Strategic Management Analysis of Huawei

This assignment requires a strategic management analysis of Huawei Technologies. Students must utilize the given research papers and articles to evaluate Huawei's strategies in areas such as international business, performance measurement, and digital transformation. The analysis should demonstrate an understanding of key concepts in strategic management and apply them to the specific case of Huawei.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Strategic analysis.....................................................................................................................1
2. Strategic Choices.....................................................................................................................3
3. Plan of Action.........................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management consists of goals and objectives which are taken by organisation
top management. It gives overall direction to the organisation and involves its objectives,
developing policies and plans which are established to achieve business goals. Huawei
technology is Chinese multinational organisation which is headquartered in Shenzhen(Agrawal,
2016). It is one of the largest telecommunication manufacturer in the world. This company was
estabilished by Ren Zhengfei in the year 1987. This company is one of the biggest telecom
infrastructure manufacturer in whole world. The honor series of mobile computing devices
which are build, manufactured and marketed by Huawei includes tablet computers, wearable
technologies and smartphones.
In this report, four main tasks are focused which involves strategic analysis which
involves careful assessment of the current situations of Huawei technologies. It further involves
challenges and strategic choices. Strategic choices highlights key points, risks and other expected
outcomes. Moreover, it includes five year strategic plans of action which involves target
objectives, focus areas, priorities and key performance indicators.
1. Strategic analysis
The case sets China's Huawei Technologies in the context of the evolving global
smartphone industry, notably its positioning and the links between its competitive strategy and
its corporate (global) strategy. It describes the origin, growth and structure of the smartphone
industry, evolving industry trends, dynamics, and profiles the major players including Apple and
Samsung , Google and Microsoft , and new entrants such as HTC and Xiaomi.
Huawei feature helped it to achieve its goals by achieving the supply or technologies by
different large organisation. It assist Huawei to achieve better status and education qualification.
It is also able to meet the customer's expectation and high quality software and hardware. The
Huawei management gives pressure to its employees which has proven effective as the pressure
gives workers to work effectively (Barney and Hesterly, 2015). In order to sustain firm's
reputation, it maintains self motivation and self discipline. It has given big enhacement and
development in raising the organisation image. Loading employees with much burden of the
work shown their better performance and complete the task before deadline.
Huawei is affected by humour as it directly impacted the company's reputation. The
humours may be in the form of scams, false information which is stopped by foreign technology
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and helps in preventing it from different security threats. These threats are overcomes by
maintaining various policies and strategies. Huawei has actively participated in go green
campaign as global warming affects the products manufacturing industries which are releasing
too much carbon emission (Bettis and et.al., 2014). Different geothermal cooling system and
other strategies are used to to minimize the effect of carbon emission and helps them to use
network.
Huawei has supported the tremendous growth and labour cost with the help of new
technology and resources. This has helped the organisation to increase its customer and benefits.
and . The company has gained the opportunities by overcoming the weaknesses. Different
opportunities helps the company to improve its reputation and getting more profits.
The smartphone market of Huawei has been exponentially grown over the past decade.
Its smartphone market share leads by 26.7% in 2016 while Samsung and Apple saw their sales
decline by 4.3%. Global shipments rose from 17.35 million units in 2014 to 1.433 billion in 2015
with an average annual growth rate of 43.82%. Huawei become the third largest smartphone
manufacturer by market share with 10% of global market share (Bettis and et.al., 2015). The
Chinese market contributed the large part with 467 million mobile phones shipped for the year.
Huawei ranked 10% market share with steady growth. In 2016, it has shipped overall 139.3
million units.
All these opportunities, strengths and market share helps Huawei to gain idea of its
lacking and development areas in order to achieve its long term objectives and profits. The
market strategies and strategic analysis assists company to regain top position in the market. It
helps Huawei to achieve customer's satisfaction and better revenue benefits. Analysis of market
share of different years assists Huawei to think about the development in products quality in
order to fulfil customer's needs.
Challenges faced by Huawei:
Huawei technology is facing many challenges regarding the smartphones. The customer
wants best smartphone with all features along with lower price (Bharadwaj and et.al., 2013). It
focuses on the factors behind Huawei stunning success-from a traditional telecom equipment
provider to the third largest smartphone maker in the world after Samsung and Apple, while
pointing to the challenges that lie ahead. The unique characteristics of smartphones multi-
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functionality, high degree of technology integration, and fast-moving ecosystems-make them an
ideal choice for analysis of industry change.
