Huawei Corporate Strategy Paper

An enterprise's strategy is a guiding development rule that focuses on the long term and adapts to the company's internal and external situations. It specifies the company's survival situation, business policies and development in a competitive environment. direction, which in turn determines its important work content and competitive methods, so strategy is crucial to an enterprise. The following is the content I have collected for everyone. Welcome to read and refer to it! Huawei Enterprise Strategic Analysis Paper 1

A brief discussion of Huawei's strategic analysis

Abstract Enterprise development strategy is the key to enterprise development One type of strategy is a strategy for enterprise development and a strategy for overall, long-term, and fundamental issues in enterprise development. In today's increasingly fierce market competition, the development of enterprises has become a question that more and more entrepreneurs are thinking about. In today's era, more and more companies are pouring into the market, which also proves that more and more companies are disappearing. So how can companies achieve sustainable development?

This article takes Huawei as an example. , focusing on analyzing its development environment and the customization of its strategy, outlining how Huawei formulated a correct and effective development strategy on its development path, pointing out the importance of development strategy, and describing the differences and development strategies between Huawei and its competitors. The difference between the modes. Finally, select and evaluate the development strategy formulated by Huawei!

Foreword In today's globalized production of information products, the participation and intervention of *** in the information industry in various countries Further enhancement is embodied in providing support in terms of policy and financial resources; providing protection in international economics and diplomacy; and directly participating in organizing, formulating and supervising the implementation of strategic development plans for information technology. It reflects the country’s strong intention to compete for technological advantages in the 21st century, maintain and enhance economic competitiveness and national defense strength.

Huawei Technologies Co., Ltd. is an employee-owned private technology company headquartered in Shenzhen, Guangdong Province, China. It produces and sells telecommunications equipment. Founded in Shenzhen, China in 1987, it is the world's largest telecommunications network solution. Solution provider, the world's second largest supplier of telecommunications base station equipment. Huawei's main business scope is switching, transmission, wireless and data communication telecommunications products. It provides network devices, services and solutions to customers around the world in the telecommunications field. In the list of China's top 500 private companies published in 2013, Huawei Technologies Co., Ltd. ranked first. At the same time, Huawei is the only company among the Fortune 500 that has not been listed on the stock market, and it is also the sixth largest mobile phone manufacturer in the world. The issues to be studied in this article are to analyze Huawei's environment, industry, market and other aspects, study Huawei's corporate development strategy and the difficulties it faces in its development, evaluate its chosen development strategy, and explain the company's Formulating and selecting strategies suitable for one's own development will play a huge role in improving the competitiveness of enterprises. It is very necessary to customize the development strategy.

This article studies Huawei's development strategy, applies the basic theories and analysis methods of enterprise strategic management, starts from the characteristics of the industry, and combines the current international industry development situation, the development situation of the domestic communications industry, and the development of communications technology. Development trends, and an in-depth discussion of the formation mechanism and implementation methods of the company's development strategy. The article first elaborates on Huawei's external environment and internal resource capabilities based on its basic situation, and summarizes and analyzes the opportunities, threats, and existing strengths and weaknesses that Huawei faces. After identifying its core competitiveness, the strategic management analysis methods SWOT analysis and PEST analysis were comprehensively applied to analyze and evaluate the company's strategy, which determined the importance of Huawei's development strategy. Finally, ideas and suggestions for Huawei's future development strategy were put forward.

1.1 Huawei Company Overview

1.1.1 Huawei Company Introduction

Huawei Technologies Co., Ltd. was established in 1987 and specializes in the research and development of communication network technologies and products. Development, production and sales are committed to providing network solutions for fixed networks, mobile networks, data communication networks and value-added services to telecom operators. It is one of the major suppliers in the Chinese telecom market and has successfully entered the global telecom market. It is currently focusing on several fields such as 3GWCDMA/CDMA2000/TD-SCDMA, NGN, optical network, xDSL, and data communications, and hopes to become a global leader in these fields through continued investment and efforts.

