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Case study: China's Xiaomi launches online lending service in India Xiaomi Corporation is a Chinese electronics company founded by Lei Jun in 2010 that makes and invests in smartphones, mobile apps, laptops, bags, trimmers, earphones, MI Television, Shoes, fitness bands, and many other products. At the start of 2018, Xiaomi was the world's fourth-largest smartphone manufacturer leading in both the largest market, China, and the second-largest market, India. Beijing-headquartered Xiaomi first moved into India's fast-growing financial services space in March 2019 with Mi Pay, which allows bill payments and money transfers. The company has recently (Tuesday, 3rd December) launched its online lending service in India, widening its offering of financial products in one of the world's biggest web services markets. While smartphones are the core of its business, Xiaomi earns low margins from its affordable devices and relies on services for long-term profit. The company prides itself in selling their affordable products to the mass markets in China and India. However, Xiaomi’s attempt at launching a financial unit in Indonesia failed due to a disagreement with regulators over licencing. The company had to eventually shut down their operations in Indonesia in late 2018. Question: Question 1. Describe the alignment between the three different types of business strategies and its association with HRM strategies and functions. What business strategy has Xiaomi adopted and how would this strategy impact their SHRM approach? Question 2 Given that Xiaomi has grown its international operations significantly in the last 7 years, the company has had to adopt an aggressive recruitment and training strategy. Based on the systems approach to HRD, the first step of the process is to conduct a HRD needs analysis. Describe how Xiaomi would conduct a HRD needs analysis. Question 3 How would Xiaomi then evaluate the effectiveness of the HRD programs?

Answer 1

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Question 1 - Describe the alignment between the three different types of business strategies and its association with HRM strategies and functions. What business strategy has Xiaomi adopted and how would this strategy impact their SHRM approach?

Xiaomi Corporation was established in 2010 and is headquartered in Beijing. In 2011, Xiaomi launched its first Smartphone and soon captured the market. In 2014 it had become one of China's biggest brands. Xiaomi's business model is about producing tablets, computers, mobile devices, wallets, earphones, trimmers, MI Tv, lifestyle products, sneakers etc.

Xiaomi terms the market model a "triathlon" as it comprises three synergistic

1. Hardware: Creative, high-quality, well-designed and customer-focused hardware    

2. Internet Services: Plentiful Internet Services

3. New Retail: Productive modern retail dependent on fair pricing

But the business model of Triathlon has evolved over time. Business responds with different strategy at different stage and different situation. Yet understanding the evolution of Xiaomi's triathlon Business model its Business model is discussed in following sections.

Actual Resources:

At the beginning when Xiaomi released its real tools were its members of the expert team, its seed money, MIUI website and its online shop. After, it has received support from multiple investors. The success of Xiaomi's smartphone created a brand awareness for Xiaomi which served as a key tool for further investment . Physical stores became a primary outlet for Xiaomi since 2013. Following an international expansion in 2016-18, Xiaomi secured a large number of patents (5920) and purchased stakes of partner start-ups. In addition to this Xiaomi hired about 18,000 people in 2018. In fact, in October 2018 Xiaomi raised money from the stock exchange.

Real partners

When Xiaomi first wanted to develop a Smartphone, there was no producer and retailer interested in partnering with Xiaomi because it lacked legitimacy. Yet Xiaomi has succeeded in convincing several significant partners. Sharp and Qualcomm are two outstanding partners agreed to supply Foxconn letter of materials, agreed to assemble their device.

Price Claim

Firstly Xiaomi offered high quality and well-designed operating system and low-cost High-End smartphone .Xiaomi founded customers of the ecosystem products earned value by accessing the low-cost Xiaomi product line. Similarly, start-ups were given interest from Xiaomi to finance product growth efforts and to enter the market.

Customer Relationship

From the very beginning Xiaomi has formed direct partnerships with clients through social media, blogging and arranging different events. Xiaomi offers answers to clients ' questions on social media and forums. They also create websites that make customer-to-customer engagement easier to solve problems.

Customer segments

As Xiaomi launched its smartphone for the first time, it primarily targeted younger idealistic who are in-touch, fashion-conscious and 24/4 linked, seeking high-tech goods at a cheaper price. This continued to reach the consumer market.

Channels

From the beginning Xiaomi adopted a "direct to customer" (DTC) concept of primary delivery strategy. The mobile sold exclusively through its web store and other online platforms. This launched physical sales platform from 2014 and also adopted the consumer approach directly. It founded its own Mi home stores, without selling its product in third-party markets.

