A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy
The case sets China's Huawei Technologies in the context of the evolving global smartphone industry, notably its positioning and the links between its competitive strategy and its corporate (global) strategy. It describes the origin, growth and structure of the smartphone industry, evolving industry trends and dynamics, and profiles the major players including Apple and Samsung (originally hardware manufacturers), Google and Microsoft (originally software developers), and new entrants such as HTC and Xiaomi. It focuses on the factors behind Huawei's stunning success-from a traditional telecom equipment provider to the third largest smartphone maker in the world (after Samsung and Apple), while pointing to the challenges that lie ahead. The unique characteristics of smartphones- multi-functionality, high degree of technology integration, and fast-moving ecosystems-make them an ideal choice for analysis of industry change. The tale of Huawei-a Chinese telecom giant-entering and succeeding in the highly competitive global smartphone industry allows for discussion of the competitive strategy and organizational transformation of an emerging economy multinational enterprise.
Authors :: Yangao Xiao, Tony Tong, Guoli Chen, Kathy Wu
Swot Analysis of "A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy" written by Yangao Xiao, Tony Tong, Guoli Chen, Kathy Wu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Smartphone Huawei's facing as an external strategic factors. Some of the topics covered in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study are - Strategic Management Strategies, Emerging markets, Innovation, Mobile and Strategy & Execution.
Some of the macro environment factors that can be used to understand the A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is backlash against globalization, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smartphone Huawei's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smartphone Huawei's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy can be done for the following purposes –
1. Strategic planning using facts provided in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study
2. Improving business portfolio management of Smartphone Huawei's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Smartphone Huawei's
Strengths A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smartphone Huawei's in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy firm has clearly differentiated products in the market place. This has enabled Smartphone Huawei's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Smartphone Huawei's to invest into research and development (R&D) and innovation.
Innovation driven organization
– Smartphone Huawei's is one of the most innovative firm in sector. Manager in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Smartphone Huawei's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Smartphone Huawei's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Smartphone Huawei's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Yangao Xiao, Tony Tong, Guoli Chen, Kathy Wu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Smartphone Huawei's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Smartphone Huawei's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Smartphone Huawei's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Smartphone Huawei's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Smartphone Huawei's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Smartphone Huawei's in the sector have low bargaining power. A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smartphone Huawei's to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Smartphone Huawei's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Smartphone Huawei's is present in almost all the verticals within the industry. This has provided firm in A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy are -
High cash cycle compare to competitors
Smartphone Huawei's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Smartphone Huawei's has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Smartphone Huawei's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Smartphone Huawei's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Smartphone Huawei's to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Smartphone Huawei's 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, is just above the industry average. Smartphone Huawei's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Smartphone Huawei's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Smartphone Huawei's, firm in the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Smartphone Huawei's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Smartphone Huawei's supply chain. Even after few cautionary changes mentioned in the HBR case study - A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Smartphone Huawei's vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Smartphone Huawei's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy are -
Manufacturing automation
– Smartphone Huawei's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Smartphone Huawei's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Smartphone Huawei's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Smartphone Huawei's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Smartphone Huawei's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Smartphone Huawei's has opened avenues for new revenue streams for the organization in the industry. This can help Smartphone Huawei's to build a more holistic ecosystem as suggested in the A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study. Smartphone Huawei's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Smartphone Huawei's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Smartphone Huawei's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smartphone Huawei's can use these opportunities to build new business models that can help the communities that Smartphone Huawei's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Smartphone Huawei's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Smartphone Huawei's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Smartphone Huawei's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Smartphone Huawei's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Smartphone Huawei's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Smartphone Huawei's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Smartphone Huawei's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Smartphone Huawei's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Smartphone Huawei's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Smartphone Huawei's.
High dependence on third party suppliers
– Smartphone Huawei's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Smartphone Huawei's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, Smartphone Huawei's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Smartphone Huawei's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Smartphone Huawei's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Smartphone Huawei's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Smartphone Huawei's in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Smartphone Huawei's needs to make to build a sustainable competitive advantage.