Huawei is a multinational tech brand based in China. The company started its journey in 1987 at Shenzhen (the company’s headquarter city). Some of the products that Huawei manufactures are; telecom equipment, electronic, networking equipment, smartphones, mobile devices, smart TV, multimedia technology, tablets, computers, Harmony OS, dongles, and broadband networks.
In 2018, the annual profit of the company reached more than 100 billion US dollars. That makes Huawei the fastest developing electronic manufacturing companies of the 21st century. It doesn’t mean that Huawei is the sole manufacturer of a smart company in the world. Mobile phone manufacturing is a very competitive industry, and Huawei is successfully competing in the market. Here is the is PESTLE Analysis of Huawei.
In the beginning, the focus of the Huawei Company was on manufacturing parts and switches of smartphones. Over time, the company shifted its focus on other operations like providing consultation, equipment to other companies, and developing telecom networks.
According to an estimate, Huawei connects approximately 3 billion people around the globe. The mission of the company is to spread the benefits of technology everywhere. The company has been placed in a digital strategy to achieve its mission. The main areas of the focus are; skill, technology, and application.
Today, we’ll discuss the SWOT analysis of Huawei and Here it follows;
Strengths of Huawei
Some of the strengths of the smartphone company are as follows;
If we look at the price range of Huawei’s competitors like Apple, iPhone, and Samsung. Those luxury brands are very costly. Although the sale and market of smartphones have increased a lot for the past 10 years, the majority of the population wants a great quality smartphone at fewer prices. That’s where the role of Huawei comes into place. It’s not the cheapest brand, but it’s much cheaper than other competitive luxury brands.
The product portfolio of Huawei comprises a variety of smartphones that the company markets in different countries depending price range of people. Now, Huawei falls under the category of the world’s top 3 brands. We can say that Huawei is an international brand.
If we look at the growth graph of Huawei, then it’s increasing consistently annually. The company offers a variety of products to individual customers, carriers, companies, enterprises, and businesses. The company has divided its business into 3 main categories; carrier, business, and consumers.
The main focus of the company is to bring the same quality products what competitors are offering like smartphones of Samsung and iPhone. The company has succeeded significantly in its effort. Huawei’s smartphones have got many top stars and reviews on Amazon from customers.
Research & Development
Research and development in technology are some of the major characteristics of Huawei’s success. The company spends billions of dollars every year on R and D. The purpose is to come up with the cutting edge technology.
This investment in R and D has helped the company to be the pioneer of 5G technology in the market. The brand is also spending a lot in the field of AI (artificial intelligence) because the world top companies like Google and Amazon are working in the same technology.
The smartphones of Huawei have crossed the borders of almost all the countries of the world. This global expansion has served the company in many ways like market share, profit, brand value, and customer base.
Adding Customer Value
The mission and aim of the company have always been the same. That is to provide the customer with innovative tech products with stability and security.
Stable Network Operation
Huawei is very serious about data privacy, cybersecurity, transparency, and data protection of customers. The developers and software engineers of the company continuously work on its applications to make it better for the customers. That’s why the company has attracted more than 3 billion users worldwide.
Weaknesses of Huawei
Some of the Weaknesses of the Huawei brand are as follows;
It’s no doubt that Huawei is worth a billion-dollar brand. But you exclude all the expenses, then a very little money left for the company to spend in future endeavors. Apple and Samsung are worth trillions of dollars companies. Therefore, the company has to make its move carefully because of the capital constrained.
Weaker Brand Compared to Competitors
Huawei is a big brand. But when you compare it with competitors like Samsung, Apple, Google, and iPhone, then it’s a weak brand. The company has different market share in different markets. The users of luxury brands consider Huawei to be an inferior Chinese brand. The company has a great market share in Europe than in the US.
Controversies & Conflicts
The international market, especially the US, perceives the brand image of Huawei as some sort of cheap and inferior product. It’s mainly because of the conflict between the US and the Chinese government. The US government especially the Trump Administration says that the purpose of Huawei’s technology is to steal the information of the American people.
Weak Market Share in the US
Such inter-government conflicts and news controversies about the Chinese system and its authoritative regime; they make it difficult for the American people to trust an outsider brand. Huawei is a strong brand in Europe and Asia, but it couldn’t hold its feet in the US market.
Opportunities for Huawei
Some of the opportunities available to Huawei are as follows;
5G Technology & AI
There are many opportunities available to the company in the field of research and technology. 5G technology is among them, and fortunately, Huawei has been able to come up much early than anyone in the market. It gives the company a competitive edge.
Now, Huawei is in a position to sell 5G modems and technology to the market-leading companies like Samsung and Apple. Even the company made an offer to Apple. If the deal happens, it would be a huge deal between both of these competitors.
India is equally a big market like the US. If the company can hold its feet in the Indian market, it would huge turnout for the company in terms of profit and market share.
Physical Brick Stores
If we look at the success of Apple and Samsung, they have their physical stores around the world. Where they provide a unique customer experience of being a luxury, it creates an image and perception in the minds of customers. If Huawei opens its physical brick stores around the world at different location points, it would be a huge success for the company and it would pay off in the future.
When it comes to technology and research and development, then Huawei is a strong brand. But when it comes to market and branding, then it hasn’t been good in this regard. The business and marketing strategy of the company has always relied on pricing, and the brand has successfully captured market share because of it.
Now Huawei needs a strong marketing and business strategy to send a clear message about the brand. The company is working day in and day out and it’s here to stay.
Online Retail Stores
Quite recently, Huawei has started employing online stores for the sale of its product. The company has had success in it internationally. Now, it’s time that the company should focus on online sales to increase its market share. With better marketing strategies, Huawei can lead the market.
Threats to Huawei
Some of the threats that Huawei Company has to face are as follows;
Highly Competitive Market
The smartphone industry is highly competitive. All the mobile phone companies are working to give the customer a better unique experience, and they all are trying to exceed one another.
Huawei doesn’t have to compete with market-leading competitors like Apple and Samsung. The company also has to compete with the new entrants as well. Because the only advantage Huawei has is overpricing and technology. If a new competitor comes into the market and offers a product at a lower price, then it would be bad for the business of Huawei.
High Labor & Material cost
The Chinese government is introducing new labor protection laws. It means that with the rise in the salaries of workers, the company would have to pay more wages to its employees. It’s good for the people, but loss for the company. It’s the same case with manufacturing material costs. If you combine both of these factors, then it would result in the form of less profit for the company.
Trade & Regulation Conflict
The tension between the Trump Administration and the Chinese government may seem like a political. But it’s bad for the business of the company because it would result in international or border sanctions on Chinese products. Since Huawei is a Chinese company, therefore, the company won’t be able to sell its smartphones in the US.
After conducting swot analysis Huawei, we have concluded that it has a strong position in the international market all around, except the US. The company could also take advantage of the opportunities. But the brand should also keep in mind the external threats.