HOLY ANGEL UNIVERSITY

School of Business and Accountancy

GROUP EXERCISE C6
Presented by:
Group 5 – A-332

Leader: Mallari, Leonna Cristy M.

Members:

De Jesus, Pearl Emray L.

Garcia, Florjean Faith O.
Lopez, Roschelle L.
Mercado, Marie Angelica D.

Pavo, Ma. Jireh Abegail

Villanueva, Erika J.

Villanueva, Vika Alyana S.

Presented to: Dr. Maria Lina T. Ramoneda

 With today's fierce competition in the business world, it is now very challenging to
survive and to succeed. Finding the perfect market strategy is a top priority for every
organization in an effort to differentiate itself from the competitors. Fortunately, there are
numerous strategies we can employ to gain an advantage over the competitors.

In 2005, the book was written by Professors W. Chan Kim and Renée Mauborgne, "Blue
Ocean Strategy – How to Create Uncontested Market Space and Make the Competition
Irrelevant," was published. It developed the concept as a new approach to increasing market
share and dealing with competitors. The book was updated and expanded with new content ten
years later, and it was recognized as one of the most iconic and impactful strategy books ever
written. It argues that avoiding crowded market spaces characterized by cutthroat competition is
the best approach to business growth (Forsyth, 2022).

In the red ocean market, the company prioritizes outperforming the competitors to
maximize value and financial gain while also attracting customers to their product or service
(Joseph, 2022). All of the industries that are currently in existence are “red oceans”, where
industry boundaries are established and businesses compete with one another to gain a larger
share of the market. This strategy focuses on developing competitive advantages in order to
survive in the markets and focuses on attracting current customers through marketing, lower
prices, or improved products rather than trying to generate new demand. They do this by
analyzing what their rivals do and trying to outdo them. On the other hand, taking a blue ocean
approach means the goal isn't to outperform the competitors. Instead, to redefine the industry's
boundaries and operate in that new area, making the competition unimportant (Smith, n.d.). By
introducing a product with superior features, the strategy aims to capture new demand which
assists the company in making large profits because the product can be priced a little high due
to its unique features. A blue ocean is an analogy to describe the potential for profitable growth
in unexplored market space that is both wider and deeper (Kim & Mauborgne, n.d.).

The smartphone or mobile industry is a subcategory of the telecommunications sector

that focuses on phones, phone service, and external devices. Since the smartphone industry is
one of the fastest growing in the world, there is a large market share available for various
competitors to compete with one another (Cram, n.d.). It is also classified as a monopolistically
competitive market in which many businesses exist in a specific industry and produce identical
but different products. The smartphone industry has a positive impact considering that
technology has continuously become a component of economic development all over the world,
but mobile technology, particularly smartphones, has only recently emerged as a significant
economic factor. One of the main reasons is that a significant portion of the phone's
manufacturing process is carried out and made in other countries. It is also a fact that the
greatest contribution of mobile phones to society is improved productivity, which allows several
people to connect with one another and act more efficiently and effectively, such that it can
entertain, educate, improve, and add convenience for any individual (Harris & Cooper, 2019).

Overall, the smartphone’s impact on society has been overwhelmingly positive,

especially in terms of the increase in productivity that boosts economic development and
growth. As stated by IMARC Group (n.d.), one of the key factors driving market growth is the
increasing demand for wireless handheld devices all over the world. Based on their forecast
report, the global smartphone market will reach 1,355 million units in 2021. Looking ahead, they
also predict that the market will reach 1,715 million units by 2027, growing at a CAGR of 3.70%
between 2022 and 2027.
 Due to ongoing developments in information technology, a tsunami of digitization is
sweeping the world and the tendency is accelerating. Every sector is starting the process of
digital transformation, which will be the next wave of growth in various markets (Zhilei, 2017).
Digital transformation has long been prioritized by enterprise companies, both large and small,
in essentially every industry, due to the urgency of market competition. Recent years have seen
a bit of a frenzy due to the demand for cloud-based digital transformation, with new goods and
systems appearing every week (Scholnick, 2021).

