Huawei Technologies Co. Ltd.'s International Business Strategies

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Huawei China
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Table of Contents
Abstract............................................................................................................................................3
Introduction......................................................................................................................................3
Literature Review............................................................................................................................5
Cultural Factors, Legal Factors and Political Factors..................................................................5
Market Entry Mode and Marketing Strategies............................................................................7
Analysis...........................................................................................................................................8
Discussion......................................................................................................................................11
Implication to International Business............................................................................................14
References......................................................................................................................................16
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Abstract
The recent assignment states about the company Huawei Technology and the different factors
that are affecting its business in the international market. It also explains some of the ways by
which, these factors will be overcome. On the other hand, the scholar also uses some of the
effective ways by which the company will be able to acquire a competitive area in several
countries. The marketing mix and some of the innovative marketing strategies are used for this
reason. It also states about the recent development that the company has gained in the global
market. However, the assignment also explains the different marketing modes, among which, the
joint venture mode is seen as the most effective one.
Introduction
Huawei Technologies Co. Ltd. is a Chinese company. This company is a technology-based
multinational company and it makes different types of telecommunication equipment. Apart
from that, it also sells electronic devices such as smartphones, TV etc. The headquarter of the
company is at Shenzhen, Guangdong, China. Ren Zhengfei founded this company in the year
1987, and initially used to manufacture phone switches (Huawei Technologies Co., Ltd., 2019).
With time, it expanded itself and the products it offers and started providing consulting services,
or operational services along with building telecommunication network. At the same time, it
spread to the international market and in the present, it operates in 170 countries. It is very
successful in the international market, but due to cybersecurity allegations, it had to face
difficulties in some of the countries.
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This is a telecommunication based organization that delivers the quality amount of services to
foreign customers. Huawei has also implemented some of the marketing strategies through
which, it has become possible for this company to gain growth in the world market. However, it
has been observed that there are some of the influencing issues such as cultural, legal and
political matters that are faced by the company, Huawei Technologies (Guichard and et al.,
2017). It has been understood that among the cultural factors, the most impacting one is the
language barriers. Different regions are having several numbers of languages that are creating an
obstacle in the path of development of the organization. On the other hand, some other cultural
issues were observed that are correlated to the increase in population growth, geographic,
historical and demographic issues. Change in the market is also providing a negative impact. The
impact of avoiding uncertainty and the power distance is also acknowledged. Some of the legal
factors and political ones are considered as they were observed to be quite affecting for the
company, Huawei.
Apart from this, it can be stated that the company should focus on such issues to find out better
and efficient solutions for overcoming it in a beneficial manner. The pressure of the influencing
party members and the varying laws and acts are impacting the company and its growth. For this
reason, marketing strategies are used in a prominent manner so that the organization can gain
some knowledge about the customers’ demands and the competitors that are present in such
business market (Zhang, 2009). The competitive advantages and the marketing mix plans are
also used for the company and its development. Thus, in this manner, the company has become
capable of understanding the affecting factors and the ways of managing it. It has also
understood that marketing strategies that will be used for increasing the international business of
Huawei.
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Literature Review
In the study of, Liu and et al., (2016), scholar mainly delivers knowledge about the market entry
modes of Huawei. Here, the scholar has organized interviews with the managers of Huawei to
understand their strategies. From the study, it is revealed that Huawei Company has utilized
certain unorthodox marketing strategies to enter into the foreign market. On the other hand,
according to, Hadjikhani, Leite and Pahlberg, (2019), it is stated that Huawei mainly
implemented strategies to overcome of the issues, which are related to culture, politics and legal
factors. Moreover, by employing joint venture market entry mode, Huawei easily entered the
Russian market in the year 1996. In addition, the company has created a joint venture with two
companies, such as Russia Telecom and Russian Beto Konzern while entering into the foreign
market. Huawei has adopted different market entry modes to enter into South African, African
and Asian market. The company has adopted an export technique as market entry mode to enter
into the South African market.
Cultural Factors, Legal Factors and Political Factors
According to the perception of, Sun, Ding and Zhou, (2016), cultural factors are causing a huge
impact on companies like Huawei. While delivering its services in the global market, the
company had to face some barriers from the language variations that are prevailing in different
countries. Language is one of the vital factors for an organization. It becomes challenging for
Huawei Company to manage such issues in the global market. On one hand, where language
helps in creating a good connection among the companies, on the other hand, it creates a
negative influence on international businesses. Each and every location has some language
variations and due to this reason, it is the responsibility of the organization to look into these
matters and to take severe action for overcoming such affecting factors.
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On the other hand, business norms are also a significant aspect that can be observed in the global
market. As in the case of America, they are having different business attitudes, which are
creating a contrasting factor for the other companies in Japan (Liu and et al., 2016). Similarly,
the company is going through such issues in the international business environment. In this
manner, negotiation skills are also seen as quite effective for the company, Huawei. For
understanding the demands of foreign companies, the company need to understand their norms
and cultures in a definite way. Governmental, as well as educational factors are also prevailing in
the international business scenario. In the same way, the company is also been affected by such
factors. In accordance with, Mao and Zhang, (2016), various countries have their different
governmental practices and the educational issues are also varying. In this way, cultural factors
are influencing the company in the international business market.
