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 Huawei was founded in 1987 by Ren Zhengfei, a former engineer in the People's Liberation Army
 Huawei is a global leade...
INTERNAL ENVIRONMENTAL ANALYSIS EXTERNAL ENVIRONMENTAL ANALYSIS
 RESOURCES
 CAPABILITIES
 CORE COMPETENCIES
 VALUE CHA...
Resources create organizational capabilities when group together and in turn, capabilities result in
the core competencies...
 Capabilities exist when there are resources on hand that have been deliberately integrated to
achieve specific tasks
 H...
 Core competencies are capabilities that are a source of competitive advantage for a company
over its rivals
 Huawei's f...
 Using the value chain analysis, we will analyze which are Huawei's operations' segments that
create value and those that...
 Huawei Technologies had annual revenue US$ 46,515 million in 2014, an increase of over 20%
year-on-year
 Huawei's have ...
 Huawei's founder; Ren Zhengfei was from the Chinese military and this connection had created
guanxi network which few co...
 Huawei was the largest telecom equipment manufacturer in China with annual revenue of
US$46,515 million in 2014, and a n...
 Despite Huawei's efforts to fit into the United States' culture, Huawei still met with difficulties
when it first starte...
 Huawei had the foresight to venture early and invested heavily in the third-generation (3G) mobile
communications techno...
 Huawei was sued by Cisco in the United States six months after setting up a subsidiary. It had
allegedly infringed a num...
Being based in China, Huawei is able to manufacture and
offer products at a lower price
A low-cost workforce, Huawei spend...
 INCREASED MARKET POWER
 OVERCOMING ENTRY BARRIERS
 INCREASED DIVERSIFICATION
 LEARNING AND DEVELOPING NEW CAPABILITIES
 Wikipedia (Huawei Technologies Co.)
 http://en.wikipedia.org/wiki/Huawei
 Official Huawei corporate report.
 http://w...
ENVIRONMENTAL ANALYSIS OF HUAWEI
ENVIRONMENTAL ANALYSIS OF HUAWEI
ENVIRONMENTAL ANALYSIS OF HUAWEI
ENVIRONMENTAL ANALYSIS OF HUAWEI
ENVIRONMENTAL ANALYSIS OF HUAWEI
ENVIRONMENTAL ANALYSIS OF HUAWEI
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ENVIRONMENTAL ANALYSIS OF HUAWEI

  1. 1.  Huawei was founded in 1987 by Ren Zhengfei, a former engineer in the People's Liberation Army  Huawei is a global leader of ICT (information and communications technology) solutions  There telecom network equipment, IT products and solutions, and smart devices are used in 170 countries and regions  At the time of its establishment Huawei was focused on manufacturing phone switches, but has since expanded its business to include building telecommunications networks  Huawei ranked 285th on the Global Fortune 500 based on its revenue in 2013  In 2014, the company’s revenue reached approximately USD 46.5 billion  They invest over 10% of our annual sales revenue into R&D and more than 48% of their 170,000 employees engage in R&D
  2. 2. INTERNAL ENVIRONMENTAL ANALYSIS EXTERNAL ENVIRONMENTAL ANALYSIS  RESOURCES  CAPABILITIES  CORE COMPETENCIES  VALUE CHAIN ANALYSIS  HUAWEI`S BUSINESS FUNDAMENTALS  POLITICAL  ECONOMICAL  SOCIOCULTURAL  TECHNOLOGICAL  LEGAL
  3. 3. Resources create organizational capabilities when group together and in turn, capabilities result in the core competencies of a firm, and these are the foundation of competitive advantage. ORGANIZATIONAL RESOURCES PHYSICAL RESOURCES TECHNOLOGICAL RESOURCES HUMAN RESOURCES R&D PRODUCTION MARKETING CUSTOMERS CARE ADMINISTRATION And So on….. HEADQUARTERS IN SHENZHEN 6 RESEARCH LABORATORIES SOFTWARE DEVELOPMENT CENTRE IN INDIA VAST TECHNOLOGICAL RESOURCES APPLIED IN 170 COUNTRIES TOP INTERNATIONAL PATENT FILLING IN 2014 REOVER 170,000 EMPLOYEES ABOUT 60% HAD A MASTER'S OR PHD MORE THAN 85% HAD A BACHELORS OR HIGHER DEGE
  4. 4.  Capabilities exist when there are resources on hand that have been deliberately integrated to achieve specific tasks  Huawei recruits employees of high caliber, with more than 85% of its employees having at least a bachelor’s degree and 60% having a master's or PhD  Thus, Huawei is able to come out with innovate products, hence holding an exceptionally high number of patents by Chinese standard.  In addition, coming from a military background, Ren Zhengfei's connection with the Chinese military helps create a “guanxi network” which is extremely helpful to Huawei
  5. 5.  Core competencies are capabilities that are a source of competitive advantage for a company over its rivals  Huawei's first competence is its R&D. Because of the inexpensive labor force in China  Huawei integrates its marketing people into its R&D team, thus the needs of telephone companies and service providers could be communicated through the marketers to the R&D department in the shortest time.  Another core competence which Huawei had is its close relationship with the Chinese military
  6. 6.  Using the value chain analysis, we will analyze which are Huawei's operations' segments that create value and those that do not.  Marketing And Sales  Inbound Logistics  Outbound Logistics &  Operations  Firm infrastructure  Human resource management  Service  Technological development &  Procurement
  7. 7.  Huawei Technologies had annual revenue US$ 46,515 million in 2014, an increase of over 20% year-on-year  Huawei's have an operating profit of US$ 34,205 million in 2014 Huawei is still generating profit  Huawei's financial support from the state-owned Chinese Development Bank in the form of a US$10 billion facility  & US$600 million from the Export-Import Bank of China are both forms of long-term financing
