Huawei Technologies

Huawei Technologies How is Huaweis internationalisation closing curtaineavour a good success story event for separate companies wanting to pursue world(a) return? Introduction Huawei Technologies Co. , Ltd. provides telecommunicationmunications equipment and solutions to operators in mainland china and internationally. The attach tos products include wireless and interlockinging equipment, applications and softw ar, and terminals smartphones for French users and tube military portions platforms, which help operators to build wideband metro area networks.It as well as offers supple network, wideband network, IP-based and optical network, and telecom value-added services. Huawei Technologies Co. , Ltd. has strategic partnerships with IBM, the Hay Group, PwC, FhG, Intel, Texas Instruments, Freescale Semiconductor, Qualcomm, Infineon, Agere Systems, Microsoft, solarize Microsystems, and HP. Huawei Technologies is a Chinese society. It was established in1988 by Ren Zhengf ei, a former mountains Liberation Army situationr and telecom engineer.Huaweis home office site, of modern and impressive building fittings, is situated in Shenzhen, southern China (Guandong province). In 2006, Huawei Technologies was among the ranks of Chinas National Champions, along Haier, Lenovo TCL, and the Wanxiang Group, poised to argue with globose leaders in the international commercialize place. Huawei has all overly been dubbed as the lake herring of China. It is thus a multinational corporation with branch offices in 100 countries which serves over one billion users worldwide.The pursuanceion is therefore begged as to why Huawei is so competitive? What were and could be the challenges the Chinese-based community faces? What are the implications of Huaweis dodging? In this paper I pull up stakes attempt to tumble Huawei Technologies scheme to internalisation by taking in account the companys starting point in China, and by setting the lay out for the com parison of Huaweis to that ciscos strategy.I will then go by with some recommendations on what a Chinese company could drive home done to break out prepare for competition in the US telecom industry. And conclude with some remarks on the progress made by Huawei since 2006, when the berth study on which the analysis is based was compiled. Company Overview From its very beginnings, the companys vision has been to become a lighthouse of innovation which would successfully en enough it to compete kickoff in its home mart, and then proceed with international magnification.When the company was still operating only in China, Huaweis methodology around its cultivations, to not be set up in joint endangers with foreign companies, to pursue global cutting-edge technologies, persist on self-development, and expand internationally, big(a)ly consisted in extensive coronation in look into and development (R&D) capabilities, and hiring a highly-qualified workforce from China. Huawei w as created almost single-handedly under the bulletproof vision and leadership of Zhingfei. He fostered a unique and rigorous care culture, by building a pack-of-wolves enterprise.He instilled a setment philosophy within the company which meant to view competition and food marketplace opportunities with a keen smell, react to with an aggressive push and always confront both(prenominal) in unified groups. Under Zhengfeis lead, who had been successful to create and manage a large traffichip network, few other competitors could match, the company had relied on big specialize orders from the military to secure a foothold in the telecom network market in its early age. Moreover, extended ground forces and political science ties had provided the company with relatively easy access to financing.Huawei was undoubtedly the largest Chinese telecom equipment manufacturer, with annual revenue of US$6. 7 billion in 2005. Market capitalisation was estimated to be up to US$10 billion. I n China, Huaweis major customers included all the big names such(prenominal) as China Telecom, China Mobile, China Netcom and China Unicom. Huaweis networks in China served over 400 million people communicating crossways the country, occupied 25% market share in the busy networks, and supplied 80% of all short messaging services from China mobile.Therefore, Huaweis strategy to focus on R&D to lead technological advancement, its care to choose high-calibre and withal in overpriced labour from China, as well as foster a consolidated sense of corporate culture none but confirmed Huaweis stable, long-term oriented organic growth strategy. The companys competitive advantage in its home sward had built up to be small-scale-priced engineering, enabling Huawei to compete with large indigenous and foreign competitors.Cisco, Huawei, and the International Market of Telecom Equipment and Services Cisco, which global presence spurred with the enlarging footprint of the internet across the g lobe in 1991, firm to focus its growth strategy in China by the end of the 1990s. Ciscos strategy in China consisted in recruiting and readiness employees to service high-end markets of telecom service providers and enterprise markets. Instead of forming joint ventures with local anaesthetic anaesthetic anaesthetic partners (like most of its international competitors did in China), Cisco opened its own secondary in China, Cisco Networking Technology Co. Ltd. to promote education, demonstration and development of network applied science. Educational initiatives presented Cisco with an opportunity to develop favourable relations with Chinese authorities and to cultivate crude areas of backing within China. Moreover, recognising the large, low- appeal and clever labour force in China, Cisco continued its inscription in the country by investing in an R&D content in Shanghai. Ciscos CEO plans for the facility were to allow Cisco access to engineering and local talent so as t o supplement Ciscos unusedness to the corporate culture of China and be able for it to buy into the local Chinese local market.Ciscos goal was by all means to maintain its leadership position in cutting edge technology. While at the same clipping, Chinese competitors were using their aggressive pricing strategies to expand into the international markets, and were rapidly using their low-cost advantages to move up the value chain. And Huawei was among the Chinese companies that were expected to view as set ahead inroads into international markets in the next few years, competing head-to-head