Market Disruption Strategies: The Transformation of Xiaomi
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.
Feel Busy All the Time? There’s an Upside to That
Imagine yourself at a restaurant, trying to decide between two desserts: a chocolate cake and a fruit bowl. You’ve been trying to eat healthier, but the cake just sounds so tasty… What do you do?
As it turns out, your decision is likely to be influenced by how busy you perceive yourself to be.
Busyness has previously been studied through the lens of time pressure. Researchers found that when people feel that they’re under significant time pressure, they tend to make decisions based on emotions. For instance, when consumers are placed in situations where they lack time to complete a task, they grow anxious and become more likely to give in to their impulses. They are more likely to choose the cake, so to speak.
However, that’s not the end of the story, as there’s a flip side to busyness. In recent years, being busy has become an unmistakable badge of honor in many Western societies. It’s quite common for people to humblebrag that they don’t have a minute to themselves. Feeling busy — that is, perceiving oneself to be a busy person — thus makes individuals feel that they’re prized, important members of society.
Maintaining Market Dominance
Peter England, owned by leading menswear firm Aditya Birla Nuvo, has become a household name in India. As we describe in our case study, Peter England became the fastest apparel brand in Indian history to reach 1 billion rupees in sales and one of the most trusted brands in its category by providing aspirational apparel to India’s burgeoning middle class. When it launched in 1997, it focused on positioning its high-quality shirts for young Indian men at the early stages of their career, striving for success.
It was the first apparel brand in Indian history to leverage television advertising. Its messages centred on honesty, international quality and sub-premium pricing to court aspiring consumers who wanted to dress for success but found premium brands too expensive.
But despite meteoric growth, its performance in the second half of the 2000s slowed. Peter England had steadily expanded into new categories, especially premium apparel, under the sub-brand of Peter England Elite and party wear, under Peter England Party, to both cater to consumers who aspired to higher grade, higher priced apparels and those drawn to the emerging clubbing culture. But these extensions didn’t resonate. The brand was deemed by customers to be frivolous, forfeiting its original value of honesty.
Six Lessons for Setting Your Business on a Growth Trajectory
The refrain I often here among practitioners is that they are facing declining growth, ever increasing competition, and loss of pricing power and thus margin. Is this inevitable in the world of business today, or is there a way that businesses can recharge growth and regain margins? Below are three case studies of companies that have successfully recharged profitable growth and there is a remarkable commonality in their paths to success. We first report the case studies and then draw out the lessons for recharging profitable growth in your business.
Talking innovation in run-up to IIMC’s GuruSpeak
The Tata Nano is a prime example. Companies tend to innovate for the environments they are embedded in. Thus, Indian companies innovate for the Indian context which is characterized by relatively less affluent consumers, fragmented distribution,… Understanding this, smart MNCs are locating in India to innovate for India and the emerging markets more broadly as they are able to contextualize the research. A great example is GE Healthcare with its R&D lab in Bangalore India that has produced such innovations as the MACi ECG machine that is priced at US$500 and can produce an ECG for the same price as a bottle of water!
Arogya Parivar – Novartis’ BOP strategy for healthcare in rural India
There was a large segment of low-income population comprising about 1.2 billion people, with incomes between US$2-5 a day with no bank accounts, no access to modern financial services, no phones, dependent on informal or subsistence livelihoods and lacked access to amenities and basic healthcare. Addressing these unmet needs could create significant market opportunities for businesses while also contributing to social goals. This was particularly true in the healthcare market, where the BOP had long been underserved. Many Asian and African countries, where the BOP typically were, faced the double burden of infectious diseases and increasing rates of non-communicable diseases such as diabetes, cardiovascular diseases etc. Novartis decided that it was time to seriously consider the possibility of commercial opportunities amongst the world’s poor, notably India.
What is the most important quality required for companies to expand in order to become an EMNC?
BYD (Build Your Dreams): Journey to Green Dreams
The case describes the history of BYD and its entry in to batteries and then automotives, and the innovations that drove the competitive advantage of the business. BYD entered the automotive industry hoping to leverage its capabilities in batteries. However, it is struggling and in a downward spiral. What should it do?
