Huawei Technologies Company Business Case Analysis

Desklib provides solved assignments and past papers to help students succeed.

BUSINESS CASE ANALYSIS
1

Contents
INTRODUCTION...........................................................................................................................................3
BODY...........................................................................................................................................................4
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14
2

INTRODUCTION
Huawei Technologies Company is a china based multinational company that is headquartered in
Shenzhen but has its operations in over 170 countries including the United States too. Huawei
Enterprise USA Inc. was founded in 2011 which focuses on providing equipment related to
telecommunication along with offering electronic products in the market that mainly includes
mobile phones. This assignment would focus on the business structure, environmental factors
that have an impact on the organization, related major risks that influence the business
performance and process of decision-making of Huawei USA. This assignment would focus on
expressing the internal and external environment that affects Huawei in its decision-making.
3

BODY
I. BUSINESS STRUCTURE AND GOVERNANCE STRUCTURE OF HUAWEI ENTERPRISE, USA
a) BUSINESS STRUCTURE OF HUAWEI, USA
According to Paswan & Blankson (2012), Business structure that is adopted by Huawei, USA is in
the form of the hierarchical structure wherein the staff of the organization is given rank
according to the position it has inside the organization (Liao et al., 2011).This arrangement of
people under one another is known as a hierarchical structure. Here, at each stage in the
hierarchy, every superior has several subordinates under them within their span of control.
Huawei has adopted a tall hierarchical structure because it has many levels under it. The above
figure represents the business structure of Huawei wherein firstly, the Chief Executive Officer of
Huawei comes then under that comes the various presidents and CEO's related to various other
departments then finally the board members and the advisors (Liao et al., 2011).
Figure 1: BUSINESS STRUCTURE OF HUAWEI
(Source: Scholes, 2015)
4

b) GOVERNANCE STRUCTURE OF HUAWEI, USA
Huawei has always been customer-focused along with inspiring other this helped to sustain
longer in the market by the way of improving continuously the governance structure. The
governance structure of the company includes Board of Directors which is considered to be
supremely responsible for managing the operations, corporate strategies and ensuring
consumer satisfaction, they are the lead Huawei (Paswan & Blankson, 2012).The authoritative
body of Huawei is considered to be the shareholder’s meeting that is conducted for the process
of decision-making on the crucial issues that prevail in the organization like decisions regarding
capital elevation, distribution of profits and finally choosing the best possible members for the
Board of Directors (Paswan & Blankson, 2012).
5

II. INFLUENCE OF THE ENVIRONMENTAL FACTORS ON HUAWEI’S DECISION-MAKING
STRENGTHS WEAKNESSES
 Popular brand all over the world has
stores in almost every region.
 Huawei sells its products at a lower
price which makes it easily affordable
for the customers (Jia et al.,2018)
 It has adopted automation in its
production stages that make it more
quality consistent and efficient.
 Huawei has an active and well-
functioned website that attracts a huge
amount of traffic.
 Huawei does not have an adequate
amount of capital which leads to a
lack of cash flow and increases the
borrowings (Turki et al., 2017).
 The employee turnover at Huawei is
higher in comparison with similar
competitors.
 Huawei does not have an
appropriate appraisal system that
leads to lower down the morale of
the workforce.
OPPORTUNITIES THREATS
 Huawei can tap the untapped markets
that have the potential to grow.
 Huawei should opt for the latest 5G
technology in its smart-phones.
 Increase and expand their online
presence through the internet and as
users are increasing on the online
platforms (Randhawa & Ahuja, 2017).
 Provide proper appraisals to the
employees along with training to
reduce the employee turnover.
 Higher competition in the smart-
phone markets having popular
brands like Apple, Samsung.
 Increase in labour costs as
smartphone manufacturing involves
labour-intensive techniques.
 The entry of new players in the
market that affect its survival (Jia et
al.,2018)
6

