OnePlus: A Chinese Tech Start-up Aiming to Disrupt the Global Smartphone Market
| Case Code: LDEN107 Case Length: 20 Pages Period: 2013-2016 Pub Date: 2016 Teaching Note: Available |
Price: Rs.400 Organization : OnePlus Industry: Smartphone Countries : China; Global Themes: Entrepreneurship, Business Model, Startup Management, Competitive Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
OnePlus, a Shenzhen, China-based technology start-up sold 1.5 million units of its first flagship smartphone, OnePlus One, globally within first year of its launch. The numbers took many by surprise considering the company was new to the market with limited investment, lack of brand awareness, meagre marketing budget and stiff competition in the crowded global smartphone market. Despite the odds, OnePlus emerged as the most successful Chinese start-up after Xiaomi Inc (Xiaomi) due to its low-cost smartphones offering high-end specifications sold directly to consumers globally through an innovative invite system. According to industry experts, OnePlus was a path-breaking company set out to achieve what no other Chinese company has ever done in the global smartphone market. "One Plus basically is making everyone in the smartphone business look foolish at the moment. A lot of the far-bigger companies have been complaining they can't compete with Apple, while One Plus appears to be doing just fine against the firm -- and far better than Samsung or HTC at the moment. This is because One Plus has found the magical trifecta of exclusivity, attractive price, and compelling differentiated features to be the perfect toxic mix to offset Apple's massive size and market dominance," remarked Rob Enderle, principal analyst at Enderle Group Inc.
OnePlus was co-founded in late 2013 by former OPPO 3 executives Peter Lau (Lau) and Carl Pei (Pei) who adopted the high-quality, low-cost imperative of OPPO. The "Never Settle" motto of OnePlus aimed at providing the best possible technology to users globally by creating elegantly designed devices with premium build quality and high performance hardware. OnePlus considerably undercut rival products on price, despite closely matching them on specifications. The business model of OnePlus was built around razor-thin margins. The company maintained thin profit margins and limited inventory. It employed an unconventional invite-only system that limited buyers to those who had received an invite from the company directly or from someone who had already purchased the device. The invite system allowed the company to keep tight control over inventory and manufacturing costs, manage risks and created an aura of exclusivity around OnePlus products and made customers crave for its products....
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