Founded in 1987 in Shenzhen, China, in just 30 years Huawei has grown to become a leading global information and communications technology (ICT) organisation that provides consumers with competitive ICT solutions, products and services. Operating in over 170 countries and serving over one-third of the world’s population, the technology multinational employed 180,000 individuals in 2017. The growing dominance of this firm is further demonstrated by the fact that its revenue more than doubled from 2013 to 2017, reaching an impressive $92.549 billion in 2017 (Figure 14.8). Although Huawei provide a range of ICT products and services, the firm is perhaps most well-known for its smartphones which have challenged Apple and Samsung’s dominance in the global industry. In fact, Counterpoint Research found that in 2018, Huawei’s global sales exceeded those of Apple, which places the firm as the second largest in the industry. This is pretty impressive considering that the Chinese giant had only released their first smartphone in 2009. The three giants, namely, Samsung, Huawei and Apple, dominate the smartphone market with a combined market share of over 50 per cent. Huawei’s success in the smartphone industry is attributed with providing consumers with the latest technology, thanks to the company’s ethos of high investment in research and development and production. The firm’s engagement with innovation is evident within their workforce, as approximately 80,000 people are employed within research and development, which is around 45 per cent of total workforce. Moreover, Huawei invested approximately $13.2 billion (£10.3 billion) in R&D in 2017. Huawei’s two-pronged strategy, whereby they use their fast-growing sub-brand Honor to capture the mid-tier segment and its premium Huawei-branded smartphones at the top end of the market, allows the firm to reap synergistic benefits and lead to its broad appeal. Given Huawei’s success in the smartphone industry, it might be assumed that Huawei’s smartphone models may be among the most popular handsets, but this is not the case. Huawei has an extensive product portfolio and its breadth of sales make up for lack of depth in sales. Nevertheless, there is perhaps a need to streamline their range of handsets. Although Huawei operates in over 170 countries, the firm failed to launch its products in the US as the government deemed the organisation to be a security threat; however, this failure has forced the firm to redouble their efforts in Asia and Europe, which has undoubtedly led to success. Perhaps worryingly though, Huawei is still dependent on China for over 50 per cent of its revenue. Issues of security have continued to plague the company, coming to media scrutiny in late 2018 for reported breaches. On the 1 December 2018, Huawei’s Chief Financial Officer, Meng Wanzhou, was arrested in Canada, on suspicion of US fraud charges which concerned the alleged breaking of US sanctions on Iran. Following Meng’s arrest, China was reportedly using Huawei as a tool to spy on rival nations. Huawei responded to these allegations by asserting that the relationship between Huawei and China was strictly business-related and that the telecoms giant did not give anything back to China’s government other than the relevant business taxes. However, given the propensity for state control in China, many critics have questioned the independence of Huawei. One of the reasons why Huawei was under such high levels of scrutiny was partly because Huawei’s founder, Ren Zhengfei, was previously an engineer in the Chinese army before joining the Communist Party in 1978. Given Huawei’s accusations the firm was eager to portray itself as a private company owned, with little to no ties to the Chinese government beyond those of a law-abiding taxpayer. Although little evidence surfaced to show that Huawei was spying on rival nations, other countries appeared fearful of the control that the Chinese government could

assert over Huawei. In particular, there was concern that collusion between the firm and the government could support politically motivated cyber-attacks and enable the Chinese state to acquire access to highly sensitive networks. Given the aforementioned security concerns, a number of countries were quick to respond. Australia, Japan and New Zealand followed the US’s approach to ban Huawei products relating to the next-generation mobile network. Furthermore, President Donald Trump also suggested that there may be a ban on US companies buying Huawei’s products. Although Canada has not issued a ban on Huawei products, they reportedly conducted a thorough review of Huawei’s portfolio. BT, a UK telecommunications provider, has removed Huawei equipment from its 5G network and although the UK has also not banned Huawei products, the Chinese giant will be regularly subjected to security testing by the UK’s intelligence agency. Contrasting these approaches, Germany stated that they oppose any banning of suppliers, including Huawei from their 5G networks. Despite being the second largest smartphone-producer in the world, Huawei experienced sanctions against their products in a range of countries due to security issues. Importantly, in 2018 the US and China were in the middle of a trade dispute, with both nations imposing tariffs and fighting over technology and patents. There is little evidence to suggest that Huawei have been liaising with China to breach security systems, but the autocratic nature of the Chinese regime makes Western leaders anxious. Many critics have questioned the extent to which China would allow Huawei to remain truly independent, particularly given its potential value for national security purposes. Alongside all of the factors that determine firm-level competitive advantage, international politics is also a critical factor in determining the success of MNEs in global markets.

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GA 120 100 80 60 40 20 0 2011 2012 2013 2014 2015 2016 2017 Figure 14.8 Huawei's Revenue Growth 2009-17 ($ billions) 2018