Strategic Decision Making

The report’s purpose is to analyze the effectiveness of the strategic decision of Huawei in USA and recommends the key strategies and activities

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STRATEGIC DECISION MAKING
6/9/2019
Student name

STRATEGIC DECISION MAKING 1
Executive summary
The report’s purpose is to analyze the effectiveness of the strategic decision of Huawei in USA
and recommends the key strategies and activities that the company can take to improve its
strategy. A Huawei technology is a leading global ICT solution providing company that was
founded in 1987. The vision of the company is to introduce digitalization and use of latest
technology by every individual, home, and companies that would be wholly connected through
smart intelligent technology. The corporate culture of Huawei reflects that the key values,
attitude, believes of people are associated with the organizational members that are also called as
“wolf culture.”
The key recommendations for the company is to enhance the strategic decision of the company
including manufacturing software and technologies, extensive promotional activities, vertical
expansion, employee’s retention strategies, and product design innovation. The
recommendations were based on weakness and threats identified, like an issue with wolf culture
of the company, high attrition rate, and the preconception of products “made in China.”

STRATEGIC DECISION MAKING 2
Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
The internal, environment of Huawei..............................................................................................3
Vision...........................................................................................................................................3
Mission........................................................................................................................................4
Corporate value............................................................................................................................4
Corporate culture.........................................................................................................................5
Macro environmental factors...........................................................................................................5
PESTLE of Huawei USA................................................................................................................6
Impact of PESTLE on Huawei....................................................................................................7
SWOT analysis of Huawei..............................................................................................................8
Industry analysis..............................................................................................................................9
Porters five force model.............................................................................................................10
The threat of new entrants.....................................................................................................10
Bargaining power of buyers...................................................................................................10
Bargaining power of suppliers...............................................................................................10
Threat of substitutes...............................................................................................................11
Rivalry among industry.........................................................................................................11
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

STRATEGIC DECISION MAKING 3
Introduction
The report’s purpose is to analyses the effectiveness of the strategic decision of Huawei in the
USA and recommends the key strategies and activities that the company can implement to
improve its strategy. A Huawei technology is a leading global ICT solution providing company
was founded in 1987. The company is serving electronic products like phones, wearable, tablets,
and personal computers. The key objective of the organization is to reach out to the world and
make it intelligently connected the place to live. The company strategy relies on innovation that
is considered the key element for the organization. Considering the facts, the number of
employees of the company by now is around 180,000. As already mentioned the innovation
centers developed by the company are 36 in numbers and research and development institutes are
14 of Huawei (huawei, about-huawei, 2019).

STRATEGIC DECISION MAKING 4
The internal, environment of Huawei
Vision
As per the recent announcement and reporting of the company, the vision includes making the
world an intelligent place to serve trillions of new opportunity, which would be helpful to keep
the company strong financial results. This vision of the company is to introduce digitalization
and use of latest technology by every individual, home, and companies that would be wholly
connected through smart intelligent technology. Moreover, the company vision also includes
outlining the intelligent solutions, business practices and most importantly the technological
innovation through artificial intelligence, internet of things, cloud services, 5G and various other
domains (huawei, Huawei-Global-Analyst-Summist2018, 2019).
Mission
In order to accomplish the vision of the company, the key mission statements included by the
company includes providing ubiquitous connectivity that would be provided to each person
equally in respect of connections; providing rapid intelligence to conduct company operations
forwardly. Other mission statement included building the digitalized platforms with the objective
to help organizations and industries more efficient, agile, and vibrant. In addition, the company
mission to deliver the customized and personalized experience to everyone and making every
individual and organization to be potential to be realized and use of technology (huawei, 2019).
Corporate value
The core value of Huawei includes collaboration, openness and shared success. This includes
building an intelligent and digital environment that would take joint efforts. The company

