Mar 30, 2020 in Research Paper

Research Paper Example

The Huawei Company, which operates worldwide, continues to reshape the landscape of the telecommunications market. The corporation maintained rise amid a challenging world economic environment in 2009, and struggled to grow at 19% to achieve optimum revenue of 21.8 billion of US dollars. This put the company among the top tier corporations with the ambitions to grow the percentage of sales by 20% until 2010, which they could not image to achieve in earlier years (Huawei Technologies Co., Ltd., 2010). However, the growth of Huawei has peculiarly not come easy. The company concentrated on technology innovation and customer service. The external market has also played a significant role in Huawei’s success. It was perceived as a low-cost equipment maker but the company shed this image by delivering good technology products to the world market. Further, Huawei stressed on hiring a highly professional staff and the construction of investigation facilities. Soon, it could soon place itself at the top of the race of the telecommunications equipment vendor. To examine of Huawei's growth and prospects for rise, the review and analysis of its strengths, weaknesses, opportunities, and threats (SWOT) is needed.

SWOT

Strengths

Situated in the heart of the world’s smartphone producing cluster in China, the Huawei Technologies Co. has profited due to its being native to the Chinese market and at the same time, being the world’s biggest telecommunications provider that can develop synergies during its cell phone operations. The staff working for Huawei is huge, as half of all employees work in the fields of development and research (Ahrens, 2013), which is connected to its chief strength – the ability to everything in-house. For many years, the management of Huawei avoided creating joint ventures with more advanced technologically companies abroad. The company management realized that foreign companies would have no inducement to bring those innovations, which Huawei needed, trying to make the partnership work (Ahrens, 2013). Moreover, Huawei is the only large company on the smartphone market that is still held privately (Ahrens, 2013). This condition has enabled Huawei to stay more secretive about its financials as well as its strategy.

Huawei is the company that can afford itself to deliver low-cost equipment not only on the local market but also in the global commerce. Its location in China as well as cheap labor has enabled the company to flow confidently through the telecommunications market in the world. The greater economies of China naturally improve the financial structure of Huawei. These are related to the previous low-cost manufacturing of the company. The rise of the company produced its innovations among the world networking equipment vendors. Therefore, the strengths of the firm include the cheap labor of China, which means the annual salary of a highly qualified engineer in China is lower than that in Western Europe or America. Although the staff’s labor is rather cheap in China but they manage to provide the technological innovations and adapt their products to customer requirements (Bollen, 2013). Thus, Huawei has managed to consolidate its strengths on the local as well as the international markets.

Weaknesses

However, since it originates from China, Huawei possesses several drawbacks because it faces consumer assumptions of inferior excellence, even though almost all cell phones nowadays are produced in China. The weaknesses comprise the accusations of the Chinese government organizations aiming at the hardware supplied by Huawei in cyber attacks to purloin personal data or intellectual property (Arthur, 2012). Therefore, this fact has put the trademark under pressure

 Huawei does not possess a history or legacy in the industry of telecommunications that Alcatel-Lucent or Ericsson have; thus, the trust of the customers is not so high. The industry the company operates in is such that it always looks forward. Nevertheless, experience and legacy offer an invaluable context and perspective that can aid an organization in anticipating the alterations and disruptions ahead. Eventually, it can help to form a vision. For the Huawei Company, this creates more of a challenge in the technical sphere and less in the strategic one since it enables the company to concentrate on its services and solutions. These areas determine the major next steps for the company as it strives for the universe leadership (Bollen, 2013). Furthermore, the geographic standpoint decreases the strengths of the company in comparison with the companies operating, for example, North America. This area remains a sizable and significant stronghold for top competitors of Huawei. The leadership place that the United States has achieved in the large-scale acquiring of LTE technology has stayed a battleground for the supply of further-generations wireless technology.

Opportunities 

The continuing explosion in traffic of mobile data represents the principle opportunity for telecommunications hardware vendors. The necessity in the network infrastructure that delivers greater bandwidth and capacity at the cheapest possible pay per bit will direct the investments in the products proposed by vendors, such as Huawei, as well as the next-generation technologies. Their chances do not reside only in the formation of innovative networks but also in the modification of legacy systems in the direction of a communications infrastructure determined by mobility and IP. Beyond transformation and technology, the opportunity to bring the networking infrastructure to the markets, which remain underserved, persists. The internationalization effort of the concern has yielded powerful dividends in the major emerging regions of the Americas, Asia, and Africa as well as the Middle East. These regions are poised to proceed to grow in the next years (Huawei Technologies Co., Ltd., 2010). Therefore, Huawei offers its products on the international market where they have recognition of customers.

Threats 

 The primary threat, which is faced by Huawei, is the contemporary consolidation of its competitors. The consolidation has become the strategic choice, particularly for the vendors searching to fill technology portfolio gaps, build economies of scale, and enhance market footprints. For example, Ericsson acquired the assets of Nortel's CDMA; thus, in doing so, it formed a position in the industry and solidified it over the market in North America. Another threat increasing the competitive stress on Huawei is the rising service provider-related actions of traditional IT vendors like IBM and HP. For Huawei, which works hard to construct further competencies in the area of services, the addition of the sustained IT players brings another threat to the challenges it faces. The last enduring threat that the company must overcome within the global economy are the geopolitical issues that constantly arise and seriously complicate the business development procedure. They include the anxiety over national security to patterns encompassing competitiveness as well as fair trade (Huawei Technologies Co., Ltd., 2010). Huawei should implement innovations to strengthen its position on the global market.

Conclusion

Summing up, the SWOT of Huawei has demonstrated that although the company possesses many strengths, it must struggle to reduce some weaknesses and turn threats into opportunities. Huawei must demonstrate to its customers that it can deliver more than just low-cost equipment. The company is in need of strengthening its positions on the global market by implementing innovations and entering new markets. Huawei should struggle to develop competitive services and a stricter vision for the telecommunications industry in general. The company must also continue defending its principal geographic markets, for example North American one, and being in the persistent pursuit of operational efficiencies. Thus, in doing so, the company will manage to achieve all the goals and become the number one company among the global producers of cell phones.

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