Huawei's Strategic Positioning in the Smartphone Industry

This solved assignment analyzes Huawei's strategic positioning within the global smartphone market. It utilizes Porter's Five Forces model to assess the competitive landscape, considering factors like threat of new entrants, bargaining power of suppliers and buyers, and industry rivalry. The analysis also includes a SWOT (Strengths, Weaknesses, Opportunities, Threats) evaluation and offers recommendations for Huawei to strengthen its position in this dynamic industry.

HUAWEI SMARTPHONE INDUSTRY ANALYSIS
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Executive Summary
The creation of strategic planning is maintained through analysis of the industry. The overall
analysis of Huawei has effectively revealed in this report. The evolution of the company and it
has flourished well both in the local and global market and has room for improvement. The
utilization of the employees to generate a good brand name in the telecom market and techniques
that are used to overcome various hurdles is effective in some areas of the market. There are
various threat along with opportunities that the company has undergone while establishing the
brand well.
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Table of Contents
Introduction......................................................................................................................................4
Discussion based upon industry nature............................................................................................4
Porter’s five model for expanding the industry...............................................................................5
Organizational competitive position................................................................................................6
Threats and Opportunities................................................................................................................8
Recommendation.............................................................................................................................9
Conclusion.......................................................................................................................................9
Reference list...................................................................................................................................9
Appendix:......................................................................................................................................11
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Introduction
Industry analysis is mainly maintained for the creation of the strategic planning. In case of the
development of the product and services of the Huawei Smartphone the effective analysis are
measured in this scenario. The discussion based upon the industry nature with the help of the
Porter’s five forces model along with the opportunities and threats are maintained. The
competitive position of this particular firms are also discussed in this aspect with the help of
supply chain, branding, marketing are stated. The effective recommendation for the next two to
five years is also discussed in this assignment. The main aim of this study is to analyze and study
the impacts this company has created on the global telecommunication network, the overall
advantages and disadvantages, threats and opportunities it has in the competition. Herein the
topic is about Huawei Smartphone industrial analysis through which its overall working structure
will be compared with its rivals.
Discussion based upon industry nature
Huawei is a china-based company which is the considered as the biggest manufacturer of the
Smartphone and its equipments. It was founded in the year of 1987 and its founder is Ren
Zhengfei who started this company as a manufacturer of phone switches. Later this company has
started expanding its business globally and started manufacturing new technology devices like:
computers, dongles and tablets. They started to focus on creating a strong and trusted customer
base. In case of the development of a strong business solution all over the world it targeted to
develop business partnerships with other competitors globally. In the year 2014, its revenue
reached an all-time high of 46.5 billion dollars. The company’s structure can be well analyzed by
looking at the working ethics and the guidelines this company follows. From the very beginning
of the business, the company has followed the consumer-centered approaches. They have started
to take customer feedbacks and met all the queries and suggestions they have put forward. The
firm also emphasizes hard work of their employees for their competitive success. The
dedications and commitment of their staffs are well-acknowledged as the company knows that it
is the spirit of their dedicated work forces which has lifted their company position in the global
telecommunication market. The chosen company has even released its market shares between
their employees, in fact it is owned by the employees. The founder only owns 1.4% market share
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in the whole company and the staffs hold the rest of it. So the employees share the company
benefits which lift their work spirit “(State of the Smartphone industry 2016: top brands and
trends. 2017)”.
The company also follows an innovative future thinking procedure. This process not only helps
in retention of the old staffs but also helpful in the recruitment process of the future employees.
Most of its rival companies such as: Oppo, Gionee create a quarterly based financial plan
whereas this company follows both short term financial guidelines as well as the long term plans
to stay focused on their future goals. The future decision making power is vested on the
company’s owner and no outsider particularly the company investors can interfere in framing the
decision of the particular organization “(Huawei Smartphone Sales Rise In the First Half of
2016. 2017)”.
Porter’s five model for expanding the industry
The use of porter’s five forces model in the company has helped in better understanding of the
current situation of the business. The strengths and weaknesses as well as the appropriate
position of the company are considered. Huawei is currently third on the list of Smartphone
manufacturer in the world. The tool was used before to analyze properly where the business will
be more profitable and the products are launched accordingly. “Porter and Heppelmann (2014,
p.78)” The potential of the newly launched product was gathered with the help of this model.
These days, this particular tool is used more effectively in proper understanding of the market
situation as well as the market trend. The opportunities and the threats of the product in a
particular geographical region are analyzed through this. In the overall analysis, this tool uses
five important guidelines, the supply power, the power of the buyer, the rivalry in the market, the
substitution threats and also the threats offered by the newly entrants in the market.