Huawei currently has more than 24,000 employees, including more than 3,400 foreign employees. In 2013, Fortune Global 500 ranked Huawei 315th in the world, up 36 places compared with the previous year. Huawei is the world's leading provider of information and communications solutions. Huawei Technologies Co., Ltd.'s business covers mobile, broadband, IP, optical networks, telecommunications terminals and other fields. It is committed to providing all-IP convergence solutions so that end users can enjoy consistent services through any terminal at any time and anywhere. Communication experience enriches people’s communication and life.

Huawei has established 8 regional departments, 55 representative offices and technical service centers around the world. Its sales and service network covers the world, serving more than 270 operators. Its products have entered Germany, France, Spain, More than 70 countries including Brazil, the United Kingdom, the United States, Japan, Egypt, Singapore, and South Korea. According to Dittbemer statistics, Huawei's NGNNext Generation Network, a new generation network system, has a global market share of 18%, ranking first in the world, and has ranked first in global shipments of switching access devices for three consecutive years; according to Gartner statistics, Huawei's DSL Digital Subscriber Line, Digital user line shipments rank second in the world; according to RHK statistics, Huawei's optical network market share ranks second in the world; Huawei is one of the few manufacturers in the world to commercialize 3GWCDMA. It has fully mastered the core WCDMA technology and has taken the lead in the United Arab Emirates and Hong Kong. , Mauritius and other regions have been successfully commercialized, becoming the first camp of WCDMA and becoming one of the few manufacturers in the world to provide a complete set of commercial systems.

Huawei has carried out in-depth cooperation with Hay Group, PWC, FHG and other companies in integrated product development IPD, integrated supply chain ISC, human resource management, financial management, quality control and many other aspects. After years of management improvements and changes, as well as the implementation of development processes and supply chain processes driven by customer needs, Huawei has developed differentiated competitive advantages that are in line with customer interests, further consolidating its core competitiveness in the industry.

1.2 Huawei's external environment analysis

1.2.1 Macro-view environment analysis PEST analysis

The macro-view environment, also known as the general environment, refers to the environment that affects everything Various macroscopic forces of industries and enterprises. When analyzing the macroeconomic environmental factors, different industries and enterprises will have different specific contents according to their own characteristics and business needs, but generally the four major categories of factors affecting the enterprise shall be dealt with: Political, Economic, Technological and Social. Analyze the main external environmental factors. Simply put, it’s called PEST analysis.

1Political Factors----Political and Legal Environment

In terms of the telecommunications equipment industry, the telecommunications equipment industry has experienced the digital switch stage, the GSM stage and the 3G stage with the support of *** , achieving leapfrog catch-up, opening the door for Chinese companies to enter the telecommunications market. After 2000, Huawei completed its initial market development tasks and formed a relatively complete global market system and product system. At this time, Huawei desperately needs the support of China's export credit. Like ZTE, Huawei actively participates in entrepreneurial delegations led by Chinese national leaders. Almost every trip brings China's export credit policy in order to promote bilateral cooperation and expand sales of Chinese enterprises, and the focus is Support major cooperation projects.

2Economic Factors----Economic Environment

Socioeconomic Structure-Industrial Structure. The rapid development of the world's information economy and Internet industry has provided rare development opportunities and huge development space for the communication device manufacturing industry, making it one of the fastest growing industries at present. In foreign markets, the financial crisis that began in 2008 caused financial difficulties in wealthy Western countries and frequently reduced investment in communication equipment. This has brought opportunities to Huawei's low-price products.

3Sociocultural Factors---Social and Cultural Environment

In recent years, China has gradually grown into the world's largest mobile phone market. However, whether in domestic or foreign markets, Chinese mobile phone manufacturers We are always catching up with the world's major brands.

In 2010, this situation finally changed. The following figures can illustrate the problem: According to statistics from market research company iSuppli, Shenzhen Huawei ranks ninth.

