Huawei's Competitive Strategy and Porter's Five Forces Analysis

The assignment provided is an analysis of Huawei's competitive strategy, including its pricing strategy, marketing mix, and porter's five forces analysis. The document also explores the company's growth in the smartphone industry and its strategies for maintaining a competitive advantage. It includes references to various books and journals, as well as online sources. The analysis concludes that Huawei can continue to grow by adopting innovative strategies and bringing new products to the market.

HUAWEI REPORT
FRAMEWORK

Table of Contents
INTRODUCTION...........................................................................................................................1
COMPANY OVERVIEW...............................................................................................................1
COMPETITIVE ADVANTAGE ....................................................................................................2
Porter's five forces analysis .........................................................................................................3
Swot analysis...............................................................................................................................4
ORGANIZATION COMPETITIVE POSITION............................................................................5
Marketing mix..............................................................................................................................5
RECOMMENDATIONS.................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Smartphone industry is at growing stage. This industry keeps on introducing the new
technologies for attracting large number of customers. The sales of the industry is increasing day
by day at globe level. Smartphones are the mobile phones that can used for multi purposes. It
provides faster wireless communication. Smartphone industry began to rise in the year 1992. As
per the research in UK 85% of the UK population use smartphones.
The report is based on Huawei as it is a well-known brand for smartphones all over the
world. Assignment will provide a detail overview of the company. The study will explain about
the competitive advantage by using Pestle and Swot analysis. Furthermore, the report will
explore any aspect that is relevant to organization's competitive position through using marketing
mix. Lastly, assignment will provide recommendations and conclusion.
COMPANY OVERVIEW
Huawei Technologies CO. Ltd is a Chinese technology company. The firm mainly
provides consumer electronics that includes smartphones and telecommunications equipments.
It is established in the year 1987 about 30 years ago. It is founded by Ren Zhengfei. The
company's headquarters are situated in Shenzhen and Guangdong in China. Firm operates from
170 countries. Due to cybersecurity allegation on the Huawei the firm has faces difficulty in
some of he markets.
The company is promoting its 5G network all over the globe. The total number of
employees which the company has is 188,000 till the September 2018. The company spend its
money highly on research and develop meant for taking competitive advantage (Rahim, Safin
and Ali, 2016). Huawei is one of the largest telecommunication manufacturer in the world.
The company has generated revenue of US$ 108.5 billion in the year 2018. In early years
1980 the company has started gaining popularity when they introduced the telephone exchange
switches. Later on, the foreign expansion of the company is done in the year 1997 when Huawei
has introduces fixed line network to Hutchison Whampoa which is a Hong Kong company. In
the year 2005 the company foreign contract has exceeds for the very first time than its domestic
sales. In the year 2012 the Huawei has moves its headquarters to the UK. In the year 2017 the
Huawei has created Narrow Band IOT. Its applications are the cloud computing and big data.
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COMPETITIVE ADVANTAGE
It refers to the condition where the company put itself to make superior to themselves
from the other competitors. This means to take lead in business position. The Huawei Strategy is
to connect the world and to take lead over the popular brands such as Apple and Samsung. They
also support sustainability to increase their brand reputation among the people's mind
(Competitive Advantage, 2019). The major role in taking competitive edge is of Research and
Development department of Huawei. By doing innovation in the products the company is able to
take competitive edge. The firm has established laboratories at worldwide. The smartphone giant
has opened 47 company who just look-after the innovation.
For example, the Apple only focused on the wealthy customers whereas Huawei also
offering low prices phones for the middle class people (China’s Huawei is taking on Samsung
and Apple, 2016). The company is taking leverage in untapped markets. Their marketing concept
relay on race to engage. The company's 76,000 of the employees are highly devoted on the R&D
department. They want customer engagement for the long term basis. There motive is not just to
make profitability but also to satisfy customers needs.
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Illustration 1: Huawei Competitive strategy
Source:(Competitive Advantage, 2019)

