Tsmg5340 Huawei
TSMG 5340
Wenzhao Li
HUAWEI: CISCO’S CHINESE CHALLENGER
The explosive growth of mobile Internet, fueled by the technological innovations, has affected every aspect of our lives. Mobile devices such as smart phones and PDA and even smart pets are now being interwoven into the fabric of our lives. The ultimate goal of all these devices is to bring all people into a networked society. Behind all these amazing devices, however, are the efforts of the telecom equipment companies, such as Alcatel, Lucent, 3Com and Cisco. Among all of these companies, there is a Chinese company, named Huawei, gradually being attention by the global telecom industry. For Huawei, its ambition is to catch up with Cisco as a world leader other than a domestic giant, which we know that none Chinese company has ever achieved in an industry as important as telecommunication.
In my reading of this issue, trying to comprehensively understand Huawei's situation in venturing into international market, four observations stand out: strength of Huawei, weakness of Huawei, Huawei's opportunities and threats faced by Huawei.
Strength:
Firstly, China’s telecom equipment market is the background of Huawei. China’s telecom industry achieved substantial double-digit growth in 1980s, and surpassed US to become the largest telecom market by the end of 2002. The glooming growth in Chinese market is an initial power of Huawei’s growth. Table 2 in the case shows that as early as 2005, Huawei had achieved the market leader with the share of 13.5%. And since China was the largest market, Huawei had become the largest domestic telecom equipment company. Secondly, the special company culture and foresight shown by the company make Huawei an extraordinary different company. The military-styled “Wolf-Pack” corporate culture and relationship with Chinese government are the “trump cards” of Huawei. The chairman, Zhengfei, admitted that: “If there had been no government policy to protect, Huawei would no
Wenzhao Li
HUAWEI: CISCO’S CHINESE CHALLENGER
The explosive growth of mobile Internet, fueled by the technological innovations, has affected every aspect of our lives. Mobile devices such as smart phones and PDA and even smart pets are now being interwoven into the fabric of our lives. The ultimate goal of all these devices is to bring all people into a networked society. Behind all these amazing devices, however, are the efforts of the telecom equipment companies, such as Alcatel, Lucent, 3Com and Cisco. Among all of these companies, there is a Chinese company, named Huawei, gradually being attention by the global telecom industry. For Huawei, its ambition is to catch up with Cisco as a world leader other than a domestic giant, which we know that none Chinese company has ever achieved in an industry as important as telecommunication.
In my reading of this issue, trying to comprehensively understand Huawei's situation in venturing into international market, four observations stand out: strength of Huawei, weakness of Huawei, Huawei's opportunities and threats faced by Huawei.
Strength:
Firstly, China’s telecom equipment market is the background of Huawei. China’s telecom industry achieved substantial double-digit growth in 1980s, and surpassed US to become the largest telecom market by the end of 2002. The glooming growth in Chinese market is an initial power of Huawei’s growth. Table 2 in the case shows that as early as 2005, Huawei had achieved the market leader with the share of 13.5%. And since China was the largest market, Huawei had become the largest domestic telecom equipment company. Secondly, the special company culture and foresight shown by the company make Huawei an extraordinary different company. The military-styled “Wolf-Pack” corporate culture and relationship with Chinese government are the “trump cards” of Huawei. The chairman, Zhengfei, admitted that: “If there had been no government policy to protect, Huawei would no