CASE STUDY – 07

“A DARK HOURSE IN THE GLOBAL SMARTPHONE MARKET”

SUMMARY

In 2016, April Huawei technologies release date B9 series smartphone in London with 3
variants the aim of the company was to establish itself as a global player in the smartphone
market. The P9 series which was owned by the Chinese technology featured their own Kirin
955 chip and dual lens camera with the powerful smartphone capabilities and high-quality
camera function. In 2016 the company Huawei, secure the 3rd edition as a larger smartphone
vendor globally with a market share of 8.2% in the first quarter.

The smartphone industry has evolved by breaking the boundaries between cell phone and PC.
The smartphone which originated by PDAs a gradually encrypted with features like e-mail,
internet web surfing and multimedia capabilities. The release of iPhone in 2007 and the
Android OS in 2008 are the main reason for the reshaping of the industry, with this Nokia was
a dominant player in market of mobile industry lost his dominance due to the innovation and
technology apple and Android based smartphones brought. The Android smartphone included
the operating system and a chip which were the crucial function device for the mobile, the main
operating systems in the market available or Android, IOS, Windows Phone and last the
BlackBerry operating systems. Android has the largest market share in terms of operating
systems and mobile phone usage compared to I always send Windows Phone the system of
chip which is called SoCs integrated electronic component are supplied by the companies like
apple, Samsung, MediaTek, QUALCOMM and Huawei hi silicon.

The distribution channels for the smartphone have expanded to various telecom carriers,
vendors, dealers, retailers and and line platforms. In an emerging market consumer purchase
non contractual phone from vendor and retailer and telecom carriers still maintain a strong
distribution group in Europe and us to stop the demand of the smartphone buyers have shifted
from calling rate plans to brand name to focus mobile experience features and high tech styles.
The smartphone and became a substitute product for various products like computer feature
phone a digital camera the calculator a music player and a tablet are you so my level function
of integration, this shipment of desktop PC and laptops have declined and a smartphone has
also implicated the digital camera market. He complements products which are hardware like
wire routers computer decorations like components of software such as apps online multimedia
mobile games and community sharing services, as the obviously since slow down developing
software capability I come down when the increase of the complement projects of this
smartphone goes up this has become a crucial part for smartphone makers for developing
competitive market. In 2006 before the release of an iPhone 715,000 smartphones were sold in
United States and after the introduction of an iPhone in 2007 the Android system it doesn’t
need it got up. The consumer demand has shifted from a traditional feature phone and focused
on calling rate plans and their brand names features such as wireless data and speech
communication along with a camera quality and social networking are the main crucial factors
for the people who are buying a smartphone.

The smartphone market has experienced an exponential growth but the growth rate sometimes
slowed down due to the market saturation in a developed economy but in emerging economies
like Asia Pacific the Middle East and Africa as shown stronger growth rates and the shift in
demand to emerging markets and led to the decline in the average sale price. This intensified
the competition leading to potential stakeouts in the industry in 2010 the top five smartphone
windows where Nokia BlackBerry, apple, Samsung and HTC. However, Apple and Samsung
with the prominent players in transforming the global smartphone landscape and by 2015 the
new five vendors of smartphones were Samsung, apple, Huawei, Lenovo and Xiaomi.

Apple was known for his style premium quality and cutting-edge technology. Samsung on the
other end enter the smartphone market with the launch of Galaxy S, with their expertise display
technology. Google adopted the light assets model and outsource the manufacturing; Microsoft
entered the market through acquisition of Nokia and was aiming to compete with iOS and
Android with their Microsoft Windows. Several emerging companies like Xiaomi HTC gained
market share frequently why community based online retaining model. Lenovo a Chinese
company focused on low end features phone and offered for low end segment, oppo and vivo
subsidies of BBK electronics achieve the youth success in China and other regions. Hawaii a
Chinese technology giant played a major role in smartphone market.

