Strategic Management & Leadership: Huawei's Success Factors

This report provides a detailed analysis of Huawei's leadership and strategic management practices. It begins with an overview of the company, its market, and the challenges it faces, followed by a definition of success and the metrics used to measure it, including the Balanced Scorecard. The report then delves into the reasons behind Huawei's success, emphasizing its leadership style, employee dedication, and long-term thinking. An internal analysis is conducted, covering value chain analysis, core competencies, and the VRIN framework. The contribution of leaders, particularly Ren Zhengfei, and the organizational culture are examined using full-range leadership models and a leadership matrix. The report also reviews Huawei's growth, international, competitive, collaborative, and positioning strategies. Finally, it analyzes the company's future using a PEST analysis, offering a comprehensive understanding of Huawei's strategic landscape and its path to continued success.

Running head: STRATEGIC MANAGEMENT & LEADERSHIP
Strategic Management & Leadership
[Huawei]
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Executive summary
The paper studies the leadership quality practiced in Huawei. The paper shows that an
employee owned leadership is good for the success. Huawei is the one single Chinese
company that has scripted the success story even outside of the country. However, the paper
has also not denied the counter of different political parties at the different global platforms
especially in the United States. The paper has indeed covered in brief the leadership quality
prevalent in the Huawei Company.

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Table of Contents
1. Introduction.........................................................................................................................4
1.1 Overview of the company....................................................................................................4
1.2 Future of the business.........................................................................................................4
1.3 Market served......................................................................................................................4
1.4 Challenges faced.................................................................................................................4
2. Defining success........................................................................................................................4
2.1 Way to measure the success using Balanced Score Card..................................................4
3. Reasons behind the success.....................................................................................................5
4. Internal analysis.........................................................................................................................6
4.1 Value chain analysis............................................................................................................6
Primary Activities-...................................................................................................................7
Support Activities-...................................................................................................................9
4.2 Identifying the core competencies.......................................................................................9
4.3 VRIN framework.................................................................................................................10
5. Contribution of the leaders......................................................................................................11
5.1 Definition of leadership-.....................................................................................................11
5.2 Zhengfei and the organizational culture of Huawei-...........................................................11
5.3 Full-Range leadership model-............................................................................................11
5.4 Leadership Matrix-.............................................................................................................12
6. Reviewing the strategy used...................................................................................................13
6.1 Growth strategy..................................................................................................................13
6.2 International strategy.........................................................................................................14
6.3 Competitive strategy..........................................................................................................14
6.4 Collaborative strategy........................................................................................................14
6.5 Positioning strategy............................................................................................................14

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7. Analyzing the future of the company using PEST...................................................................15
8. Conclusion...............................................................................................................................16
References..................................................................................................................................17

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1. Introduction
1.1 Overview of the company
Huawei is a leading name in providing the solutions to the information and
communication technology at the global platform. It is headquartered in China. It has continually
progressed in the industry ever since its inception in the year 1987. The different products,
services and the ICT solutions are served to the global audience (Makarov, Ostanin & Vaitkov,
2014).
1.2 Future of the business
Many technological achievements are yet to happen such as the initiation of its own OS
for mobile phones. It has already surpassed Apple in terms of manufacturing of Smartphone.
However, the future look little unpredictable mainly because of the anti-Chinese feeling in the
Western countries especially in the United States (Dalton, 2014).
1.3 Market served
It has deployed its different technological achievements in more than 150 countries. It
initially focused on manufacturing phone switches; however, later on, it expanded through
constructing telecommunication networks, providing consulting services to global customers and
manufacturing communication devices (Zhu et al., 2013).
1.4 Challenges faced
The biggest challenge for the company is the disbelief that many international
governments have about the products made by a Chinese Company. The country has
specifically faced challenges in the United States (Zhu & Jones, 2014).
2. Defining success
Success can be defined in numerous ways as different companies have their own
perspectives regarding the success. To some success mean a progressively growing graph of
company’s annual financial performance. On the other hand, some companies think beyond of
that. They are also concerned about sustainability that requires satisfying the needs of its
different stakeholders. There are some as well who consider success as a final destination of
the set operational goals and the objectives (Coad, 2014).
2.1 Way to measure the success using Balanced Score Card