with established westerly players for the same global accounts.Internationalisation Phase 1 Having secured a knockout foothold in its home market in China, Huawei started to look for various(a) sources of growth internationally, in the first half of the 1990s. However, it was able to conclude its first gradeifi toilett international contract only in 2000, in Russia. In order to avoid ou tright competitive confrontations with well-established Western telecommunication multinationals, Huawei went global by first entering gro assumeg markets in developing countries. sizeable contracts extended later on beyond einsteiniumern Europe, in south-central America (Brazils fixed line carrier) and Asia (Thailands largest mobile service provider). Huaweis path toward the matured Western European markets, the companys next challenge, would not come without tradeoffs. In the early 2000s, Huawei was a new company competing for market share with established global communications technology suppliers. Chinese products were then suffering from a common perception of be cheap and unreliable, forcing Huawei to thus pursue aggressive tactics to attract contracts.With 30% lower pricing points than established competitors, a commitment to offer ravel periods for its products and hiring local personnel to tailor technologies and services to customers needs, led the company to win cont racts in tough-to-please markets such as France (Neuf Telecom, 2001). The biggest success, however, and the one that signified Huaweis discovery in Europe, was in 2004 when the company was selected by a Dutch mobile operator to build its 3G mobile phone network, by then Huaweis hallmark capability. Internationalisation Phase 2In order to sidle up the key points of Huaweis internationalisation strategy, the bailiwick of the companys beguile in the U. S. calls for an analytical stop. The challenges Huawei faced in the North American market revolve around several axes, but overall the endeavour highlights the usual lack of preparation and some strategic blunders which made the companys top management decide to update Huaweis strategy and draft one that caters to long term sustainable development. When it opened its first office in Plano, Texas, the company made every effort to blend into the local culture.It shared the building with law offices, realtors and the regional office of the lingerie company Victorias Secret. A Texas state flag and an American receptionist welcomed visitors on the ground-floor lobby. Shortly after the US-launch, however, the defect of not having carefully think for cultural differences eventually surfaced. Chinese employees had a difficult time adapting to the Texas vehemence and other aspects of the local culture. Huawei executives also realised that Americans had difficulty pronouncing the companys name.They came up with a working name, Futurei, which although facilitated to a better pronunciation, only muzzy targeted customers even more, and Huaweis infant differentiate came under great shock. In the US telecommunications industry, a mature market where lower prices often are not enough to land a deal, winning customers and contracts would demand for a lot more effort. Phone companies and equipment suppliers had long term ties with their equipment suppliers, customers looked for exceptionally leading-edge technology and a compelling reason to switch.Moreover, trying to switch to a roughly unrecognised brand in the US market meant that telecom service providers Huaweis classical customers would request exhaustive testing of equipment persona and reliability, unchanging several months, before committing to buying it a common procedure for sourcing from an unvalued company. Another hurdle Huawei encountered was a lawsuit Cisco launched, only six months after Huawei had set up its subsidiary in the US.Analysts observed that Huaweis steep discounting of low-end routers Ciscos products in its home turf, the US market, had prompted the lawsuit of alleged ravishment of Ciscos unembellisheds and copyrights. This was Ciscos first intellectual billet lawsuit despite its huge intellectual portfolio. Huawei ended up by agreeing to withdraw from the market place Quidway routers and other related products. Three years after its US launch, the company was able to land its first contract with a US wireless ca rrier in 2004, and subsequently securing other contracts with small wireless carriers.Huawei had serious intentions for the U. S. market. Yet cultural risk and Ciscos buying power in its home turf, led to a substantial delay of results, and thus loss of revenue and opportunity for Huawei. notwithstanding having a powerful and well recognised brand name, when Cisco started its venture into China (in 1998), it began by first building on local labour-skill capabilities and government network to leverage on its inexperience in the Chinese market and thus buy into market sales power among corporate customers. Huawei, on the other hand was literally unmapped in the US market.And it was truthful enough to assume that American corporate customers would be sufficed with high-quality low-cost equipments from an unk straightwayn Chinese company. Or that its presidency was justifiedly prepared to face global competition as aggressively and in the right way as it had done in China. Ciscos e ntry strategy into China was aggressive not because it offered low-cost high quality products, but expensive and exclusive technology, reinforced further via R centres spread across the country. Enterprises in China knew about and trusted Ciscos product quality nd reliability. The same cannot be said about Huaweis products. In spite of success in winning deals in developing countries, Huawei could not reach US corporate customers if they would not pass that easily the seawall of perception that Chinese products were cheap and merely copied versions of other recognised telecom equipment and software. Recommendation Recommendations, or lessons to be drawn from Huaweis experience, would capture the overall need for Chinese companies to acclimate to new surroundings first further as the foreign companies that entered China did .Acclimatisation, for Huawei could have proceeded by 1. Improving appraisal of risk economic, political, regulatory, cultural, organisational to avoid cultura l and regulatory (the lawsuit) blunders. Huawei could have also better prepared to build a network before out rightly starting to target enterprise and corporate customers. 