Cases of Xiaomi and Oppo - Chinese Mobile Phone Enterprises in the Indian Market - Research Assignment Help

Assignment Task:

Chapter 1: Introduction

Background study:

At the turn of the century, the world experienced an unprecedented pivot from traditional commerce channels to the use of the internet. This indicated the beginning of a new global economy where goods and products would be manufactured and sold all over the world. In the wake of this shift, the main electronic products used were personal computers to access the internet. Progressively, this shifted to hand-held devices also referred to as mobile phones. Currently, mobile phones are arguably the most important gadgets in the world with their offerings of access, connectivity and recently, a responsive conduit for sales and marketing of products. Increased awareness, new products and development of new infrastructure have had a marked effect in the growth of mobile phone manufacturing companies looking to meet the needs of the larger global market. Among the largest players in this regard are Samsung, Huawei, Xiaomi and Oppo, which are all Chinese companies (Bhattacharya, 2019). These companies were developed locally in China following government support and protectionist policies targeting the growth of indigenous companies (FT, 2018). The main boost for their growth was the presence of a robust local market made up of an estimated 1.2 billion people which represents a large market for consumer electronics.

After undertaking changes in the policies of the country, the companies sought a new strategy that was export-oriented and involved the building of products for the foreign market. At the onset, this required an elaborate strategy given the competition would be intensified by there is a larger range of companies fighting for the available market share. Another challenge to be faced in the entry into new markets is the difference in the cultural disposition of the people in the new markets being targeted by the companies. This is are among the main factors that would hinder or restrict new companies from venturing into novel markets and gaining enough market share to be profitable in the long term. The hurdles were however lowered with the growth of social media and its extensive marketing offerings. Through social media companies have been able to investigate the preferences of customers, answer their queries and meet their needs effectively. It has also lowered the institutional barriers that lengthen the process of setting up shop in new markets. Currently, customers have access to products all around the world through e-commerce. At the click of a button, the products could be instantly delivered to them at their convenience.

Despite the ease in entering smaller unregulated markets, there is a greater challenge experienced in the entry of companies into larger markets with greater potential for growth. This especially brings into mind the BRIC nations comprising of Brazil, Russia, India and China (World Population Review, 2019). With a cumulative nominal GDP of $20 trillion, these countries represent great frontiers for growth of market share and profitability for companies looking to get into the export market (World Population Review, 2019). China being one of the largest manufacturers of electronic goods has been especially aggressive in exploring these markets to get a market share for their products. This study focusses on the entry strategies employed by Chinese mobile phone companies in venturing into the Indian market (Bhattacharya, 2019). The study is aimed at delving deeper into the strategic thinking behind certain investments geared towards improving a particular brand’s presence in the Indian market. The companies that will be used as case studies are Oppo and Xiaomi which are among the biggest mobile phone vendors in India (Bhattacharya, 2019). In undertaking the study, there are a variety of problems that the study will be seeking to address.

1.2 Problem statement:

While globalization has made the world more connected than ever, there is still a range of hurdles experienced in the implementation of a robust internationalization strategy. The first challenge is in the fact that the global economic system is intricately connected causing a form of systemic risk for companies targeting the export market. Political events such as trade wars and Brexit have a reverberating effect on other economies making it even harder to structure a workable entry strategy into a particular market. Other challenges to be faced are in the manufacturing and logistics processes. A country like India has a very large population which means cheap labour and better economies of scale with the building of production plants within the country. For other companies, actively exporting electronic gadgets into the country is preferred. In the long run, a balance has to be made between the options explored to identify that which provides the highest value.

Supply-side factors and demand-side factors also play a significant role in the entry strategies employed by a given company. Availability and prices of production factors like raw materials and employees also influence the above-mentioned choices. The most important factor is consumer demand and the types of products preferred by a given market (Bhattacharya, 2019). The mapping of a given market to profile the demographic factors and come up with designs that are appealing and thus sell is important for a given company. Accompanying design factors would be a responsive marketing campaign and elaborate brand awareness to ensure that the product is well-publicized and preferred by the consumers in a given market. These are among the challenges faced by companies venturing into new markets. This study will investigate the case of Oppo and Xiaomi to determine how they were able to overcome these hurdles and grow in the Indian market.

1.3 Research questions:

The primary research question in undertaking this research was seeking to determine the entry strategies used by Chinese companies in gaining access to the Indian market. The secondary research questions were as follows;

1. What are the features of the target market (India) that are important in the structuring of a responsive entry strategy by Chines companies?
2. What other factors are considered by Chinese companies in developing an entry strategy for the Indian market?
3. How do the companies use these strategies to overcome the inherent challenges or barriers present in the target market?
4. How do all these factors contribute to the strategic positioning of the companies and their plans for growth in the long-term?

1.4 Research objectives:

The objectives of the research were developed from the research questions stated above. As such, the main objective of the study was to investigate the entry strategies employed by Chinese companies in delving into the Indian market and the growth of their presence in this market. The secondary objectives of the study were;

• To investigate the features of the Indian market considered by Oppo and Xiaomi in the structuring of their entry strategy in the country.
• To identify the other factors considered by the Chinese companies in developing an entry strategy for the Indian market. 
• To investigate how the outlined strategies, enable the companies to overcome the challenges faced within the Indian market.
• To find out how these factors contribute to the strategic positioning of the companies and the strategies they put in place for their growth in the long-term.

Questions:
1. What these companies have done in other city countries to compare their actions in the Indian market to prove that the Indian market is really valued.

2. In a few simple words, why are other cheap phones not taken seriously? Why Focus on the smartphone.

3. Are both OPPO and Xiaomi used? How many companies did you use? U Can focus on one company, the other two companies as a comparison.

4. Structure and thinking are very clear. Pay attention to controlling the number of words. Please continue to maintain a positive attitude and complete the entire project by the end of July.

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