Analysis of Huawei's Competitive Advantages and Market Attractiveness

This report provides a comprehensive analysis of Huawei's competitive advantages within the dynamic smartphone market. It begins by assessing the industry's overall market attractiveness, highlighting the increasing demand for smartphones and the profitability of companies in this sector. Th...Read More

Running head: BUSINESS ENVIRONMENT AND STRATEGIC MANAGEMENT
Business Environment and Strategic Management
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Table of Contents
Market attractiveness of industry.....................................................................................................2
Market attractiveness for future.......................................................................................................2
Sources of competitive advantage for Huawei................................................................................3
Sustainable competitive advantage of Huawei................................................................................4
Reference List..................................................................................................................................6

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Market attractiveness of industry
The use of the internet services along with the mobiles has resulted in the beginning of
mobile internet. The mobile internet that is known as smart phones has been a powerful device
that is spearheading in the market where as the traditional voice machines are beginning to lose
in the consumer market. According to a survey that was conducted in 2010, it showed that more
than a billion people on a global manner are using the smart phones, which shows that they are in
high demand and will be in the near future as well (Kim et al., 2016). Most of the organizations
that are dealing in the smart phones industry have been profitable in the recent years and will
continue the trend in the future as well. The sale of smart phone products have been increasing
by 100 percent every year and the total sales will be increasing by the end of 2018 (Karns, 2016).
The attractiveness of the industry is very high, as the power of the buyer is high that is
there are more number of suppliers in the market that are producing the products at a cheaper
price and is giving competition to the major organizations like Apple and Samsung. The
customers with a low budget have many alternatives that are present in the market if they cannot
afford to go for the high-end products (Puad, Yusof & Sahak, 2016). The capability of the
consumers is also high with respect to influencing the mobile operators, as there are various
channels of distribution that result in the switching of the supplier costs. Since the rivalry among
the companies is intense, it has helped in keeping the costs of the handsets at a lower price so
that the sales can be maximized by the companies (Makkonen, Vuori & Puranen, 2016).

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Market attractiveness for future
The market attractiveness of the smart phone industry for the future seems to be at a
strong point, as the rise of the technological advancements will result in developing new
products that the consumers can purchase. Most of the companies are looking to make their
products in an innovative manner so that it can grab the attention of the customers towards it,
which will help in increasing the sales of the particular company. The companies are focusing
mainly on the new modes of technologies such as Augmented Reality and flexible screens so that
it can help in providing the company with a competitive advantage over the other companies
(Calvo-Porral & Levy-Mangin, 2016). This will help in attracting the attention of the customers
towards them in spite of the intense competition that is present in the market. The medium-sized
companies are manufacturing the products at a cheaper price and are providing the same features
that are available in the high-end phones so that the customers can pay a minimum amount and
enjoy the same facilities. This has resulted in shifting most of the customers towards them due to
the price factor that is being provided by the companies (Tseng, Liu & Wu, 2014).
Sources of competitive advantage for Huawei
Huawei is one of the major competitors for companies like Apple and Samsung, as it has
strength of 170,000 employees and has an annual sale of $61 billion approximately by selling
telecom equipments in more than 150 countries. The company has been in the number one
position on a global basis with its sale of telecom equipments and has been dominating the
European countries along with South-East Asia. The main advantage of the company is that it
makes all the products that are related to wireless communications. The telecom networks that
the company manufactures helps in transmitting the signals, which has helped in increasing the

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sales of the company. The company is the top seller in counties like Netherlands and Portugal
and is second in Spain, Hungary, Italy and Poland (Xia & Gan, 2017).
The major advantage of the company is that it has managed to tap the potential buyers
that are present in the African market by providing them broadband services in the rural and the
urban areas. This has helped the operators in getting better return on investments within a shorter
time span. The company has developed its own platform of mobile money, which has helped in
increasing the number of users in the market as well. It had entered in to a partnership with
WorldRemit, which allowed them in transferring the funds over the Sub-Saharan region of
Africa. The company has also provided internet connectivity to the trekkers and Sherpas in the
Mount Everest base camp so that it can help in understanding the weather and guide the
mountaineers in a better way and in a safer environment as well. The company is also competing
against ZTE with respect to the 5G technology so that it can provide the customers with faster
internet connectivity, which will help in gaining a competitive advantage in the mobile market
(Na & Park, 2016).
Apart from these, another major source of competitive advantage is that the company has
helped in building smart homes by connecting it with their radio frequency so that the buildings
can consume less amount of power and promote a greener environment (Xia & Gan, 2017).
Sustainable competitive advantage of Huawei
The company sustains its competitive advantage by bridging the digital divide, as it
ensures that communication is provided to all the users in the market so that the people from
various regions can communicate in an efficient manner. The company is providing the
broadband services to all the users so that it can help in gathering the information and

