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Published by Kushal Lokhande

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Published by: Kushal Lokhande on Aug 08, 2011
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Present Globalization Period » Inefficient Telecommunication hampered economy » Immediate need to modernize telecommunication » 1979 Policy of collecting telephone installation fees » Introduction of advanced foreign equipment and technologies » Incorporation of state-owned telecom enterprise. completion of grillwork optical backbone project » Focus of enterprises shifted from govt. puppets to responding to customers » Reduction in telecom service fees to stimulate demand » Entry of foreign telecom equipment manufacturers » Rapid growth of domestic telecom equipment manufacturers » Discontinuation of preferential tariffs to import to encourage domestic equipment purchase. » Entering into WTO in 2001.. » Reduction of Import tariff on Telecom product 1990 .2000 High-Speed Development Period » Series of Reforms to promote telecom industry » Laying down of long distance cable network. opening up of telecom provider market » Separation of China Telecom into 4 companies to bring competition in every segment » Domestic equipment manufacturers pushed for international cooperation side by side developing own products » Export of equipment started » Exports reached US$450 m in 2003 » Handset exports reached US$ 738 m in 2004 2 .1989 Preparation Period 2001 .China Telecom Industry Scenario 1978 . JV with Belgium Bell Telephone Co. Shanghai Bell Telephone Equipment Manufacturing Co. Ltd. Huawei Technologies Co.

C&C08 switch in 1993 » Owing to low price & matured performance.due to potential profits owing to high margins » First domestically manufactured product.Huawei Background » Established in Shenzhen in 1988 » Vendor of imported PABX (Private Automatic Branch Exchange) Systems » Shifting focus towards R&D in 1992. Ltd. entry into urban markets » Gradual Extension of products in key telecom fields Imported Telecom products vendor Learning technology from foreign products Gaining domestic market insights Accumulating capital for future 1988-1992 1993-1996 Imitation of the imported product technology to manufacture own product Entry into the Hong Kong market 1997-Present Restructuring internal processes Establishing overseas R&D centres & branch offices Joint Laboratories and JVs with major companies Huawei Technologies Co. 3 .

customer focused approach High quality workforce Opportunities Huge potential for market growth in telecom industry Untapped markets in various parts of the world Potential partnerships with capable local players Globalize the Strategy SWOT Total Global Strategy Threats Weakness Complete reliance on internal capital sources Huge organizational structure Competition from globally renowned brand like Cisco General perception of Chinese products in the global arena Lowering profits due to increasing R&D and marketing costs » » » » Focus on building the Brand Making the presence felt entering international bids Building High-tech perception international exhibitions Perception about Chinese economy Brochure about Chinese transformation Huawei in China Huawei Technologies Co. 4 . Ltd.Huawei Internationalize the Strategy Develop Core Business Strategy Marketing Strategy Strengths Low engineering labor costs One common platform (ASIC) for all products Formidable R&D Capability Market-oriented R&D focus.

Ltd. 5 .Huawei Risk of Entry Marketing Strategy Porter s Analysis Capital-intensive. access to finance key issue Finite amount of "good" radio spectrum Ownership of a telecom license Scarce solid operating skills and management experience Bargaining power of Suppliers Large number of equipment makers around Enough vendors to dilute bargaining power Intensity of Rivalry High degree of competition Competitors lure customers with lower prices and more exciting services Tends to drive industry profitability down High exit barriers (specialized equipment) Bargaining Power of Buyers Increased choice of telecom products and services Low product differentiation Low switching costs Threat of Substitutes Products and services from non-traditional telecom industries Cable TV and satellite operators now compete for buyers Internet becoming a viable vehicle for cut-rate voice calls Huawei Technologies Co.

Ltd. 33% R&D. 6 . SunMicrosystems Marketing Sales & Customer Service. 9% Production. Moscow » 46 % R & D Employees » Market focused R&D approach » Mission statement : Huawei is in pursuit of realizing customers dreams in the IT sector. 46% Admin. and becoming a business with sustainable growth » Established Joint Labs with industry stalwarts Texas Instruments. Intel. Bangalore. 12% Employee Distribution Huawei Technologies Co.Huawei R&D Strategy » Shifting focus towards R&D in 1992. Microsoft.due to potential profits owing to high margins » Company spends 10% of its Sales Revenue on R&D » 13 R&D centers worldwide : Dallas.

5 HUAWEI Rating 8 6 6 9 9 7 6 7.5 1.Huawei Benchmarking Competitors Weights Product and solution Brand Market perception R&D Employee Base Market Reach Market Power 2 1 1 2 1 1.45 Huawei Technologies Co. Ltd. 7 .5 Total CISCO Rating 9 10 9 9 10 10 10 9.

8 .THANK YOU Huawei Technologies Co. Ltd.

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