4Technological Factors---Technological Environment

With the true advent of digital survival, on the basis that broadband networks will become more popular, everyone’s social attributes will be further amplified, and the world Flatter. Within the scope of authorization, anyone can equally obtain the information they need anytime, anywhere, without being troubled by the ocean of information and barriers. At the same time, interactive video has become the dominant form of information expression. The development of information carriers has gone through the process of "text, pictures, sounds, and videos." Video is the most intuitive form of information expression. The improvement of ICT infrastructure, the popularization of broadband, and the cloudization of services will promote people's transition from using "voice + text" Shift to the use of "video and imaging".

1.2.2 Huawei’s external opportunities and threats

1 Opportunities

First, Huawei is in a rapidly growing communications industry with a huge market , people's demand for communication is increasing day by day, and the telecommunications equipment manufacturing industry has huge excess profits.

Second, with the perseverance of a military background, the country’s supportive policies, coupled with the financial and material resources accumulated since the reform and opening up and the substantial growth of the entire Chinese economy, it can be said that Huawei’s opportunities are The market provides it, but the market depends on competition and strength, so opportunities are reserved for those who are prepared.

Third, China’s low R&D costs and low human resource costs have given Huawei a huge cost advantage. According to statistics, the per capita cost of Huawei's R&D department is US$25,000 per year, while the per capita cost of European companies' R&D departments is approximately US$120,000 to US$150,000 per year, which is six times that of Huawei. The average annual working hours of Huawei's R&D personnel is about 2,750 hours, while the average annual working hours of European R&D personnel is about 1,300 to 1,400 hours. The ratio of per capita time input is 2:1. Therefore, Huawei responds quickly in terms of product response speed and customer service, which is its core advantage in defeating the weak. It has also helped Huawei develop a good reputation in the industry for its delivery costs and efficiency.

Fourth, in the past ten years, the economic development of developed countries has been far worse than before, and high-quality and low-priced "Made in China" products have become very popular. Under this opportunity, Huawei and ZTE stood out. They not only shared the Asia-Pacific market, but also used their "cost-effectiveness ratio" to further increase their market share in Europe and the United States

Fifth, China *** gave the communications industry Numerous supportive policies. Huawei is China's first private enterprise in the communications industry, so the policy support given to Huawei by the state and government plays a crucial role.

2 Threats

First, threats from the communications industry. There is a saying at present: the communication device manufacturing industry has slowly become a sunset industry. Excessive technical capabilities, excess services and the inertia of end-users' inherent consumption habits have led to a decline in the profitability of telecom operators, which will inevitably affect device manufacturers. revenue and profit.

Second, there is pressure from RMB appreciation and inflation. More than 75% of Huawei's current sales revenue comes from overseas. If the RMB continues to appreciate, Huawei's competitiveness will definitely be reduced.

Third, the threat from peer competition. Through mergers and acquisitions, telecom equipment manufacturers have gradually formed competing groups, but Huawei has obviously been excluded. If Huawei is not well-prepared for the joint suppression from competitors, it is very likely that it will be damaged.

1.3 Analysis of Huawei's internal environment

1.3.1 Huawei's core competitiveness

Huawei's unique core competitiveness that cannot be copied in order of importance Arrange: first, R&D capabilities and product differentiation; second, corporate culture; third, general customer relations.

1 R&D capabilities

a Low-cost R&D. In China, 3 million engineering college students graduate every year, and Huawei can recruit outstanding students to work at Huawei. The salary of an R&D engineer in China is one-third to one-quarter that of Europe, and the legal working hours are that of European engineers. 1.5 times. At the same time, Chinese people are diligent and often work overtime.

More than 80% of R&D expenses are human resource costs. Therefore, 1 yuan invested by Huawei in R&D is equivalent to 10 yuan invested by a European company. That is to say, our R&D costs are one-tenth that of European companies.

bHigh-quality research and development. From the perspective of "Huawei" knowledge strategy formulation: every year, no less than 10% of the company's revenue is invested and 10% of R&D funds are invested in new technology pre-research; in terms of the number of R&D personnel, it has more than 51,000 R&D employees, accounting for 10% of the company's total 46% of the total number of people, of which more than 1,400 are engaged in medium- and long-term technology research full-time; judging from R&D results: To date, Huawei has applied for a total of 40,148 patents around the world.