China has met with various challenges while moving to the global market. It has faced
lower cost engineering from its competitors. Huawei has low global reputation and it was not
recognized as a factor which hinders its achievement in global market share. In order to make
strong global market, the organisation has used many resources, manpower and capital along
with extensive time before gaining the global share (Blackburn, Hart and Wainwright, 2013).
The customers are facing problem in announcing the name of Huawei. Therefore, management
has to changes its name and come with another name as “Futurewei”. This is one of the major
challenge as company has to harboured with two names which is sometimes confusing for
customers.
The main challenges faced by the company are from localized Chinese vendors. It has
faced intensified competition from local Chinese vendors in these regions including Techno itel
and infinix etc. The three vendors combined shipped more smartphones than Huwaei in Africa
which is seriously challenging the largest smartphone makers ambition in this area (Carroll and
et.al., 2016). China has to make progress in economy, for this reason it is under stress for the
GDP growth. These activities increases their development chances which has given golden
opportunity for Chinese eceonomy. This has increased the value chain where the productivity
and wages are main elements of consumption .
China has make groundwork to strengthen the relationships and economic benefits of
business with another countries. China is facing a unique combination of risks and challenges
(Dess and et.al., 2014). It is facing many problems like debt loads, high rates and many different
risks.
2. Strategic Choices
Huawei has continued to make breakthrough in Global high end market. In 2016, it has
made significant growth though it was down year for the global smartphone market. The global
smartphone has increased by 2.3% last year. Huawei continued to swim strongly against the tide,
with smartphone shipments up 29% year-on-year to reach 139 million – far higher than industry
average – while sales revenue saw a robust increase of 44% up to 179.8 billion RMB. In 2016,
Huawei CBG has achieved 100% growth in sales revenue in 14 countries (Eden and Ackermann,
2013). The company has followed business strategy to minimize risks and achieves successful
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growth. Adoption of business strategy is helpful for company to engage in head-to-head
competition in order to search sustainable profit growth. The organisation attracts the customer
from different large industries, finance, puyblic sectors, SMEs worldwide etc.
This enterprise has to give more concern on interacting partners, close cooperation in
order to launch different policies. Its target market must have to include all age group except
children. The company has to introduce latest mobiles which are capable of supporting different
features so that it can make influence on young generation and business. as the current trend in
China is increasing day by day (Frynas and Mellahi, 2015). Local class people and students
prefer dual sim phones as they use two networks and do not like to carry two different phones.
Therefore, the trend of dual sim phone is increased among local class people.
Huawei smartphones have created great opportunities to target the consumers by
providing various features and wide range of mobile phones in the market. The customers may
be the people who are looking for mobiles and have different preferences in mobile usage. The
company has to launch smartphones according to the needs of their customers.
Business strategy:
Huawei come with new features and smartphones in order to attract its customers. It has
launched various new products of smartphones with new features. It has developed its products
for the people of all age group. Huawei has to strategically think from the macro down to micro.
The key indicators must be identified to control strategic outcomes. The company has to focus
on unstructured content of strategy map, actions including those structured measures the results
and desired outcomes.
Innovations
Many of the organisation strategies fails in the market as they give more concentration on
beating their competitors. In order to make best quality of prodcts and services, the organisation
has to give more attention on developing different strategies. (Hill and et.al., 2014). It does not
have to face more competitors in market if it properly works on innovation. In order to get more
customers, Huawei has to pay attention on innovation. Value propositions helps company to
fulfil customer's needs by innovating new ideas. In smartphone sector, consumer satisfaction
increases as they like to purchase such products therefore, innovation plays very important role
in this sector. However, for applying innovation focus on create requirements and along with
this they also put some extra efforts.
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Focuses on non customers:
Huawei has focused customers which do not buy the products from the company. For
attracting more customers, there are various types of strategies which is used by different
organisations. The company has to look after the areas where the smartphone sector is not
available (Hughes, 2013). With the help of this, Huawei is able to make profits and achieves the
customer's satisfaction.
