Huawei Brand Strategy Management

Huawei Brand Strategy Management

Canvas Business Model

In order to have a clearer picture of the operations of the Chinese phone maker, a thorough internal investigation of Huawei’s business model is conducted. The purpose is to have a more in-depth grasp of the company’s operations and the value it provides to its customers as a result of completing this investigation. It also aids in the knowledge of internal processes inside the company, as well as how they could evolve in the future.

Key Partnerships

Huawei has previously collaborated with Telefonica, Zoom, Accenture, Google, Hewlett Packard, Arrow Electronics, SAP, Thales, and other firms (Dmitrijevs, 2020).

Huawei’s Value Propositions

It is Huawei’s value proposition, which defines the core principles that the business aspires to provide to its clients, that allows it to meet the expectations of its customers and meet their requirements. Huawei’s manufacturing activities are one of the ways in which the company offers value to its customers.

Huawei is focusing its efforts on in-house manufacturing in order to ensure long-term success in the marketplace. The corporation may also be able to save money on import duties by producing domestically, allowing it to reinvest those savings elsewhere, such as in R&D (research and development) (Li, 2019), so providing consumers with long-term value. In order to supply its consumers with new and creative goods and services, Huawei’s research and development activities are critical to the company’s ability to innovate.

Huawei places a high importance on research & development in its operations. Huawei is the third-largest spender on research & development, trailing only Google and Amazon in this category. To avoid being prevented from expanding into the United States as a result of allegations of Chinese espionage, Huawei has designed its own chipset to operate on its servers, which also adds value to the company’s clients’ experiences (Wu et al., 2021). Unlike its competitors, Huawei has the ability to tweak and modify the components of their goods in order to produce its own processors that can be used in their products as well.

Channels

When it comes to reaching and distributing its products to clients from a variety of demographic backgrounds, Huawei employs a number of strategies. For the purpose of keeping clients informed about the company’s position in the business and displaying its products, Huawei maintains its own website. Customers are sent to a page with a list of retailers from which they may decide where they want to acquire a smartphone after clicking on a link to purchase one. Currently, Huawei does not sell its products directly to customers through this distribution channel. Chinese smartphone manufacturer Huawei offers its products online through third-party retailers such as Amazon and Flipkart (Arsova, Mitreva, & Temjanovski, 2022). Recently, rising competition from Chinese firms such as Xiaomi, who also use the internet channel to cut their costs, has forced Huawei to place an increased focus on this online channel in order to compete more effectively. This attitude served as the foundation for the establishment of Huawei’s ‘Honor’ sub-brand.

Huawei’s usage of physical storefronts is just as important as the company’s internet presence in terms of customer service. Huawei’s most major markets are China and India, and the company distributes its goods in both countries through actual stores owned by the company. Having a physical retail presence, according to Yeo et al. (2020), allows the company to exhibit its products and develop a brand image while also being in direct contact with its customers. Additionally, Huawei distributes its goods in a number of countries through third-party retail establishments and mobile service providers in addition to its own physical retail stores.

Cellular carriers play a key role in the selling of smartphones, and Huawei’s success in Europe may be attributed to the company’s close ties with the continent’s cellular service providers. In order to gain a presence in the European market, Huawei spent years cultivating connections with carriers in nations such as France and Finland, among other countries. The corporation relied on these carriers as the principal route via which its items were delivered to customers. Huawei, on the other hand, does not have access to this carrier route in the United States, as indicated by their market share in the nation, which is less than 0.4 percent (Peng & Zhang, 2021). Carrier partnerships have played a significant role in both Huawei’s success in Europe and its failure to develop an international footprint in the United States, demonstrating that carriers as sales channels have a significant impact on the selling of handsets.

Huawei’s Customer Relationships

The company’s relationships with its customers are excellent. On Huawei’s community website, people may post images and share their thoughts. Customers of Huawei may be contacted through social media platforms such as Facebook, Weibo, Twitter, and other networks.

Social networking is a must-have communication tool for organizations that care about their consumers (Chen, Tang, & Yang, 2018). Huawei provides a range of support options for its devices. Customers can get answers to their queries on Huawei’s website, or they can contact the firm directly via email or phone. Customers may also use Huawei’s website to find the nearest service facility and chat with a Huawei professional directly. Thanks to this online service, customers in over 100 countries may now obtain support swiftly and conveniently.

