A DARKHORSE IN GLOBAL SMARTPHONE MARKET Harvard Case Solution & Analysis

A DARK HORSE IN GLOBAL SMARTPHONE MARKET Case Study Solution

Abstract

The case illustrates global initiation of the Chinese smartphone brand Huawei into global markets. It entails the value proposition, business strategy and technology implementation that has enabled Huawei set the game high in the telecommunication industry, beating Apple and Samsung in terms of sales. The value proposition and competitive advantage of Huawei lies in the incorporation of style(hardware) and Edge cutting technology (software) that has allowed it to develop a competitive position in the global markets.Over the period of time,telecommunication industry has boomed with the establishment of smartphones and internet technology, analyzing the trend and customer behavior, Huawei developed its competitive advantage by Pursuing the dual brand and dual channel strategy to cater the market and to tap the maximum market share. Under the Dual channel strategy, the company offers product through on-line portals like websites and through traditional channels, while under the dual-brand strategy the company offers two distinct product lines Honor and P-lite series to cater the youth and elite target market respectively.

Perhaps, the company has set competition in the market and has been successful in elevating its global presence. However, the challenge to sustain its position and to capture more market opportunity and intense competition from Samsung and Apple seems to hinder the strategic position of the company.Also, with the passing time, the rapid change in customer behavior and market trends,the company faces the issue to withhold the market share due to weak grip on software development and cost of developing high-end design to sync with Global Markets.

Keywords:  Competitive position, Technology, value proposition, Dual-channel strategy

 

INTRODUCTION

Huaweiis a Chinese telecommunication company; it’s headquarter isin Shenzhen.The company started by offering the third party services to the telecommunication service provider in China.In doing so, it caters the market by offering PBX switches to the customer through a third party agency in Hong Kong. However, with the fast, pace of technology and emergence of customer trend to use the cellular phones for communication, the company entered in to the telecommunication market and started offering mobile gadgets, such as mobile routers and everything related to the smartphones. Doing so, it expanded into the Chinese market tremendously, ranking itself as the Number 1 Chinese brand company and Number 3 in global markets.Through the right mix of strategy and technology, Huawei succeeded to expand itself into 170 countries by developing the core software and hardware indifferent to Chinese carriers, which offered the company competitive advantage in syncing with the market dynamics easily.

Since its initiation the company succeeded in gaining sales in the local and international market, however with the surge of technology and easy hand on smartphone resources, the telecommunication market became saturated, shrinking the profits and sales of the overall giant palters in the market, including Apple. However, Samsung sustained its position by landing its business strategy in innovation, which secured its solution in the global market.The company also faces high competition on from Microsoft, Nokia, along with the local players like Lenovo and Xiaomi, however, despite of such intense competition and strong market hold of the two giants, Huawei succeeded to develop its dual-brand strategy in which it catered the youth and niche market by offering the honor and p-lite series respectively, catering the both ends of market. Also, the niche market strategy or P-lite product line allowed the company to compete with Apple in terms of design and with Samsung in terms of technology. Hence leading to the development of competitive advantage and strong market hold.

In such circumstance, Huawei management has to develop a more go through strategy to tap the market opportunity effectively while dwelling in to the local and global markets on a faster rate, so to beat the sales of Apple in next 3 years and Samsung in next 5 year given the market conditions, and change in customer behavior, technology and external factors.

Problem/Issues

  • Since the technology is shifting the market direction, the company faces the issue in developing the right mix of hardware and software functions to excel in market and to beat the big giants like Apple and Samsung due to limited resources, as compared to Apple and Samsung
  • The company has limited supply chain operations and hands on resources as compared to Apple and Samsung.
  • The software operations of the company are weaker as compared to Samsung, hence making it difficult to compete and excel the market through same technology.
  • The market for smartphones is saturating, and the customer demands and market dynamic are hanging in separate markets separately, making it difficult to develop one global strategy.

A DARKHORSE IN GLOBAL SMARTPHONE MARKET Harvard Case Solution & Analysis

 

Analysis

SWOT Analysis

Strengths:

  • The company has strong base of suppliers that enables it to develop the latest technology and design for the product, making it stand out of the competitors in the markets.
  • The company has strong control over the dual-brand strategy, which enables it to increase the market share and pursue the market developing strategy effectively.
  • The company has extended its supply chain operation in 170 countries, making it take the competitive advantage by consolidating the overall resources, hence reducing the production cost and increasing the profit margins.
  • The company has strong value proposition in the market, making it to develop strong market position in the mind of the customers.
  • Huawei is expanded immensely in global markets, hedging the risk of failure of low sales due to product proliferation in US or Western markets...................

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