Porter's five forces analysis
Smartphones industry is one of the growing and most profit making industry. Thus, the
Smartphone giant Huawei is able to make higher profitability. Hence, the Porter's five forces
analysis is applied to see what are the forces that drives smartphone industry and Huawei -
Bargaining power of Buyers (High) – The customers of Huawei has high bargaining power as
there is many relative products are available in the market. One of the firm strategy is to provide
lower prioce smartphone but their competitors which are Xiomi, OPPO and Lenevo are also
doing so. Thus, the customers switching behaviour is high in this industry. . This gives customers
a choice to choose the products from the large number of manufactures. Therefore, Bargaining
power of the customers is high in smartphone industry
Bargaining power of Suppliers (High) – Very few suppliers are available in technology
industry. Thus, this gives suppliers power to bargain more in smartphone industry., For making
smartphones, there is need of raw materials such as memory, ATL chips and extra. Thus, the
firm has to deal with these suppliers for doing timely delivery of the raw material and products.
Therefore, Bargaining power of suppliers is high for Huawei.
Competitive Rivalry (High) – There is intense competition in Smartphone industry. Companies
are doing battle to take the competitive lead. Smartphone manufacture companies are keep on
bringing the advance technologies and features in their smartphone so that they can gain the
customer's retention (Grodal, Gotsopoulos and Suarez, 2015). Thus, the Huawei is also highly
engaged in innovation. They are offering lower price products so that they can gain competitive
advantage but their competitors are also doing price wars. For example., Huawei competitor
Lenovo is also offering low price products. Customer switching behaviour is high in this
industry. Therefore, Huawei is highly investing in R&D department. Hence, competitive rivalry
can be said high for the smartphone industry.
Threat to Substitutes (Low) – Very few substitutes are available in comparison to smartphones.
The substitutes are the tablets, PC and telephones. They can't compete the features and multi
processing which smartphones can have, Even, there substitutes is bigger in size. The
smartphones are easily carried by the customers in their pockets. Thus, the customers prefers
smartphones. Hence, Smartphones cannot be replaced by its substitutes. Therefore, the threat of
substitutes products is less for Huawei.
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Threat to New Entrants (Low) – The threat of New entrants is considered as low for the
Huawei because the huge capital investment is required in R&D department and for launching
smartphones (Tao, De Cremer and Chunbo, 2016). Even to adopt the latest technology can be
difficult for the new entrants as the suppliers bargaining power is also high. Although there is
tough competition in smartphone industry. This makes difficult for the new entrants to capture
this markets. Hence, the Threat of new entrants is low for Huawei.
Swot analysis
It is a strategic tool that identifies the opportunities and threats of the company. Thus,
Swot analysis is being done to identify the internal environment of Huawei -
Strengths
 Huawei strength is that they do competitive pricing which is helpful for them to take
competitive lead. Earlier popular brands Samsung and Apple are smartphones leaders but
Huawei used competitive pricing strategy to compete with them. Samsung and Apple
smartphones are comparatively higher price than the Huawei.
 The company supply high quality products. They provide products at reasonable prices
without compromising with the quality. The Huawei phones has rate 4 stars by the
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Illustration 2: Porter's five forces analysis
Source:(Porters five forces, 2016)

