Characteristics that are critical to the success of shanzhai companies are:-
* Fast supply chain:- Since they don’t carry any inventory they transfer the inventory risk to wholesalers thus converting their inventory quickly into fast cash. * Less lead time:- Shanzai took only 45 days for mass production which was considerably less than time taken by the traditional manufacturer. So they can provide maximum variety of mobile phones in minimum amount of time. * Target mass market:- The target the people who could not afford the modern expensive mobile phones by providing mobiles at really low cost. Moreover they target the rural areas where function, appearance and price were more important than brand name. * Focus on cost:- They focused in every aspect of cost by compromising on quality and using fast supply chains. * Tailor product features and functions to local requirements:- They provided customer with the same or even better features what all luxury mobile phones have at really low cost.
Things that mainstream companies can do to mitigate the impact of shanzhai are:-
* They can pressurize the government to take some actions since most of the shanzhai phones were produces illegally. It gave them a huge margin to compete with the mainstream suppliers who go through regular and expensive government procedure for its mobile phones. * They should adapt themselves according to the requirement of the customers and focusing more on rural customers by providing delighters like flash light which attract them to buy their mobiles. * They should try to reduce their profit margin without compromising on the features and sell mobile at cheaper price so that people can afford its price. * Since shanzhai mobiles had many complaints regarding quality so these...