2 Corporate Culture

Huawei’s culture mainly consists of two points: first, a culture of struggle; second, not letting Lei Feng suffer. To put it simply: if you work hard, you will get good rewards and opportunities for development and growth. When I was in a hurry to interview and visit Huawei, I wrote down two of the company's slogans: "Coming to work on time means entering work on time" and "If you do simple things repeatedly, you will be an expert; if you do repeated things simply, you will be a winner."

3 Universal customer relationship

Huawei advocates universal customer relationship. Unlike Western companies that only target decision-makers to do their work, Huawei builds a comprehensive customer relationship with decision-makers, technicians, users, operating departments, financial departments, etc. When Huawei is in the international market, it has also inherited and carried forward this universal customer relationship working method. From carrier testers and ordinary engineers to directors, CTOs, and CEOs, Huawei employees have all-round contact. Make customers feel respected.

The first point of Huawei's leadership quality model is the ability to develop customers. The definition is: This is a behavioral characteristic that is committed to understanding customer needs and proactively using various methods to meet customer needs.

1.3.2 Huawei’s internal strengths and weaknesses

1 Strengths

a Huawei has the most comprehensive product line in the communications device manufacturing industry and can provide the industry’s most comprehensive product lines. The complete end-to-end solution and "one-stop" service eliminates compatibility issues between different devices, not only improves device utilization, but also saves debugging time, creating value for users.

bThe products are cost-effective and delivered quickly. 48% of Huawei's global employees are engaged in R&D work, and no less than 10% of its sales are invested in R&D each year. These ensure the company's technological leadership and reserves. At the same time, because Huawei's human resource costs are lower than those in developed countries, its products are Much cheaper.

cThe advanced production process system shortens the production cycle of products and improves production efficiency and production quality. The complete supplier certification process ensures the quality of products and project implementation, and wins the comparative competitive advantage of speed, high quality and low cost.

d Corporate culture and execution. Huawei's "Wolf Nature" culture emphasizes unity, dedication, learning, innovation, benefit and fairness, and also emphasizes being proactive and performance-oriented. Huawei has a unique set of human resources management methods, including new employee training, employee assessment methods, criticism and self-criticism, big-character poster slogans, etc., which provide guarantee for Huawei to maintain its "wolf culture" and "dedication spirit."

2 Disadvantages

a Brand problem. Many people in developed countries do not trust "Made in China" products. In their view, Chinese products are synonymous with low price and poor quality. This environment is very unfavorable for the sales of Huawei telecom equipment. In addition, the internationalization strategy of "surrounding cities from rural areas" has sacrificed Huawei's brand image to some extent and is not conducive to improving its brand value.

bThe basic links of research and development are weak, with more improvement innovations and less original innovations. Although Huawei has been the company that applied for the most patents in China for several consecutive years, there are basically no original products among these numerous patents.

c marketing model. In the early days of internationalization, Huawei used its domestically dispatched sales team to adopt the same direct sales model as in China, in which it negotiated directly with telecom operators. However, practice has proven that this is only effective in developing countries outside South America, and it is even less feasible in developed countries.

2. Selection and formulation of Huawei's corporate development strategy

2.1 Selection of Huawei's corporate development strategy

Huawei will continue to adhere to the "customer-centric" and based on customer needs, and gradually build on the comprehensive advantages of the three major business areas of telecommunications network, global services and terminals to provide customers with cloud, pipe and terminal products and solutions to help operators improve revenue ARPU, enhance bandwidth competitiveness Bandwidth and reduce Total cost of ownership Cost to achieve business success. The boundaries between traditional industries are becoming increasingly blurred, and the information technology industry and the telecommunications industry are converging. The telecommunications industry is standing at a new starting point, promoting the more efficient development of other traditional industries, and is undergoing far-reaching changes - from focusing on voice to focusing on data, from focusing on channels to content, and from focusing on communication needs between people. Extending to the connection between machines, the business type has also shifted from traditional telecommunications business to integrated information and communication technology business.