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technology, which will help in addressing the challenges on a global manner. The company has
launched training centres so that it can help in developing the local talents with the help of digital
knowledge so that the use of digital communication can grow in a better way within the market
(Kotabe & Kothari, 2016).
The company has been working with governments of the major countries so that it can
help in stopping the cyber security threats so that the challenges that are present in cloud
computing can be addressed in a better manner. The competitive advantages of the company are
done while promoting a greener environment on a global manner. The company has been
recycling its consumption of energy by installing better equipments and technologies so that the
emission of the greenhouse gases can be limited for the business activities of the company. The
company also develops innovative solutions so that it can help in minimizing the effects on the
environment that can be negative in nature. This has helped the company in reducing its carbon
emissions so that it can promote the use of green technologies within its activities (Bengtsson &
Wang, 2016).
The company also cares for its employees by providing them with local and diversified
channels, which will help in the creation of personal values among them. Through the
competitive advantages, the company also contributes towards the society in the countries where
it is in operation. The company operates under strict ethics and prohibits the use of bribes and
monopolies so that they can operate with integrity in the consumer markets. The company also
works with the suppliers in a better way so that it can help in defining benchmarks and manage
the risks of supply management in an efficient manner. This has helped the company in being a
leader of sustainable development in the mobile industry and work collaboratively with the
customers and suppliers (Na & Park, 2016).

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Reference List
Bengtsson, L., & Wang, W. (2016). Cost innovation in global supply chains: the case of Huawei
Technologies. International Journal of Logistics Systems and Management, 23(2), 189-
208.
Calvo-Porral, C., & Lévy-Mangin, J. P. (2016). The influence of switching costs and satisfaction
on loyalty towards smartphone service providers. International Journal of Mobile
Communications, 14(4), 309-327.
Karns, G. L. (2016). Assessing market attractiveness under the Stewardship Model of
Business. Social Business, 6(2), 175-193.
Kim, M. K., Wong, S. F., Chang, Y., & Park, J. H. (2016). Determinants of customer loyalty in
the Korean smartphone market: Moderating effects of usage characteristics. Telematics
and Informatics, 33(4), 936-949.
Kotabe, M., & Kothari, T. (2016). Emerging market multinational companies’ evolutionary paths
to building a competitive advantage from emerging markets to developed
countries. Journal of World Business, 51(5), 729-743.
Makkonen, H., Vuori, M., & Puranen, M. (2016). Buyer attractiveness as a catalyst for buyer–
supplier relationshipdevelopment. Industrial Marketing Management, 55, 156-168.
Na, H. K., & Park, Y. W. (2016). Architecture of Interfirm Collaboration and Global
Competitive Advantage: Findings from the Mobile Handset Industry.
Puad, M. H. M., Yusof, A. R., & Sahak, S. Z. (2016). Smartphone Product Appearance: What
Drive Consumers’ Purchase Decision?. In Proceedings of the 1st AAGBS International

7BUSINESS ENVIRONMENT AND STRATEGIC MANAGEMENT
Conference on Business Management 2014 (AiCoBM 2014) (pp. 235-244). Springer,
Singapore.
Tseng, F. M., Liu, Y. L., & Wu, H. H. (2014). Market penetration among competitive innovation
products: The case of the Smartphone Operating System. Journal of Engineering and
Technology Management, 32, 40-59.
Xia, W., & Gan, D. Z. (2017). The Marketing strategy of HUAWEI Smartphone in China.