Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?
In 2016, Chinese telecommunications equipment firm Huawei Technologies Co. Ltd. (Huawei) aspired to be the world's top smartphone manufacturer. The company had identified German camera company Leica Camera AG (Leica) as a long-term partner to reinvent Huawei's smartphone photography to beat an influx of domestic rivals and the market leaders, Apple and Samsung. The flagship dual camera smartphone that was co-engineered by Huawei and Leica, the P9, contained a camera module that was actually made by a Chinese manufacturer, Sunny Optical Technology Co., under Leica's authorization. As a result, Huawei's motives for the partnership with Leica were criticized as a quick fix to beat Apple in the dual camera market and repair negative publicity the company had suffered earlier. Was the long-term alliance really the best solution for both Huawei and Leica? Was it the right alliance in an emerging market? Wiboon Kittilaksanawong is affiliated with Saitama University. Freddy Rocky Mason is affiliated with Nagoya University of Commerce & Business.
Swot Analysis of "Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?" written by Wiboon Kittilaksanawong, Freddy Rocky Mason includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Leica Huawei facing as an external strategic factors. Some of the topics covered in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? case study are - Strategic Management Strategies, Joint ventures and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing transportation and logistics costs, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leica Huawei, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leica Huawei 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? can be done for the following purposes –
1. Strategic planning using facts provided in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? case study
2. Improving business portfolio management of Leica Huawei
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Leica Huawei
Strengths Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Leica Huawei in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Leica Huawei in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Leica Huawei is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Leica Huawei is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Leica Huawei digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Leica Huawei 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? firm has clearly differentiated products in the market place. This has enabled Leica Huawei to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Leica Huawei to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Leica Huawei in the sector have low bargaining power. Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leica Huawei to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Leica Huawei is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Leica Huawei has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Leica Huawei 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.
Analytics focus
– Leica Huawei 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 Wiboon Kittilaksanawong, Freddy Rocky Mason 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.
Highly skilled collaborators
– Leica Huawei 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Leica Huawei has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Leica Huawei to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Leica Huawei 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Leica Huawei is present in almost all the verticals within the industry. This has provided firm in Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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.
Weaknesses Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? are -
High cash cycle compare to competitors
Leica Huawei 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?, it seems that the employees of Leica Huawei don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Leica Huawei 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. Leica Huawei 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?, is just above the industry average. Leica Huawei 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.
Capital Spending Reduction
– Even during the low interest decade, Leica Huawei 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.
Slow to strategic competitive environment developments
– As Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? HBR case study mentions - Leica Huawei takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Leica Huawei 's lucrative 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 Leica Huawei supply chain. Even after few cautionary changes mentioned in the HBR case study - Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Leica Huawei vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Leica Huawei, firm in the HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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, Leica Huawei is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Leica Huawei needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? | 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Leica Huawei 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.
Loyalty marketing
– Leica Huawei 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Leica Huawei is facing challenges because of the dominance of functional experts in the organization. Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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.
Using analytics as competitive advantage
– Leica Huawei 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Leica Huawei to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Leica Huawei in the consumer business. Now Leica Huawei can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Leica Huawei 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Leica Huawei 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 Leica Huawei to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Leica Huawei to increase its market reach. Leica Huawei 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Leica Huawei 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. Leica Huawei 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.
Manufacturing automation
– Leica Huawei can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Leica Huawei can use these opportunities to build new business models that can help the communities that Leica Huawei operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Leica Huawei 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, Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Leica Huawei can develop new processes and procedures in Leadership & Managing People 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.
Threats Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? are -
Consumer confidence and its impact on Leica Huawei 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.
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. Leica Huawei 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.
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 Leica Huawei.
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 Leica Huawei in the Leadership & Managing People sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Leica Huawei in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Leica Huawei
– 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 Leica Huawei.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Leica Huawei with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image?, Leica Huawei may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Leica Huawei business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Leica Huawei can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? .
Technology acceleration in Forth Industrial Revolution
– Leica Huawei has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Leica Huawei needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
High dependence on third party suppliers
– Leica Huawei 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? 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 Leica Huawei needs to make to build a sustainable competitive advantage.
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