STRATEGIC DECISION MAKING 5
believes the power of boundaries and dissolving and keeping work together in order to create an
ecosystem that will drive on shared success. Through increased the development level
considering the digitalization and by the intelligent world and by extension the company could
bring advantage through providing digital to every individual. Along with the value of industry
development and ecosystem, the key principles of the company include the consideration and
focus over smart devices, ICT infrastructure and cultivating fertile company environment that
would include automation, information technology, and intelligence. This kind of developed
environment would encourage the key partners of the company to enrich their clouds and
application and enhance their ability to serve the customers in an improved way (huawei,
openness-collaboration-and-shared-success, 2019).
Corporate culture
The corporate culture of Huawei reflects the key values, attitude, believes of people associated
with the organizational members which are also called as “wolf culture.” The staffs of the
company are very much sensitive when it comes to prompt response and market information
considering a change. The fear of eagerness and challenges may make the progress of the
company to encourage each individual of the Huawei. In addition, team cooperation and
innovation are majorly relevant elements of the corporate culture of Huawei and are encouraged
to share their thoughts openly and personal opinions are shared with one another in the
organization to get to the new idea to bring innovation the organization. The wolf culture of the
company had been responsible to bring an increased level of insights regarding unsteadiness of
the market and allow the company to rapidly react to the available opportunity while analyzing
industry and market (Javed, 2015).

STRATEGIC DECISION MAKING 6
Figure 1: (Source: (huawei, openness-collaboration-and-shared-success, 2019)
Macro environmental factors
From analyzing the external environment of the company while constructing a business in the
USA, the strategic tool, used is PESTLE
PESTLE of Huawei USA
Political  Second largest democracy across the globe
 Fair and transparency
 Stable political climate
 Faces international criticism
 High foreign direct investment (usa.gov, 2019)
Economic  Globally largest economy
 World leader
 Increasing GDP
 Ranked third in terms of purchasing power parity and GDP in the
global ranking by 2050
Social  The third most populous nation (statista, united-states, 2019)

STRATEGIC DECISION MAKING 7
 Diverse culture people
 Best educational system across the globe
 Increased illness and obesity due to an increase in the fast food
industry
Technological  A global leader in technology and science
 Reduction in jobs due to an increase in advanced technology
 Increased rate of innovation (Fazlıoğlu, 2019)
Legal  Each state has own legal scheme and government structure
 Strong protection to Intellectual Property Rights
 Environment and labor law 2019 (usa.gov, laws -and- regulations,
2019)
 Occupational safety and health act
Environmental  Extremely diverse wildlife, climate, and geography that is attracting
tourism
 Toughest weather condition across the globe
 Disruption to everyday life due to climate and weather disaster
(Bruns, 2013)
Impact of PESTLE on Huawei
 Political factors of USA could result in an opportunity for the Huawei, the reason being
the country is politically stable which makes conducting the business and increase
sustainability.

STRATEGIC DECISION MAKING 8
 Economic factors are another opportunity for the company, the reason being the
purchasing power of the country is high with good infrastructure available that eventually
help the company to increase the sale and increase the profitability of Huawei.
 A social factor of the nations is acting as an opportunity and quite of threat; the company
can increase the opportunity as large population availability to offer the goods and
services by the company and ability to increase the customer database. However, serving
people with diverse culture could be challenging for the company while conducting
marketing activities.
 Technological factor is more of an opportunity for the company as the company would be
able to implement innovation through advanced technological infrastructure and quick
adaptability of technology by potential customers (Pyka, 2017).
 Legal factors of USA could be a threat for the company; the reason being the legal
requirements is to be abiding by the company while manufacturing the products or
conducting business. Some of the acts discussed in the table need to be abiding by
Huawei related to employees, labor, customer privacy, etc.
 Environmental factors of USA are other threat to the company, the reason being the
climate disaster had been responsible for large financial loss in the nation, and for this
cause the company may have to work for the environmental sustainability (Ahlin, 2014).
SWOT analysis of Huawei
A SWOT analysis would be a helpful strategic tool that would also help to assess the internal
environment of the company. Moreover, this would reflect the key strengths of the company that
can be used to diminish the weakness of the company to gaining a higher competitive advantage.

