Despite the US’s attempts to pressure allies not to use Huawei, it looks like the company is breathing new life into its global business. It’s shoring up in developing markets and rebuilding in developed ones, says Lewis.
The company’s strategy is based on a core competency model, where people matter the most. This is why Huawei strives to create an integrative work culture where East and West meet, and where employees enjoy a heightened sense of global awareness.
1. Globalization is the end state of a market economy
Huawei’s internationalization strategy obeys the tenets of market globalization, which requires companies to adapt their business structures and technological processes to local conditions and markets. This is how the firm became a leader in globalizing telecommunication infrastructures. The company’s production serves specialized markets that are highly sensitive to rapid response and indispensable in the information society (fixed networks, mobile networks, data transmission, optical networks, software, energy solutions).
To develop such a product portfolio, Huawei needs to be able to access global resources and markets to produce its products more efficiently and at lower costs than rival firms. Economic globalization is facilitated by policies that promote free trade and open borders, which allow companies to access low-cost raw materials and parts and to sell their goods worldwide.
As a result of its internationalization efforts, Huawei has achieved an important goal: it now provides its technology in a total of 170 countries and serves more than one third of the world’s population. The company has a presence in every continent except Antarctica, and is the leading supplier of global network equipment for fixed and mobile telecommunications networks.
Huawei’s success in the global arena has also been fueled by its focus on customer-centricity. This approach requires that the company focuses on understanding consumer needs, identifying future trends and developing new technologies to meet these requirements. Its commitment to innovation is reflected in its annual R&D expenditures, which are higher than those of any of its competitors. Its focus on innovation has been crucial to its global success, but so too has its commitment to the development of a cohesive corporate culture that values people and encourages teamwork.
2. Innovation is the key to success
Huawei’s success on the global stage has been fueled by unwavering investment in innovation. The company’s technology is used in more than 170 countries, serving one third of the world’s population. Today, the Chinese brand is the third largest manufacturer of routers and switches after Alcatel-Lucent and Cisco and has also climbed into the ultra-competitive smartphone market. Huawei’s telecommunications products are deployed by almost all major communications carriers worldwide.
The brand has expanded its footprint in many different ways, from creating infrastructure for carriers, terminal equipment and global services to developing consumer products and managing data centers. This triad approach has been essential to its success, especially as it has grown into a global leader in the digital economy.
In addition to its commitment to innovation, Huawei has been able to communicate its value and differentiate itself by focusing on customers. It has a strong belief that its employees should be valued and promoted according to their contribution to the company’s goals. This helps Huawei attract and retain talented people who are willing to work hard in the face of challenging conditions and circumstances.
Huawei has also been able to distinguish itself by offering affordable and reliable products that cater to the needs of consumers in developing countries. This pricing strategy has helped it gain footholds in markets previously ignored by premium smartphone brands like Apple, Samsung and Blackberry. The company is also a pioneer in fifth-generation (5G) technology, which is expected to be up to 100 times faster than current 4G networks. In fact, Huawei was the first to launch a commercial 5G network in the Isle of Man in 2014. This foresight will give the company a competitive advantage when it comes to the next wave of global connectivity and digital transformation.
3. Globalization is a way of life
Huawei’s CEO Ren Zhengfei insists that his company is committed to its globalization strategy. Despite being caught up in a political battle with the United States over security concerns, the Chinese technology giant continues to expand its brand internationally.
For the company, being global is a mindset that extends to its internal culture and processes. It prioritizes spiritual and value-driven leadership, and emphasizes a customer-centric approach. Employees who can embody these values and think globally stand a good chance of moving up the ranks.
As part of its internationalization strategy, Huawei has forged partnerships with many brands around the world. The most important of these partnerships was with the American networking company 3Com, which it bought out in 2007. This was a major turning point for the company, which moved from being a regional player to becoming a global leader.
The company also has a long-standing partnership with the consulting firm Hay Group, which has helped to shape its organizational structure. Huawei has also worked with firms like IBM and Price Waterhouse Cooper to improve its technological capabilities. The company has accelerated its internationalization since 2000, and today 65 percent of its revenue comes from overseas markets.
Its growth in the United States is hampered by a political battle with the US, which accuses the company of being linked to Chinese state espionage. As a result, the company has faced resistance from US intelligence agencies and the US Congress. It is also facing a ban on selling its products in the country. This has forced Huawei to shift its focus to other emerging markets. It is also investing heavily in artificial intelligence and internet of things projects.
4. Globalization is a competitive advantage
Huawei’s globalization strategy has given it a competitive advantage in the equipping of transmission infrastructure, the technological heart of information society. Its processes enable the company to attend to the specific needs of each client, with the lowest price.
This globalization strategy enables Huawei to develop new technologies and to expand to markets outside of China that would not otherwise be able to afford the company’s products. In addition, the company has a clear focus on R&D. Its overall R&D expenses accounted for 14.6 percent of its total revenue in 2016.
In addition to leveraging a global strategy, Huawei also relies on a strong brand to communicate its message. Its marketing and advertising campaigns are designed to promote its products globally and to increase brand visibility. The company has invested heavily in global advertising and marketing agencies such as WPP/Ogilvy Mather, Saatchi & Saatchi and several digital agencies.
The company’s global ambition has also been driven by its people. In a recent memo to employees, CEO Ren Zhengfei described the current situation facing the company as a “life or death battle.” He used military language to remind his team that they must keep fighting in the face of ongoing pressure from the US government.
Finally, Huawei has a clear strategic plan to maintain its global presence in the face of political pressure. The company is determined to work with the new administration to find policies that will be in its own and the US’ best interests. In the short term, this will require that the company volunteer more corporate and financial information to demonstrate transparency. Over the long term, Huawei is confident that its commitment to globalization will help it overcome political challenges and remain a global technology leader.
5. Globalization is a source of inspiration
The Chinese company’s success in the global market is a source of inspiration for other companies that aim to enter and succeed in foreign markets. Huawei’s success lies in its ability to integrate the values and traditions of various cultures into a unique corporate culture, a spirit that Ren Zhengfei calls “Digging In and Widening Out.”
The approach he took when establishing Huawei is reflected in the way the brand operates today. Its global presence is based on building a network that encompasses local business and industry conditions, as well as achieving product and brand visibility in each market.
Unlike other Chinese technology brands that have achieved success in the West through glitzy events, PR campaigns and lobbying, Huawei has built its presence through its consistent investment in marketing and brand awareness. In fact, the firm’s efforts to become a household name in the Western world have paid off: In 2017, Huawei was ranked 70th on Interbrand’s list of the world’s most valuable brands.
Its internationalization pattern also reflects its understanding that ICT products acquire value not through their use in isolation but through the combination of their use with other ICT goods (Wu and Zhao, 2007). The company’s entry strategy into each market has therefore been adapted to the circumstances of each country: Joint ventures for Russia, the United States and Europe; sales through distributors for Latin America; assembly, distribution and R&D centers for Africa.
This approach to globalization enables Huawei to maintain its competitiveness in the long run. Moreover, it allows the company to develop and improve its products according to the demands of the different markets, as it can adapt to local conditions quickly and effectively. For example, in Latin America, the company’s success is rooted in its capacity to respond quickly and efficiently to the needs of local customers, thanks to a double commitment: an assembly, distribution and R&D center in Mexico, as well as a partnership with a local supplier for telecommunications hardware.