We are mentally stuck as a species!
I was recently struck by how mentally stuck we are as a species with incredibly damaging consequences for the well-being of the planet’s citizens!
Consider what is going on in the US. The Republican party, spearheaded by the Tea Party faction, has created a deadlock, forcing the US government to start cutting non-essential services. Polls show that this is going to hurt the Republicans. Yet, they are stuck in their dated viewpoint that rejects any new effort by the government to intrude in peoples’ lives, even when it is good, as is the case with the so called Obamacare initiative, which lies at the root of the current failure to arrive at a bipartisan agreement that would have stopped the shutting down of services.
Let’s now jump to the Middle East. The newly elected president of Iran, Mr. Rouhani, in a break with his predecessor, has held out an olive branch to the West. He has stated that “Iran will never develop a nuclear weapon,” and that his government has the full authority come to an agreement with the West in this regard. Mr. Netanyahu, the Prime Minister of Israel, however, wishes to convince the West that this is merely a game of smoke and mirrors, a ruse, and the Iranian government is not to be trusted. Same old; same old; unable to move beyond the past.
Go anywhere and look at the news, history seems to incessantly repeat itself. It seems that only a few people can move beyond the bounds of the past and the knee jerk reactions that are driven by them. When they do, as for example the reconstruction of Europe after WWII by the victorious US, or Gandhi’s non-violent mobilization of India’s masses to overthrow colonial rule, or Nelson Mandela’s Reconciliation Commission to forge a new and harmonious post-apartheid South Africa, great things are achieved.
Perhaps political leaders should pause and ponder. Should they remain entrenched and entrapped in knee jerk politics? This is the lazy option relying on effortless automatic responses without reflection. Relying on the ancient associative mental capacities that are common to all animals—think rats and electric shocks here. Or, should they try to forge something new and beneficial for their citizenry, by eschewing the knee jerk response, and taking the thoughtful high road that exploits the advanced cognitive capabilities that our unique to our species. It’s worth a politicians time considering this, as it might just ensure them a place in history.
Responsible journalism needed!
In an opinion piece in The Wall Street Journal today (September 26, 2013), entitled “India’s Attack on Innovation,” Mr. Rod Hunter, a Senior Vice President at the Pharmaceutical Manufacturers of America, made claims that are incredibly specious and self-serving arguments to bolster his thesis that the Indian government was attacking innovation.
First of all, the title is a gross generalization of the topic of his article which is about pharmaceutical patents. I agree that one should debate the Indian Government’s decisions regarding accepting pharmaceutical patents. However, the debate needs to be based on reasonable arguments and examined from all sides.
The Wall Street Journal should be embarrassed to publish an opinion peace that is vacuous in its arguments and pander to the public with gross over generalizations, even if this would serve Mr. Hunter’s goals.
Let’s examine Mr. Hunter’s arguments for why India should not be allowed to reject pharmaceutical patents granted elsewhere in the world, to get needed medicines at an affordable price to its citizens. The first argument made by Mr. Hunter has merit. He argues that the motives of the government are not altruistic but play to the demands of India’s domestic pharmaceutical players. However, his remaining arguments are about as ridiculous as any that I have heard. Mr. Hunter’s claim that India is not poor is ridiculous. India’s per capita income is less than US$3000/annum on even a PPP basis! That is less than 10% that of the US or for that matter the G7 average per capita income! Arguing that India has 150 million middle class consumers and should thus not worry about the cost of medication is equally ridiculous. It conveniently ignores the fact that India has a population of 1.2 billion and thus government policies cannot be directed at just 12.5% of the population. Government policy needs to encompass the majority. Finally, claiming that India is rich because Mumbai has a GDP greater than Hungary is an embarrassingly foolish argument! The per capita income in Mumbai remains less than In Hungary and the wealthy city of Mumbai comprises less than 2% of India’s population.
The Wall Street Journal should take a little care to ensure that they don’t publish opinion pieces that are inflammatory but don’t stand up to any intelligent scrutiny at all. This of course assumes that it aspires to journalistic standards higher than the National Enquirer!