Group Discussion Week 4_Group 9

Group 9

GUO, Jiawen 

ZHAO, Ruoqi 

HUANG, Wanting

YE, Xiaotong

Discussion 1

ECCR grid (Eliminate, Reduce, Raise, Create):

Eliminate: Xiaomi Automobile has abandoned some elements in traditional car manufacturing that consumers no longer value. For example, instead of producing SUV models that are becoming increasingly homogeneous in the market, it has chosen the field of electric sports cars where there are fewer competitors.

Reduce: Xiaomi Automobile has reduced costs in traditional car manufacturing by introducing super large die-casting technology and exclusively developed Xiaomi Titan alloy, which has improved stability and safety in the production process. Utilizing the experiences and resource of Xiaomi mobile phone system, thereby reducing labor costs and trial-and-error costs.  Apple spent 80 billion and Evergrande spent 100 billion to build cars, while Xiaomi only spent 10 billion.

Raise: Xiaomi Automobile has enhanced intelligence, connectivity, and comfort, which are values pursued by contemporary young consumers. It has widely absorbed user feedback to make the product conform to the aesthetic standards and the concept of "downgrading consumption" of the young demographic.

Create: Xiaomi Automobile has created a new user experience by forming a closed-loop user experience strategy of "user, car, home," embracing Apple users. Xiaomi Automobile fully supports the Apple ecosystem, with nearly 50% of Xiaomi car users being Apple users, which is something other mobile and car brands may not have noticed or been able to achieve.

Discussion 2

Porter’s Five Forces:

1. Buyer Power:

(1) Hybrid vehicles offer cost-effective advantages over pure electric vehicles: In the mainstream market of 100,000 to 150,000 yuan, hybrid vehicles have obvious advantages over pure electric vehicles. Due to the bottleneck in battery cost reduction and the short-term inability to widely apply fast charging technology, hybrid vehicles have become a more cost-effective choice for consumers with their lower prices and stronger endurance capabilities.

2. Supplier Power:

(1) Increased suppliers diminish supplier bargaining power: The expansion of the electric car industry, the number of suppliers increases, it is easier for brands to find alternative parts suppliers, and the bargaining power of suppliers is reduced.

3. Threat of New Entry:

(1) Limited offerings hinder consumer loyalty: Currently, Xiaomi only has one electric sports car model and has not continued to produce or develop other types of vehicles beyond SUVs and sedans that cater to a broader range of age groups. As a result, consumers lack loyalty to Xiaomi's automobiles and are more likely to switch to newly launched models from other electric vehicle brands when making a second purchase.

(2) High entry barriers and manufacturing challenges: The barriers to entry in the automotive industry are relatively high, requiring significant capital investment, technical accumulation, and brand building. As a smartphone manufacturer, Xiaomi leveraged its strengths in AI and the Internet of Things (IoT) to enter the automotive sector. However, it also faces challenges in manufacturing experience deficiency and supply chain management.

4. Threat of Substitution:

(1) Lagging behind in intelligent driving compared to competitors: The Xiaomi SU7 is excellent in terms of intelligence, but compared to some competitors, there is a gap in the level of intelligent driving, especially in terms of data accumulation and algorithm iteration.

5. Competitive Rivalry:

(1) Weakness in intelligent driving: Xiaomi's brand mainly focuses on smart home products and lacks deep cultivation in the automotive industry. Although Xiaomi SU7 excels in intelligence, it lags behind some competitors in terms of intelligent driving capabilities, especially in data accumulation and algorithm iteration.

(2) Many competitors in market: Xiaomi's SU7 is positioned in the mid-to-high-end market, with its main competitors including Tesla Model 3, LUXEED S7, Zeekr 007, XPeng P7i, and others. These models directly compete with Xiaomi SU7 in the price range of 200,000 to 300,000 yuan.