Essay: Huawei Technologies Co., Ltd.

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  • Huawei Technologies Co., Ltd.
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Huawei Technologies Co., Ltd. (hereafter; Huawei) is a Chinese multinational provider of information and communications technology solutions that is headquartered in Shenzhen, Guangdong. At its early stages, Huawei only focused on manufacturing phone switches but has now expanded to building telecommunication network and also designing smart phones for the consumer market around the world. This assignment aims to analyse how Huawei managed its organisation and add value to the resources they use in the mobile phone industry.
Huawei has narrowed the gap between two of its major competitors; Apple Inc. and Samsung Electronics in the global smartphone market. Their market share increased by 9% for the first quarter of 2017 and has now successfully hold the 3rd spot ranking for worldwide smartphone. Huawei’s smartphone shipments have increased steadily over the past five years: In 2016, they shipped a total of 139 million smartphones, a 29% increase over 2015. In any industry, businesses need to differentiate themselves from their competitors by adding value to the resources it utilizes. Offering end consumers more than just the product they purchase might distinguish businesses from their competitors, gaining them a competitive advantage. Below are some of the ways that Huawei adds value to their resources: Huawei always look into ways to innovate their products in order to stay competitive in the smartphone market. In order to stay innovative, Huawei always look for joint venture with other brands and their joint development with Leica in their second generation dual-lens camera technology sparked a new trend in the smartphone photography. As a result, the global sales of Huawei for the P9 smartphone series exceeded 10million units and it became an instant hit competing close with Samsung Galaxy smartphones (Chua, 2016). The implementation of technological innovation allows constant improvement for Huawei as they are keen to increase their customer experience (Cendrowski, 2017). They always seek on good quality on all of the materials that they use for their smartphones.

Smartphones are high-tech products with high requirements and rapid innovation. This requires full attention on speed because a new product worth can be decreased if the innovating speed is not fast enough. Huawei’s R&D facilities allows them to predict future technological needs whilst developing their core technological advantage.

The most important thing in the aspect of cost is the customer perceived value on the willingness to pay for the product. With the presence of internet, the brand and product knowledge of customer is strong as they can research and compare products before buying. When Huawei first entered the smartphone industry, it adopted a cost competition strategy where they set their price much lower than its competitors but they proof that they can function as well as the high-end smartphone brand. Once the entry market strategy to place their product in the market became a success, Huawei started to slowly increase their price gradually, especially for their flagship models.

Huawei takes it as their responsibility to build a ‘Better Connected World’. Their sustainability strategy is implemented firmly into their company to ensure that it is aligned with their corporate business strategy.

One of the main challenges that Huawei face is to keep their customers loyalty. Comparing Huawei to its major competitors, they do not have a strong brand name as Apple and Samsung does globally. However, a major part of Huawei’s success goes to its technical knowledge that their competitors can’t match. Huawei spends a lot on R&D, helping them build smartphone models whose quality is very close to iPhones and Galaxies (Cendrowski, 2017).

The main reason why Huawei is facing problems with customer loyalty is due to a low brand awareness amongst their international customers. It is hard for Huawei to compete on gaining market presence globally. In order to build a brand that people know, they need to invest heavily on their brand, sales and marketing implementation plan.

Conducting a PESTLE analysis will help businesses identify all of the various external factors that might affect their brand. It is of great concern to come up with the best and precise decision for their company’s success (Boddy, 2014). Therefore, recognising the opportunities and threats from the external environment will help in the strategic planning

In regard to the political factor in China, Huawei benefits from a strong government support. With the China market being competitive, Huawei took a finance benefit from state owned banks to help upgrade their product and services. With that, they started expanding outside of China and emerge in new markets.

In order to stay innovative and competitive in the market, Huawei set up their own research institute in Europe (Anon, 2015). Also, the purchasing power on smartphone in Asia is increasing due to the positive economic growth in most Asian countries. In Japan, the presence of Mobile Virtual Network Operator (MVNO) opens more opportunities for Huawei and other smartphone manufacturer to enter the Japanese market (Yamaguchi, 2016).

There is no doubt that Huawei leverages on the mass population of China, where the need to communicate is important as a part of basic need (Jesensky, 2017). Apart from that, Huawei can access into the Asian population (migrated from home country) in the global market.

Huawei’s global growth has been influenced by their success in China. Their rapid rate of innovation has given them growth and development opportunities. One of Huawei’s technological advantage is the R&D centres they own around the world and the formed joint ventures with the industry technological knowhow such as the joint development with Leicia.

Huawei is very keen on the ways that they are giving back to the environment. They launched energy conservation projects to reduce the energy they use in manufacturing, laboratories and data centres. In their recent CSR report, Huawei discussed to reduce carbon emissions in the next five years.

Samsung was defeated by Huawei in a patent battle in China. Allegedly, Samsung were using Huawei’s technologies on most of their phones and tablets without Huawei’s permission.