As per the study of, Yu and Guo, (2018), legal factors are also influencing the marketing
strategies of Huawei. The most influencing laws and acts that are impacting the company are the
patent acts, labour acts, tax rates and some of the environmental laws. Similarly like the cultural
factors, the legal factors are also prevailing in different countries such as America, Japan and in
many other locations. The company Huawei needs to cooperate with the employees of other
countries to understand their laws and regulations (Alcácer, Cantwell and Piscitello, 2016). In
this way, the company should focus on the labour and the wages laws for the aim of
understanding the business environment of the countries. Apart from this, the companies should
deal with the governmental laws for proceeding with their business in a better manner.
Political factors are also influencing the company like Huawei. The pressure of the ruling party is
also creating an impact on the profitability of Huawei. According to the viewpoint of, Xia, W.
and Gan, (2017), Chinese firms are falling down because of the political promotions and the
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meetings of the national congress. Likewise, political issues are also influencing the
organization’s growth and development. Such issues are more seen in the markets of Europe and
due to this reason; it becomes difficult for the company to work in an effectual manner in those
growing markets. Recently, it has been observed that Huawei is trying to use its sufficient
marketing strategies for increasing its production in foreign markets (Hadjikhani, Leite and
Pahlberg, 2019). Apart from international political factors, Huawei is also facing some of the
local political issues as well. It is their responsibility to look on these issues for the purpose of
overcoming it.
Market Entry Mode and Marketing Strategies
Among all the different market entry modes, Huawei uses the joint venture mode for its
betterment. With the help of this mode, the company has been able to gain a better position in the
global environment. In the context of, Wu and Zhao, (2007), it has been observed that the joint
venture is useful for identifying the risk factors and to understand the ways of controlling the
resources that are needed for the company. Apart from this, a joint venture is used for controlling
the investment return and the issues related to other companies. Recently, it has been noticed that
the company has used the joint venture to continue its production along with the other two
companies such as Russian Beto Konzern and Russia Telecom (Dawei, 2008). During this
process, some of the environment, as well as firm factors, were impacting the companies’
growth. For minimizing the effect of such factors, marketing strategies were also implemented.
Apart from the 4Ps of the marketing mix, Huawei also used some other effective marketing
strategies for its betterment. It focused on the competitive advantages that were prevailing in the
global market. Along with this, it also concentrates on the BCG matrix for creating good
communication (Cao, 2017). Distribution strategy is also seen as quite beneficial for the
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company to fulfil the foreign demands. In addition, customer analysis and market analysis are
also done in a similar manner. Marketing strategies are used for continuing the business in the
global market in a successful manner.
Analysis
Huwaei technology is one of the famous organizations in China. It plays an important role in the
global business market of telecommunication equipment. It has a huge foreign expansion in the
business market. Many countries around the world share connection with this company. This
company also faced many political and other controversies in recent few years. The controversies
over Chinese involvement in 5G wireless networks is the most recent discussed allegation of the
Huwaei company ( Matura, 2019 ). On 1st December of 2018, Huwai vice chairwoman and the
daughter of company’s founder Ren Zhengfei was arrested for this case. She was charged with
conspiracy to defraud multiple international companies. It has faced criticism for many aspects
of its operation. Authority of Huwaei rejects most of the allegation that has been charged against
them. On January 28, 2019, US federal prosecutors stated that Meng and Huwaei have thirteen
fraud bank accounts.
There are few obstructions of justice and trade secrets that are assumed to have within the
company. One of the most important factors of the Chinese political environment, which is made
of Huwaei’s largest market, is the influence of the ruling party. The ruling party of China carries
an immense influential power towards the country’s economic environment. Therefore it can be
said that any factor or incident which influences Chinese politics are also responsible for creating
a huge impact on Huwaei’s profitability. For example, it has been seen that during the political
promotions and National Congress meetings, the fall in prices of most Chinese firms was
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observed. According to the many business experts, local and international politics has been
affecting the performance of Huwaei Company throughout many years (Guo, Li, and Zhong,
2019). One more example, in this case, can be stated that the Chinese government took the
decision to ensure enough training programs for the engineering students of telecommunication
stream.
This step increases the competitiveness in the market of telecommunication. This decision of
government creates a positive influence on the performance of the Huwaei company.Huwaei is
taking the expert engineers in their company and arranges proper training for them in order to
make efficient employees of their company. This step also increases the competitiveness of the
domestic labor force in the market. Government of Chinese also provides loans and incentives to
the telecommunication companies (Arrive and et al., 2019). Huwaei company takes these
advantages in order to increase the productivity of the company. Overall, there are many
controversies that are going in China related to the Huwaei company, which cannot be denied at
any circumstances.
