Supply chains are virtually the most important aspect of strategy that shapes the quality and quantity of returns a business corporation gets out of its activities. The larger the business corporation and the more sophisticated its markets are; the more complex its supply chain becomes. Huawei happens to be the largest telecommunications company with respect to the revenue it accrues. Its dominion over the telecommunication, broadband services, as well as convergence services is as a result of its sales strategies culminated by an acute supply curve. The manner in which any company displays and relays its services and products to a specific fraction of the market determines its success with respect to that particular sphere. It is only imaginable what Huawei as a company had to do in the form of strategies, tariffs, and services to enjoy the dominion it has established in the telecommunications market. There are numerous factors that have cumulatively contributed to the success it has. The economic viability of a corporation can be evaluated with respect to its characteristics using divergent formula of analysis. Considering Huawei’s supply chain, it is necessary to establish its current position in the electronics and telecommunication industry, its relationship with its suppliers or buyers as well as how it stretches to the global market and its esteemed efforts in product development accrued as a result of innovations and issues regarding intellectual property.
Ren Zhengfei, the founder and CEO of the private company owned on shareholder basis with the founder pocketing the majority of the shares, displays a rather outstanding history. The skills Ren had as a result of his involvement in the military were very influential in both formation and growth of the company, originally as an arms company. However, Ren developed interest in challenging the dominion most telecommunications companies had in China (Li Fang and Yang). Therefore, Huawei shifted its interest to the provision, development of telecommunication products and services. It is noteworthy that there were numerous strategic factors that enhanced its success at the time of formation. In fact, the business started at a time China was in the verge of economic reforms, the government was aiming at empowering private investments to empower the economy of China. It provided a good platform of establishment for the company. The absence of raw materials within the company forced Huawei to import its raw materials from leading international telecommunication companies like Ericsson, Alcatel, Nokia, and Motorola.
The company took special interest in the production of switches despite the stiff competition that existed in the field as a result of thousands of stakeholders in the business. Through its president, Ren, Huawei strived to distinguish itself as an outstanding telecommunications company by embedding sophisticated and desirable design in its switches. From as early as 1990, the company had developed interest in the use of complex technology in the telecommunications department. The most fundamental strategy that made Huawei what it is now is the decision by its president to uphold in-house operational systems. Therefore, the contemporary position of Huawei as accompanying is as a result of its individual research strategies and use of complex technology. Huawei is already established as a multinational telecommunications company with markets all over the world. It produces various types of telecommunication products.
According to analysis relating to a business’ performance through its supply chain, customer and supplier relations are core to Hauwei's operations. In fact, the suppliers are agents that link the business with its esteemed clients in the market. As already mentioned, Huawei operates between its numerous markets in other countries all over the world. Therefore, a characteristic of its relationship with its suppliers and buyers will vary with respect to the position of its market. Essentially, the use of suppliers depicts Huawei as a company that strives to achieve greater development and social responsibility in its sales. As far as the supply chain is concerned, the relationship a company establishes between itself and its suppliers and buyers is culminated by its corporate social responsibility (CSR).
Huawei ensures that its suppliers display the same commitment they exhibit in their production strategies to assure customers in time delivery of products as well as quality assurance. Huawei focuses on this relationship by outlining strict protocols for both its production and supply teams with respect to business ethics, health and safety, the environment and labor conditions. It is noteworthy that suppliers have a direct impact on the relationship between an entity and its customers. Huwaei as a company takes great caution in this context to ensure its relationship with its customers is not jeopardized by suppliers. Additionally, the company upholds that any risk that threatens any part of their supply system (company-supplier-customer) has to be dealt with to ensure continued relations. Huawei has a Supplier committee chaired by a Procurement officer who handles and schedules meetings to unveil the performance and conditions of operation between the three stakeholders. Through this platform, the company has been able to maintain compact links with its suppliers and customers over its international markets.
As precautionary measures, Huawei developed a qualification system that evaluates the suppliers they hire and incorporate in their supply chain. This is to ensure that the entity continues to maintain its relationships with its customers. Essentially, evaluating the impact of suppliers will depict their importance in the supply chain. Owing to this analysis, it is vivid that suppliers represent the company and its products at the various drop zones around the markets. Therefore, the suppliers can affect the brand of the company and distort its image in the market depending on how it relates with buyers. On the other hand, over pricing customers will reduce the marketability of Huawei’s products. Therefore, the company lays out strict procedures and pricing limitations for its suppliers to ensure their legacy and loyalty to their customers is well preserved. For instance, consider the Annual Huawei Global Supplier CSR conference in 2011 to discuss the commitment and innovative principles of their supply systems. The company gathered 360 different people that represented their major customers. It was held to convene on the perceived behavior of both parties to ensure ethical and moral transactions are upheld.
Through this case study, it is vivid that Huawei takes particular interest in cultivating moral relationship between it and the customers through the suppliers. It is aware of the emergence of behavioral changes that might affect this relationship and using the CSR committee; it keeps track of the developments in its supply chains directly linked to either its suppliers or the customers. Most importantly, Huawei keeps track of good customer relations through this setup. The characteristics and performance of any particular supply chain are shaped by the relationship (Cooper, Lambert and Pagh). Majorly, suppliers perform an important role in linking the customers with the production firm, ensuring possible and healthy communication between the two.
