Impacts and Influences of Macro Environment on Huawei's Business Strategies

This report explains the impacts and influences of the macro environment on Huawei's business strategies. It discusses the political, economic, technological, social, environmental, and legal factors affecting the company. It also evaluates the internal environment and capabilities of Huawei, as well as the competition using Porter's Five Forces model.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Impacts and the influences of the macro environment on the organisation and their
business strategies.......................................................................................................................3
TASK 2............................................................................................................................................6
P2 Internal environment and capabilities of the organisation.....................................................6
TASK 3............................................................................................................................................7
P3 Porter's Five Forces models in the organisation to evaluate the force of competition..........7
TASK 4............................................................................................................................................9
P4. Strategic management planning of the Huawei...................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to the set of the process and the practices which the business use
to attracts the number of customer, increase in the level of the performance and achievement of
the objective of the business. Strategy of the business helps to reach he success and growth of the
business. In the strategies of the business there are the three main practices such as cost
leadership, differentiation and focus of the company. This report explains about the business
strategy of the Huawei which is the famous which provides the information and the
communication technology across the world. It is the largest Chinese company which sells the
electronic devices for the customer such as the smartphones. The headquarter of the Huawei is at
the Shenzhen, China. This file involves the impact of the external environment on the Huawei
and its business strategies. There are also the internal environment on the business of the
Huawei. This report includes the evaluation and analysis of the five forces of the porters. There
are various theories and the models which determine the strategic planning of the Huawei.
TASK 1
P1 Impacts and the influences of the macro environment on the organisation and their business
strategies
In the business of the Huawei there are various external factor which affects the
positively and negatively on the strategies of the business. The success and growth of the
business is depends on the political, economic, technological, environmental, social and legal
factors of the business. These external factors are explained below:
Political factors: These factors affects the business of the Huawei in the international markets
because of the increases in the control of the government affects the productivity and
profitability of the business. In the expansion of the business of Huawei in the international
markets is one of the biggest challenges due to increase in the pressure of the politics (Alghazi,
and et.al., 2017). In the international markets the smartphones of the Huawei are famous so there
is the significant force of the politics across the world.
Positive: Political factors have positive effects on the business of the Huawei because the
governments of the china provides the loans to the local companies to increase the sales and the
productivity in the international markets.

Negative: In the promotion of the political and in the meetings of the national congress
the process of the most of the Chinese companies decreases so this will affects negatively on the
business of the Huawei.
Economic factors: The success and the growth of the business of the Huawei is depends on the
economy of the china and their targeted markets. The performance of the targeted market of the
Huawei is effective and efficient economically the sells of the smartphone of the Huawei
increases in the targeted markets(Bentley-Goode, Omer, and Twedt, 2017) . The economic
factors affects the business of the Huawei
Positive: There is the increase in the economy of the china which increase the disposable
income of the business and there is increase in the demands of the good quality of the
smartphones of the Huawei.
Negative: When the value added tax increase there is the decrease in the operating cost
of the company of the telecommunication sector and this will reduces the profitability of the
business of the Huawei.
Social factors: These factors refers to the needs and wants of the customer are affected by the
social culture and trends. So the business makes their strategies and business plans as per the
social factors. Social factors affects the business because is affects the demands of the products
and services in the people.
Positive: The changes in the trends and the culture of the society Huawei brings the new
and effective techniques and practices for the development of the products and services. Because
of the social factors the Huawei makes sure about the sustainability in their products.
Negative: Because of the continuous changes in the social trends and culture the Huawei
have to changes the strategies and the practices of the business on the as per the changes in the
society
Technological factors: The success and the growth of the technology industry increases it will
increases the success and the growth of the Huawei business. Huawei is the information
technology company which aims and focuses on the research and innovations of the technology
products and services (Lawton, 2017). The technological factors affects the business of the
Huawei because there is the rapid changes in the technology.
Positive: There is the increases in the sales of the Huawei by fast development of their
own modems of the 5G before their competitors in the international markets.