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The balanced score card is one of those tools that help organization measure its
success based on the categorized parameters. Huawei in a like way does use balanced score
card to measure its success. It helps the company focusing on innovative ideas that ultimately
encourages them to explore a wide range of opportunities in a varied nature of market through
making huge investments in the Research &Development (R&D) process. Nevertheless, the
company has a significant number of Research & Development centers in the different countries
across the globe (Godinho & Ferreira, 2013). The list also includes the United States, which is a
big achievement. This is for a fact that the United States government hardly trust on a Chinese
company. In such situation, this will help Huawei in its innovative approach despite all the
negative factors in the country (Fu & Fu, 2012). The innovativeness that the Huawei infuse in its
strategy making through the use of balanced score card has already helped the company in
becoming the leading global solutions for ICT.
Figure 1: Balanced Score Card of Huawei
(Source: Kurien & Qureshi, 2012)
3. Reasons behind the success

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There are several reasons behind the success of Huawei. Following are some of those (Hu,
2016):
1. World class leadership style in the form of Ren Zhengfei
2. Giving first priority to their customers by even valuing them more than the any other
member
3. Dedicated employees are one of those reasons that has helped the company gain a
huge success
4. Interestingly, every single employee in the company is treated like a boss to make them
feel the requirement and justify their responsibilities
5. Long term thinking is the other potential strategy that helps the company become
competent in the market. The unique way of dealing with the employees has helped the
company immensely in working on 10 – year plans rather than a quarterly or an annual
financial year
6. The decision making skill is the other quality that has helped the company in attaining
the success. Ren Zhengfei believes in thinking deeply over any decision rather than
jumping on it and make a hurried decision
7. Partnering with few of the world’s leading telecoms companies. It has helped the
company reached to a significant number of global customers through the help of
already operating telecoms giants in their respective circuits
8. Brand positioning strategy is the other key that has enabled the company in positioning
their brand value appropriately, which is why the company has successfully deployed the
medium-low end Smartphones at the global platform
4. Internal analysis
4.1 Value chain analysis

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Figure 2: Value Chain Analysis of Huawei
(Source: Fearne, Garcia Martinez & Dent, 2012)
Value chain holds a significant place in the world of business. A value chain is mainly divided
into two categories such as the Primary Activities and the Support Activities. Primary activities
and support activities are further divided into few sub categories as shown in the above
diagram.
Primary Activities-
Inbound logistics-
Huawei is one of those companies that have continually deployed innovative ideas to
enhance their business capabilities. One of such example is the use of Narrowband Internet of
Things (NB-IoT). This is a one kind of chipset technology, which in combination with the vehicle
detecting technology is implemented in the vehicles as well as in the dockyard. This helps in
knowing the availability of dock yard, which is important to avoid any unnecessary wait time at
the different dock yards. The technology also helps in knowing the actual movement of the
vehicles. These two technologies in combination enhance the tracking capability of the Huawei
Company. The inbound logistics is full of innovative technologies that have maintained the
roaring success for the company (Joo, Oh & Lee, 2016).
Operations-

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Manufacturing is no longer a traditional process where there are few machines handling
the entire manufacturing works. The trend has shifted towards the technological invention.
Huawei like the few superior companies has used utmost technology in enhancing their
manufacturing capabilities. Some of the few technologies are Internet of Things (IoT), Big Data
and Cloud Computing. These technologies help in understand the demand of market in real
time and respond accordingly. Nevertheless, it is very decisive in the contemporary business
that a company understands its target market. Huawei is doing the same by implementing the
mentioned technologies (Zhang & Vialle, 2014).
Outbound logistics-
This is another very important segment as it facilitates the transport of manufactured
products to the target customers. Huawei has smartly managed its outbound logistics by being
both at the domestic and the international level. The domestic logistic is handled with the
different transport means such as the trucks. They track the movement of the shipment through
the use of different technologies such as Cloud Computing and Internet of Things. They are also
expanded into the various international markets. This enables them to handle the designing of
the product at the most advanced level. This also enhances their connectivity with the local
customers (Micheli & Carrillo, 2016).
Marketing & Sales-
They started with the Word-of-Mouth marketing strategy. It worked as well. However,
with the passage of time they have realized the importance of advertising on the different media
channels. The company is focused on globalization and innovation, which is why they have
smartly changed their marketing strategies to suit the current demand. Partnering with the
different telecom carriers across the globe is one of the marketing strategies that Huawei does
to attract a mass customer (Jiang, 2016).
Service-
Huawei has smartly managed its service quality as well. It has its own servicing centers
in different locations across the globe. They also take the help of some other companies that
offers solutions to technology related issues. This ensures a quality post sales service to their
customers as they are treated with the world’s best in quality service experts. Additionally, it
also offers the calling facilities to its customers where customers are just needed to ring the