The mobile communications sector is one of the fastest-growing in the world. To survive
in a crowded market populated by numerous brands like Apple, Samsung, Blackberry, Nokia,
Sony, Huawei, HTC, and more, most companies work to develop cutting-edge products like
waterproof mobiles, anti-scratch screens, and specialized applications that ensure differentiation
and competitive advantage. These businesses, which compete fiercely in the red ocean market,
are constantly looking to develop new items that will satisfy their customers and keep them
coming back (Muhamed, 2020).

Huawei Technologies Co., Ltd. is a Chinese multinational technology corporation

headquartered in Shenzhen, Guangdong province, that designs, develops, manufactures and
sells telecommunications equipment, consumer electronics, smart devices and various rooftop
solar power products. It is evident that Huawei is constantly finding new ways to operate in a
blue ocean despite the rise in the number of new competitors in the market. Huawei has built a
strong reputation for itself as a communication technology company both inside and outside of
China. In order to become the sole high-end mobile phone brand located in China, it has also
successfully extended its excellent brand equity to its smartphone devices. With a focus on
performance, usability, and the caliber of its hardware, Huawei designates a significant subset
of professionals as its primary target market. Huawei has successfully increased their brand
equity thanks to a "devoted" brand culture. Huawei has gained the respect and recognition of
Chinese consumers and has maintained consistent growth in the worldwide market thanks to its
strong technological know-how, persistent dedication to research and development, and attitude
of perpetually seeking excellence (Labbrand, 2016).

Having said that, the possibility of Huawei’s operations entering a blue ocean is most
likely to happen. Other than the characteristics and strategies that have been mentioned, the
following opportunities may also be utilized by Huawei to increase its chances of operating in a
blue ocean:

1. Creating Games

According to The Drum (2022), a third of the world's population is made up of Gen Z,
whose influence across industries is starting to gain attention. Behind the scenes, brands have
been working hard to comprehend, connect with, and engage with this generation of digital
natives. The generation today are digital natives who prefer to text and use social media as they
spend a lot more time online. The development of competitive gaming, or esports, has been
aided by Generation Z. The most played games are fighting games, real-time strategy games,
first-person shooter games, and multiplayer games (Dhalla, 2022). Similar to the idea, Netflix
believes game are the future and it has taken its first steps into the gaming industry. Netflix's
games have been downloaded 30 million times worldwide, according to data from app analytics
company Apptopia, making it a successful venture. Gaming has developed over the past 20
years from a common past time to the center of entertainment as we know it. Most people
consider gaming to be a part of life, but many (young) consumers view it as their way of life
(Jakob, 2021). Companies have a great chance to interact with Gen Z gamers where they are
and create

2. Venturing into a new system

A mobile operating system (OS) enables smartphones, tablet PCs, and other devices to
run programs and apps (Steele, 2020).The top three mobile operating system that is known are:
Android OS, which is owned by Google Inc., Windows OS, owned by Microsoft Corporation, and
IOS, owned by Apple Inc. Currently, Huawei is using a distributed operating system called
HarmonyOS, still under Android OS, but with no access to the Google Play Store, Youtube,
Gmail, Google Drive, and other Google services. Huawei may venture into its new system like
IOS as most smart phones are using Android OS. An example would be Apple as they are
highly dependent on the iPhone's production cycle to propel its financial success in the absence
of a game-changing new product, including their own OS (Beattie, 2021). The company has a
competitive advantage as they have their own mobile operating system which sets them apart
from competitors. As mentioned by Tozzi (2021), developers, IT operations teams, end users,
and even C-suite decision-makers—benefit from a customized mobile OS. It facilitates software
management and deployment while enhancing security and performance.