Created uncontested market
In China's market, smartphone department is very challenging and it is very high among
the existing market. It has created uncontested market for the customers and it is very popular in
selling its product. Huawei is facing the competition from Samsung and Apple companies. The
company has to pay more attention on finding such areas which helps them to win customers
for their long term growth(Morschett and et.al., 2015). The management has identified the
uncontested market so that they can gain more growth and profits.
Make the competition irrelevant
The concern of price skimming strategy is based on providing best quality services with
lower expenses (Rothaermel, 2015). In order to follow this strategy, the company has to provide
the products which are less costly. To make competition irrelevant, company has to make cost
effective products for the customers. The best method to attract customers towards Huawei is to
make products whose price is feasible for lower class people also. The organisation can make the
competition irrelevant by following these strategies. These strategies helps them to diversify
their business. Furthermore, the company has to bear the loss while making less expensive
products.
Creating new demand
Huawei has fulfilled all the new demands and requirements of the customers. Huawei has
to increase its productivity in order to achieve customer's satisfaction. Customer's satisfaction is
very necessary for it in order to achieve its goals on time. The authority of Huawei has to
concentrate more on making these products in order to create more demands. These organisation
has to offer different discounts on certain products which will increase the attraction of
customers towards them for creating demands also(Stroh, 2014). The company is selling
smartphone and in order to increase their profits, it is very essential to raise the demand of these
products.
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Product differentiation strategy to break the trade off costs
As per the product differentiation strategy, Huawei can take advantage of this strategy in
order to set themselves apart from the competitors. It helps the organisation to build brand
loyalty and dedication for the work. In this, the organisation is manufacturing less expensive
products with innovative ideas to attract more customers. The organisation needs to manufacture
such goods which are less expensive so that their competitor become irrelevant (Verbeke, 2013).
It has to make innovative products so that no one can make duplicate products of it.
Raise
Huawei is needed to raise those services which assists them in creating more economy.
In order to diversify the business the company has to increase the productivity of these products.
Huawei is making more revenue in this category. It has to give more attention on its smartphone
segment as the public is interested in purchasing these products of the company. It is giving more
attention on mobile phones in order to increase long term profits.
Huawei has to follow this strategy in order to minimize risks and challenges, and tries to
provide better services to its consumers. The company has to put all efforts in order to gain best
reviews from its customers. The adoption of market strategy helps it to increase revenue and
reputation.
3. Plan of Action
Objectives Deadlines Focus areas Priorities KPIs
Improve
information
access in
developing
countries and
remote areas
2018 Build
smartphones
which can easily
access the
network.
Young people Provide
transparency
To promote
environmental
sustainability and
contributing to
2019 Development of
various plans to
minimize
pollution
Green evolution
policies.
Environmental
sustainability
vision is to make
a positive impact
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the communities
through
outstanding
environmental
sustainability
performance.
Diversifying
business
2017 Business
strategies
Low expensive
products
Implementing
various policies
regarding
business plan.
Improve market
share
2019 Focuses on
customer needs.
Meet customer
satisfaction.
Overall revenue
must be
increased.
Objectives and target:
Huawei has planned five year strategic plans for increasing its growth. The main mission
and vision of the company is to serve customers whose demands helps company to drive forces
behind their development. It has continuously created different large values by responding the
requirements and demands of the consumers. Huawei believes that their success comes from
customers success. The organisation believes that dedication is very important factor which will
help them to win customers respect and trust. The main aim of Huawei is to improve information
access in developing countries and remote areas.
The organisation believes in popularizing communication technologies, increasing
educational opportunities and developing ICT talents. In order to develop communication
technology, they need to support educational programs (Simons, 2013). Huawei also aimed to
promote environmental sustainability and contributing to the communities. They aim to develop
the leverage communications technologies to improve the lives of disadvantaged people. The
company aimed to bring smartphones which can fulfil all the needs of customer on time with
best services.
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Huawei sets the target of surpassing Apple by 2018. It has surpassed two major players in
and determined the way by setting the goal and achievements In order to overcome the serious
threat of market share of the US and South-Korea smartphone makers (Moray, 2017).