  8. 8.  Huawei's founder; Ren Zhengfei was from the Chinese military and this connection had created guanxi network which few competitors could match.  This relationship had helped Huawei secure big contract orders with the military during its early years  China government has various political legislations that affect Huawei's external strategic environment  For Huawei, the Chinese business political environment is very serene for growth  In the recent past, the government has introduced reforms aimed at offering an environment that favors business growth
  9. 9.  Huawei was the largest telecom equipment manufacturer in China with annual revenue of US$46,515 million in 2014, and a net profit of US$4498 million. At the same time, its market capitalization was estimated to be up to US$30.5 billion  An organization would want to operate in an economy that provides the highest possibility of good returns and growth. Huawei Technologies is not an exception in this case  To start with, the growth potential of an economy is very important factor to consider in external strategy  As a multinational, it has a strong economic background that enables it to effectively compete globally without expecting major challenges from other similar multinationals
  10. 10.  Despite Huawei's efforts to fit into the United States' culture, Huawei still met with difficulties when it first started operating in Plano, Texas in 2001. Huawei's employees had difficulty adapting to the Texas accent and their local culture  Due to Ren Zhengfei's military background, he had instilled military style training for new employees and his employees were urged to learn from the behavior of wolves. He wants Huawei's marketing department to be aggressive, just like a pack of wolves  The organization looks at factors such as the distribution of wealth, mobility in terms of social factors, the education and schooling available in the country, trends of lifestyle, time usage and leisure, work attitudes, family and relationships, fashion, tastes, preferences, interests in development, religious tastes, cultural aspects, values and norms  Huawei Technologies prides in the social factors provided by the people of China
  11. 11.  Huawei had the foresight to venture early and invested heavily in the third-generation (3G) mobile communications technology  Huawei formed a 3G research joint venture with Japan's NEC and Matsushita and entered the mobile handset market in early 2004 to familiarize itself with the 3G industry in future  Currently Huawei is working on 5G (5th Generation) ICT technological advancement as confirmed from some of its internal resources  The government of China has been very concerned about its technology. In fact, it has taken very serious steps towards transforming the level of technology by investing highly in universities and colleges. This fact offers a very great opportunity for Huawei's growth
  12. 12.  Huawei was sued by Cisco in the United States six months after setting up a subsidiary. It had allegedly infringed a number of Cisco's copyrights and patents and Cisco was seeking damages in the lawsuit  By the time Cisco dropped its lawsuit in July 2004; many sales contracts which Huawei was pitching for were lost  To make matter worse, a Huawei's employee was caught taking photographs of high-tech equipment from Fujitsu in a trade show in Chicago in June 2004
  13. 13. Being based in China, Huawei is able to manufacture and offer products at a lower price A low-cost workforce, Huawei spends less in R&D but achieve comparable results with foreign technology companies who spend more Being a Chinese company, Huawei will be view in a different light compared to other companies from other countries The perception was that Chinese vendors were mainly relying on western engineering methods and were turning the higher margins and complex products into standard commodities Having already facing difficulties entering the United States market, Huawei can present itself better in the United States by collaborating with some of the United States companies Huawei delivers reliable equipment’s, quality service & continues its product development, it will pose a formidable opponent to foreign companies Huawei have to be wary of competition from companies from low-cost countries where they pose a direct threat Discovering such great potential in China’s market size, foreign companies started to see advantages in entering China; however, their entry was restricted due to government policy. Therefore, the threat to entry is low
  14. 14.  INCREASED MARKET POWER  OVERCOMING ENTRY BARRIERS  INCREASED DIVERSIFICATION  LEARNING AND DEVELOPING NEW CAPABILITIES
  15. 15.  Wikipedia (Huawei Technologies Co.)  http://en.wikipedia.org/wiki/Huawei  Official Huawei corporate report.  http://www.huawei.com/en/about-huawei/corporate-info/financial/index.htm  Official Huawei annual report 2014.  http://www.huawei.com/en/about-huawei/corporate-info/annual- report/2014/img/huawei_annual_report_2014_en.pdf  Financial Highlights about Huawei.  huawei.com/en/about-huawei/corporate-info/financial/index.htm  From Huawei official Mr. Khurram Shahzad (Senior Functional Specialist).  From Huawei official Mr. Fraz Khan (Head of Marketing Huawei mobiles)
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