Strategic Analysis of Huawei Corporation: SWOT and PESTEL Insights

This report provides a comprehensive analysis of Huawei Corporation, examining its internal and external environments. The internal analysis utilizes the SWOT framework to evaluate Huawei's strengths, weaknesses, opportunities, and threats, highlighting its large product portfolio, technological innovation, and international presence while also addressing controversies, wea...Read More

Huawei Corporation and Its Environment
Introduction
Business unit are the important part of
economy as it develops job opportunity for
peoples and help in overall economic
development. Different kinds of company
operates their business with different purpose
(Dunn and Jensen, 2018). In which there are
various factors that affects their business
functions and that may be internal or external
factors. In order to understand that, Huawei
Chinese multinational organization is selected.
This company was set up in year 1987, china.
It deals with mobile phones, networking
equipments, and telecom equipments. It
produced products like table computers, Smart
TV, Harmony OS, smartphones, mobile &
fixed broadband networks etc. the present
report carries out discussion about Internal &
external factors along with their impact on
company.
Swot analysis is a model that is used by company for analysing strength, weakness along with threat and opportunity. In which strength indicates that in which the brand is goods and what distinguish it from other competitors. Weakness halt
brand to do well and focus on that point for betterment of company (Buffa, Franch and Rizio, 2018). Opportunity aids firm to increase their market share and brand value. Along with this, threat possess potential to harm the brand. In order to
meet long term competitive advantage, it is vital for entities of corporation to address all factors and all these internal factors in context of Huawei Company are as follows:
Strength
Large product portfolio – Biggest strength of Huawei Company is that they have an extensive product portfolio. They has their fastest growth in manufacturing wide variety of smartphones. Huawei is one of the top three smartphones brands
as well as top two brand at global level. Due to this their sales increases day by day along with higher profits. Besides this, firm also produced many other products such as multimedia technology, dongles, smart TV and so on.
Innovation in technology- Huawei company mainly emphasis on innovation and creations. Every year this company invest a considerable amount of money on research and development for introducing innovative products. Due to strong
focus on R&D, they are the leading players in smartphones along with 5G technology.
Leading position in smartphone market- Huawei enterprise is the second leading player in smartphones after Apple Inc. Being leader in smartphone industry, they also produces and sell many smartphone in market and that become the
leading revenue source of company (Guceri-Ucar and Koch, 2016). This firm come up with innovative technology and good camera even though their prices are feasible and due to this their market shares has increased at high level.
International presence- Global reach of company is very excellent and that is the main strength of brand. Company is expanded globally and due to this they become the leader in good revenue, market shares and a strong consumer’s base.
They operates their business operations across 170 nations for this they perform with many large networks distributors, suppliers and business partners.
Competitive pricing- The primary reason by which brand accomplishes its popularity and faster growth is their competitive pricing. For this they mainly focus on lower pricing strategy.
Weakness –
Many controversies- Huawei has many controversies since its formations as well a tainted image at global market. This is due to the rivalries between us and china and the close connection between
Chinese government and Huawei. Additionally, they has lost their AT&T support in US along with many partners of US
Weak market in US- selected firm has not well positioned itself in US market due to some controversy and due to this the US government is keen on not allowing the brand to flourish their product in US
market.
Lack of capital- Huawei Company have low capital for their operations compare to other top brands. Due to this they need to be very careful while planning any business operations.
Weak brand- Due to low capital and lack of marketing, they have weak brand image. Even if this brand has sharp image in some countries but due to less popularity in most of top markets their brand is
weak
Opportunity –
Al & 5G technologies- With the help of research and development they have opportunity to seen a significant advantage in 5G technology. They need to be more focused towards AL and 5G technologies
as they already get success in 5g technologies.
Marketing- Huawei is leading company in smartphone industry but they have very weak marketing strategies as compared to other players.
Retail chain- Selected firm have opportunity to make use of online channels for increasing sales as well as to expand their presence at global level by putting more efforts in order to develop their brand
retail chain (Dunn and Jensen, 2018).
Threat –
Competitors- Biggest threat in smartphone industry is that, the existence of competitive edge and Huawei firm has threat with Apple, Xiaomi, and Samsung.
Trade pressures- Trading tension between china and US and this become trouble for Huawei brand.
Regulatory pressures- Rules and regulatory pressures are increasingly severe threat to global players in technology. The trade war between US and china along with political pressure become biggest
threat for Huawei Company to operate its business at global level.
Internal factors – SWOT analysis