Huawei was founded in the year 1987 by a former engineer of the People’s Liberation army
the company started its sales agent from Hong Kong company producing a switches in 2002
the company reached cross licensing agreement with Nokia and Ericsson enabling into the 3G
market. The company growth is pinard to base station reducing equipment volume and weight
it became a strategic supplier to Vodafone and British communication and form the partnership
with top telecom carriers in the Europe by the end of it turn 7 the company had a significant
share in market of Europe. The company has focused on integrated strategy which involved
cloud computing, wireless networks and a smart device. It developed its mass storage for cloud
computing services and commercialize the 4G networks the companies investing in 5G sector
technology with a plan to large scale commercial use by 2020.

In smartphone market it started by manufacturing low end phones for telecom carriers but in
2015 the company shipped 108 million smartphones and securing the position among the top
three global smartphones along Samsung and apple the particular growth as come from the
Europe in the medium and iron market. The strategy of the company was built on 3 pillars

1) Market repositioning and channel restructuring

2) Focusing on system on chip development smartphone design
3) Driving synergies between business

These pillars have allowed to establish the company has a major player in the global
smartphone market along with smartphone giants like Samsung and apple.

PROBLEM STATEMENT

The company’s strategic goal was to surpass apple and Samsung in the smartphone segment
within time frame but the company faced several challenges,

1) The one of the challenges the company was facing loss the lack of designing operating
system and apps whereas Samsung and apple IOS and Android based one UI very famous
and popular, the company relies on the Android system with this EMUI customization.
2) Then another challenge was the ability to control the industry chain the company relied on
external suppliers where various components and technology like display panels and
semiconductor chips this dependency was not in the control of the company and this was
disturbing the manufacturing process.
3) Additionally, the rising manufacturing costs was a huge challenge for the company to have
a competitive advantage as a labor and production costs increase in the country of China it
was difficult for them to reduce the overall manufacturing or operating cost.
4) The company had a I competition in the mobile industry market since the components were
easily substituted by the others.
SWOT ANALYSIS FOR HUAWEI IN THE SMARTPHONE MARKET

STRENGTHS

1) Strong brand recognition the company has established itself as a reputable smartphone
company particularly in Europe and other regions it was famous for its high quality camera
and technological advancement
2) The research and development capability especially in system on chip development was
efficient and was there competitive edge for the business.
3) The company had wide range of smartphone catering different segments of the market both
high and lower end of the market under the honor brand, the company reach wider range
of customer base.
4) The company added strong partnership with global telecom carrier providers, and had a
significant distribution channel and market access and sold their smartphones effectively.

WEAKNESS

1) The one of the challenges the company was facing loss the lack of designing operating
system and apps whereas Samsung and apple IOS and Android based one UI very famous
and popular, the company relies on the Android system with this EMUI customization.
2) Then another challenge was the ability to control the industry chain the company relied on
external suppliers where various components and technology like display panels and
semiconductor chips this dependency was not in the control of the company and this was
disturbing the manufacturing process.
3) Additionally, the rising manufacturing costs was a huge challenge for the company to have
a competitive advantage as a labor and production costs increase in the country of China it
was difficult for them to reduce the overall manufacturing or operating cost.
4) The company had a high competition in the mobile industry market since the components
were easily substituted by the others.

OPPORTUNITIES

1) Emerging markets particularly in Asia Middle East and Africa we’re showing a significant
growth opportunity for the company so by leveraging its strong brand and cost-effective
device it could capture those regions.
2) 5G technology awesome opportunity at the company should appeal in being a market leader
and provide features which could use 5G.
THREATS

1) Intense competitions from the major players like Samsung apple and other Chinese
smartphones which could make it art in maintaining the market share.
2) The company was a global company so the company was under the geopolitical challenges
trade restrictions and other issues due to the geopolitical tension particularly in the market
of United States.

SOLUTION

To address the challenges and weaknesses of the company by grabbing the opportunities in the
upcoming smartphone market the company can consider the following implementation essay
solution.