Huawei is able to interact directly with its consumers because to its global network of over 45,000 retail outlets. Huawei’s stores are popular with customers because they allow the corporation to exhibit and connect their brand directly with the general population. Huawei’s retail locations are the main point of interaction for customers.

Huawei’s Customer Segments

Business-oriented segment: Clients that only use their cellphones for work-related communications demand a reliable network while making business-related phone calls.

Value-chasing segment: The value-chaser market segment is concerned with getting the best price possible on a product and is constantly on the lookout for methods to save money on purchases.

Family-oriented: Those who place a high value on their family’s requirements are more likely to rely on their smartphones to stay in touch with the people who matter to them the most.

Entertainment-focused market: People who fall into this group use their cellphones to play games, watch movies, and listen to music, among other things. The ability to stream movies and play games without degrading performance is based on having fast data rates available to you.

Socializer market: The socializers mostly use their cellphones to access social media programs such as Facebook, WhatsApp, and Twitter, among others.

Heavy users market: Substantial amounts of data use and intensive smartphone use demand high data speeds and large data storage capacities for the heavy user class of people.

Huawei’s Key Activities

Huawei’s most important core operations are possibly R&D, the company’s technological resources, and connections with other strong technological enterprises. Huawei’s ability to differentiate themselves from the competition through their branding and marketing initiatives is critical to their success (Li, 2019). Huawei is able to offer itself to new clients by cooperating with well-known and trustworthy companies. Huawei depended heavily on traditional advertising, such as billboards, posters, banners, and more, when it first entered the market and established its presence. Celebrities are often utilized to advertise and support a company’s brand.

Key Resources

One of Huawei’s most valuable resources is its intellectual property, which includes technology. It also has a substantial foundation of materials and supply chain networks, distribution and storage facilities, an online and conventional physical retail chain, as well as websites and online stores, among other things. It also has a significant social media presence, as well as an extensive information technology and communications infrastructure, manufacturing facilities, and well-trained employees. Patents and trademarks that are critical to Huawei’s operations are owned or licensed by the company in huge numbers (Arsova, Mitreva, & Temjanovski, 2022). Apart from that, Huawei has a huge number of physical facilities across the world that are critical to its operations, which it either owns or rents. There are several production, distribution, and storage facilities as well as corporate offices and a retail network that make up the company’s vast network.

Revenue Streams

Huawei gets its revenues from carrier networks section of the business, consumer business, and enterprise business. A range of advising and other services are provided by Huawei in addition to the production and sale of consumer electronics. Revenue is generated by the provision of commercial network and communications services as well as the provision of a broad variety of consumer devices. Sales and service fees are the primary sources of revenue for the company at this time. In the last 5 years, Huawei generated revenue of CNY 395 billion (about $57.6 billion) on annual average, representing a considerable rise over the last decade’s figure of CNY 288 billion (approximately $53.6 billion) (Wu et al., 2021). Further, Arsova, Mitreva, and Temjanovski (2022) found that approximately 32% of total income came from the Consumer sector, with the Carrier Network segment accounting for more than 61 percent.

Cost Structure

The cost structure is made up of R&D, product development, and network management and maintenance. The costs associated with Huawei’s product development, procurement of materials, procurement and delivery facilities, development of online portals, IT and communications infrastructure, management of partnerships, implementation of marketing and advertising campaigns, and operation of physical retail outlets are just a few of the expenses the company faces. Approximately $17.4 billion (approximately CNY 118 billion) was spent by Huawei on its entire operating expenses in 2015 (Yeo et al., 2020).

Individual Reflection

Throughout this semester, my fellow colleagues and I had an opportunity to collaboratively participate in a group project with other members of our class. The focus of our group activity was Huawei. We were looking at Huawei’s business model through the use of the Canvas business model. My contribution to the group report was huge. I was chosen as the team coordinator, ensuring that all deadlines were met and that we held our scheduled meetings on time via multiple platforms on Zoom, WhatsApp, and in the school portal. For part 1 of the report, I also dealt with the Canvas Business Model section. I was mainly responsible for researching on Huawei’s activities, resources, key activities, and the entire 9 segments in the canvas.

