|Industry||Telecommunications and smart devices|
|Revenue||$138.30 Billion (2020)|
|Profit||$10.02 Billion (2020)|
|Competitors||Ericsson, Nokia, Samsung, Lenovo, Apple, Xiaomi, Sony, HTC|
Huawei Technologies is a leading global information and communications technology (ICT) solutions provider headquartered in Shenzhen, China. The company which initially sold smartphone devices has now evolved into forming telecommunications networks. Huawei provides these services by working simultaneously with Vodafone, T-Mobile, British-Telecom, and Orange, also known as leading telecom operators worldwide. With a market share of 20%, the company has achieved the position of largest smartphone seller in the domestic region and ranks second after Samsung globally (Forbes, 2021). The company has established a name for itself and has also made itself a valuable telecommunications brand worldwide (Slotta, 2021).
Table of Contents
Huawei Strengths 2021:
- Global Outreach.
In 2020, Huawei established 1500+ successful networks across 170+ regions and countries, providing their services to almost 3 billion people worldwide (Huawei, 2021). Such an extensive network allows Huawei to engage with more customers and expand its target market to compete with brands like Samsung in developing as well as developed regions.
- Increasing Brand Value Globally.
According to a study of BrandZ, the company ranked on the 45th position among the Top 100 Most Valuable Brands. This was two ranks higher than the previous year. The company has an estimated brand value of $29.4 billion, nine percent more than the previous year. As of 2020, the company has been included in the top 50 brands worldwide, proving its continued success in global markets (Huawei, 2020).
- Hike in Sales Despite US-Conflicts.
The company has shown a high resilience despite its conflict with one of the most developed regions, the United States. The US banned Huawei phones under the allegation that they could contain backdoors enabling surveillance from the Chinese government (Keane, 2021). This raised concerns in US-based allies, and they too represented a hostile treatment towards the company. However, Huawei’s resilient workforce was able to increase revenue even in these tiring times. This is evident from its constant increase in revenue in 2018 and 2019, wherethe company’s earnings showed a 25% hike making the total revenue $8.7 billion (59.3 billion Yuan) (Pham, 2019). In the year 2019, 610.8 billion yuan ($86 billion was the total revenue generated by the company (Disis, 2019). These earnings display that despite US hostility, the company has still managed to build a high reputation and brand name to survive and even flourish during such situations.
- Innovative Technology.
Another core strength of the brand is its innovation in its technological product. Since the beginning, the company has kept research and innovation as one of its top priorities. The company was one of the first few ones to opt for 5G technology and has also invested massive amounts of money in AI technology (Huawei, 2020). These innovative inventions by the company predict a better future for it amongst international players.
Huawei Weaknesses 2021:
- Espionage Controversies.
The brand has been accused of using its resources for espionage purposes in Poland. Poland’s Government arrested two men out of one who was working for Huawei in January 2019 as they were suspected of spying for China. The espionage trial began on Tuesday in Warsaw court (Ptak & Pawlak, 2021). This espionage trial has brought bad publicity towards the brand and has damaged its image severely. It prompts the debate whether Huawei products should be used or are an extremely risky option in terms of privacy. This has also made multiple European states consider the ban of the Chinese brand.
- Bans from several countries.
The company has faced a ban from Japan, Australia, Taiwan, New Zealand, and the U.S since 2019. Whilst UK has only partially banned the company limiting its growth by 35% in the new market of 5G technology (Buchholz, 2020). These are the major economies, and due to a ban in these economies, the company will experience a great deal of loss in its revenue and will lose a great deal of its market. (See Figure 1).
- Market Share.
Due to the partial ban imposed by the UK, the company has suffered a great loss in the market share of the UK compared to its competitors. Competitors like Samsung have a market share of 28.87%, and Apple has a market share of 51.62%, whereas Huawei only has a market share of 6.85% percent (Global Stats Counter, 2021).
Huawei Opportunities 2021:
- Untapped Indian Market.
India being an emerging market provides a huge opportunity for Huawei to expand further. However, Huawei has entered the Indian market before (Business Standard, 2018), it has not penetrated the market properly, making India an untapped source of revenue. If Huawei were to develop a prominent position in the Indian market, they could witness an increase in their revenue figures.
- Brick and Mortar Stores.
Competitors, for instance, Samsung and Apple, provide the luxury of brick-and-mortar stores to their customers, which adds to their reputation in the telecommunications market (Warwick, 2021). It adds to their reputation because it gives customers another way to purchase their electronic devices while also improving brand perception. Although Huawei does have physical outlets, they are quite less in total. Huawei could achieve further by establishing more physical outlets in the countries it operates in.
Huawei Threats 2021:
There is intense competition in the smartphone industry from major brands, for instance, Samsung and Apple. Also, this market is ever-growing making it a place with great potential for new entrants. Any new entrant could join the market and wipe Huawei’s presence by introducing a couple of technological advancements. One example of a new entrant is Xiaomi Inc., which is growing at an unprecedented rate (Moshra & Pathak, 2021).
- Sanctions Coming from Other Different Countries.
Huawei has already faced bans from major economies, and due to the bad publicity, this has made other countries consider banning the brand. Countries including Germany, Sweden, Belgium, Denmark, and France are considering imposing a ban on the brand in these regions (Buchholz, 2020).
Huawei SWOT Analysis Conclusion:
Coming to a conclusion, it can be noticed from the SWOT Analysis above that Huawei is a valuable and prominent brand in the telecommunications industry. It has managed to establish its place by working and building on its strengths and expanding in different world regions; however, it has an equally damaging reputation due to its espionage controversies. In addition to this, the company could capitalize on opportunities presented to it, such as expanding more in the Indian market and constructing brick and mortar outlets for customers. This will help the brand work on its weaknesses and minimize the threats to company profits.
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- Business Standard. (2018). Huawei Expands Honor Range of Smartphones Made in India. Business Standard.
- Disis, J. (2019). Huawei’s smartphone sales and 5G business stay strong despite US hostility. CNN Business.
- Forbes. (2021). Huawei. Forbes.
- Global Stats Counter. (2021). Mobile Vendor Market Share in United Kingdom – September 2021. Global Stats Counter.
- Huawei. (2020). Huawei soars in brand value, goes up in BrandZ World’s Most Valuable Brands rankings. Huawei.
- Huawei. (2021a). Our Company. Huawei.
- Keane, S. (2021). Huawei ban timeline: Detained CFO makes deal with US Justice Department. CNET.
- Mishra, V & Pathak, T. (2021). Monthly Pulse: Xiaomi Becomes #1 Smartphone Brand Globally for First Time Ever. Counter Point.
- Pham, S. (2019). Huawei’s profits jump by 25% despite US efforts to curtail its business. CNN Business.
- Ptak, A., & Pawlak, J. (2021). Polish trial begins in Huawei-linked China espionage case. Reuters.
- Slotta, D. (2021). Huawei – statistics & facts. Statista.
- Warwick, S. (2021). Apple Reveals Plans for More Retail Stores Despite the Shift to Online Stores. iMore.