Huawei Case Study

(intended for Class Discussion

Output from 4SMG1 22 Sep)
 Huawei
• Leading Global Information & Communications
• Founded in 1987. Products consumed in 180 countries
• Headquarters in CN, Shenzhen, workforce > 180,000
• Revenue (Sales) > USD104 Billion (2018)
• Aims to be leading solutions that powers IOT, Cloud, Big Data and
Software Defined Networking (SDN) across all sectors on Digital
Transformation
• Owners: Ren Zhengfei founder. Employee-owned. 64% employees
participated in virtual restricted shares
Company Vision and Mission
• Vision

• Mission
Product and Service Profile
• Relate the diverse product and service (be Brief)

• Relate to the Product Life Cycle

Business Gap
• Target – to become market leader in telecommunication industry

• Current State
High level of uncertainties (Volatility, uncertainty, complexity and ambiguity)
Trade war between US and China whish caused Huawei is not able to use certain OS i.e:
Google
Revenue growth muted (40-60% sales drop)
Supply chain disruption (components and software)

• Challenges – Ambitious to become a market leader been threaten & affected

and estimated $30B loss to target of $130B
 Environment Analysis • Legal on Import/Export
• EU/US – telecom carriers License
maintain strong grip on • Patents and IP rights
distribution of contract
of smartphones and
P L
telecom devices
• Entry barriers at boarders
• US policies under Trump
administration and Trade
War
E PESTEL E
• Globalization, China joining
WTO, Labor-workforce; market
share;
• booming markets in CN, India
and other countries, • 5G, Cloud computing, fast
• EU; Outsourcing
S T changing requirements by
customers, E Commerce
• Spending on Technology Digital
• Demand, Language barriers; Transformation
Embracing eCommerce etc
 Situational Analysis Stereotype as low end phone.
• Focus Innovation Perception “Spied”
• Widespread R&D Fail to enter US widespread
• Strong distribution channels R/D still heaving dependent
• Eco-System created STRENGTH WEAKNESS OS rely on Google
• Collaboration major telecom Designing SOC or Apps
• State Gov backing
• Strong Leaders
• Cost Leadership
• Cash Flow healthy
• Emerging Leader • Global and US policy
• Market saturation (eg phones)
• High product variation
• WW Digitalization, CN smart citites • Fierce competition
• 5G (or even 6G) • Rising manufacturing cost in CN
• Smart phone is a strong substitute for other • Language barriers
devices • Boarder entry barriers
• Market differentiation showing wide range of • Import/Export legislation
product/demand • Iphone quality, Samsung display screens
• Firm growth rate for APAC • Eco-system – dependent on silicon supply US Companies
• Strong strategic partnership with major
companies
OPPORTUNITY THREAT
• S-O Strategies
• Strong market presence (acceptance) in EU and CN, making US threat not so significant
• Gov backing for support and connecting with other importing countries
• Strong network distribution to distribute phones sales and other telecom
• S-T Strategies
• Has the ability to develop own OS (needs more time test) to capitalized IOT market which is
the growing
• CN gov has still strong bargaining power with US
• Offer 5G for other leasing licenses

• W-O Strategies
• Has the ability to develop own OS (needs more time test) to capitalized IOT market which is
the growing
• W-T Strategies
• On-hold geographic expansion to US
Industry Rivalry
• Porter Evaluation – work in it if possible
Value Chain
• – work in it if possible and information