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224 PART II STRATEGY DEVELOPMENT allowed it to advance its mobile technology and net. working solutions. The company's partnership with Symantec also allowed it to branch out into storage and security solutions. By 2018 Huawei had overtaken Ericsson in sales of telecoms equipment (with revenue of US$96 billion). was the third-largest handset supplier and a leader in the development of 5G technology, the next generation mobile standard essential for connected devices. CASE STUDY 1 The US market Uniquely perhaps among technology businesses. Huawei: overcoming Huawei has achieved its leading global industry posi- tion despite antagonism in the USA. There was sus- market obstacles picion in US government circles that its equipment could be used for 'snooping', that the company was B etween 2016 and 2017, the fastest-growing major too closely linked to the Chinese government and Chinese multinational company in China was Hua- military, which could endanger security. However, many wei, which grew 31 per cent. Huawei delivers ICT solu- multinationals, including US firms, were happy to use tions, products and services to one-third of the world's Huawei equipment as they found it to be effective and population in 170 countries. Huawei's founder is Ren cheaper than competitors. Zhengfei who was formerly deputy director of the Peo- Huawei's goal is to double the business every two ple's Liberation Army engineering corporation before years. To achieve this, the company aims to increase setting up the company in 1987. Its headquarters are its focus on services, such as cloud computing. In in Shenzhen, China, and it employs 180 000. addition, it aims to continue to build its telecoms equip- In 2010, Huawei was included for the first time in ment sales, which account for half its revenues, and its the US magazine Fortune's Global Fortune 500. In handset sales, which account for one-third of sales in 2017 Interbrand ranked the Huawei brand 70th in its the fast-growing enterprise sector. This sector is domi- Best Global Brands. nated by Amazon, Google, Microsoft from the USA. and Alibaba and Tencent from China. Key to achiev- History ing this potential growth, Huawei believes, is exploiting When Huawei was first started it primarily dealt in the Internet of Things and building greater industry and imported private branch exchange switches from government collaboration. Hong Kong. Within a few years, it made one of its first digital breakthroughs by launching the C&C08 digital Questions telephone switch. This enabled Huawei to develop 1 What do you consider to be the reasons for Huawei's products to supply to multinationals in the sector. rapid global growth? Hutchinson Whampoa, a Hong Kong based com- pany, provided Huawei with its first overseas contract 2 What must Huawei do to maintain and build their in 1997, supplying fixed-line network products. In the global position? mid-2000s, the company built a third-generation net- 3 How important to Huawei's global ambition is suc- work for a Danish company and signed supply agree- cess in the US market? ments with Vodafone and British Telecom. Huawei has continually focused on R&D, opening a 4 What strategy should they adopt in the US market? centre in India to develop a range of telecom software. It has expanded into both the USA and Sweden, cre- References: www.Huawei.com; Financial Times (2018) ating five R&D centres, one in Stockholm and the rest L. Lucas Huawei flourishes despite perennial hurdles in US. in the USA. 4 April. Available from www.ft.com/con m/content/2baaaaae-3320. 1 1e8-b5bf-23cb17fd1498 (accessed 5 June 2018); Inter- Huawei has worked with multiple companies include brand (2017). Best Global Brand Rankings. Available from ing 3Com, Nokia, Siemens and Motorola, which have http://interbrand.com/best-brands/best-global-brands/2017/ ranking/ (accessed 4 April 2018). Scanned with CamScanner