International Trade

Yonni Angel Cuero Acosta

Group 6
Karen Palacios Sánchez / Daniel Sebastián Barrera Obando / Santiago Eduardo Lozano
Pado / Jason Camilo Alvarez Trujillo
_________________________________________________________________________

A Dark Horse in the Global Smartphone Market:

Huawei´s Smartphone Strategy

1. Analyze the smartphone industry: How attractive is the industry? How will its
attractiveness change in the future?

The smartphone industry is very attractive, although it has presented a great

deceleration for the year 2015, the next years showed a strong rise in the sale of these;
According to The Economist, it is an industry that will remain in force for many
years, perhaps forever.

Many have looked for a substitute for the smartphone, but its closest substitutes
(laptop, tablet, smart tv) do separately what a smartphone can do. That is why many
do not see a new product that is capable of meeting the needs that a smartphone
meets, and even do more than this.

Although it is a very attractive industry, it has great barriers to entry, since there are
well-positioned brands, production costs are high, the cost of hardware if it doesn’t
have its own operating system; all this makes many want to give up the idea of
entering the smartphone business. Its appeal can change at any time, however, many
predict that its use will last for many years to come.

2. What are the sources of Huawei´s competitive advantage in the smartphone industry?

Huawei has an advantage in its relatively affordable prices combined with a correct
design and a pleasant experience, the discounts that the company has given to its
products have made its flagship element, the P9 Lite, the phone of choice in the
market, surpassing any Samsung's reference, this is supported by strategies, such as,
for example, including the product with rates from some operators, in which payments
are smoothed for those who do not have the ability to pay instantly.

With respect to Apple, the price advantage does not apply, Apple does not compete by
means of prices in the market, it operates knowing that they are a high-end company,
so they look for another way to enter competition, this through their area of marketing
which is in charge of knowing how to operate in each market, since the company
adopts very different strategies in each territory it reaches, that is, without ceasing to
make a large investment in advertising and its distribution area.

In addition to these strategies, the company has taken different key points on which to
focus from its production to its sale, some of these are: Put innovation and
 development as a priority, develop smartphones with strict quality control and a close
relationship with its buyers, highlighting its great customer service area, which turns
its buyers into loyal customers, and its advertising campaigns with highly recognized
figures such as Lionel Messi or James Rodriguez.

Huawei has also had to deal with some strategies of its rivals, especially political
rivals, who tried to veto its sale in the United States and cut its relationship with
Google, which provided the technology giant with operating systems and servers, but
still The company managed to develop a functional operating system and dealt with
rival United States powers such as Russia, to which the company will help develop
5G technology.

3. How sustainable is Huawei´s competitive advantage in the smartphone industry?

What should Huawei´s do to sustain its competitive advantage?

Considering the great trajectory that Huawei has, knowing that this company began
with the objective of creating and supplying telecommunications equipment in China,
and dominated in this market. Currently, thanks to its beginnings, they have
distribution partners strategically located throughout the world.

These connections not only make it easier for Huawei to distribute smartphones
through the sales networks of local telecom operators, but also provide Huawei
smartphones with single access to wireless data transfer and voice communication as
well, as well as other capabilities offered by operators. They have successfully
deployed more than 400 LTE networks and more than 180 EPC (Evolved Packet
Core) networks, thus serving almost half of the world's 4G users. Not even the main
competitors (Samsung and Apple) can compare to these capabilities that Huawei has.

Experience, technological capabilities and great power as a provider and creator of

telecommunications equipment give Huawei a competitive advantage that is quite
sustainable throughout the world, being the only cell phone brand that can afford this
luxury. It is also helped by its partnerships with leading camera and audio companies
such as Leica and Harman / Kardon and its ability to produce its own mobile
processors.

4. What role does Huawei´s global strategy play in contributing to its competitive
advantage in the smartphone industry?

Taking into account the beginnings of Huawei, the knowledge acquired throughout its
history and how it managed the process of telecommunications. It was not new to
enter to a market where it has significant competition, on the other side, its
competitive advantage was based on positioning its brand, giving good quality and
service to the consumer. In addition, it achieved synergy between companies that
favored competition and its costs were reduced thanks to the strategic plans with other
suppliers.

At the time of implementing integrated strategies and strategies of cloud-tube-device

where its purpose was to differentiate, change the purpose of their products and enter
a high-end market. They realized the advantages they could use in their favor, they
 put into practice the research and development of new products that were at the
forefront, producing a sense of satisfaction in the customer, in addition to persuading
the final consumer with fashionable styles and innovative designs, accentuating
markets that were previously in favor of competition. On the other hand, the
relationships with other operators and the knowledge he had from old experiences,
stimulated the relationships and provided an extra advantage, since their products
stood out for the quality and comfort they produced.

Another point that contributes to Huawei's competitive advantage was its financial
muscle, since its great investment capacity encourage intervention in the high-end
industry, and it was in this industry where its sales shot up and found a fairly high
market niche, promoting its sales and giving results, as its costs decreased when its
production increased

References:https://www.xataka.com/moviles/como-huawei-se-esta-convirtiendo-en-un-
gigante-de-la-tecnologia-movil