Research On The Strategic Transformation Of Xiaomi Under The Background Of "Internet +"

In recent years,with the rapid development of science and technology,the "Internet +" era of new technologies such as big data,artificial intelligence,and cloud computing has emerged.This makes the market situation change rapidly and the competition between enterprises becomes increasingly fierce.Relying on the Internet dividend,the smart phone market has shown a rapid growth trend from 2011 to 2016.Against this background,Xiaomi experienced a trough period since its establishment in 2016,and its heavily dependent mobile phone business sales showed a cliff-like decline.Therefore,Xiaomi,which mainly relies on mid-to-low-end mobile phones for profit,has had to carry out a series of strategic transformations since 2016 to adapt to the huge changes in the internal and external environment.What caused Xiaomi to encounter a major Waterloo? What risks might Xiaomi have in the process of strategic transformation? And how to prevent these risks are topics worth studying.The paper analyzes the current situation of Xiaomi Company and its internal and external environment to obtain the motivation for its strategic transformation,and then analyzes its specific strategic transformation strategy,and proposes possible risks during the transformation and corresponding preventive measures.Using PEST and Porter's five-force model to analyze the macro and industry environment,combined with the analysis of Xiaomi's internal resources and capabilities,it was found that new technology changes in the external environment,bargaining power is at the disadvantage of the industrial chain,and the market is approaching fullness.The fierce competition in the industry and the gradual diminution of the original resources and capabilities of the company are the driving forces behind Xiaomi's strategic transformation.Then through the analysis of its specific transformation strategy in product structure,business,channel and organizational structure,it puts forward the possible financial and non-financial risks in the transformation process: First,the inventory realization risk.Due to the continued decline in millet mobile phone shipments and supply chain problems in the past three years,resulting in a backlog of raw materials and manufactured products,the inventory turnover rate has decreased,which in turn has reduced inventory liquidity and increased inventory liquidity risk.The second is receivables recovery risk.In order to rapidly expand offline channels and overseas markets,Xiaomi has adopted the form of credit sales,which has reduced the company's receivables collection efficiency and cash rate.The third is cash flow risk.Xiaomi 's net cash flow from operating activities is negative for three years,and the large amount of cash flow required for operating activities depends on the cash inflows from financing activities.The fourth is supply chain risk.With the rapid expansion of Xiaomi's strategy and business,all links in its value chain may not be enlarged simultaneously.Due to the lack of self-built industrial chain and core component technology,problems have arisen in the procurement cost control.Fifth,competition risk.As the mobile phone market continues to be subdivided,there are many manufacturers in each market line,and the arrival of 5G has further increased the degree of competition.In addition to competitors in the industry,traditional manufacturing companies with technological advantages have also become new competitors in the Io T business.The research conclusions of this article are divided into two points: First,the huge pressure on the internal and external environment of Xiaomi makes the strategic transformation of Xiaomi imperative.Second,the main risks of Xiaomi's transformation are inventory realisation risk,receivables recovery risk,cash flow risk,supply chain cost risk and competition risk.The corresponding countermeasures are to improve the company's inventory management information level,improve the accounts receivable management system,improve the company's profitability,maintain supplier relationships,increase R &D investment and enhance the uniqueness of the product.The innovation of this article is reflected in the current strategic research on Xiaomi in China,which mostly focuses on the company's strategic research on its mobile phone business.It does not study the company's overall strategic transformation,strategic risks and countermeasures.