Supplier’s power – the chosen firm has to assess how much easily the suppliers can drive up the
prices. The firm has to implement each important input for the uniqueness of their product and
services. They have to conduct a thorough analysis of how much cost-effective it would be to
switch from one supplier of the product to another.
Power of the buyers – the chosen company mainly analyze buyer’s perspective before the launch
of a particular product. They set the price in such a way that a significant number of customers
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are able to buy it. In order to retain their core customer base, the buyer’s perspectives have to be
considered into account. They are introducing various new products and are signing new
partnership agreements with rival companies like Google and Samsung to influence their market
effectively, “(Kharpal, 2017)”.
Market Rivalry – in the global Smartphone industry, the rivalry is stiff. “Rao and Reddy (2015,
p.45)” said that, the competitor’s threats and weaknesses have to be taken into consideration
when introducing new product in the market. The products and services of the rivals are also
noticed such as: LG and Samsung. The firm has to put some aggressive business maneuvers to
overcome this stiff competition and survive in this world.
Threats of substitution – since the market is always increasing, the customers are getting more
and more buying options. This forces Huawei to bring attractive offers and pricing techniques to
retain those existing buyers. “Bull et al. (2016, p.100)” suggested that, the facilities offered in
their devices have to be extraordinary and out of the common concept so that the existing buyers
continue to buy form the chosen company. The substitutes are mainly: Oppo, Vivo, Xiaomi.
Beside this, a trusted relationship has to be created with the customers so that they can get all the
information about the company whenever they want.
Threats of new-entrants – many rival companies have faced terrible loss when a new-entrant
company supplies a better quality product in the market. Huawei has to make sure their products
are fulfilling all the criteria that the customers are demanding. It is a general tendency that the
new-entrants like: ZTE mostly offer the same qualities and services but they charges
significantly less than other companies. This company has to set their prices accordingly to
overcome this challenge.
Organizational competitive position
The main competitors of Huawei are Samsung, Xiaomi. Other than that Oppo and Vivo are
gaining popularity in this chosen business.
Xiaomi: This firm has overturned Samsung to become China’s highest selling manufacturer but
they have lost their position to Huawei in the year 2015. “Shockler and Fetter (2015, p.52)”
stated that, the market share of this industry is constantly declining and this is indirectly
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benefitting the chosen company. The supply chain of this firm is weak as most of their suppliers
are changing their supply line to other company. The services that the above mentioned firm is
offering are not fulfilling the customer satisfaction. Xiaomi’s brand name is overall is going done
as compared to Huawei.
Oppo: This is a newly entrant company in the existing telecommunication business of china.
They are supplying their products globally and are targeting to capture the declining market of
Xiaomi. Last year their shipment has surged to 18 million and this has directly affected their
share in the market. Their newly launched product has played a vital role in their market capture
particularly in the subcontinents. “Salcito et al. (2015, p.676)” suggested that, the main concern
of this firm is their weak customer base in most of the regions of the world. This is the main
reason why they are not flourishing even though they are offering a strong and intelligent
product.
Samsung: Samsung is no doubt the biggest threat of Huawei in the industry. Their products hold
the maximum share in the market. Samsung has kept their supply line constant and their brand
value is trusted by most of the customers. “McLay (2014, p.102)” said that, this company’s
product is highly appreciated by the customers around the world and is fulfilling their needs.
However, their main concern is their pricing techniques which are diverting their customer base.
Huawei has to capture this section and pull most of their rival customers.
Vivo: like Oppo, Vivo is also a new-entrant in this business. Their main strength is the
technological advancement in their products. They are offering new improved software which
most of the customers prefer. Huawei on the other hand, has a strong customer base and most of
them are loyal about the company products. They will not shift their trust towards this newly
introduced brand.
Threats and Opportunities
Threats
Several competitors have taken a large chunk of the market share. Xiaomi and Oppo for instance
have started dominating the local markets that were once the stronghold for Huawei.
“Jarzabkowski and Kaplan (2015, p. 540)” opined that, the other companies mentioned before
prevent the expected growth of this company in the global market.
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Their entrance into the global market is hampered by the giant rival corporations like Samsung
and Vivo. The current product quality has not made a very big impact on the global scenario.
There have been various accusations made against the products. The selected financial entity has
also been accused of launching products that are of inferior quality. The supply chain is not up to
acceptable standards.
Lack of appropriate technology has had an extremely negative effect on the quality of services
that are being offered. Some of the products that have been launched recently have been found to
have violated several legal guidelines. “Chen et al. (2014, p.320)” suggested that, this has led to
the development of a bad perception among the general public.