The fact cannot be avoided that despite all controversies Huwaei company is an efficient service
provider company in China and all over the world too. The recent controversies and legal cases
decrease the popularity of the Huwaei Company to an extent. The truthfulness of those
allegations is a matter of question. Few allegations are assumed to be the truth. The cultural
factor of the huwaei took an important role in the establishment of the company and this culture
of the Huwaei is considered as the wolf- culture. It is said that the culture of the Huwaei has
similarity to the nature of the wolf. The first character of the wolves is bloodthirsty. Employees
of the Huwaei are extremely thirsty about the market information and always remain ready to
adopt any change in order to fulfill the aims of the company. The second characteristic of the
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wolves is the coldness or fearlessness. Employees and the authorities of the Huwaies company
are considered to be fearless at any cost, no matter how hard the situation is. At this moment,
Huwaei is facing a hard time for some legal issues, still, Huwaei is trying hard to keep their
atmosphere as cool as possible. They are trying to proceed with the progress. The third character
of wolves is taking decision according to its situation. Every member especially the authority and
employees of the Huwaei Company tries to take new initiatives according to the situations.This
nature of the company helps them to adopt new innovative steps. Huwaei is famous for
encouraging employees and their customers. These characteristics of the Huwaei, which is
termed as wolf nature creates a positive impact on the performance and positions of the
Huwaei .As a result, Huwaei is expanding its business volumes about twenty percent every year
(Gao and et al., 2019). Huwaei also provides the facility to its customers to share their opinions
with them. These opinions help the company to understand the requirements of innovations in
order to increase the satisfaction of the customers. Overall it can be stated that the culture of the
Huwarei has been designed on few factors that are fairness, honesty, creative and continuously
keeping research on the situations. Recent legal issues, arresting the CEO of the company,
various allegations on the company creates big questions on the cultural value of the Huwaei.
Still, the fact cannot be denied that Huwaei is expanding them more and more with the passage
of time. It is one of the most discussed company in China, which has been showing remarkable
performances by adopting new innovative strategies according to the requirement of the
situation. It creates records of selling the most numbers of smartphones. China is considered as a
country of economic growth. Majority of the population of China has the buying power to
enhance luxury. This factor helps Huwaei to become the largest smartphone seller company. The
organization is focusing on to hold the Chinese middle-class local market which is increasingly
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concerned with the quality. They faced failure in Europe at the time of economic turndown.
Socio-cultural aspects have some influences on the performance of Huwaei Company. China is
the country with the maximum number of populations. There is extremely high demand for
smartphones and other electronic equipment (Arrive and et al., 2019). China is the largest source
of importing and exporting electronic tools to other countries of the world. Green pipe policy is a
nice initiative taken by the Huwaei in order to save the environment.
Discussion
Huwaei technologies Co.Limited is the organization which carries innovative technology
developer with Chinese based origin. It tries to use high quality technology in order to provide
the efficient service to the customers. Huwaei technology has a very strong research and
development sector where multiple researches on development of telecommunication is going
on.Huwaei is a private company which is owned by the employees. This organization has already
become successful to create an important place in the global telecommunication market(Guo and
et al., 2019). Country like China where economic growth is increasing day by day, works as a
positive factor for the success of Huwaei. Recent developments of Huwaei are remarkable. The
rate of expansion of their company increases above twenty percent in every year. Recently few
legal issues had effected the reputation of the organization at a some extent. Despite all the legal
issues the fact cannot be ignored that the culture of the Huwaei is playing an important role to
enhance the success of the company in the global telecommunication market. Huwaei is showing
the outstanding performance on the 5G based technology. This technology had introduced and
developed three major points on the basis of three technological elements to design the entire
network based system. Whole network system has one particular motto to provide the efficient
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service to the customers and gradually increase the success rate of company. This organization
developed the joint force related ventures with carrriers and mainstream based tools with the help
of chipset based vendors. They developed the interoperability development testing system, which
is also termed as IODT too.Along with 5G technologies there is the Nobel innovation of
Huwaei , Tube star and Rular star are occupying the market at a great extent. Huwaei is the
developer of three basic capabilities which can make future world full of wireless connectivity.
These are single run pro,Mobile –based cloud,Wireless Artificcialy intelligent things. These
developments of the digital things from the home of Huwaei have helped its carrers to run the
whole world along with multiple networks.Chinese Libearation company and finally Chinese
Government helps Huwai a lot from the establishment of the company. China is always seeking
new innovative ideas in the field of technology. This factor works as a positive factor for Huwai
as it believes to bring innovation in every aspect (Li, Capone and Malerba 2019 ). Technical
innvaton is no doubt the most importsnt step to bring the revolution in a company .Huwaei
adapts multiple technical innovations throughout many years according to demand.Huwai
ranked 68 th position in Best global brands 2018. This company has the term in order to make
innovation meaningful which influences the team members to provide technological innovations
the best degree where the whole world can be connected through wireless connections. British
report has published the important issues of Huwaei about their hardware networking system(Yu
and Wang2019). Huwaei is not successful to create positive influence in the telecommunication
market of Britain. United Kingdom faced many difficulties while implementing the hardware
system of Huwaei. Government of United Kingdom has banned Huwaei in their country. Apart
from Britain, there are many countries reported that network based gear technology of Huwaei
has many problematic issues at different times from the last fifteen years(Guo and et al.,2019).
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