Answer all the questions in this section.

Case study

Huawei Company

Huawei is a private company, they have more than 180,000 employees, and operates in more than

170 countries around the world. Huawei is a leading global provider of information and

communication technology infrastructure and smart devices, they provide telecom networks, IT,

smart devices, and cloud services. They aim that they are committed to bringing digital to every

person, home and organization for a fully connected intelligent world.

Their vision and mission are to bring digital to every person, home and organization for a fully

connected, intelligent world, and they are currently focusing on ICT and intelligent devices.

In 2018 Huawei recorded a 21% growth and jumps to 68th place in Interbrand International's list

of top value companies around the world, according to Interbrand International, a leading global

brand consultancy. Huawei this year jumped two places from last year's rankings and its brand

value rose by 14%, an estimated 7.6 billion US dollars. Huaweis R&D centres is built in many

countries, such as Silicon Valley and Dallas in USA, Stockholm in Sweden, Moscow in Russia,

Bangalore in India, and Beijing, Shanghai, Nanjing, Shenzhen, Hangzhou, Guangzhou in China. Huawei Technologies is the worlds largest provider of telecommunications technologies and

Chinas second largest privately held corporation, with a vision To enrich life through

communication, Huawei has earned a reputation as one of the most dynamic, fastest growing,

innovative global technology companies today. Their strategies have helped the company to gain

a position as one of the most important and recognized company around the world after Apple and

Samsung, furthermore their communication channel and logistics also had contributing to the

developing of Huawei and lend a hand to expand to new markets. Huawei is a global Telecom

solutions provider with main focus on customer needs and innovation. Through its unique end-toend

offering of equipment in Telecom Networks, Global Services and Devices, it had earned global

reputation in wireline, wireless and IP technologies, and had served nearly one third of the global

population.

Its vision was to enrich the lives of the customers through communication. It had overtaken

Ericsson, another global telecom player in its expansion activities. But Huaweis globalization

efforts were marred by issues of security concerns expressed by countries that were sceptical over

its lack of transparency. US had vehemently opposed Huaweis growth activities in its country. To

become a truly global company, Huawei had to develop its market in the US. Against the backdrop

of such security concerns, the case study would analyse the growth of Huawei in its home country,

China, its international growth strategies and whether the hue and cry raised by the US authorities

on security concerns would really impede the growth of Huawei globally.

ENTRY MODE TO DIFFERENT MARKETS

Huawei have developed different entry modes depending in the geographical distance of countries,

different markets and different products, thinking all the time in customers needs and what can

they do in order to satisfy those needs and make them possible to get for all the people around the

world, this means that Huawei also competes in price. Some of those special methods are:

Joint venture in Russian market. Huaweis market selection strategy targets market that

have weak telecommunications infrastructure, but have great development potential

Export entry mode in countries such as south America , Asia and Africa, Huawei use the

export method as an input mode, due to factors of great influence on both sides, these

factors such as geographical distance and local market conditions, within this point isimportant to highlight that in countries such as Colombia, Huawei just offer smartphones

and tablet, they have not exporting laptops and some others products they use to offer, the

price also plays an important role within countries like Colombia, Ecuador and some

others, because the products are high quality ones and consider as luxury and they are not

as expensive as some others brand, so Huawei have gained lot of market within this

countries.

There is a different entry mode for North America, Huawei had to face some challenges in

order to penetrate this market, so they decided to use the same strategy to get into the

American market as the one they use in west Europe, this method include franchising, coresearch,

coproduction (OEM) and co-sales (helping each other to sell products in each of

their own markets), the table below reflects these alliances

Different entry modes for different products. Huawei also employs different entry modes flexibly

for different product specially the ones without advantages, for instances in 2g mobile networks,

Huawei use to cooperates with giants of this area. furthermore, for the product which they consider

as advantageous ones, with technological advantage and without market resource, it uses the

method of joint venture, franchising or co-research. Furthermore, a significant part of Huaweis

leap from regional player to global leader has to do with its astute strategy of brand partnerships

throughout its development.

PROMOTIONAL CHANNELS

Services and products of Huawei are deployed in nearly one hundred and forty countries across

the globe and it serves five largest operators of the telecom industry in the global market.

The company has 170,000 employees to provide efficient working and out of these 76,000 are

engaged to work in its research and development division. Huawei has 21 institutes of R&D in

various countries like China, Canada, United States, Pakistan, Germany, Sweden, Colombia,

Turkey, Russia and others.

Distribution channels of Huawei has always been very effective. It believes in developing joint

ventures with local authorities and under this relationship it provides dividends in exchange of

using products from Huawei. Currently, brand Huawei does not deal directly with customers as itbelieves in cultivating appropriate channel of distribution that includes distributors, sales

networking team, enterprise and consumers.

Providing an accurate number of products on a given day at a place has become very important for

the company. Place signifies location, market coverage, mobile phones and online market. It has

two vital channels. First is sellers channel that set up an office in target market for direct sales of

products and second is a joint venture for building further brand channels.