On the other hand, the company is properly established at various points in the global market. As a matter of fact, the market served by a specific company depicts the tip of its supply chain. Every supply chain must have a market in its organizational structure. Fundamentally, the supply chain analyzes the numerous processes that take place in the transportation of goods and services from production zones to consumption zones. Therefore, it is logical that the nature of markets a company serves have a direct impact on the type, nature, and sophistication of their supply curve. Huawei has continuously established global links to create a dominion in international markets. An overview of its milestones depicts every development it has accrued as a consequence of its international acquisitions. Fundamentally, Huawei has investments in Europe with most of its drop zones in United Kingdom (UK), Finland, and France. Virtually, the company has branches in prominent countries in every continent (Yu, Suojapelto and Hallikas)t. As a matter of fact, its contemporary strategy involves the establishment of considerable drop zones in each country.
The previous years have seen Huawei exhaust divergent sales strategies to ensure it is accessible to the global market. It has made great use of its technological aspect to come up with numerous sales strategies that give it an upper hand in the international front. In 2012, it established a partnership with 33 different countries to produce a compact cloud computing services. As much as the technological expectations of the world are continuously changing, the company establishes its drop zones with respect to the availability of that specific technology in the country. Huawei takes particular interest in the nature and level of technology before it ventures in any particular market. However, it is visible that its products have transformed most global and local markets into digital systems. Its dominion in various parts of the global market is manifested in the numerous awards the company has pocketed as well as the global rankings that saw the company jump to the second position with respect to the influence it has on global markets.
For instance, Huawei was ranked third for its dominion on the global Smartphone market in 2013 (Jochan). Specifically, the company holds a 5 percent market dominion in the sales of smart phones. One major strategy the company uses in the global market is localization. The company takes the advantage of strategic factors in the global market to establish its influence. Essentially, the company has localized outlets in major cities of technologically upright states. The company has leading service companies in every continent. The presence of Huawei in international markets is depicted by the extensive use of its gadgets all over the world. For instance, the smart phones produced by Huawei are used by a vast population spread all over the world.
As depicted from the historical background of the company, Huawei conducts its own research from within its production zones. The significance of research in product development cannot be eluded. As a matter of fact, the company launches a new product annually. This shows that the production team liaises with both the design and research departments to help in the production of new gadgets in the market. It is important to note that, product development is a strategy in itself that companies utilize to gain a competitive advantage over competing firms. Huawei has an exceptional research team that collects information from the Huawei data management system to know the requirements and aspirations of its customers as an insight of what particular factor to research on. Customers and data systems provide essential knowledge that guide researchers on the products required in the market. Technological advancements and oligopoly in global markets have made them sophisticated and susceptible to influence by competing firms.
Huawei has strived and performed better in the use of technology, in their products. Most importantly, the company has embraced divergent and appealing designs that distinguish their products. For instance, the production of the Huawei P6, the slimmest Smartphone in the world makes it outstanding in the market. The competitive nature of their products in the global market displays their efforts in product development. Huawei takes particular interest in the originality of their technology; its in-built research and production systems make their products unique. For instance, the company is partnering with other auxiliary companies to develop a new operating system for Smartphones. Product development and other strategies used by organizations form an integral part of any supply chain. Such factors shape and determine the efficiency of the supply chain. Evaluations of Huawei supply curves show overwhelming advancements when new products are compared to pre-existing products. In fact, this shows that the customers have established preference of Huawei products in the market, a factor that advantages their innovative, and development processes.
The innovative characteristics of Huawei as a company, is depicted by the numerous models their products exhibit. Particularly, the company insists on using divergent product development strategies to dictate their influence in the global market. For instance, design is an aspect of production that helps in distinguishing products. Huawei has use design to gain dominion in the market through sleek designs that fit the purposes. The company ensures each of their product exhibits a design not shown by any other company in the global market. Additionally, the effect of technology in the contemporary world extends beyond the telecommunication market. That is the main reason Huawei uses as much technological concepts as possible in its products to ensure that their products remain relevant beyond the telecommunication arena.
Research and development is a field that Huawei exhibits high performances. Given that the company relies on its own individual research to come up with new production and technological concepts, it has to train its employees on the new mechanisms (Low). In this context, the company has numerous education zones that train intellects on various technological concepts. Additionally, Hauwei gives back to the community through this particular setup by providing such technological training and embedding innovative characteristics to the community. The company has been able to distribute its research and development insight to the global front and partners with thousands of educational institutions to ensure technological principles are well propagated. Also, the company ventures in the search for talented individuals from these centers and sponsor them in pursuing further education in any technological field.
Conclusively, supply chain entails numerous factors that every company must put into consideration if it is to enjoy the dominion Huawei has. It is logical that Huawei’s supply chain might involve more factors beyond the aforementioned given its vast market and technological instincts. Every company that is profit oriented and aims at expanding its resources would find it recommendable to follow or emulate Huawei’s way of shaping its supply chain to accrue optimal performance of its individual aspects. Organizations and corporations are coming up with strategies to equip their businesses with a competitive advantage against products from different regions. Globalization has heightened the effect of competition on the good and products availed in the market at a time, this has shifted the target of business strategies to changes in the supply curve (Meixell and Gargeya). Businesses are now integrating domestic and global environments to be controlled by the same supply chain.
Works Cited
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Jochan, E. Huawei overtake LG in global market share rankings for Q3 2013 . 29 10 2013. 30 03 2014 <http://www.independent.co.uk/life-style/gadgets-and-tech/news/huawei-overtake lg-in-global-market-share-rankings-for-q3-2013-8911158.html>.
Li Fang, H. C. and L Yang. "Dynamic evolution of china advanced manufacturing model in global view—a case study based on huawei company." Journal of Northeastern University (Social Science) (2011): 118-123.
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Meixell, M. J. and V. B. Gargeya. "Global supply chain design: A literature review and critique." Transportation Research Part E: Logistics and Transportation Review, 41(6) (2005): 531 550.
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