3.  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

4. INTERNAL ENVIRONMENTAL ANALYSIS EXTERNAL ENVIRONMENTAL ANALYSIS
 RESOURCES
 CAPABILITIES
 CORE COMPETENCIES
 VALUE CHAIN ANALYSIS
 HUAWEI`S BUSINESS
FUNDAMENTALS
 POLITICAL
 ECONOMICAL
 SOCIOCULTURAL
 TECHNOLOGICAL
 LEGAL

5. 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

6.  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

7.  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

8.  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

9.  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

11.  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

12.  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

13.  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

14.  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

15.  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

16. 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

17.  INCREASED MARKET POWER
 OVERCOMING ENTRY BARRIERS
 INCREASED DIVERSIFICATION
 LEARNING AND DEVELOPING NEW CAPABILITIES

18.  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)