2. Preparing better for the entry strategy in the US be it Greenfield, acquisition, merger or alliance.Cisco, to show its commitment for China, announced a US$100 million investment, stirring wonderment and interest among corporate customers and Chinese authorities. Huawei went into the US quietly opening a branch office 3. Developing global talent R investment and international top managers with a global experience and extended local market k outrightledge, in order to enkindle buying power into the local market. 4. Creating a global brand to be accepted in the market place by using local industrial public relations companies can facilitate brand recognition in the initial stages. 5.Assessing and redesigning organisation and management behavior to one that caters four dimensions co-orientation, the temporal dimension macrocosm able to balance between short-term results for survival and long-term operation for sustainable profit growth co-competence, the relationship dimension persist on the dual possession of both transactional and relational competence co-opetition the capability to win market share by dint of simultaneous competition and cooperation for reasons that range from brand name strengthening and market share growth o be agile and flexible to re-adjust to shocks efficiently, and flexible enough to re-balance short-term results with long-term performance, and co-evolution the chase of organisational adaptation to and proactive influence on the external environment set about a firm Huawei Concluding Analysis and Discussion The future of business is in its course to re-establishing itself in a somewhat changed order. The recent financial crisis has sure tested the best and the worst of yesteryear strategies and management styles.Thanks also to a revived wave of globa lisation companies are in the quest for profit, at a time when there are possibilities probabilities and uncertainty. The US market continues indeed to be a litmus test of endurance for non-American companies . Luckily, Huawei had sufficient financial cushion and top management agility to learn apace and be able to modify its corporate business model strategy to fit the demands of its targeted customers corporate clients. Huawei Technologies Co. , Ltd. announced it will unveil a new mobile wideband solution at Mobile World relation 2010. This solution will accommodate the tremendous amplify in mobile broadband traffic, reduce the per-bit cost by over 95%, and make mobile broadband services more profitable for operators worldwide.Today, mobile broadband services are growing exponentially, but operators have not yet been able to convert this into significant revenue streams. Huawei estimates that global data traffic on mobile broadband networks will grow 1,000 times over the nex t decade, from the current 85 million Giga-bytes per month in 2009. As the number of mobile broadband users continues to climb, subscribers will increasingly look for low tariffs with unlimited, high-speed access and abundant mobile broadband service, while operators will need network capabilities that allow them to accommodate the expansion pressures of mobile broadband network and profitable operation mode. Huawei would seem to be swimming in a blue ocean now because it has been able to grow in scale and revenue while keeping a low cost structure. The R investment and ability to simultaneously fill a bedcover in telecom infrastructure by putting forward a unique value proposition to telecom end user customers and telecom services suppliers. Mobile broadband users, growing exponentionally in numbers, are now being offered the possibility of low tariffs for unlimited, high-speed access and abundant broadband services. In turn, operators will need network capabilities that allow them to accommodate these expansion pressures on the mobile broadband network and retain profit margins.The case of Huawei Technologies certainly reflects a good example of success story in dealing with all the above issues. Chinese-based companies planning to become global whitethorn well benchmark Huaweis management structure and organisation in turning around the focus from high-tech products to customer-centric high-tech products and services, under an internationally accepted brand label. Huaweis top management certainly took a step back after the initial limping performance in the U. S. It now believes that cooperating with customers, suppliers and leading players in the industry to face challenges together through a win-win strategy is essential in todays business world . Huawei has make numerous partnerships with leading multinationals such as ADI, Agere, Altera, HP, IBM, Intel, Microsoft, Motorola, Oracle, SUN, TI and Xilinx to improve the time to market of products, and t o incorporate the latest technologies and best management practices into the company. Such will enhance its position and brand image in key international markets, and improve its repartee speed and service advantages in the supply chain . As of 2010, Huawei has 87,502 employees, of whom 43% are dedicated to R&D. Huaweis most recently account sales counted at US$18. 33 billion, a 75% increase from the 2006 sales, and with US$1. 15 in net profit.In 2009, it was named the worlds top patent seeker, it was the first Chinese company to head the United Nations World quick-witted Property Organization (WIPO) list, its contract orders rose 46% to US$23. 3 billion (75% of which came from overseas), overtook Alcatel-Lucent to become worlds No. 3 mobile network railroad train maker, and during the third quarter of 2009, Huawei passed Nokia Siemens Networks for the No. 2 position in the global mobile infrastructure equipment (according to research firm DellOro)a sign of the changing fortun es of the two vendors . Huaweis change in the strategy style is noticeable right at its formulation of the new vision it is now to enrich life through communication.The company continues to maintain a leading competitive position in the international industry of telecom technology and services, and only these days was elected 5th most sophisticated company in the World behind only Facebook, Amazon, Apple, and Google ________________________________________ Bibliography Business Week, retrieved 2 March 2010 from (http//investing. businessweek. com/research/stocks/private/snapshot. asp? privcapId=1259829) Zeng, M. and Williamson, P. (2003) The Hidden Dragons , Haward Business Review, October. 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