The digital world is abuzz with a four year old company – Xiaomi –
giving established global multinationals a run for their money. The company has
already trounced Samsung in China to be the numero uno in smartphones. It’s now
training its eyes in India where initial sales have been more than encouraging.
With its stupendous rise, Xiaomi has also attracted some rave reviews. It has
been accused of aping innovation giant Apple. Can a new comer replicate the
success of an established one?
The annals of business history would perhaps reveal the truth. In
the recent past, we have seen Samsung and Apple take each other to court
several times for replicating innovation. In today’s digital age, such blatant
replication of innovation is bound to rise as faster-innovation-to-market becomes
the norm. One copies the other to go one-up in the market. Is there a way out?
An increasing number of companies can be seen scaling up their investment in
people and culture. This investment would be the only competitive
differentiator that a competitor cannot copy. Around people and culture
revolves significant other differentiators like programs, assets and
capabilities. These are unique as are the people within each organization.
Take for example the perceived value of quality that comes with
every product. The company creates products that consistently deliver high
quality in accordance with its brand promise. An Apple customer need not
necessarily go through reviews and recommendations to understand and assimilate
specifications – features and functionalities. They simply know what they are
getting – an outstanding product. The late CEO of Apple, Steve Jobs, had said,
‘be a yardstick of quality. Some people aren’t used to an environment where
excellence is expected.’ He also believed in ‘hiring good people with a passion
for excellence.’
Xiaomi is a four year old brand with the perceived value of
offering products that are value-for-money. At least, for the time being. The
company probably has a winning product in Mi3 packed with all the features and
functions of a top-notch Samsung or Apple product and time will tell if
customers aspire to own the product. Going by its marketing ploy, limiting
availability to a select few, there is certainly a beeline of customers waiting
to own the product. Can they change the perceived value? Time will tell.
Business history indicates that companies who create radically new
markets are not necessarily the ones that scale them up into big mass markets. The
pioneers almost always lose out to latecomers
