Business Model Innovation of Exponential Organizations: The Case of Xiaomi

Abstract

The latest trend in today’s organizational development is to become exponential organizations. As a new organizational paradigm for the Internet society and sharing economy era, it is a more flexible, streamlined, and entrepreneurial organization that efficiently integrates global resources and achieves rapid growth. While existing literature has explored how exponential organization success is inextricably linked to its business model, little attention has been paid to and summarized regarding each stage of the exponential organizations’ innovation in the context of the business operation cycle. Meanwhile, the limitations of previous studies were not providing sufficient explanation or strategies for Chinese manufacturing organizations’ exponential transformation to make them sustainable, and not upgrading to relate to organizations in general rather than focusing on a representative Chinese organization. This work aims to deeply analyze a single case of Xiaomi, the representative of exponential organizations, through a case study, summarizing the business model innovation strategies of exponential organizations from four perspectives—value proposition, value creation, value delivery, and value capture—and 11 elements of exponential organizations. The findings are as follows: (1) Making full use of Internet digital technology and effectively integrating and utilizing social resources can help exponential organizations to build an innovation ecology and (2) The 11 attributes of exponential organizations and the corresponding requirements provide more options and space for business model innovation. As a result, these findings add to the current discourse regarding exponential transformation and upgrading, with the expectation of providing theoretical references for the Chinese manufacturing organizations’ exponential transformation and upgrading.