Business model innovation by Xiaomi

As per Teece (2010). Business model innovation is a way to competitive advantage. So when Lei Jun decided to set up Xiaomi, he and his team started to focus on creating an ambitious business model by scrutinizing current business model in the mobile industry. They also built an innovative business model by allowing fundamental and gradual progress in the building blocks of business models.

Types of Xiaomi Business Model Innovation

There are different types of business model innovation

premiumization

Xiaomi has done premiumization as a kind of business model advancement which is repositioning service or product based on continuum of price-performance. Xiaomi repositioned lower-end smartphones with low prices and good quality while mid-end models were of high demand.

Plug-in module

Xiaomi introduced new revenue stream from Plug-in panel. This platform supports other machine and attachments readily inside the core business plan. In Xiaomi's case it may be applied to other peripheral and network products beyond its main smartphone app.

New channel choice,

Due to the new channel option, which is a key example of business model advancement found by Meyer (2007) Xiaomi was able to keep its cost low. In the first four years, Xiaomi sold its smartphone online just to meet its user at low cost.

Manufacturing and supply innovation

Xiaomi developed and produced product by horizontally incorporating its partner start-ups. Through partnering and participating in a variety of companies, it has gained productivity in production and procurement. Because of this breakthrough, this massive expansion of Xiaomi product line became possible.

In just four years Xiaomi built a success by becoming the most successful tech firm in the world and won the No1 spot in China's mobile industry with its innovative business model. It has established a robust global supply chain, its famous applications and digital product delivery channels with 100 million active users. The firm still considers itself as more than just a mobile provider and has aggressively developed its companies into internet infrastructure both vertically and horizontally into other product categories. The corporate plan, rooted in Xiaomi's dream, is to expand the ecosystem rapidly to create defensibility, gain users actively to seize market share, and lock users across services and platforms for bigger monetization later on.

Question 2 Given that Xiaomi has grown its international operations significantly in the last 7 years, the company has had to adopt an aggressive recruitment and training strategy. Based on the systems approach to HRD, the first step of the process is to conduct a HRD needs analysis. Describe how Xiaomi would conduct a HRD needs analysis.

Operational activities

Xiaomi has developed its operations in 70 countries and in 16 markets, among the top 5 smartphone vendors. It manufactures 75% of smartphones in China and India locally. (2017 Sushma). Because of the low cost of human resources in those countries, Chinese and Indian manufacturing units operations are the main sources of value generation.

Xioami's organizational infrastructure is composed of a wide range of support schemes and functions such as planning, quality control, finance and general management. With its presence in 70 countries and recruiting nearly 18000 people. Xiaomi keeps its corporate structure relatively flat (Dudovskiy, 2018).

Xiaomi is projected to employ 1000 technical staff in 2018 and some of them are likely to recruit in 2018). By now Xiaomi has applied globally for 24,000 patents and awarded 5920 of them where half are global patents "(Lei, 2018).

Xiaomi - HRD needs analysis

Employee training programs benefit organizations of varying sizes. Also small companies can boost competencies in customer support. Wide companies also need trainings Human Resource Management Society believes that delivering workplace training programs makes the workplace feel more involved and dedicated to the company.

Implement a staff training plan in your company to boost the morale of your job and teach new skills by Xiomi as described below:

Step 1

Analyze the needs of organisation. Interview managers and supervisors, and identify areas of employee performance that need to be strengthened. Study performance evaluations of the staff to identify rising management problems. Contact the human resources department of organisations that are equally sized and oriented, and inquire what training opportunities are important.

Step 2

Submit the results of the study to the committee or leadership team at the organization. Prepare a detailed presentation and be able to answer questions. Set out the advantages, expected costs and time requirements of each planned plan. Ask for comments, feedback and alterations.

Step 3

Finalize the schedule, and decide the next fiscal year budget. Request for funds using the budgeting mechanism for the organization. Include in the budgeted number supplies, travel, speaking fees, internet access fees and meals when calculating the personnel training budget. Demand for funds until the start of the fiscal year, instead of demanding unbudged funding during the fiscal year.

Step 4

The American Association for Learning and Development advises taking the entire budget and allocating the funds by agency, by person, or by training programme. Note the advantages Xiaomi wants from each training program and decide whether you can get the expected outcomes from the expense of the program. Decide whether to allow or voluntary preparation programmes.