Negative: Technology is changes continuously so the purchases of the new and advance
technology is creates difficulty in the business because the cost of the advance technology is very
high the company cannot purchase them as per the changes.
Environmental factors: These factors also affects the business of the Huawei in the global
markets. Environmental factors includes climate, whether from which the company have to
makes changes in the business as per the changes in the environments.
Positive: Huawei have the aims on the sustainability and spends lots of money the
decrease the footprints of the carbon and reduces their influences on the environment.
Negative: Because of the changes in the whether and the climate the company get
affected by this the Huawei is investing greater money in maintaining the sustainability in the
environment (Leischnig, Wölfl and Ivens, 2016).
Legal factors: legal factors includes various laws and regulations which the governments
impose on the company such as the law of the employment, consumer protection law, health and
safety law. In the business of the Huawei there are number of the employees working in the
different countries and they have laws of the wages and the labour which in the business
activities.
Positive: The laws increases the outputs of the business of the Huawei by forcing the
manager of the company to treat the employees in the effective and takes the environments more
seriously.
Negative: Because of the Huawei facing the charges of the criminal in the US of stealing
the secrets of the trade it will results in the loss of the revenue and affects the good image of the
brand.
External factors of the Huawei affects both in the positive and the negative ways to the
business. These external forces will increase the success and the growth of the business of the
Huawei if they make the effective plans and policies related to the external factors. The
involvement of the government in the business of the Huawei affects the successful operation in
the business (Lim, Chalmers and Hanlon, 2018). With the changes in the technology the Huawei
increase the sales and productivity of the business.

TASK 2
P2 Internal environment and capabilities of the organisation.
The SWOT analysis refers to the effective and efficient planning of the business that
helps to analysis the activities and operations of the company. To identify the impact of the
internal factors SWOT analysis is helpful for Huawei it includes the strength, weakness,
opportunities and the threats of the business. These are explained below:
Strength: There are various strength of the Huawei which helps the business in the
markets to achieve the success and growth. Huawei have the greater quality of the products and
services which attracts the number of the customer and increase the sales of the business. Huawei
have the biggest strength on their is the competitive pricing of the products and services The
electronic devices of the Huawei is the best as compared to the other famous companies like
Samsung and the apple (Lozano, 2018). Huawei manufactures the smartphone which is low
budget and better quality offered to the customers companies to the other companies. The
Huawei is the aims to brings new and effective innovation in their devices which increases the
satisfaction of the customer by the value products and services. To customer of the Huawei
increase due to the cheaper and best quality of the smartphones. There are the very skilled and
the talented employees in the business of the Huawei which works to increase the profitability of
the business. Huawei have the strong portfolio of the brand which increases the number o9f the
customer towards their products
Weakness: The Huawei can makes their efforts to improve the weakness of the business
which creates the difficulty in the successful operation of the business. The weakness of the
Huawei can be improved by using the SWOT analysis and achieve the advantages of the
competition in the business. The demands of the products and services are not very food in the
Huawei which results that they missed the greater opportunities of the business. The products
which sold by the Huawei there have the gaps which leads to increase the chances for the new
competitors in the markets. The planing of the financial is not done by the Huawei effectively
and efficiently. The ratio of the current assets and the liquid assets determine that the Huawei is
using the cash is effective but in the actual conditions it is not properly and effective maintained.
The profits ratio and the total contribution is less than the average ratio of the industry which is
in the percentage (Nadeem, and et.al., 2018). They do not have the effective image of the brand
in the market after increasing rates of the low price smartphone.