1) Developing an operating system for its own mobile which could provide user friendly
experience which can be compared with iOS of the iPhone and Android 1 UI of the
Samsung.
2) Strengthening the supply chain control by establishing partnership and investing in
integration of the control of developing a in those capability which could help in
minimizing the risk associated with the disruption due to supply chain.
3) Giving importance to 5G technology and developing device apps and features which could
helping differentiating them from other brands and attract people who are tech savvy.
4) Focusing on mitigating geopolitical challenges and building trust and having a regulatory
and government in a good relationship, they should cooperate with the regulatory
authorities and provide transparency in security standards and show the world that the
company is committed to ethical practices.
5) They should continue investing marketing and branding, to increase their brand recognition
and building customer loyalty highlighting the strength technological advancement and the
innovation and showing the world how to differentiate the companies when compared to
other company like iPhone and Samsung.
ALTERNATIVE SOLUTION

They should further develop to create synergy between cloud-pipe- device strategy and create
smart devices and IIN (information networks).

Focusing on mitigating geopolitical challenges and building trust and having a regulatory and
government in a good relationship, they should cooperate with the regulatory authorities and
provide transparency in security standards and show the world that the company is committed
to ethical practices. Developing an operating system for its own mobile which could provide
user friendly experience which can be compared with iOS of the iPhone and Android 1 UI of
the Samsung. Strengthening the supply chain control by establishing partnership and investing
in integration of the control of developing a in those capability which could help in minimizing
the risk associated with the disruption due to supply chain. Giving importance to 5G technology
and developing device apps and features which could helping differentiating them from other
brands and attract people who are tech savvy.

RECOMMENDATION

Based on the challenges the company should invest in research and development and develop
a cutting-edge technology and differentiate from other competitors. They should enhance
software capabilities with a seamless user experience and robust app ecosystem. The company
can expand into emerging markets like Middle East Africa and Asia Pacific when the growth
potential is high, embracing brand differentiation prioritizing excellent customer service and
actively engaging in gathering feedback from the customers and building customer loyalty.

Case questions

1) The smartphone market has experienced an exponential growth but the growth rate
sometimes slowed down due to the market saturation in a developed economy but in
emerging economies like Asia Pacific the Middle East and Africa as shown stronger growth
rates and the shift in demand to emerging markets and led to the decline in the average sale
price. This intensified the competition leading to potential stakeouts in the industry in 2010
the top five smartphone windows where Nokia BlackBerry, apple, Samsung and HTC.
However, Apple and Samsung with the prominent players in transforming the global
smartphone landscape and by 2015 the new five vendors of smartphones were Samsung,
apple, Huawei, Lenovo and Xiaomi.
The attractiveness of smartphone industry is subjected to change in the future develop markets
have reached the saturation but emerging markets are still present, industry growth may be
slowed down due to mature markets and competition will intensify as the player are looking to
kept to the market share and technological advancement like 5G connectivity and evolving
customer preference regulator change and geopolitical factor have impacted the industry
attractiveness.

2) Strong brand recognition the company has established itself as a reputable smartphone
company particularly in Europe and other regions it was famous for its high-quality camera
and technological advancement. The research and development capability especially in
system on chip development was efficient and was there competitive edge for the business.
The company had wide range of smartphone catering different segments of the market both
high and lower end of the market under the honor brand, the company reach wider range
of customer base. The company added strong partnership with global telecom carrier
providers, and had a significant distribution channel and market access and sold their
smartphones effectively.
3) Sustainability of the company advantage depends on different and various factors and
challenges like
❖ Technological innovation
❖ Property protection and intellectual
❖ Customers changing preference and satisfaction
❖ Market adaptation and flexibility
❖ Strategies and impact of those strategies on business

4) The companies global strategy play a vital role in its sustaining its competitive advantage
because of market diversification may allow it to mitigate the risk associated with the
maturity of the market and stagnation of the market, their global strategy plan may involve
partnership and alliance and collaboration with the telecom carriers may give a competitive
advantage, another would be building the brand and marketing by creating a strong brand
and presence they effectively communicating its value proposition to customers in the
global market the company can sustain its competitive advantage in various markets.