Step 5

List the training classes by Xiomi will offer over the next year. Prepare a schedule, and post it on the intranet of your company. Enable staff to sign up online, if necessary, to save precious time for the workers. Be responsive to workflows and departmental schedules.

Step 6

Out - of-company contract or pick and internal trainer to offer instruction. Call referrals to the future trainer to check that their manuals to delivery style suit your needs. Ask them to send you examples of his work, a quotation of his full wages and a list of any equipment they need. Outsourcing preparation will save money by calculating the expense of the implementation and curriculum.

Tell an individual with industry experience to lead a lesson, or using the human resources department of your business. Set simple class quality standards, and provide a feedback mechanism in place. Extra pay should preparation not be part of the job requirements of the employee.

Step 7

Evaluate each program's progress shortly upon completion of the programme. Ask participants to complete approved appraisal forms. Analyse the remarks and focus on further education. During the year checking by managers to determine the continued effectiveness of the training programs.

Taking all the factors into account, I will conclude by saying that Xiaomi's strategy of dominating the connected home through active investment in Mi Ecosystem Companies is both bold (aggressive) and safe (defensive) and ultimately wise (attaining goals with least effort).

Question 3 How would Xiaomi then evaluate the effectiveness of the HRD programs?

Xiaomi focuses on the following points in terms of its HRD, they have Open culture, good provident funds, great diversity, own employee committee and product launch initiatives.

Open Culture:

Xiaomi as an company aims to provide its workers with a clear and desirable environment. The management organizes an all-hands get-together to develop an open culture where the leadership addresses all the office employees.

Provided benefits:

The Organization is providing a 10 lakh medical insurance to all its workers as part of its compensation plan. The insurance is available for all team members, including wives, parents and babies, and their relatives.

Diversity impact:

Xiaomi, along with two of its manufacturing partners, has partnered on a diversity campaign to recruit more people at their assembly facilities. As a result, at its Chennai plant, it now has over 95 per cent of women. "They appreciate the importance and experience woman operators offer. They are much more secure, centered and efficient, "Muralikrishnan says.

On-board employees from community:

A big part of Xiaomi’s organisational culture is its customers The Company, that is, people who enjoy the brand, has Mi-fans. There are twenty separate fan clubs around the world, and they arranged themselves in a formal way, like naming a president and vice president. The Organization now has 20 staff from the Mi-fan network that has come on board.

Product Launch Initiative:

The Business welcomes these Mi-Fans to the launch each time a new product is launched. About 1300 Mi-fans attended the event last year, when Xiaomi unveiled the Redmi Note 7 pro. Once again, about 1000 fans attended Note 8 release in October 2019. "The aim of inviting them is to gather product input and use this knowledge to better ourselves," Muralikrishnan says.

Only five years ago, Xiomi set out on his journey to India. Xiaomi India currently hires 1,000 people at its Bangalore headquarters and through its five regional offices. Apart from becoming a favorite company in the electronics market, it is also seeking to become a popular place for its workers to work.

Muralikrishnan B, COO, Xiaomi India, says about the Company’s people strategy, “Our people strategy is based on three pillars— we want to be a preferred place to work for our employees, to drive a culture of engagement and create learning and growing culture for the workers and the Company.”

To begin with, the Xiaomi has put in a learning and development initiative called Mi learning systems or Miles Here; they have free services accessible to all, concentrating on developing practical or technological expertise in fields like networking, analytics, user interface / experience, among others. After this, there is a first-time management preparation plan called the boot camp which is a comprehensive eight-week plan. Here all first-time administrators are taken in the art and management sciences through a structured learning session. Employees are trained to hold constructive consultation sessions as part of the course, delegate and treat difficult staff. On the engagement part, the Company has introduced a number of initiatives which also included the feedback session to conclude the effectiveness of the Programs.

“Our people strategy is based on three pillars— we want to be a preferred place to work for our employees, to drive a culture of engagement and create a learning and growing culture for the workers and the company”

-By COO XIOMI India

Xiaomi organises different event to encourage and entertain their employees .Xiaomi organized a cricket tournament called Mi-Pl where the last edition featured about eight teams. The competition ran over four days. This also retains games such as carom, chess and table tennis in the indoor section.

The Company arranged a Kids Day in March, last year, where workers were encouraged to carry their kids to work. Then again the Group celebrated its fifth anniversary in May, last year. They arranged a family day as part of this, where all workers took members of their families to work. The celebration's highlight was the annual awards given by the Xiaomi on that day.

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