PESTLE ANALYSIS
POLITICAL FACTORS
Political factors affect the decision-making of Huawei as it offers its products all over the globe
and every country has its political framework that Huawei has to deal and sell accordingly.
ECONOMIC FACTORS
There is a relationship among Huawei and other economic factors of other countries i.e. if the
phones are sold more in the target market then Huawei succeeds (Jia et al.,2018).
SOCIAL FACTORS
Huawei is mainly a Chinese product thus; people have a perception that Huawei does not have
appropriate quality standards, therefore, people tend to distrust its products.
TECHNOLOGICAL FACTORS
Huawei has to take decisions according to the latest technology generation like 5G that is going
to emerge in the market and make innovation in its products (Randhawa & Ahuja, 2017).
LEGAL FACTORS
Huawei has to carry out the decision process according to the legal framework of the countries
like the government in power, taxation policies that would differ from country to country.
ENVIRONMENTAL FACTORS
Huawei has to focus on making decisions that do not harm the environment of any country
(Turki et al., 2017).Huawei has policies to decrease the emissions of carbon in its products so
that the environment is not harmed.
7

III. RISKS THAT INFLUENCE THE PERFORMANCE OF HUAWEI
STRATEGIC RISKS
According to Kot & Dragon (2015), risks are related to the extreme competition that Huawei
faces. The market in which Huawei carries out its operations is extremely competitive regarding
the pricing of the product, services offered; new products, changing technology, availability of
the alternatives, etc. reduces the product lifecycle along with attracting new market players
(Ardito et al., 2014).These risks influence the decision-making of Huawei as it has to look for
new tactics for surviving.
FINANCIAL RISKS
These risks are related to the finances involved in the organization. Huawei has to take a
decision regarding new product development, change in the technology, bringing innovation,
etc. based on the availability of the finances (Kot & Dragon, 2015).If the organization lacks
finances then it has to manage its operations in a lower budget and if it has adequate finance it
can try new things.
EXTERNAL RISKS
These risks are related to the economic, legal and trade, etc. Huawei has to decide so that they
can overcome the economic risks, to adapt the complexities of the legal framework and
overcome the trade barriers (Ardito et al., 2014).Every country has a different economic pattern
which is uncertain that is to be dealt with by Huawei. Then the laws and regulations of the
countries based on which the decision has to be made so that I benefit the organization.
OPERATIONAL RISKS
The performance of Huawei is dependent on the operational risk which involves the supply and
business continuity. Huawei should not rely on one supplier and should find an alternative
supplier to avoid the selling of inferior products (Randhawa & Ahuja, 2017).Also, should aim at
improving so the business continues.
8

IV. BUSINESS PRACTICES THAT AFFECTS HUAWEI’S PERFORMANCE
There are various business practices that are followed by Huawei to carry out its operation
efficiently, they are:
CUSTOMER CENTRIC
According to Barranco & Shihadeh (2015), Huawei is considered to be customer-centric. It
focuses on fulfilling the demands of its customers by offering them the latest, innovative and
affordable products. As its customer-focused, it tends to offer products at an affordable price
and excellent quality.
DIVERSITY AMONG STAFF
As of 2018, Huawei had employed for over 188,000 employees approximately. The employees
that work at Huawei comes from different countries, backgrounds, etc. (Barranco & Shihadeh,
2015).To establish diversity in the organization Huawei has focused on gender equality at the
workplace in case of recruitment, allotting work, etc.
EMPLOYEE CARE
Huawei considers its employees as the most important part because they are major
contributors to the organization’s survival (Randhawa & Ahuja, 2017).Huawei ensures that the
employees generate a sense of belongingness towards the organization in all aspects that is
why takes decision-based on the employee's interest as well.
CREATION OF FAVOURABLE ENVIRONMENT TO WORK
Huawei makes sure that the working environment is full of positivity and therefore, has built a
global value chain that involves the best resources of the world. Huawei abides by the
prevailing legal structure along with sharing values with its partners around the globe and does
not discriminate any employee based on its demographics (Barranco & Shihadeh, 2015).
9

