A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – increasing commodity prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
High switching costs
– The high switching costs that Smartphone Huawei's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
Superior customer experience
– The customer experience strategy of Smartphone Huawei's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Successful track record of launching new products
– Smartphone Huawei's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Smartphone Huawei's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Smartphone Huawei's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Smartphone Huawei's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Smartphone Huawei's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Yangao Xiao, Tony Tong, Guoli Chen, Kathy Wu suggests that, Smartphone Huawei's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Smartphone Huawei's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy, in the dynamic environment Smartphone Huawei's has struggled to respond to the nimble upstart competition. Smartphone Huawei's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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 decision making process
– As mentioned earlier in the report, Smartphone Huawei's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Smartphone Huawei's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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 -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Smartphone Huawei's in the consumer business. Now Smartphone Huawei's can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Smartphone Huawei's to increase its market reach. Smartphone Huawei's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smartphone Huawei's is facing challenges because of the dominance of functional experts in the organization. A Dark Horse in the Global Smartphone Market: Huawei's Smartphone Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smartphone Huawei's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Smartphone Huawei's to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Developing new processes and practices
– Smartphone Huawei's can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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 -
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Smartphone Huawei's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Smartphone Huawei's needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Increasing wage structure of Smartphone Huawei's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Smartphone Huawei's.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Smartphone Huawei's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Smartphone Huawei's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Smartphone Huawei's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Smartphone Huawei's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.