Deadlines:
Huawei has to achieve its target and objectives before 2020. Its CBG targets a 5% market
share at 2016. The smartphone brand has to launch more products to raise its market share by
2017. Its CBG held 3.7 market share in smartphones in third quarter of the year. The Chinese
telecom has invested $1 million into Vietnam’s ICT industry in 2017-2019 period. The company
has to achieve the objective of its promotion to environmental sustainability and contributing to
communities by 2019.
Focus areas:
Huawei has focused on building smartphones with new features so that they can provide
higher connectivity and raise the living standard of people. Huawei has focused on global
success which it has to witness in recent quarters. It has focused on developing green evolution
policies so that their productivity can emit less carbon. It has planned to open up handset
manufacturing in China for which it has recently got license (Grant, 2016). Its Chinese
counterparts like Xiaomi, Lenovo- Motorola have been one step ahead and have already rolled
out their first batch of locally manufactured smartphones in the country.
The outstanding feature which makes P9 stand out from the crowd is not only its unique
dual camera setup, that includes a monochrome sensor, but also the name attached to it – the
well-known German camera maker, Leica. Additionally, its dual lens camera is its new focus for
smartphones.
Priorities:
Huawei giving priorities to young people as young generation have shown more interest
towards smartphones. For achieving the satisfaction of young generation, company is making
more efforts to launch smartphones with new features and applications. They are making the
terms and condition easier for the people so that they can easily understand the functionality of
mobile phones (Mintzberg, 2014). The company will focus on the customers needs so that it is
easier for it to achieve the customer's confidence and satisfaction.
Furthermore, it has focused on new technologies in order to enhance the performance of
smartphones. It has also provided new technologies to its employees so that they can make better
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products. Moreover, Huawei has given priorities to the product which can lead to future growth
of the company. The organisation has given preference to their employees as it believes that
employees are the best resource for increasing their productivity. It has to give more focus on
coming year risks and challenges so that they can withstand in critical situation and perform
better.
Key performance indicators:
Effective achievement of business objectives by the organisation is the main aim of Key
performance indicators.
Improving information access in various developing countries and remote areas is a very good
idea which can be beneficial for everyone, specially the younger ones. KU Information
Technology monitors and accesses hundreds of metrics to ensure that the systems and
processes are working efficiently and is capable to meet the need of the customers. KPI
reporting is there to provide transparency and hold them accountable. They share key
performance indicators with KU. Some well known examples of KPI are Change request
(CR) comparison, Change approval Process etc. Making mobile phones and building more
towers specially in the remote areas is also a very good idea so that people can be able to
communicate with each other. In Change Request (CR) Comparison, all the changes made to
the system which are being tracked and determined if they caused a problem. This objective
proved very helpful for the people in China as well as in remote areas.
Promoting environmental sustainability and then contributing to the communities is a very good
idea for the Green evolution policies. Environmental sustainability vision is to make a
positive impact through outstanding environmental sustainability performance (Moray,
2017). Development of various plants can also be done such as Gober gas plant which can
help in reducing the pollution of China. The key impacts will be energy consumption,
resource and waste management, generation and application of knowledge, graduates with
sustainability skills, knowledge and understanding, biodiversity and ecosystems and finally
the water use.
CONCLUSION
Summing up above report, it can be concluded that strategic management plays an
essential role in achieving business goals and it is considered as an important part of the
organisation. Strategic management helps the organisation to develop effective strategies and
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also find out the factors which directly impacts the performance of the company. The present
report is based on the Huawei technologies which is specialist in selling smartphones and tablets.
Huawei has adopted business strategy for enhancing its performance in the market of China.
Huawei is smartphone organisation. The company has to implement different innovative ideas
which helps them to attract more customers towards their business. The use of latest
technologies and resources helps them to face challenges and risks and achieve success.
Huawei has also analysed the next five year strategic plan to focus more on the customers
needs and requirements. It has determined the future objectives, targets risks associated with new
business. It has analysed future focus areas, priorities for the work it has to finish and its
deadlines. Huawei has focused more on launching smartphone according to the needs of various
age groups so that it can provide better connectivity and raise standard of living of the people.
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REFERENCES
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Stroh, P.J., 2014. Business strategy: plan, execute, win!. John Wiley & Sons.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
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Simons, R., 2013. Performance Measurement and Control Systems for Implementing Strategy
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Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Mintzberg, H., 2014. Reading 1: Five Ps for strategy. Readings, p.5.
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