STRATEGIC DECISION MAKING 9
Strengths Weakness
 Innovation focused
 Technological advancement (huawei,
yunlu-technology-the-story-behind-
safety-AI, 2019)
 Emerging leaders
 Cost leadership strategy
(consumer.huawei, 2019)
 Strong work environment
 Issue with wolf culture of the company
(nytimes, 2019)
 The preconception of made in China
 High attrition rate
Opportunities Threats
 Advanced technical opportunities like
5G and upcoming technologies
(huawei, sanlian-hope-powering-smart-
manufacturing-with-ai)
 Untapped some of the nations in the
Asian market (Alves & Sousa, 2018)
 Enhance economies of scale
 Increase in customer spending (Aksoy,
2018)
 Increase in a competition like One plus,
Dell, Ericsson, Xiaomi, and Samsung.
 Cut Price competition
Huawei strategy is to diminish the weakness through gaining advantage from the key strengths of
the company. For instance, the preconception of the products to be made in china could be
diminished through globalized brand image of the company that would be able to accomplish

STRATEGIC DECISION MAKING 10
using emerging global leaders that is a key strength of the company. Moreover, the company
strengths also include innovation through process, and operation of the business that would help
the company to also integrate the focus over people and their process to keep them motivated and
reduce the attrition rate. Moreover, through enhancing the work environment of the company, it
can reduce the attrition rate and resolve the issue related to corporate culture.
Industry analysis
The industry is very much responsible for the strategic decision of the company. This includes
analyzing through porters five-force model that is a strategic framework reflecting the key forces
of the industry.
Porters five force model
The threat of new entrants
The barrier to entry is very high in the electronic industry, the reason being the investment in the
industry is very huge, which does not let many organizations raise or conduct business with ease.
Moreover, the customers are unable to trust a new company in such an industry where the
products are not of the very low amount or prices. In addition to the barrier, the company has
increased the level of production to result in economies of scale that would be a great challenge
for a new company entering into the industry (Amabile & Rigolizzo, 2015).
Bargaining power of buyers
The buyers are considered the key in every market; where in case of the monopolistic market like
the technological industry the role of buyers is much more enhanced. The buyers switching cost
in this industry is not very high which makes the bargaining power more in hands of customers

STRATEGIC DECISION MAKING 11
and increased competition and very close and direct competitors offering has increased the
barraging power in hands of customers, which could be a challenge for the company.
Bargaining power of suppliers
The suppliers in the case of Huawei plays a vital role as the profit margin of the company
depends on the manufacturing cost of the products. Moreover, the large suppliers in the
electronics industry could have the threat of suppliers to sustain while increasing the profit
margin through economies of scale. This would include large companies like MediaTak,
intelAMD, for the supply of memory, ATL chips, processors, etc., therefore reflecting the
bargaining power largely in hands of suppliers (huawei, leading-new-ict-en, 2019).
Threat of substitutes
The key substitutes for the products served by the company like smartphone, personal
computers, and tablets would include two way radios, satellite phones, and telephones. However,
the operational cost and convenience level of these substitute goods are very low reflecting the
lower threat of the substitutes for Huawei (scienceabc, 2019).
Rivalry among industry
The key competitors of the Huawei would include two global leaders in the electronic and
technological industry that are Apple and Samsung with a market share of total thirty-nine
percent. The global share of Huawei with the global largest low cost electronic products is 11.8
percent (statista, 2019). The competition in the industry is very high and since there are various
companies serving the products with cost leadership strategy, this could also increase the threat
of the company regarding cut price competition in the market (appleinsider, 2019).