External environment- PESTEL analysis
PESTEL analysis is a framework that is used by the business entities in order to analyse the key factors which can influence operation of company from outside. PESTEL analysis of chosen firm is mentioned below:
Political- It includes all that factors which are related with law, tax policies, rules of government, legislations and so on. Huawei is leading brand and manufacturer their product mainly at china but sold at international level. Therefore,
the business relation throughout the worlds affects the sales of company. In relevance to this, European Union is the most famous market at global level for smartphones and if the political stability of that nation will changes then it will
become challenging task for selected firm to make sales there (Retamal, 2017). During that US and china faces a trade war and that develops problem to Huawei to its business across countries. Additionally, by this war the tax
impositions of both countries on import & export gets high and that affects the operation of company by massive tax. Other political factors such as Chinese government & international trading also affects sales of firm. Chinese political
conditions influence the economic condition of nation and that hamper the profitability of enterprise.
Economical –Huawei company is a global brand and sold their product at international level. In relevance to this, main market of this company is China & European Union. So if the economic condition of that nation is effectively stable
enough then company will able to gain profit by selling their regardless of economic condition of other nation. The selected form is a leading brand in China and use a competitive strategy in order to set the price of products for
maintaining the sales across the market. It has been analyse that the economic growth rate of China is rapidly increase and due to this the sales of technical gadgets also increase. Higher economic stability gives higher flux of income and
therefore the purchasing power of customers also increases.
Social - It includes all these factor that are related with the lifestyle, ethics and behaviour of an individual. In relevance to this there are many social aspects that influence the sales of Huawei products in which demographic of country
segments, population according to target customer and priority of consumer for product. With growing population the demand of smartphone is also increases as youth segment who are major buyer of smartphone are increases. To
maintain this companies need to understand social culture trends of particular reason and then make marketing strategies for product accordingly to connect with customers. One of the negative aspect off selected form is that it is a
Chinese company and many western consumer believe that Chinese product has a very short life spam and poor quality. So due to this the western consumer do not prefer to buy Huawei products.
Technological factor- Advancement in technology put major impact on operation of company as the technology is growing very high and due to this demand of technical gadgets and service become trendy. Individuals across globe are
dependent on Internet technology and by this international brand like Hawaii grow rapidly. They invest a lot of funds in innovation & research that become the most effective reason to makes them leading brand over other brands of
smartphone (Magbool, M.A.H. and et.al., 2016). This is well known for technically advanced camera phone across the world. Another opportunity for chosen form is that they are leaders of 5G communication technology that increases
the speed and energy saving as well as reduces the cost.
Legal factor- It is related with the low policy legislation of government that can influence the sales and operation of company. Legal factors are very important while dealing with international markets. In relevance to this, factor that it
includes are environmental low, Labour low, patents, tax rates and so on. In which selected organization need to consider all factors for smooth running of operation. Huawei has many employee in several countries so they have to deal
with labour law for wages and other incentive concerns in each nation. Data privacy is another factor that need to be checked by company in order to avoid any kind of legalities which company can face in avoidance of data privacy law.
Environmental factor-In contest of environmental factor company needs to invest in sustainability towards carbon footprints so that they will able to minimize the environmental impact. The selected organization is a global brand and
they need to consider environmental condition as they can affect the transportation of raw material and finished good.

From above discussed report it has been
analyzed that it become vital for company to
address all internal and externals factors
while operating their business at global or
national level as these factors possess power
to affects the function and hinder the
performance of company. With the help of
SWOT and PESTEL analysis, entities of
company will able to effectively analyze the
factors before making any decision.
How Huawei impacts its context external environment
Political factor- The biggest problem that faces by selected company is that china and US have been an economic
rivalries for past two decades and due to this they have to remove 600 jobs at Santa Clara research center of US and
they transferred these jobs to research center in Canada that will their next sanction and would be limit Huawei to
communicate with their employees in the US.
Economical- The major reason of Huawei success is that they manufactured and set the prices of product according
to the economic conditions of target market. Their policies is simple and that is to sell goods over sticking or selling
less products (Craig and Moores, 2017). The economy of Europe is stable, due to this manufacturer produces quality
products and sell them at higher cost.
Social- The demand of smartphone is extremely increases as it become necessity of an individual. In relevance to this,
this factors puts negative impact on selected firm in US nation as western market peoples thinks that Chinese product
to be cheaper and have poor quality and due to this they has to fight with better marketing strategies in order to
remove this label.
Technological - 5G technology, with the help of R&D, Huawei able to get success in launching 5G modem first. This
provides them a string and unique position in competitive edge like Apple and Samsung.
Legal- Patent law infringe along with copy right issues are problematic in some areas for smartphones technology
companies and when a company operates its functions at global level then they have to face multiple jurisdictions of
different nations. For example consumer is law is different in some nation and very strict law too. Therefore, Huawei
need to careful about patents copyright and other law. Additionally, like many other Chinese company, the selected
firm also has bales of poor treatments with their labor. And this hamper their performance so betterment of company
they need to adopt all internationally labor laws and provides them better treatment.
Environmental factors- Environmental law & European market is that factors which affects the operations of chosen
firm. Like the industrial waste of their company puts violation of environmental law (Guth and Sachs, 2018). Is they
carried out their operations by keeping volition of environmental law then European union and the US would enforce
authorizations on china & Huawei and this will become bad for their brand image. So for them it is important to
considered law of environment and need to reduce industrial and carbon emission to atmosphere.
Conclusion
References
REFERENCES
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