customers, Thus, this indicates that customers are satisfied by the product quality
(Gjoreski, Ciliberto and Roggen, 2018).
Weakness
 Huawei has less capital in comparison to Apple. The capitalization amount is verry less.
Thus, the firm has to take its business moves very consciously and make plan
accordingly.
 The company doesn't market its product as much needed. Very little amounts remained
for marketing. Therefore, there is less brand awareness of Huwai products in some
countries such as India. This makes the company weaker brand.
Opportunities
 The company has opportunity to open its brick stores in Indian and UK markets. The firm
has scope to expand their business in both the countries. It improves brand perception of
Huawei products if they open up their own physical stores.
 The company is quick to innovate. Thus, they are able to bring 5G technology at
worldwide level. By designing 5G friendly mobile they are able to take competitive lead.
Threats
 There is tough competition in smartphone industry. Thus, the firm has threat from its
competitors such as Lenovo and OPPO who are also offering products at less price (Yeh,
Wang and Yieh, 2016).
 The rising material and labour costs at global level can be threat for this smartphone
Giant. As for making equipments there is high requirement of Labour and materials.
ORGANIZATION COMPETITIVE POSITION
Marketing mix
To learn more about organization competitive position the marketing mix is explained as
follows -
Product - The Company has vast product range. The products of Huawei mainly includes
Mobile, Smartphone, Fixed broadband services and multimedia technology. The company brings
innovative technologies to gain the customers interest. The company builds digital platform by
using its ICT technologies that includes cloud computing, big data and software networking.
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Price - The firm has adopted competitive pricing strategy. It is one of the low cost smartphone
supplier. They provide good quality products at comparatively lesser price which helps them to
gain competitive advantage (Dol, Colin and Otnes, 2015). The firm target both the lower income
group and higher income group. There smartphone range various from customer to customer.
Thus, this makes them differ from the other brands.
Place - The firm sales its products by two channels. First is that they have online existence.
People who prefer online shopping can directly purchase their products through online website
of Huawei. The second mode is that they sell their products to wholesalers, and they again resale
it to retailers. Lastly retailers distribute their products to the end customers. The firm has global
existence.
Promotion – Traditional as well as digital both the marketing channels is being used by Huawei.
The company sells and promotes its products globally by using E-commerce channels. Digital
promotion is also used by the firm such as through social media. The company hires sports and
movie starts for promoting their products. Beyond this the company also publish its articles in
newspapers and magazines to attract large number of people.
People – The people who are working in their sales team are remain important for the company.
Other one is there R&D department who brings innovative products in the market (Chung, Choi
and Choe, 2019). The customers are also in company's priority list. They take customers reviews
very seriously. By considering the reviews on their official website they make further changes in
their products.
Process – Huawei insures that their retailers have sufficient amount of stock available so that
they can sale it to the customers on timely basis. Their retail stores have various systems
installed that timely informs the company when inventory levels are low. The company has
online delivery process. The computer systems receive this orders and delivered to the service
providers.
Physical Evidence – The distinct packaging is being used by Huawei which makes them differ
from the other smartphones brands. The company also demonstrate its products features, colours,
size on their online website in high quality image by capturing it from various angles.
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RECOMMENDATIONS
Huawei can make improvements in their products and services by considering this -
 The company can offer discounts to its loyal customers to increase customers
engagement.
 The company can hire influencers such as bloggers or popular TV stars to advertise their
products on social media channel. As from there they are able to attract large number of
the customers.
 Huawei can also bring up their own app which facilitates customers.
 The company should constantly look into their processes for making improvement in it in
terms of cost and efficiency.
 To increase employees loyalty the firm should provide timely bonuses.
 Before going for commercialization of the new products the company should test it.
CONCLUSION
From the above project report it has been concluded that Smartphone industry is growing
rapidly. The smartphones firms are making huge profits. It has been concluded that aggressive
pricing strategy of Huawei is making them super giant in smartphone industry. Through
conducting porter five forces analysis and Swot analysis it has been identified that there is
internal and external forces that influence the Huawei profitability. The firm can take
competitive advantage by snatching the opportunities. Organization competitive position is being
analysed with the help of marketing mix. It has been determined that Huawei can continue to
grow by adopting strategies and bringing innovative products in the market.
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REFERENCES
Books and Journals
Chung, H., Choi, K. and Choe, N., 2019. Development of a smartphone application for providing
disinfectant information on livestock industry. Korean J Vet Res.59(2).p.97.
Dol, H., Colin, M. and Otnes, R., 2015. How smartphone industry made UComms easier:
Moore's law goes underwater (pp. 1-5). IEEE.
Gjoreski, H., Ciliberto, M. and Roggen, D., 2018. The University of Sussex-Huawei locomotion
and transportation dataset for multimodal analytics with mobile devices. IEEE
Access.6.pp.42592-42604.
Grodal, S., Gotsopoulos, A. and Suarez, F.F., 2015. The coevolution of technologies and
categories during industry emergence. Academy of Management Review.40(3).pp.423-
445.
Rahim, A., Safin, S.Z. and Ali, S.M., 2016. Factors influencing purchasing intention of
smartphone among university students. Procedia Economics and Finance.37.pp.245-
253.
Tao, T., De Cremer, D. and Chunbo, W., 2016. Huawei: Leadership, Culture, and Connectivity.
SAGE Publications India.
Yeh, C.H., Wang, Y.S. and Yieh, K., 2016. Predicting smartphone brand loyalty: Consumer
value and consumer-brand identification perspectives. International Journal of
Information Management.36(3).pp.245-257.
Online
China’s Huawei is taking on Samsung and Apple. 2016. [Online]. Available
through:<http://theconversation.com/how-chinas-huawei-is-taking-on-samsung-and-
apple-52838>
Competitive Advantage. 2019. [Online]. Available through:<https://www.google.com/url?
sa=i&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjKndmw>
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