STRATEGIC DECISION MAKING 12
Recommendations
1. Manufacturing software and technologies
The company major threat is that the company depends on software and operating systems
manufactured by another company, which may be responsible for the reduction of the profit
margins of the company. For instance, the operating system used by the company is Android
systems that are also used by some of its major competitors like Samsung, which do not
allow the product to become unique. Therefore, it is recommended to the company to include
manufacturing its own processors, software, and operating system for mobile phones to keep
the cost of the company at lowest and encourage innovation through the operating system as
well. The benefit of this could be understood through the example of apple and MI phones
that are using their operating systems successfully (Camison & Fores, 2016).
2. Extensive promotional activities
It has been identified that the key competitors are promoting their brands at large place,
which is quite high than that of Huawei. The company must conduct various promotional
activities to keep the customers attracted and a reminder to make a purchase of the brand
instead of its competitors. This would include the use of popular brand ambassador,
reflects key features of the company through advertisements. The promotional activities
recommended to the company are social media marketing to attract maximum customers
at the same time. Moreover, television advertisements, printed media can also be used to
attract local area customers around the regions of the USA. Promotion would also include
sales promotion at a great place, as cost leadership strategy would also be enhanced
through this recommended marketing strategy (Du & Bstieler, 2016).

STRATEGIC DECISION MAKING 13
3. Vertical expansion – The Company needs to decrease the cost to the company that is
decreasing the manufacturing and transportation cost of the company. The vertical
expansion strategy is recommended to the company that would include being backward
integration that is investing in supplier activities and business to reduce the cost of the
raw materials. Moreover, this would increase the scope of the company to serve other
large competitors too however increasing the sale of the company and ability to enhance
innovation and development of agile supply chain (Procter, 2014).
4. Employees retention strategies
One of the weaknesses identified of the company was the inability of the company to
retain the staff and an increase in the attrition rate of the company. This could overcome
by applying key attrition strategies by the company to keep the staff motivated and
eventually beneficial for the company to increase the production and sale of the company.
Some of the strategies that the company must adopt are training and development
programs. The company is into innovation and change at a fast pace, which could make
the employee of the company resist to perform well. Through proper training programs,
the company can teach and could also reflect the individual growth of the employees in
the organization to minimize resistance and increase motivation to retain the employees
at the maximum rate.
5. Product design innovation – The innovation is key to the company that has been
responsible for its success, which must be enhanced. One of the innovations that is most
required and recommended to the company include designing innovation that could be
through own operating system that would be unique and user friendly and more attractive
than that of competitors. In addition to the software the looks, style of the model also

STRATEGIC DECISION MAKING 14
reflect great importance. Thus, the company must work upon unique designing of a
phone, color combination, sizes to attract and target various sort of customer segments.
For this, the company must enhance innovative corporate culture to get ideas from the
employees, customer engagement to make a unique design that is recognizable by the
customers specifically. This would also help the company to enhance its brand imaged
and brand recognition, eventually help the company to gain a competitive advantage over
its close competitors (Nyberg, Dentchev, & Van Hoof, 2016).

STRATEGIC DECISION MAKING 15
Conclusion
Huawei technology is a leading global ICT solution providing company founded in 1987. The
company strategy relies on innovation that is considered the key element for the organization.
The vision includes making the world an intelligent place to serve trillions of new opportunity,
which would be helpful to keep the company strong financial results. The mission statements of
Huawei included by the company includes providing ubiquitous connectivity that would be
provided to each person equally in respect of connections; providing rapid intelligence to
conduct company operations forwardly. The corporate culture of Huawei reflects the key values,
attitude, believes of people associated with the organizational members that are also called as
“wolf culture.” Political factors of USA could result in an opportunity for the Huawei, the reason
being the country is politically stable which makes conducting the business and increase
sustainability. Economic factors are another opportunity for the company
From the industry analysis, it can be said that the bargaining power largely in the hands of
suppliers. Some of the suppliers of Huawei are large companies like MediaTak, intelAMD, for
the supply of memory, ATL chips, processors, etc. The key competitors of the Huawei would
include two global leaders in the electronic and technological industry that are Apple and
Samsung with a market share of total thirty-nine percent.

STRATEGIC DECISION MAKING 16
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