Huawei Core Values:

Customers First

Huawei exists to serve customers; whose demand is the driving force behind our development. We

continuously create long-term value for customers by being responsive to their needs and

requirements. We measure our work against how much value we bring to customers, because we

can only succeed through our customers success.

Dedication

We win customers respect and trust primarily through dedication. It includes every effort we make

to create value for customers and to improve our capabilities. We value employees contributions

and reward them accordingly.

Continuous Improvement

Continuous improvement is required for us to become better partners for our customers, improve

our company and grow as individuals. This process requires that we actively listen and learn in

order to improve.

Openness & Initiative

Driven by customer needs, we passionately pursue customer centric innovations in an open

manner. We believe that business success is the ultimate measure of the value of any technology,

product, and solution or process improvement.

Integrity

Integrity is our most valuable asset. It drives us to behave honestly and keep our promises, and,

thus, win our customers trust and respect. Teamwork

We can only succeed through teamwork. By working closely in both good times and bad, we lay

the foundation for successful cross-cultural collaboration, streamlined inter-departmental

cooperation and efficient processes.

CHALLENGES AND COMPETITION ANALYSIS

Although Huawei has achieved tremendous success in the past 30 years, it has its own unique set

of business challenges. Being in the digital and technology sector where things are changing at an

exceedingly rapid pace every day, it still very important for Huawei to put innovation as part of its

strategy. Continuing the pace of innovation, Huawei still facing lot of challenges due to the high

competition that exists within this industry and the historical failure of similar companies, history

has shown that monopoly control is temporal, some structural realities in every industry have and

will continue to change as illustrated by BlackBerrys fall from their dominant heights. The biggest

mistake of successful companies is complacency. For Huawei, continuing to push forward with

R&D is insufficient. Nokia spent ten times more on R&D than Apple for example for a long period,

Nokia made a mistake building products to satisfy its current key segments needs, ignoring the

small number of consumers who showed great interest in future touch-screens. Similarly, Huawei

must continually seek to satisfy and create future consumer needs rather than their current ones.

Furthermore, an advantage that Huawei nowadays has is that is an entirely employee-owned

private company, it will certainly attract attention from investors looking to latch on to its

impressive growth. An important point or challenge Huawei faced during its transition of a Chinese

technological company to a global one, was the brand image in the United states of America, by

far the most difficult challenge in Huaweis global strategy was in the U.S. where there is a smear

campaign by the U.S. government. Intelligence officials have recommended American firms not

to do business with Huawei due to potential Chinese state influence and security concerns besides,

this company has long been searching for an opportunity to expand to North America, which

accounts for about 20 % of global telecom spending. Ever since a 2007 report highlighted the

military background of CEO Ren Zhengfei, Huawei has become a political target. Before he

founded Huawei in 1987, Ren was a civil engineering director for the Chinese military. Huaweicurrently sells telecom equipment to major Internet carriers which, in turn, carry data for

practically every government agency. The U.S. intelligence committee said that U.S.

telecommunications firms should avoid business with Huawei because of potential Chinese state

influence and security threats.

In response, Huawei has started a charm offensive toward analysts, reporters and politicians to

shake suspicions. Huawei also disclosed the members of its Board of Directors. These B2B

challenges are partly why the smartphone will likely be the key to Huaweis growth in America.

Huawei cannot admit defeat or forgo the U.S. completely as it comprises about 20% of global

telecom spending. While it does not need to be dominant in the U.S. market, it must be accepted

as it grows as a smartphone brand. If Huawei plays this out well, it could be a significant showcase

of citizenship and earn the brand a seat at the table with the likes of other Asian technology brands

in the United States such as Samsung, Lenovo and LG. Moving ahead, Huawei must volunteer

more financial and corporate information for transparency.

Huawei company has started making a conscious effort to bring more international and diverse

experience in its managerial ranks, not only at Board level but in multiple senior and midmanagement

roles, what actually had led the company to a brand oriented global leadership, it has

also started hiring high-profile Western executives to diversify its senior management team. This

strategy should be followed and implemented in a comprehensive fashion so that diverse, global

thinking and experience permeate deep into the organizations fabric. A truly global senior

management team is essential for Huaweis success in foreign markets.

The above case study is an extract from Rajawat & Chacon (2019).

Case questions

QUESTION 1 [20 MARKS]

Use the case study above on Huawei Technologies to answer the questions below. The student may

use other resources to supplement their answers. a. State is the Vision and Mission of Huawei Technologies? (4 marks)

b. Identify two (2) of Huaweis core values and justify, in your view, why they are relevant to the

Botswana market. (6 marks)

c. Given that Huawei is a multinational company with its origin in China, and operating in different

countries, design an appropriate organizational structure. (6 marks)

d. What challenges would a multinational organization such as Huawei face. (2 marks)

Any two of the following