Acting responsibly as a company is important to have a better brand recognition and positive brand reputation. Acting responsibly is not only seen through giving back to the environment, but it is also how ethical a business is conducting with its internal and external stakeholders. Below are some of the ways how Huawei acts responsibly in their business :

Working closely with stakeholders, listening to their needs and use them as key inputs for improvement is important for Huawei. They have established a ‘Stakeholder Engagement Management Process’ to engage with their stakeholders. This includes a broad range of activities, meetings and events. From all of the activities, they seek to understand their stakeholders’ expectations, requirements and suggestions.

As stated above, Huawei’s aim is to reduce carbon emission in the next 5 years. Due to this, they have established an energy management system that allows them to minimise their energy consumption and make the best use out of energy and established a new supplier qualification system that examines the suppliers sustainability requirements.Integrity is Huawei’s core value, so they have a zero tolerance for bribery and corruption. All employees are required to sign a Business Conduct Guideline (BCGs) and to increase the influence on suppliers, Huawei include a contract that requires them to understand the Honesty and Integrity Agreement.

As a global company, Huawei actively recruit staff around the world to maximize localization, all of them are from a diverse culture background. Not only Huawei adheres to the local minimum wage laws and regulations, they also implement a very beneficial compensation system. They have established a long-term partnership with consulting firms such as Hay Group and Mercer to conduct a regular salary survey to promptly adjust employee’s compensation based on the surv
ey results and the business growth of the company. Apart from that, there is also an employee benefit system for their employee well-being, such as :

– Social Insurance

– Commercial Insurance

– Medical Insurance

Aligned to that, Huawei also offers a global insurance to make their employees feel less burdened from troubles and difficulties due to the sufficient benefits they provide. Including this will be their medical, global accident and business travel insurance.

Huawei continuously ensure the environmental compliance of their products to promote energy conservation and emission reduction across their supply chain and have successfully reduced over 15,000 tons of CO2 emissions with their solar power stations.

An ethical and properly managed CSR strategy can be used as an advantage for businesses. Huawei advantages from their CSR strategy by :

To minimise the impact of Huawei’s product packaging, they have acquired a FSC® certified packaging to ensure that the materials comes from a well-managed sustainable forests. Apart from that, they also opt to use bioplastics which are made from plant-based raw materials to help protect the environment and the earth’s nonrenewable resources.

Huawei strictly adapt all environmental regulations into the lifecycle of their packaging materials. This includes selection, manufacturing, usage and disposal. Their green packaging strategy using renewable steel palette instead of cardboard packaging has reduced the cutting of forest products and greenhouse emission gas.

Through their recycling initiatives (in-store and online trade-in), they make smartphone consumers aware of the benefits of properly recycling electronic goods. By collaborating with qualified product recyclers, Huawei maximise the electric product value by ensuring that the scrapped items are properly disposed in an environmentally responsible manner.

Huawei invests heavily on R&D and their ongoing research and innovation helps to ensure that an additional electromagnetic radiation protection are implemented into their design. The main is to deliver both excellent communication services and safety. In order to comply with the global security laws, Huawei collaborate with third party verification organisation from the major countries they’re in.

TowerXchange presented the Green Initiative Award to Huawei to recognise the contributions Huawei made towards to environment.

Huawei aims to support all of the ICT sector in the countries they operate as they try to do everything in their power to support and give back to local communities by bringing benefits to local people. More than 200 community support programs were running globally in 2016 that helped them reinforce cultural exchange and gave a strong boost in local community development.

Among all of the success Huawei has received in their CSR activities, there are still issues that they are facing. Due to the rapid development of smartphone innovation, Huawei’s employees often have to work overtime to catch their workload. This causes their employees to be put under high amount of pressure but Huawei does offer high amount of incentives for development opportunities. In the rational of Huawei, as long as the employee shows an outstanding performance, Huawei will not hesitate to offer a career development opportunity to them. Although the high intensity work might not be attainable for most employee, the goals for a career development opportunity is highly defined and relevant for most employees who wants a high wage position in Huawei.

Apart from that, Huawei’s employees are usually facing emotional problems that are hard to resolved. Huawei has faced with suicide scandals due to its ‘wolf culture’. The wolf culture focuses on the spirit of never giving up and emphasizes competition among people. With the suicide scandals going on, it puts Huawei’s brand reputation under risk and uncertainty. Huawei needs to find a way on how to put their employees mind at ease every once in a while. In order to reduce the external pressure Huawei puts towards their employees, they need to find a specific and relevant form of ‘gateway’ or entertainment for their employees. Apart from bonuses and career development opportunities Huawei offers, it is good to take their employees mind off things by having entertainment programs during weekends. Huawei can also adopt how Google treats their employees by making the workplace a ‘stress free environment’ that can be done without changing their organization culture. For example, a movie area in the workplace or a café concept cafeteria for their employees do their work whilst taking a break from the stress office environment.

In conclusion, Huawei’s global presence requires them to focus more on adding value to product innovation and quality. Thus, requires them to invest heavily on R&D. Huawei also emphasizes on their CSR activation plans from their employee benefits, product design and also operates in an environmental friendly environment. They are trying their best to ensure that their employee benefits are being met with regular auditing with their external partnerships with Hay Group & Mercer. By winning awards and launching green projects, Huawei has proven that they are a responsible brand who is trying their best to give back to the environment.

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