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Huawei Technologies SWOT & PESTLE Analysis

ID : 52285053| Sep 2018| 16 pages

COMPANY PROFILE -Huawei Technologies

Business Sector :Telecommunications

Operating Geography :China, Asia, Global

About Huawei Technologies :

Huawei Technologies is a leading global information and communications technology (ICT) solutions provider headquartered in China. Founded in 1987, Huawei's products, and services and ICT solutions, are consumed in more than 170 countries. With a workforce of 180,000 employees and sales volume of over USD 39 billion , Huawei is committed to leveraging the power of Internet of Things(IoT), cloud computing, big data, and software-defined networking (SDN) to help customers across industries, including energy, transportation, government and public sectors, manufacturing and financial services, to achieve their goal of digital upgrade.

Huawei Technologies Revenue :


603.62 billion yuan - FY 31, March 2017 (y-o-y growth +15.7%)
521.57 billion yuan - FY 31, March 2016

Ownership / Major shareholders :

Huawei technologies is an employee-owned company. Ren Zhengfei, the president of Huawei retains a direct 1.42 percent share of the company. The remainder of the shares is held by “a trade union committee tied to the affiliate Shenzhen Huawei Investment Holding Co.” This body represents Huawei’s employee shareholders. About 64 percent of Huawei staff participate in this scheme, and hold what the company calls “virtual restricted shares.” (As on April 2018)

Competitive Analysis of Huawei Technologies

SWOT
PESTLE
The SWOT analysis for Huawei Technologies is presented below:
Strengths
Weaknesses
1. Emerging leader
2. Focus on Innovation
3. Cost leadership
4. Technical Advantage
1. The MADE IN CHINA preconception
2. Failure to Enter into the US
Opportunities
Threats
1. Untapped Indian market
2. 5G Opportunities
1. Threat of New Entrants
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Huawei Technologies

Strengths

1. Emerging leader: Globally No.1 in terms of sales of networking equipment. Huawei had held onto this position since 2014 when it overtook Sweden’s Ericsson. Huawei is disrupting smart phone market oligopoly of Apple and Samsung. Not only it is the leader in its home country, but over the past 2 years, Huawei has climbed to the top in Finland too, selling over 10 times as many phones as apple. Huawei is the leader in smartphone sales in Portugal and the Netherlands and the second biggest in Spain, Italy, Hungary, and Poland. While the industry enjoys only single-digit growth, Huawei clocked its shipments growth by 30% and revenue growth by 40% for 2016.

2. Focus on Innovation: Huawei has kept its focus on innovation from its early days. Be it World’s first 5g implementation on power grids or Hybrid Cloud Core Network or even IoT, Huawei has been the undisputed pioneer in network communications . Huawei was the recipient of ‘Best IoV Innovation’ Award at World Intelligent Vehicle Conference 2017. Open Innovation has been at the core of the company, and the company has invested at least 10% of their annual revenues in R&D every year for the past 26 years.

3. Cost leadership: Huawei has been competing with Xiami with its lower-priced Honor which is exclusively available online, thus cutting on retailer costs. At the same time, it has been competing with Apple and Samsung with its high-quality higher-priced Huawei-branded phones.

4. Technical Advantage: Huawei makes all products of wireless communication, that is, the chipsets inside smart phones that interact with the networks, the telecom networks that transmit signals, and the handsets themselves. Huawei leverages this advantage by offering discount coupons to carriers who buy Huawei's network communication products, thus making them a sweet deal on the smart phones.

Weaknesses

1. The MADE IN CHINA preconception: There is a gap between how customers see Chinese brands and how they see effective worldwide brands still exists. The overall inclination is to purchase things created in China yet marked in the West since most shoppers see Chinese trademarks as agents of low-value, low-quality products that rapidly get destroyed. Just 32% of abroad buyers say they have confidence in items with the "Made in China” tag.

2. Failure to enter into the US: Huwaei’s market share in the US is less than 0.5%, which doesn’t even make the top 5. It is known in the U.S. for providing moderately reasonable cell phones—is said to endeavour to enter the market for smart phones over the $500 territory, a market which is commanded by items from Apple and Samsung. Allegations on Chinese companies for spying on behalf of the Chinese government are a major factor for reluctance to buy Chinese brands in the US.

Opportunities

1. Untapped Indian market: Opportunities of ICT technologies in India are have been given a boost by government initiatives like Demonetization and Digital India. Paytm, one of the fastest growing e-payment wallets is backed by Huwaei’s infrastructure. Infosys’ Finacle is launching a cloud-based Core Banking System called Finacle FusionCloud in partnership with Huwaei which would target new–age banks and fintech companies. Also, smart phone penetration in India is only 31% as of June’17 according to IAMAI-IMRB.

2. 5G Opportunities: Huwaei is the clear leader 5G R&D. 5G technology provides speed up to 70 times that of 4G and network capacity of an estimated 1000 times the connections that 4G network can handle. Concepts like smart cities, homes and interconnected cars need the architecture of 5G where Huwaei is seen as an early leader.

The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.

Major Competitors :

Major Brands :

  • Huawei Products( Smartphones,Tablets,PCs,Other Accessories)
  • Huawei Cloud
  • Fusion Solar Smart PV
  • Honor
  • Huawei Marine

Key Business Segments / Diversification :

Huawei Technologies
Wireless network Fixed line Consultancy servicesMultimedia technology
Enterprise network infrastructureElectronic and communication devices Cloud

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Name
Business Segment
Year
Type
Objective/Synergy Achieved
HexaTierCloud Data Services, database security and compliance solutions2016AcquisitionHuawei acquired HexaTier at $42 million and will use HexaTier to set up a research and development center in Israel for databases in the cloud.
Toga Networks IT Networking Company2016AcquisitionHuawei which is the world’s biggest telecom vendor has reportedly acquired Toga Networks at more than $100 million .Toga Networks is seemingly developing products for the telecom industry and has also branched out into cloud storage systems and applications for data centers, so it’s entirely in line with Huawei’s line of business.
AmartusSoftware developer and SDN service solutions provider2015AcquisitionThe acquisition of will enable Huawei to accelerate its SDN (Software-Defined Networking) roadmap and improve its competitiveness in SDN solutions and services by introducing fast business innovation and multi-vendor capability.
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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Copyrights and Disclaimer

Huawei Technologies SWOT and PESTLE analysis has been conducted by Nikhil Dargan and reviewed by senior analysts from Barakaat Consulting.

Copyright of Huawei Technologies SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Huawei Technologies SWOT & PESTLE Analysis
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