Opportunities: There are various opportunities for the business of the Huawei such as
that the china given the labour intensive to its large number of the populations which increase the
profits of the business by reducing the cost of product and operation. The Huawei will increase
the quality of the products by the low cost of the production. The Huawei have the opportunities
of the 5G technology of the communication of the mobile from this the company can get the
success and growth of the business in the international markets. The opportunities to get the new
customer from the social networking sites increase the sales of the business of the Huawei. The
Huawei spend the lost of money in the platforms of the social sites (Orr and Pegram, 2017). The
advance and the new technology gives the lots of benefits to the Huawei to use the strategy of
the pricing in the new markets. The cost of the transportation is reduces due to the prices of the
shipping is the lower and bring the benefits for the products of the Huawei by increase the share
of the markets and the profits of the company.
Threats: There are various threats in the business of the Huawei and the one of the most
important threat of the Huawei is the increasing competition of the smartphone. The dealing of
the Huawei is with the competition of big brands such as the Samsung and the apple but they
also have to deal with the new competitors of the business. The increases in the strength of the
distributors which is local is also termed as the threats of the Huawei because of this the
competition is increasing to the distributors of locally (Priem, Wenzel and Koch, 2018). Increase
in the raw material affects the profitability of the business is also consider the threats of the
business.
VRIO Strategy:
Value: When the resources of the company gives the value to the business it is consider as the
valuable resources.
Rarity: These resources refers to the resources which is used by one or more than one country.
Imitability: The resources of the business is expensive and difficult to duplicate than it is a
imitable resources.
Organisation: To achieve the objective of the business there should have to be effective
management system, process, structure and culture of the organisation.
Benchmarking strategy:

It is strategy which is used to compare the performance of the business activities and also
check the performance of the products in the internal and the external environment of the
organisation.
The impacts of the internal environment in the business of the Huawei has done the
effective and efficient works in their business by the help of the SWOT analysis. By producing
the lower cost and effective quality of the products helps in the effective functioning of the
business. To increase the business Huawei have the best opportunities by improving the image
of the brand, entering in the new competition markets. By minimizing the weakness of the
business Huawei increases the sales and profits of the business.
TASK 3
P3 Porter's Five Forces models in the organisation to evaluate the force of competition
The five forces of the porters is the effective and efficient tool of the management that
helps to identify the competition in the markets. The five forces of the porters includes the
bargaining power of the buyer, bargaining power of the consumer, threats of the new entrants,
threats of the substitutes products and services and the last one is the rivalry of the existing
companies. These five forces are used to evaluates the profits of the Huawei in the different
markets conditions. These five forces of the porters are explained below:
Threat of the new entrants: in the business of the Huawei the threats of the new
entrants is low because there is need of the greater investments in the business and high skilled
employees and greater time to operate the technology effective and efficiently. These needs and
wants of the business helps to compete with the organisation which is both global and local. For
example to set up the business of the new entrants needs more time money and efforts to make
the good image of the company so the threats of the new entrants in the Huawei is weak.
Bargaining power of the suppliers: in the business of the Huawei the power of
bargaining of the customer is very low because there are the large number of suppliers as per the
buyers of the Huawei. The supplier have the less control over on the prices of the products of the
Huawei which results in the weak forces (Shuen, 2018). The products which is provided by the
supplier is low standard, low cost of the switching and the less differentiated of the products so
the Huawei is easily switch to the other suppliers. For examples the products and services the
supplier gives creates the weak force of the suppliers.

Bargaining power of the buyers: The customer of the Huawei have the greater power of
the bargaining because of the same variety of the products in the markets. The prices of the some
companies also have same as the Huawei so the customer can purchases from other companies
also. This results in the switches to the low cost which products the power to the customer to
select between the various types of products and services. Differentiation of the products and the
branding of the products creates the difficulty for the customer of the Huawei to purchase their
products. For example that the customer does not wanted to switch from the high products of the
apple to the Huawei products which is low cost.
Threats of the substitutes products and services: In the Huawei the substitutes of the
products and services are very low. There are very few substitute of their products and services
in the markets which includes phone of the satellite, telephones and the two way radios. These
products are very old in the generation of the advanced technology because the people cannot
operate the social networking sites on the telephone and the two way radio. For example the
products of the Huawei are less expensive and in effective in the quality but other brands sells
the same quality of the in high cost. So Huawei have very few substitute of the products and
services.
Rivalry of the existing companies: the competitors of Huawei are very low so they have
to make the practices and the actions to get the positions leader of the markets creates the strong
force of rivalry of the existing companies (Ukko, and et.al., 2019). In the business of the Huawei
there are the high cost of the fixed products this will results in the reduction of the prices when
the increase in the demands so the rivalry of the existing companies have the stronger force.
So the Huawei make the effective and efficient strategies to improve the problems which
determine by the porters five forces. By taking the benefits of the economic scale in the
companies and by the advantages of the cost fights with the new entrants. Purchases of the
products and the services by the Huawei at the low cost and if they not like the quality then they
will switch to the other suppliers.