V. FUNCTIONAL DEPARTMENTS OF HUAWEI
MARKETING DEPARTMENT
According to Feyzioglu & Pierreval (2009), marketing department of Huawei focuses on making
its products reaches to its targeted audience. This involves various promotional techniques like
advertisements, etc. that helps in awareness of its products to its potential customers along
with providing them with after-sales services.
FINANCE DEPARTMENT
The finance department of Huawei focuses on managing the monetary aspects of the
organization (Randhawa & Ahuja, 2017).This department keeps track of the finances that have
been used by Huawei in activities like promoting, new product development, innovation,
employees, etc.
HUMAN RESOURCE DEPARTMENT
The human resource department of Huawei focuses on the manpower working in the
organization (Feyzioglu & Pierreval, 2009).It aims at recruiting talented employees that are
required and are fit for the job position that is vacant and beneficial for Huawei.
RESEARCH AND DEVELOPMENT
The research and development department of Huawei focuses on analyzing and understanding
the latest operations that going in the market. It lets the organization understand the new
technology, innovation, product that is developed in the market by the competitors.
PRODUCTION DEPARTMENT
The production department of Huawei focuses on understanding the amount of product to be
produced that the organization requires. This expresses the requirements that the organization
has in terms of the articles to be produced (Feyzioglu & Pierreval, 2009).
10

CONCLUSION
It can be concluded that Huawei USA follows a hierarchical structure that helps it in providing a
proper structure to its business. Then there are environmental factors that affect the
performance of Huawei which is explained through SWOT and PESTLE analysis. Further, there
are risks like strategic risks, financial risks, operational risks, etc. that can have to be overcome
because it has an impact on Huawei. Business practices like caring for the employees, checking
on the health, diversity, etc. is expressed which impacts the performance of the organization.
Based on the analysis of all these aspects it can be connoted that Huawei has the potential to
expand in the new markets soon.
11

REFERENCES
Ardito, C., Barchetti, U., Capodieci, A., Guido, A., & Mainetti, L. (2014). Business Process Design
Meets Business Practices Through Enterprise Patterns: A Case Study. International Journal of E-
Collaboration (IJeC), 10(1), 57-73. DOI: 10.4018/ijec.2014010104.
Barranco, & Shihadeh. (2015). Business structure, ethnic shifts in labor markets, and violence:
The link between company size, local labor markets, and non-Latino homicide. Social Science
Research, 49, 156-166. DOI: 10.1016/j.ssresearch.2014.08.003.
Feyzioglu, O., & Pierreval, H. (2009). Hybrid organization of functional departments and
manufacturing cells in the presence of imprecise data. International Journal of Production
Research, 47(2), 343-368. DOI: 10.1080/00207540802425898.
Jia, J., Mo, H., Capretz, L., & Chen, Z. (2018). Grouping environmental factors influencing
individual decision making behavior in software projects: A cluster analysis. Journal of‐
Software: Evolution and Process,30(1), N/a. DOI: 10.1002/smr.1913.
Kot, & Dragon. (2015). Business Risk Management in International Corporations. Procedia
Economics and Finance, 27(C), 102-108. DOI: 10.1016/S2212-5671(15)00978-8.
Liao, Chuang, & To. (2011). How knowledge management mediates the relationship between
environment and organizational structure. Journal of Business Research, 64(7), 728-736.
doi:10.1016/j.jbusres.2010.08.001
Paswan, Guzmán, & Blankson. (2012). Business to business governance structure and marketing
strategy. Industrial Marketing Management, 41(6), 908-918. DOI:
10.1016/j.indmarman.2011.10.011
Randhawa, J., & Ahuja, I. (2017). Examining the role of 5S practices as a facilitator of business
excellence in manufacturing organizations. Measuring Business Excellence, 21(2), 191-206. DOI:
10.1108/MBE-09-2016-0047.
12