Company Name :
Xiomi
Model Name : Redmi MI
The following are the 5
economic concepts that can be applied for the redmi MI market in India:
Ø Oligopoly market’
Ø Elasticity of demand
Ø Demand curve
Ø Supply curve
Ø People responding to incentives
Oligopoly market
In India
smart phone market falls under the oligopoly market.
Xiomi,
Lenovo, Huwai falls under this market.
The
reduction in price of Xiomi becomes barriers of control for other big companies
like Samsung, Apple etc.
People responding to
incentives
India is
price sensitive country. Xiomi took the advantage of Indian market. People gets
lots of features in a very reasonable price.
Example:
Xiomi MI 4 was priced at around Rs. 10,990 with high end quality features
whereas Samsung J7 was priced at around Rs. 14,000.
Elasticity of demand
Since there
are many substitutes elasticity of demand will be there.
In the
market where companies like Apple, Samsung rule Xiomi keeps its price so low
and in that low price it provodes premium quality phone that its demand
increases.
Samsung a
had fight when Xiomi offered more functions of smartphones at a lower price
with same specification.
“Theory of
share of a good in a consumer budget”
If goods
take a larger share of consumer budget it tends to be more elastic than the
goods that take only as small fraction.
Demand curve
Increase in
the average price of Lenovo A6000 causes the demand curve for Xiomi shift to
the right and increases the quantity demanded of Xiomi Redmi 2.
Supply curve
In July
2014, India has became the most important market for Xiomi outside China.
Xiomi’s
entry will shift the market supply curve to the right for smartphones.
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