Opportunities:
The lack of proper technology provides a window of opportunity for the introduction of new and
advanced tools. The tools that are being supplied by the chosen firm include advanced android
software, newly developed camera features, new apps that are a market trend among customers
and advanced wireless connectivity.
Several regions of the world where the selected company had not had offices are being targeted
for establishment of new office branches. Proper advertisement and promotion in these areas
have the potential to drastically increase profits for the studied corporate entity.
They are introducing new products globally to meet the requirements of the economical
customers. The features of these products are designed to meet all the requirements of the
targeted customers.
The promotional methods that the selected organization is using are designed to be in a way that
is extremely catchy. The main trends of these advertisements are based on the popular topics of
the targeted region currently.
The company under review has managed to create a decent name in the markets that it has
targeted in the past. It has an opportunity to expand the existing name that it already possesses.
Recommendations:
Huawei has faced some difficult hurdles in the last decade and has overcome those hurdles
deftly. In recent years, the company has targeted to establish their business firmly in the global
market. They should, set their target to enter the European and American market in the upcoming
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years. The service outlets must be increased globally to gain customer trust. “Bodie et al. (2014,
p.55)” the company also should largely focus on the promotional strategies. In this way they are
able to increase their business activities on different social media. The discussed company also
should utilize the marketing mix and conducting various analysis like PEST analysis and SWOT
analysis to calculate their future impacts on the world market. In order to create an impact among
the economical buyers the selected industry also must introduce various mid range devices.
Conclusion:
It is concluded that the chosen financial firm has been effectively trying to improve despite
several complaints regarding product quality and legal accusations. It is locally third in rankings
in its country of origin. It is trying to expand its business worldwide. However, it has not had
much success in the overall global market scenario due to factors such as competing
organizations and apparent lack of product quality. It has tremendous scope for improvement in
several factors. Hence, it is concluded that the studied firm has a good market position in several
regions with room for improvement in the global marketing scenario.
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Reference list
Bodie, Z., Kane, A. and Marcus, A.J., (2014). Investments, 10e. McGraw-Hill Education.
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C.,
Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services
framework. Ecosystem services, 17, pp.99-111.
Chen, W.M., Kim, H. and Yamaguchi, H., 2014. Renewable energy in eastern Asia: Renewable
energy policy review and comparative SWOT analysis for promoting renewable energy in Japan,
South Korea, and Taiwan. Energy Policy, 74, pp.319-329.
Huawei Smartphone Sales Rise In the First Half of 2016. (2017). Fortune.com. Available at:
http://fortune.com/2016/07/26/huawei-phone-revenues-growth/ [Accessed on 23 Feb. 2017].
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools‐in‐use: A framework for understanding
“technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Kharpal, A. (2017). We'll beat Apple, Samsung in smartphones: Huawei. CNBC. Available at:
http://www.cnbc.com/2016/02/21/mwc16-huawei-beat-apple-in-smartphones-in-3-years-
matebook.html [Accessed on 23 Feb. 2017].
McLay, A., 2014. Re-reengineering the dream: agility as competitive adaptability. International
Journal of Agile Systems and Management, 7(2), pp.101-115.
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming
competition. Harvard Business Review, 92(11), pp.64-88.
Rao, N.V. and Reddy, K.S., 2015. The impact of the global financial crisis on cross-border
mergers and acquisitions: a continental and industry analysis. Eurasian Business Review, 5(2),
pp.309-341.
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Salcito, K., Wielga, C. and Singer, B.H., 2015. Corporate human rights commitments and the
psychology of business acceptance of human rights duties: a multi-industry analysis. The
International Journal of Human Rights, 19(6), pp.673-696.
Shockley, J. and Fetter, G., 2015. Distribution co-opetition and multi-level inventory
management performance: An industry analysis and simulation. Journal of Purchasing and
Supply Management, 21(1), pp.51-63.
State of the smartphone industry 2016: top brands and trends. (2017). Android Authority.
Available at: http://www.androidauthority.com/state-of-the-smartphone-industry-q1-2016-
713340/ [Accessed on 23 Feb. 2017].
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Appendix:
1. Timeline:
Activities Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Topic selection and relevant data search
Review of the industry data
Study of competitive position using
Porter’s five forces
Evaluation of threats and opportunities
Recommendation and conclusion
Final draft
Table 1: Timetable chart
(Source: self developed)
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2. Porter’s five forces model:
Figure 1: Porter’s five forces
“(Source: Jarzabkowski and Kaplan, 2015, p. 541)”
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