One of the main challenges that I encountered as a leader/coordinator was handling the different personalities in the group and ensuring that everything was running smoothly. At first, our group had issues in terms of communication and commitment to begin the group task. However, we all agreed on the need to urgently begin a smooth collaboration in regard to the class work for purposes of attaining good grades and for future cooperation in other group projects. Another major challenge was that we were unable to meet physically due to the demands of the new learning structure post-COVID-19. Therefore, we had to coordinate our times very well in order to be able to “meet” as often as required and to ensure full participation. Another challenge was finding information relating to Huawei on academic journals and valid and credible sources. There is a lot of information online, yet their validity and credibility is questionable. We were able to bypass this problem by using online libraries.

From being a member of the group, I learnt to better communicate and to be patient. Also, the value of accountability and responsibility were well inculcated during the entire process. I found out that we were only as strong as our weakest member. Whenever we lagged behind, we could not make progress until an issue was resolved. So, we had to resolve all issues fast. Challenges that may reoccur include the issue of communication. To solve this, I suggest that people select a group leader as the first activity in the project. Group leaders would give direction and monitor progress without necessary letting members feel like they are being supervised.

From the study of Huawei, I learnt that there is a need to have a solid plan in everything one does. I found the concept of partnerships as an important factor for Huawei, and one that can be carried over to personal life. Huawei has partnered with many firms on different times and for various reasons. It has done so in order to gain a competitive edge and to cover up for areas where it is inadequate. The same can be used in personal life to improve one’s standing. For my future career, I plan to venture into marketing. The knowledge I gathered in doing this report is important because it will enable me to further develop my communication and leadership skills. I want to be a better leader, one who is able to not only communicate effectively but also be able to factor in other people’s opinions and push them to be better.

Challenges and Opportunities of Digital Business

A substantial impact on the global economy, corporate activities, and the lives of individuals has been made as a result of the COVID-19 pandemic. Consequently, many e-businesses have gone through challenges, but digitization is allowing them to adapt and overcome these difficulties as well (Almeida, Santos, & Monteiro, 2020). Therefore, digital businesses are exposed to both challenges and opportunities, despite the crippling effects of COVID-19.  The fact that people and businesses alike are increasingly relying on technology to assist them in dealing with this unprecedented situation is evidence of the speed with which the digital world is evolving. A significant influence is projected across all industries as a result of digitization (Soto-Acosta, 2020), with new digital products and services based on the concept of flexibility being developed. The growing demand for new personnel, regardless of where they live or where they are employed, is an additional advantage for the industry. E-businesses have expanded leading to more employment opportunities.  The development of cybersecurity and privacy, which will be two essential components in the future of these technologies, will be instrumental in the advancement of the Internet of Things, artificial intelligence, big data, and robots, among other technologies. However, challenges have also emerged including loss of business to more established firms, strict legislative guidelines, and barriers of entry into e-commerce. 

References

Almeida, F., Santos, J. D., & Monteiro, J. A. (2020). The challenges and opportunities in the digitalization of companies in a post-COVID-19 World. IEEE Engineering Management Review, 48(3), 97-103.

Arsova, M., Mitreva, M., & Temjanovski, R. (2022). Interrelationship between marketing activities and the financial performance of Huawei. Journal of Economics, 7(1), 27-35.

Chen, J., Tang, Y., & Yang, J. (2018). A survey of system dynamics in B2C e-commerce business model. Modern Economy, 9(04), 830.

Dmitrijevs, R. (2020). Research on Marketing Strategy of Huawei Mobile Phone in European Market. Open Journal of Business and Management, 8(03), 1138.

Li, Y. (2019, December). Research on Huawei Mobile Phone Marketing Strategy Based on Market Segmentation Theory. In 5th Annual International Conference on Social Science and Contemporary Humanity Development (SSCHD 2019) (pp. 293-300). Atlantis Press.

Peng, Z., & Zhang, S. (2021, December). Challenges for Huawei to Go Global Under the Trade Disputes. In 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) (pp. 1424-1433). Atlantis Press.

Soto-Acosta, P. (2020). COVID-19 pandemic: Shifting digital transformation to a high-speed gear. Information Systems Management, 37(4), 260-266.

Wu, Z., Wu, J., Hou, Q., Jiang, H., & Chen, F. (2021). The strategy of international brand expansion of it enterprises: a case study based on Huawei. Procedia Computer Science, 183, 733-744.

Yeo, C., Kee, D. M. H., Mo, X. Y., Ang, H. E., Chua, S. M., Agnihotri, S., & Pandey, S. (2020). Technology advancement and growth: A case study of Huawei. Journal of the Community Development in Asia (JCDA), 3(1), 82-91.