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given number. They can easily call them for a free pickup and delivery of their products. This is
both time saving and hassle free (Shi & Jiang, 2016).
Support Activities-
Firm Infrastructure-
The company has undoubtedly one of the finest infrastructures in the world. The fact is
very clearly revealed in its advancement in different technologies and also in its leadership.
Approximately a half of the entire population of its employee is engaged in the Research &
Development process. This signifies that the company has excellent bench strength for the R&D
process (Cao, 2017).
Technology development-
Huawei makes significant investments in the R&D process. This has enabled them to
bring various new technological solutions to further their capabilities as a leader. The use of few
technologies such as Cloud Computing and the Internet of Things are just few examples
(Xuesong, 2016).
Procurement-
It manages the procurement process through working in partnership with the different
other companies to get the supply of the required materials. They look for other companies to
get the shared benefits. The company use technology to enhance its connectivity with its
suppliers. The use of digital technology has enhanced its procurement capability (Li et al.,
2016).
Human Resource Management-
The human resource management is little different in the company. Retention ratio is
higher than many other reputed companies. This is for a fact that it gives its employees ample of
chance to get connected with the company’s operational objectives. Because of which it has
numerous such employees that have feeling for their responsibilities as well as for the
company’s performance (Yan, Yu & Dong, 2013).
4.2 Identifying the core competencies
Following are the core competencies that Huawei has (Spigarelli, Alon & Mucelli, 2013):

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 Giving every single employee an opportunity to get connected with the company’s
operational objectives and the mission
 Establishing Research & Development centers in the various global parts
 Dedicated employees that have leadership qualities in them
 Operating through various global telecoms companies across the globe
4.3 VRIN framework
Figure 3: VRIN Framework Analysis of Huawei
(Source: Talaja, 2012)
Value- The services offered by Huawei is challenged by many other competitors in the
respective product zone. In the different services and the technologies it has several
competitions from its competition. The company has managed its competitiveness through the
use of technology and an extensive exploration of Research & Development process. However,
the negativity that most foreign governments have for a Chinese company is the one worry,
which is hampering its value recognition in the international market. The potential that the
company has can even help it surpass the respective giants if they are allowed an utmost
exploration in the different foreign countries (Talaja, 2012).

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Rarity- The products that it offers are rare because very few companies are there that offer
solutions to technological demands at the global platform. The products and services offered by
the company can be considered rare in this regard (Talaja, 2012).
Inimitability- Huawei cannot be termed as inimitability entirely; however, it notably challenges
the dominion of Apple and Samsung in terms of mobile manufacturing. The company is
expected to become the third largest Smartphone providers in the world (Talaja, 2012).
Non-substitutability- The Company is continually engaged in deploying various new thoughts
to become sustainable. It is trying to make communication networks more energy efficient than
ever. However, the company still needs to travel a long distance in order to be sustainable
(Talaja, 2012).
5. Contribution of the leaders
5.1 Definition of leadership-
Leadership can be defined as a collection of various characteristics that one posses and
perform to lead from the front (McCleskey, 2014). Zhengfei is one of such leaders that have
helped Huawei reach to the highly recognized position. Undoubtedly, Huawei is a leading name
in providing solutions to the technological issues. Huawei is a rare Chinese company, which is
actively getting recognition in the European market. The company has surpassed the business
of Ericsson; however, it is comparatively unknown to the European audience. This is the sheer
leadership quality that has helped the company in becoming the only Chinese company to
conquer the international market. The company is continually becoming stronger in the
international market (Tao, De Cremer & Chunbo, 2016).
5.2 Zhengfei and the organizational culture of Huawei-
The culture at the Huawei is very different to other reputed multinational companies. This
is different in the sense that it is known as an employee owned company. Every single
employee is a part of the company’s shares. Zhengfei is one of those. Such culture has helped
its employees become connected to the operational objectives and the mission of the company.
The involvement of every single interested employee helps them dedicate their efforts to the
success of the company (Ba, Zehou & Qing, 2016).
5.3 Full-Range leadership model-