Market context help analyze and receive relevant and personalized marketing contents. Swot is also known as market context. Below the information shown is Strength, Weakness, Opportunity and Threats (SWOT) of Huawei.
- Strength: Huawei invested largely in R&D, having wide vision and experienced sales personnel to help with cost advantage in emerging markets.
- Weaknesses: The lack of experience and awareness outside of telecom, and market pressure due to their low-priced products.
- Opportunities: Huawei’s business model relates to cloud storage and their large data solutions.
- Threats: Accusations of espionage and new competitors entering the telecommunications market.
Huawei Technologies Co. Ltd. is a Chinese company that was founded in 1987 by Ren Zhengfei. Huawei specializes in the production of telecommunications equipment including, WLAN, servers, routers, switches, storage, cloud core network, data center energy, wireless network, carrier software, IT infrastructure and network energy. Huawei’s founder Zhengfei was an information technology expert. Zhengfei implemented the company’s philosophy which views competition and market opportunities with keen smell; react to with an aggressive push and attack both in a unified group. Under Zhengfei’s guidance, Huawei successfully created and managed a large relationship network, few other competitors could match. In the early years, the company relied on big contracts from the military to secure a stronghold in the telecommunication network market in its early years.
In Shenzhen, China, Huawei began focusing on importing foreign technology. During the first few years the company’s business model consisted of mainly reselling private branch exchange switches imported from Hong Kong. Initially focused on manufacturing phone switches, Huawei expanded its businesses to include and outside of China, and manufacturing communication devices for the consumer market. A feature of innovation that Huawei has employed in their global success is through collaborations with local specialists of other countries or regions it has an interest in. Doing so allows guaranteed customization for products and services in those particular markets, in turn ensuring both profit increase and adding value. Businesses across China were looking to improve their own telephone system as such Huawei’s breakthrough was of great interest to the Chinese government. With government support, Huawei embraced a period of success and innovation in the following years to come (Lasky, 2019).
Huawei has deployed its products and services in more than 170 countries and even overtook Ericsson in 2012 as the largest telecommunications equipment manufacture in the work. Huawei built the world’s largest desktop cloud in 2012. Huawei has collaborated with IBM, Motorola, Intel, and Microsoft, who specialize in the manufacturing of computer hardware and software.
By 2015, Huawei had the world’s first 1T optical transport network and became the third-largest manufacturer of cell phones in the global market (Lasky,2019). By 2016, Huawei has shipped over 139 million smartphones and now hold the 3rd spot for worldwide smartphone shipments. Presently, the mobile market has continued to attract key players like Nokia and Samsung who access the international market. A competitive feature of the mobile devices Huawei produces is the longevity of the battery. Mobile phones battery longevity determines their convenience to consumers. Huawei has consistently made improvements to the performance mechanisms of their smartphones by introducing lighter processors which consume less power, therefore lengthening the battery life of the devices.
To be successful in the technology industry, businesses need to set themselves apart from their competitors by adding value to the resources it utilizes. Huawei added value by looking to innovate their products to compete in the smartphone market. Huawei’s second generation dual-lens camera technology ignited a new trend in smartphone technology, resulting in world-wide sales of Huawei’s P9 smartphone. Sales for the P9 smartphone transcended 10 million units and came close to competing with Samsung Galaxy smartphones (Roll, 2018). Huawei is keen on increasing their customer experience by providing technological innovation and ensuring quality materials for their smartphones. Huawei’s research and development(R&D) facilities let them foresee future technological needs of consumers while improving on their technological advantages.
Benefiting from strong government support in China’s competitive market, Huawei had financial advantages from state owned banks to upgrade their products and services. Huawei has even set up a research facility in Europe. The presence of Mobile Virtual Network Operator (MVNO) unlocked opportunities for Huawei and other smartphone manufacturers to enter the Japanese market (Sin, 2017). With an annual revenue of US $6.7 billion in 2005, Huawei was unquestionably the largest Chinese telecommunication equipment manufacturer. Huawei has some big-name customers including China mobile, China Netcom, Telecom, and China Unicom.
Although successful internationally, Huawei has faced problems in some markets, due to claims of undue state support and cybersecurity concerns, particularly from the United States government; Huawei’s framework equipment may enable surveillance by the Chinese government. The U.S. indictments of Huawei’s products containing backdoors for Chinese government surveillance are consistent with domestic laws requiring Chinese citizens and companies to cooperate with state intelligence when warranted. Huawei executives have continued to denied allegations stating that the company has never received any requests by the Chinese government to introduce backdoors in its equipment and that Chinese law did not compel them to do so.
Another concern Huawei faces, is promotion. Huawei promotes its brand through, public relations, personal selling, advertising, marketing and media. Huawei’s target audience is low income consumers, showcasing their low prices of mobile phones. An example of this is Huawei’s new slogan that was introduced at the Mobile World Congress 2013-Make It Possible. This slogan calls for consumers to dream by offering a vision of a mobile world where journeys are never hindered by lines or limitations (Beattie, 2013).
Furthermore, Huawei has been at the forefront of espionage allegations over Chinese 5G network equipment. In 2018, the United states passed a defense funding bill that contained a passage barring the federal government from doing business with Huawei, ZTE, and several other Chinese vendors of surveillance products due to security concerns (Federal Register, 2020).
Another threat to Telecommunication companies is the ample percentage of Carbon Emission that lead to global warming. Huawei assisted in the go green initiative to combat the effects of global warming due to networks releasing too much carbon emission. With the go green campaign, Huawei is recognized as a green telecommunication company giving them the opportunity to attract more consumers and providers. Huawei has a strong focus on supporting all-of the information and communications technology (ICT) sector in countries they operate in, showing their determination to support and give back to local communities.
Huawei still faces issues amongst all their success. With all the workload due to the rapid development of smartphone innovation, their employees must work overtime. This puts their employees under tremendous pressure, but Huawei offers huge incentives for development opportunities. Huawei offers entertainment programs on the weekends for their employees as well as bonuses. To limit their employees stress, Huawei could try incorporating a ‘stress free environment’ similar to what Google offers their employees.
In closing, Huawei’s global presence allows them to focus more on include value to produce innovation and quality, requiring them to invest heavily on R&D. China’s reputation has slowed the sale of Huawei’s products in the overseas market which inhibits the high income consumer market.
Huawei puts extreme emphasis on their corporate social responsibility activation plans from their product designs to employee benefits, operating in a friendly environment. Regular auditing from their external partnership with Hay Group & Mercer, helps ensure employee benefits are being met. Huawei has shown they are a responsible brand who gives back to the environment through award winning and launching green projects.