3. Developing its own messaging app

As stated by Benbria (2022), messaging applications are a comprehensive real-time

communication system that gives the user a chance to connect with as many people as desired,
at any time, on any platform of their choosing. In addition to calling or video chatting, users may
transmit text, photos, videos, and voice memos from it. It is easy to use, efficient and gives
consumers several alternatives. In 2021, messaging applications were one of the most widely
used app categories with over three billion users. (Curry, 2023). With that, one potential
opportunity for Huawei is to focus on developing a more secure version of the messaging
application. A lot of people use these apps to communicate, so there is a large potential market.
Huawei could develop messaging apps that are more user-friendly and offer more features than
existing apps. It could start by being a business messaging app since security issues are
controversial on these platforms. Therefore, many people will shift to using this app, especially
businesses since this would allow them to have a more secure way to communicate with each
other and would also help to address any potential security breaches that might occur.

4. Owning an application store

According to Google Play (n.d.), people may find their preferred applications, games,
movies, TV episodes, books, and more on Google Play, an online marketplace. By far, Google
Play Store has brought in over $120 billion in revenue for developers by making 2 million
applications and games available to billions of users worldwide. As with Huawei, it has its own
official app for installing applications which is Huawei AppGallery. Similar to Google Play Store,
it is a platform for managing packages and distributing applications on the market. However,
Huawei Mobile Services (HMS) has developed a full ecosystem, including integrated services
for payment, in-app monetization, subscriptions, data analysis, and other crucial developer
features, making AppGallery more than just an app store. (Uy, 2020). Having to develop its own
autonomous ecosystem, Huawei has chosen the ideal setup and timing. The duopoly that exists
between Apple and Google in the app store market may be broken as a result of Huawei's
action.
Brand Mapping

High Quality and Less Affordable

Apple is a high-end company that sells a wide range of products, such as iPhones,
iPads, MacBooks, iMacs, and additional accessories. They are well-known for their top-notch
hardware, elegant styles, and user-friendly programs (The Healthy Journal, n.d.).

Samsung is a well-known company that sells a variety of consumer electronics, including

smartphones, tablets, televisions, laptops, and other devices. They are renowned for their
advanced features, innovative design, and premium materials (The Tech Wire, 2022).

The high-end brand Google Pixel sells a variety of items, such as laptops, tablets,
smartphones, and other accessories. They are known for their cutting-edge features, including
the Google Assistant, excellent cameras, and Android-only operating systems (Chou, 2022).

Sony mobile devices are renowned for having advanced features including excellent
cameras, water resistance, and long battery life. Additionally, they include distinctive features
like 4K HDR displays and advanced audio capabilities (Olizarowicz, 2021).

However, these brands often cost more than those made by other companies, like
Xiaomi, Oppo, Lenovo, Nokia, One Plus, Realme, Vivo, or Huawei.

High Quality and More Affordable

Nokia is a well-known company with a long history that makes phones with dependable
and durable design at competitive prices. Yet, compared to more expensive brands like
Samsung, Huawei, or Apple, their phones may not always have the newest and most
sophisticated features. Instead, they frequently offer long battery lives and outstanding
performance (Gubalane, n.d.).
 A number of smartphone manufacturers, including Oppo, Oneplus, Vivo, and Realme,
provide models with advanced features including excellent cameras, long battery lives, and fast
processor. Oppo is renowned for its chic aesthetic and advanced camera capabilities (Nicholls,
2022). Vivo and One Plus, on the other hand, are renowned for their low costs, quick software
updates, and sleek, minimalist designs (Goodwin, 2021). Realme phones also frequently
include a variety of consumer-favorite features, like premium displays and quick charging
(Preston, 2023). All of these brands are affordable when compared to other brands and provide
good value for the money.

Low Quality and More Affordable

A well-known company called Xiaomi and Lenovo sells a variety of smartphones with
advanced features. They are renowned for offering value for money and reasonable costs
(Yadav, 2023). But, compared to more expensive brands like Samsung, Huawei, Realme, Vivo,
One Plus, or Apple, both phones can be missing some functionality or have lower-quality parts.
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