FIVE ECONOMICS CONCEPTS USED BY XIAOMI

UTILITY -
👉 The satisfaction people derived from consumption activities.
👉 Xiaomi mobiles are known for its great specifications with lower price which leads to consumers satisfaction. Here the utility consumers get by using Xiaomi products is very high. That's why Xiaomi has become the most selling mobile mobile brands in Indian market for the last three quarters.

PRODUCTION FUNCTION -
👉 Maximum output Q that a firm can produce for every specified combinations of inputs.
👉 Xiaomi which is a Chinese company initially faced a lot of problems to fulfill the demand of its products in customers because it has no manufacturing plant in India. But now it has nearly six manufacturing bases in india where a lot of skilled labour work to produce Xiaomi products. So right now it can meet the demands of the consumers in india.

PRODUCT DIFFERENTIATION -
👉 Every model of Xiaomi has a three variants like 2gb ram with 32 GB internal storage, 3gb ram with 64 GB internal storage and 4 GB ram with 128 GB internal storage. So product differentiation help customer in choosing for buying purpose which helps Xiaomi in Selling its products.

RELATIONSHIP BETWEEN SUPPLY AND DEMAND -
👉 Xiaomi always uses flash sell method in online store. Where limited number of mobile units sell occurred for a limited time period. In this situation the demand is high but supply is limited so it sells all its products comfortably.

ECONOMICS OF SCALE -
👉 Economics of scale means percentage of change in average cost of production following 1% change in output.
👉 Xiaomi eliminates having to manage surplus raw materials and drastically reduced shipping costs. Secondly it also use inventory holding technique which helped in keeping costs down by lowering inventory holding price. And lastly it gives less emphasis on advertising. So its advertisement cost is very low. In this way Xiaomi lowers its manufacturing cost which leads to increase in productions.