TASK 4
P4. Strategic management planning of the Huawei.
Executive summary: The strategic planning of the management refers to the process and the
activities which used by the company to make sure that they have to focus on the resources and
the energy, increase the strength of the business activities. Make the determination that the
employees are working towards the goals of the Huawei or not. It explains the budget of the
Huawei that they uses for the taking the vantages of the competition.
Mission: The mission the Huawei is make the world with the digitalisation including the
person, company and the home with properly connected.
Vision: the vision of the Huawei is building the platform of the digitalisation which helps all
the companies and the industries to become more effective and efficient.
Needs of the products: the products of the Huawei are greatly needed by the people because
they are less expensive and better in quality (Yuan, and et.al., 2018). There is the greater needs
of the smartphone by the people so they make the process of the products lower from other
companies and attract the number of the customer.
Objectives:
 To achieve the goals of the business.
 To increase the trust of the customer.
 To survive in the competition markets.
Competitive edge: The Huawei is wants to increase the competition of the their by making the
effective management plans in the business. The plan of the management leads to the success
and growth of the business in the high competition of the Huawei
STP:
segmentation: the Huawei makes the planning to segments those areas which give their success
and growth in the present and future. It is the process of the business which finds the various
segments of the customer which is related to their needs and wants. The market segmentation is
based on the geographic, demographic and psycho graphic (Zhu and Chertow, 2017).
Geographic includes the urban and the rural areas of the china where they can segments the
customer. In the demographic people are divided as per their age from 15 to 60 and make the
products. In the psychographic all the types of the people are covered.
Targeting: in this process the Huawei has select the group of the customer in which they wanted

to sell their products. Includes the young age people which uses the smartphone more.
Positioning: in this process of the Huawei they make the position of the products as per their
age and status whop love to use the mobile in their life.
Budget:
Particulars Amounts (£)
Marketing 50
labour 30
Promotion 20
Total 100
Sources of the funds: In the business of the Huawei the government of the china provides the
loans for the successful operation of the business in the international markets (Trevisan, 2016).
the government are the main sources which provides the funds for the management of the
business activities and for the effective plaining of the strategic management in the Huawei.
Stakeholders are the creditors, directors, employees, customer etc. which can affects the business
and also be affected by the actions, policies and objectives of the organisation. There have lots of
advantages and the disadvantages to the business. In the business of the Huawei stakeholders
play an important role to reach the success and the growth of the company
Diversification strategies:
Concentric diversification: It refers to adding the same kinds of the products and services in the
existing business. In the business of the Huawei they include the similar goods and services in
their business so that they could fully utilize the effectiveness of the systems of the marketing
and the technological system.
Horizontal diversification: It will determine the giving the goods and services to the customer
which existing of the business. In the Huawei they develop the new goods and services that will
attract the number of customer which increases the sales and productivity of the business.
Conglomerate diversification: It refers to including the new products and services which is not
related specifically and have no similarities of technological and commercial. In the
diversification the Huawei increase the level of the profitability because development of the new

products with the existing products brings good quality and more feature and it will increases the
sales of the business.
CONCLUSION
It can be concluded from the above study that the strategy of the business is very essential
for the for the success and the growth of the business. Business strategy includes various
practices and the process which leads to achieve the goals of the business in the different
situations of the markets. There are various external factors which affects the the effective and
efficient functioning of the company. These external factors are political, economical, social,
technological, legal and the environmental which influence the company positively and
negatively. There are lost strength and the weakness of the business in the internal environment
of the company. These strength and weakness helps to determine the current position of the
company in the market. The company could have the lots of opportunities in which they get the
success and the growth of the business in the future and the present situation of the markets.

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