainable business opportunity. The BOP can be customers as has been shown through the work of Unilever. The BOP also often own assets, such as small parcels of land or a few head of livestock. Likewise, the BOP has skills and labour. These can be sustainably leveraged to the betterment of the BOP. In this paper, I describe three initiatives that are profitably engaging with the poor as customers, providers of labour and providers of raw materials, while at the same time helping the target group lead better lives. Abstracting from these initiatives, I offer a framework for building profitable businesses at the BOP.