Research On Strategic Risk Management Of Xiaomi Company Based On Balanced Score Card

With the great increase in the popularity of the Internet and the rapid advancement of information and communication technologies,a series of Internet companies have been born in line with the trend of the times.As an Internet company founded only nine years ago,Xiaomi has stood out among many Internet companies with its unique business model and has grown rapidly to become a leading Internet company in China.Not only has it become the third-ranked unicorn company in China with a valuation of $46 billion,but it has also been officially listed on the Hong Kong Stock Exchange in 2018.Xiaomi's business model is that after the company sells intelligent hardware at a lower profit margin,it provides Internet services to customers through the MIUI system.It can be seen that Xiaomi Company is essentially an Internet company,except that its customer channel is different from traditional Internet companies.The business of Xiaomi's external sales of intelligent hardware is essentially the channel of its Internet business.This is why the public's perception of Xiaomi is more inclined to be a hardware company.This business model can promote the stickiness of Xiaomi's Internet business users through the use of intelligent hardware.However,because it involves both the intelligent hardware industry and the Internet industry,it has made Xiaomi more impactful in achieving its strategic goals,and its strategic risks are more complicated.Therefore,Xiaomi Company urgently needs a strategic risk management tool that is both simple and effective.At present,the research on strategic risk at home and abroad tends to explain its definition,type and cause of comprehensive and precise.Few scholars are based on the development of a strategic risk management theory that is simple and easy to understand,enabling business managers to quickly master and integrate with practical work.The academic community's understanding of the Balanced Scorecard is more of a performance evaluation tool.Although some scholars have combined it with risk management,they have not conducted in-depth research on its application in the field of strategic risk management.Based on the above background,this paper uses the strategic management tool ofBalanced Scorecard to study the issue of Xiaomi's strategic risk management.In the theoretical part,firstly introduce the contents such as the research background,the research status at home and abroad,the basic framework of the paper,etc.,and use it as the starting point of the article to lead the full text.Then draw on the research content of the predecessors,define the strategic risks and introduce the balanced scorecard theory and risk management theory throughout the full text.Finally,the superiority of introducing the Balanced Scorecard into strategic risk management is clearly defined.In the practice part,following the traditional risk management theory,the basic ideas of Xiaomi's strategic risk identification,Xiaomi's strategic risk assessment and Xiaomi's strategic risk response are carried out.In Xiaomi's strategic risk identification process,we first introduce Xiaomi's main business and its established strategic goals.Then,the strategic environment in which it is located is analyzed from the perspectives of macro,meso and micro.Finally,the four aspects of the balanced scorecard are classified into categories for the contradiction between the strategic objectives and the strategic environment.In Xiaomi's strategic risk assessment process,it evaluates from the perspective of the possibility of risk occurrence and the negative impact on the strategic objectives after the risk occurs.For the former,the risk of occurrence is scored by a simple fuzzy comprehensive evaluation method.For the latter,the hierarchy is first established using the four dimensions of the balanced scorecard as a link.Then use AHP to determine the weight of strategic risks,and use weight to measure the negative impact of each strategic risk.In the strategic risk response process of Xiaomi Company,the work of risk response was firstly divided according to the nature of the four dimensions of the Balanced Scorecard and the organizational framework of Xiaomi Company.Then,countermeasures were put forward for the analysis of the more important strategic risks.After researching the idea of using the balanced scorecard for Xiaomi's strategic risk,it was found that Xiaomi's overall strategic risk rating is very close to the lower risk level,and there are some strategic risks that need to be focused on,such as the risk of income structure and the risk of brand and reputation damaged.Thus Xiaomi company should finish some specific measures such as enhancing the ability of the Internet to liquidate and properlyhandling the negative information of the internet.It can be said that this paper not only finds new research ideas for strategic risk management of enterprises,but also explains the feasibility and superiority of introducing balanced scorecard into enterprise strategic risk management from the perspective of practice,and also combines the specific situation of Xiaomi Company.A set of processes for strategic risk management based on balanced scorecards can not only strengthen the management level of Xiaomi's strategic risk,but also provide reference for strategic risk management of other similar enterprises.