2.1.1 Market-leading strategy

The market is the source of all work. Without the success of the market, the company will not only be unable to develop competitive products and leading technologies; Implement all strategies.

1 The market is Huawei’s life. Huawei's success today is mainly due to its market and technological strength. In fact, Huawei has only gradually taken the lead in technology in recent years. The products and technologies of the past few years are not very good at all. However, Huawei's marketers are able to sell products that are not very good. Therefore, a saying used to describe Huawei was circulated in the industry: "First-class market, second-class service, third-class products." We know that even if the product is not good, it can be compensated for by strong customer relationships. The establishment of customer relationships is achieved through high attention to customer needs and rapid response, that is, through various channels, we establish various types of stakeholders with customers.

2 The market is the core of all work. First of all, it is reflected in product research and development, such as whether product research and development projects are approved, how to determine product design ideas and research and development roadmaps, how to choose product technical standards, how to improve and perfect products, etc., all based on market prospects and market feedback. to proceed.

2.1.2 Core Technology Strategy

Huawei is a high-tech company composed of a "marketing team + R&D center" and is engaged in the world's most cutting-edge IT and communications technology research and development. and sales. Therefore, core technology and product research and development are the two most critical systems to ensure Huawei's success. Ensuring that it has world-leading core technologies is one of Huawei's four major strategies, because Huawei is convinced that the competitiveness of its products comes from core technologies. R&D investment reaches the world's leading level

Huawei R&D Center In order to continue to improve its ability to innovate around customer needs, Huawei has long insisted on investing no less than 10% of sales revenue in R&D. In the past two years, it has even more Investment was further increased. In 2005, Huawei invested RMB 4.7 billion in R&D, accounting for 14% of the previous year's total market sales. It ranked first among the top 100 electronics companies in the country in terms of both total amount and proportion. Huawei also insists on investing 10% of its R&D investment in pre-research to conduct continuous research and tracking of new technologies and new fields.

2.1.3 All-employee shareholding strategy

The unique all-employee shareholding system has played a huge role in Huawei’s development history. Without this system, Huawei would not be possible To survive, it would be impossible to develop to this day. Therefore, the all-employee shareholding strategy is one of Huawei's four successful strategies. However, this system is the most controversial topic for Huawei, and it has always been one of the focuses of society's attention to Huawei. The world's most successful "painting an egg and hatching a chicken" incentive method

2.1.4 International strategy

A company can only develop from management system, process, supply chain, production, R&D, and human resources Only by realizing internationalization in all aspects and forming an international system that is mutually supporting, adaptable and supportive to each other can the comprehensive internationalization of the market be finally realized.

Similar to the path taken by developing countries, the supply chain is first internationalized and then production is gradually localized.

After Huawei obtained its first pot of gold as an agent for PABX user switches, the huge market capacity and high profit returns in the communications industry forced Huawei to set up its own technical team, begin to develop its own brand of products, and gradually mastered the production technology of PABX. And it has begun to sprint towards carrier-grade products with larger market and higher capacity, which is what the industry calls "office program-controlled digital switches".

Currently, most of Huawei's materials can be obtained from the domestic market, thus significantly reducing material procurement costs. The company's supply chain has gone through a natural transformation process from "internationalization" to "localization" . This is a successful example of developing countries obtaining international industrial transfer. "Localization" is the result achieved by Chinese enterprises in an international competitive environment by relying on their strength. It is completely different from the administrative monopoly that all supply chains had to come from within the country before the reform and opening up.

2.2 Analysis of the effectiveness of Huawei's development strategy

1 Huawei's recent financial situation

In 2013, Huawei's sales revenue reached 185.2 billion yuan, a year-on-year increase of 24.1%. This is mainly due to Huawei's substantial growth in overseas sales revenue and its balanced and rapid development in the telecommunications network, terminal and service industries. Net profit reached 23.8 billion yuan, with a profit margin of 12.8%. At the same time, Huawei has achieved sufficient cash flow from operating activities of RMB 28.5 billion, which will help the company and customers work together to seize the market opportunities brought about by industry integration and achieve sustained and steady growth. See Figure 4-1. It can be seen from the figure that Huawei's sales revenue, operating profit, and cash flow from operating activities are all increasing year by year.

