Research Question

To achieve the objectives stated earlier, following is the leading research questions modeled for the present study

• What is the reason behind the XiaoMi business down turn?

1.2Research Objective

This research will be an effort to study reasons behind the XiaoMi Inc. downfall

• To identify the reasons behind the company’s lower financial position.
• Highlighting and assessing reasons that has significantly influences XiaoMi performance.
• Underlining the significant improvement measures

1.3Significance of the Study

The present study aims at highlighting the factors pertaining to the town turn of the XiaoMi Inc. The company has enjoyed many years of success but the recent financial situation of the company addresses a complete different story. Therefore, in this study we will try to analyse the company’s present situation and factors associated with the company’s major setback.

1.4Proposed Thesis Structure

Thesis would include total six chapters. Chapter 1 will describe the main points of topic, research question, objectives, significance, and summary of all chapters. Chapter 2 will show literature review of main topic. Chapter 3 will include methods adopted for this study. Chapter 4 will provide analysis of data as well as results and Chapter5 will be of discussion and future implications

 

 

 

2.Literature Review

Globalisation is the connectivity of the world economies, which has led businesses to operate at much larger scale and hence originated the concept of Multinational companies (MNC) (Knight, 2000).  With the expansion of these MNC’s they have to face various challenges as well such as fierce competition, volatile market, rapid technological growth and human resource management. According to Van Vught et al., (2002) in order to survive the companies basic persistence lies in to various dimensions such as increase productivity, encourage creativity and reduce competition. In such instances many company’s mark their niche in the market place while few of them fall back.

In the present study we are analysing one such example which is the XiaoMi Inc. XiaoMi Inc. is a privately owned Chinese consumer electronics manufacturer headquartered in Beijing, China.  The company was founded in the year 2010 by six founders. Under the MI brand the company products include MI smart phones, MI laptops, MIUI, MI TV, MI Talk, MI Bank and MI Box. According to the Harvard business review report in 2013 the company became 5th largest smart phone manufacturers of the world only in three years of their operations.

However, soon after the company massive success the XiaoMi faced fierce down turn in the year 2015. According to the Forbes business report the company short fall from its business target of selling 100m smartphones in 2015, instead company hardly coped to reach at 70m sells. Many analysts were view that the company’s lower sells are because the company was unable to meet the changing demands of the customers (Meekers, 2015).

However, many controversies also resisted XiaoMi Inc. to reach its target and also became cause of the company’s financial down turn. The XiaoMi faced a legal compliance from the China's State Administration of Radio, Film, and Television for running a foul advertisement. Furthermore in October 2014, a privacy issue was raised from the company’s MI cloud server as it is storing the entire user data located in china. However company letter solved the issue through MIUI update by making cloud massaging optional for the servers. According to Shih et al., (2014) report the company reputation has been significantly affected from the Mi Cloud server where company has to stop its all production line for complete one week.

Taiwanese Fair Trade Commission (FTC) fined the company in the year 2013 by advertising higher sales number then what was actual and XiaoMi has to pay to FTC $600,000. Another major event that has affected the company more intensively was the ban of XiaoMi from the Indian market. In 2014 the Ericson Company filed a suit against the XiaoMi in connection with the infringement of its patent.  The company has faced major setback from the execution of such a larger market and reduced the company sells further.

 

 

 

3.Propose Research Methodology

3.1Research design

The following study is conducted to analyse the factors that are associated with the XiaoMi Inc. down turn. The data will be collected through questionnaires and quantitatively analysed by using descriptive measure