Case Study: Huawei: Cisco's Chinese Challenger

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Case 6 – Huawei: Cisco’s Chinese Challenger

1) Describe the strengths, weaknesses, opportunities and threats faced by Huawei as it ventured into international markets? (SWOT Model)
Looking from the corporate, Huawei as evolved as one leading competitors of the world, the following are the SWOT analysis of Huawei:
Strengths: a) Leader in 3G technologies based on the number of contracts gained. b) Low cost pricing strategy and low operating costs. c) Hiring local people in a region which is a Huawei’s strategy to change technologies and services according to customer needs in that region. d) Spending substantial amount on R&D and acquiring highly talented labour resulted in very impressive record of patent ownership. e) Strategy of combining
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b) Difficulty in stepping into developed countries. c) Small service base of people. d) The network chosen in developed countries was still Cisco because of Huawei’s less focus on Network security. e) Was not able to capture the technological hub and adapt the local culture in United States.
Opportunities: a) Developing TD-LTE technique for the Chinese market. b) Creating more of strategic leadership by getting into ventures and then expanding the business. c) Using the internet technology to deliver the services. d) Develop business in North American market. e) Creating low cost handsets with high technology inside and selling it to the western markets.
Threats: a) Growing business of Nokia can pressure the presence of the Huawei in the market. b) Transformation of the original Chinese telecom policies and the industry can hamper the growth of Huawei. c) Developed countries and enterprise market preferred Cisco due to its attractive feature Network security. d) Growing competition of other telecoms’ and vendors and also creating cloud space.
2) How did the company initially position itself in its international expansion
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It has an inexpensive and highly talented R&D workforce which is one of the competitive advantage for that company. Substantial spending in R&D which made it to held impressive records of patent ownership. From the current scenario of the telecommunication market, it can be notified that Huawei stands as the world’s largest telecom equipment maker and in particular china’s largest telephone equipment maker. The number of sales made by the company is higher than the other telecom equipment providers in the market. Its sales exceeded US $30 billion in 2009, and also the global sales increased by 24% i.e. to 185.2 Yuan in 2010. Another aspect for competitive advantage is the recognition of the provider. Huawei’s strategy of integrating its market people and R&D team with the thought of understanding the service providers and telephone companies needs and providing innovative solutions. Huawei has developed its business well from the market strategy that they accepted for the international expansion and thus is recognized by all across the globe. Also due to this, the company was able to receive many awards from the telecommunication industry for its tremendous contribution in the field of telecommunication. Also the company focuses on doing the corporate social activities by giving sponsorship to different events held in the global

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