2 Huawei's market share

In 2013, Huawei's balanced global layout enabled the company to achieve rapid and steady growth in the fields of telecommunications networks, global services, and terminal businesses. Development, the annual sales revenue was RMB 185,176 million, a year-on-year increase of 24.2%. Sales revenue in the domestic market reached RMB 64,771 million, a year-on-year increase of 9.7%. Affected by the reduction in investment by major telecom operators, sales revenue growth slowed down, but it maintained a stable market position.

3. Suggestions for improving Huawei's development strategy

While Huawei has become one of the top global telecom equipment manufacturers, it has also brought the entire telecom equipment manufacturing market from a high-profit era to a low-profit era. The intervention of Huawei and ZTE has greatly reduced the cost of purchasing equipment for Chinese telecom operators. While defeating the opponent, he also brought himself into a realm that he had to face: how to survive in the increasingly fierce competition.

3.1 Senior Talent Strategy Suggestions

Ren Zhengfei inspires employees to start their own businesses at Huawei through his personal authority and provocative writing ***, but this is a dangerous signal. Once employees lose trust in him, Huawei will fall apart. At the same time, this is short-sighted behavior. Instead of relying too much on entrepreneurial leaders, we should train professional managers to take charge of high-level management positions, and appropriately increase the number of paratroopers like Kai-Fu Lee.

3.2 TD strategic suggestions

Huawei really should not give up on such a large market as TDS-CDMA, but should give up some of the company’s views on TD and change the company’s TD aspects. strategy, which is to catch up in TD, there should still be time left for Huawei.

3.3 Suggestions for cooperation with ZTE

Currently, there are reports in the market that Huawei and ZTE are engaged in a price war overseas. This is beneficial and stimulates fighting spirit. Where there is Huawei, there is ZTE. When the two of them fought together, they eventually fell into the hands of Chinese companies. However, this has increased internal friction, and at the same time, due to the merger of international telecommunications giants, Huawei and ZTE have once again taken a long time to catch up with them. If two companies form a consortium, they will save R&D costs, have strong R&D teams around the world, and form a consortium to avoid price wars."

3.4 Humanized Management Suggestions

Huawei should take more into account the true connotation of human nature. In addition to material needs, people have other levels of needs. Materials are the first and spirituality is the second. Huawei's cultural assumption is that in addition to employees having material needs. In addition, more consideration needs to be given to employees’ other needs as social beings.

Conclusion

Through the study of Huawei's development strategy, we can draw the following conclusions: Today, with the increasingly close global economic integration, with the continuous development of market economy and foreign investment With the large influx of enterprises, my country's communications market will face fierce competition as it matures. How does Huawei survive in a crisis, how does it develop in the face of competition, how does it quickly occupy a dominant position in the market, and improves its market competitiveness. This makes the company must pay attention to the management of corporate strategies and the selection and formulation of corporate development strategies.

Based on a detailed and thorough analysis of the internal and external environments faced by Huawei, this article determines corporate goals and formulates development strategic measures suitable for the company's development, namely market-leading strategy and core technology strategy. , all-employee shareholding strategy, and internationalization strategy. At the same time, Huawei's suggestions for improving Huawei's development strategy were put forward, including suggestions on high-level talent strategy, TD strategy, cooperation with ZTE, and humanized management, in order to provide Huawei with a better corporate development strategy.

Because the research on the corporate development strategy of this article is based on a full understanding of Huawei and the domestic communications industry, it applies the knowledge of strategic management learned and uses a theoretical and practical method to conduct research and analysis. It is hoped that through the research on the company's development strategy and the suggestions for improvement, Huawei can overcome the difficulties and dangers in development and continue to grow in the competition.

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