Leading Huawei: Lessons from China's Most Successful Executive SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Leading Huawei: Lessons from China's Most Successful Executive
Although Chinese giant Huawei surpassed Ericsson in 2012 to become the global telecom leader in terms of sales revenue and net profit, the company is still relatively unknown in the West. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. The authors describe seven characteristics of Zhengfei's leadership style, including 'adaptive vision', 'humble dedication' and 'winning by cooperating'. Characterized by his employees as someone who 'leads with his heart and moves with his mind', Zhengfei's purpose, inspiration and humility in leading China's most global company will provide inspiration for leaders everywhere.
Swot Analysis of "Leading Huawei: Lessons from China's Most Successful Executive" written by David De Cremer, Tian Tao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zhengfei's Huawei facing as an external strategic factors. Some of the topics covered in Leading Huawei: Lessons from China's Most Successful Executive case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Leading Huawei: Lessons from China's Most Successful Executive casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Leading Huawei: Lessons from China's Most Successful Executive
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leading Huawei: Lessons from China's Most Successful Executive case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhengfei's Huawei, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhengfei's 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 Leading Huawei: Lessons from China's Most Successful Executive can be done for the following purposes –
1. Strategic planning using facts provided in Leading Huawei: Lessons from China's Most Successful Executive case study
2. Improving business portfolio management of Zhengfei's 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 Zhengfei's Huawei
Strengths Leading Huawei: Lessons from China's Most Successful Executive | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhengfei's Huawei in Leading Huawei: Lessons from China's Most Successful Executive Harvard Business Review case study are -
Highly skilled collaborators
– Zhengfei's 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 Leading Huawei: Lessons from China's Most Successful Executive HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Zhengfei's Huawei 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.
Innovation driven organization
– Zhengfei's Huawei is one of the most innovative firm in sector. Manager in Leading Huawei: Lessons from China's Most Successful Executive Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– Leading Huawei: Lessons from China's Most Successful Executive firm has clearly differentiated products in the market place. This has enabled Zhengfei's Huawei to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Zhengfei's Huawei to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Zhengfei's Huawei 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.
Learning organization
- Zhengfei's 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 Zhengfei's Huawei is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Leading Huawei: Lessons from China's Most Successful Executive Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Zhengfei's Huawei
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zhengfei's Huawei does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Zhengfei's Huawei 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 Zhengfei's Huawei in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Zhengfei's 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 David De Cremer, Tian Tao 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Zhengfei's Huawei digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhengfei's 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.
High brand equity
– Zhengfei's Huawei has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhengfei's Huawei to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Zhengfei's 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.
Weaknesses Leading Huawei: Lessons from China's Most Successful Executive | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leading Huawei: Lessons from China's Most Successful Executive are -
Need for greater diversity
– Zhengfei's Huawei 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.
Lack of clear differentiation of Zhengfei's Huawei products
– To increase the profitability and margins on the products, Zhengfei's Huawei needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Zhengfei's 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.
Interest costs
– Compare to the competition, Zhengfei's Huawei 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.
Skills based hiring
– The stress on hiring functional specialists at Zhengfei's Huawei 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 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 Zhengfei's Huawei supply chain. Even after few cautionary changes mentioned in the HBR case study - Leading Huawei: Lessons from China's Most Successful Executive, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhengfei's Huawei vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Leading Huawei: Lessons from China's Most Successful Executive that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Leading Huawei: Lessons from China's Most Successful Executive can leverage the sales team experience to cultivate customer relationships as Zhengfei's Huawei is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Zhengfei's 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. Zhengfei's 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.
Increasing silos among functional specialists
– The organizational structure of Zhengfei's Huawei is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Zhengfei's Huawei needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhengfei's Huawei to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, David De Cremer, Tian Tao suggests that, Zhengfei's Huawei 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Leading Huawei: Lessons from China's Most Successful Executive 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 Zhengfei's Huawei 's lucrative customers.
Opportunities Leading Huawei: Lessons from China's Most Successful Executive | 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 Leading Huawei: Lessons from China's Most Successful Executive are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhengfei's Huawei is facing challenges because of the dominance of functional experts in the organization. Leading Huawei: Lessons from China's Most Successful Executive 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.
Better consumer reach
– The expansion of the 5G network will help Zhengfei's Huawei to increase its market reach. Zhengfei's 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.
Learning at scale
– Online learning technologies has now opened space for Zhengfei's 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.
Developing new processes and practices
– Zhengfei's 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.
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 Zhengfei's Huawei in the consumer business. Now Zhengfei's Huawei can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Zhengfei's 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.
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. Zhengfei's 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. Zhengfei's 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.
Using analytics as competitive advantage
– Zhengfei's 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 Leading Huawei: Lessons from China's Most Successful Executive - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhengfei's Huawei to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhengfei's 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 Zhengfei's Huawei to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhengfei's 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, Leading Huawei: Lessons from China's Most Successful Executive, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Zhengfei's Huawei can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leading Huawei: Lessons from China's Most Successful Executive suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhengfei's Huawei can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhengfei's Huawei in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Threats Leading Huawei: Lessons from China's Most Successful Executive External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leading Huawei: Lessons from China's Most Successful Executive are -
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. Zhengfei's Huawei needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhengfei's Huawei can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Zhengfei's Huawei is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Zhengfei's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhengfei's 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 Leading Huawei: Lessons from China's Most Successful Executive .
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 Zhengfei's Huawei.
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 Zhengfei's Huawei business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Zhengfei's Huawei 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. Zhengfei's Huawei can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Zhengfei's 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.
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 Zhengfei's Huawei in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Zhengfei's Huawei 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhengfei's 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.
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.
Weighted SWOT Analysis of Leading Huawei: Lessons from China's Most Successful Executive 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 Leading Huawei: Lessons from China's Most Successful Executive 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 Leading Huawei: Lessons from China's Most Successful Executive 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 Leading Huawei: Lessons from China's Most Successful Executive 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 Leading Huawei: Lessons from China's Most Successful Executive 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 Zhengfei's Huawei needs to make to build a sustainable competitive advantage.