Huawei Business Model and Organisational Culture

Huawei Business perplex and Organisational CultureIntroductionThe purpose of this report is to handling Huawei as the focus of an analysis and comp be and contrast agate line ideals adopted by sepa stray companies that ply within the smart sh turn out out constancy. The analysis will then include a description on Huaweis organisational ending and the impact this has on the comp any(prenominal)s success. An analysis of Huaweis relationships with other companies and countries will be through to try and determine how this ascertains the contri thoe chain and the distribution and logistics strategies.Comparison of stage logical argument models, grocery lay in positioning and mart development of Huawei and its competitors at home and overseasA firms Business Model (BM) is thearticulation of the put to workes through which resources argon leveraged to createand deliver value to stakeholders allowing the firm to generate a profit(Chesbrough,2010). For forms the high-end sma rt retrieve manufacture has been predominate by Apple and Samsung with both companies being involved in a worldwide corporeal encounter since 2010 as Samsung who was back then a supplier to Applehad released a product that was far to akin(predicate) to the iPhone. For years, thesetwo companies have been battling for superiority within the industry and onlyfocusing on beating to each one other but however one Chinese audio manufacturer ishoping to battle both companies to be treasure as one of the best. Huawei waspreviously known for distributing smart borders that were cheap and un- bell ringeredbut the company is dumping this business model and has re-invented its self tobecome a orbicularly recognized oppositeiate by advancing chop-chop into markets worldwide.Huawei has now become the worlds subprogram three smartphone brand and earneditself a 10% global market sh be (Samsung-23.3% and Apple-14.7%).Innovation of new business modelsAsthe industry is get more and more c onsuming and populated with smartphonesthat argon constantly improving to be better than their competitors its gettingmore abstruse to design a business model that butt end meet targets and be thedominator of the smartphone industry. The business model is a advert indicator ofwho is going to be at the excrete of the telecom market and the traditionalsmartphone business model is facing contests that have never been dealt withbefore from issues that the companies have not necessarily had any influence on such as globalization and the important role that internet plays in todaysworld. Having a victorious business model has been key to the devise and successof Huawei, they have even got their own Business Model Innovation Centre (BMIC)which has been praised for analysing current business models from itscompetitors to see an end result of them bettering themselves as a globalorganisation. The BMIC develops methodologies and tools to jockstrap allow thebusiness innovate there curr ent business model to help the business to continuegrowth to be multilingual, multicultural and multinational with plenty ofrecognition in key foreign markets. With the innovation of the businessmodel, its expected that new opportunities will a procession but with scourges to a fault acclivitous from industry competitors it is imperative that the business model cancapitalize on these issues to ensure that a well preserve profit is achievedalong with having that competitive proceeds over its major competitors.Challenges of implementing a successful business modelTo ensure that these can be overcome as quickly and as safely as viable there are numerous challenges that must be overcome, includingRevenue enhancement through differentiated substance abuser experienceBusinessmodel innovation that supports/monetizes new servicesCoststructure optimization for sustained profitabilityTransactionmodel adaptation that improves financialsParticipationin emerging disruptors such as cloud com putingHuaweisrole is to help clients understand how and when to do these things so that period-to-market and commercial risk are minimized.Inrecent years Huawei has toyed hard to establish itself as the undisputednumber one smartphone brand in China and part of their business model has beento establish themselves within other markets. Huawei has advanced assertivelyinto other markets and focused mainly on boosting brand awareness andincreasing gross revenue especially in Europe.Global recognitionIn Europe, the company is growing at an unprecedentedrate due to the company releasing better quality products and re-inventing thebrands design with high end marketing campaigns. In particular, Europeans havebeen receptive of Huawei and are ditching previous mentality of either gettingthe latest iPhone or Samsung and go around to trying new technology released byHuawei. Around half of Huaweis 100+million phone sales and 65% of the companysrevenue in 2016 was generated from markets out of doors of its home country, China. Huaweisaw an adjoin in market share as its popularity rapidly rose in countriessuch as Germany, Italy and Spain. The rise of Huawei has stifled the iPhonesmomentum in China and is now being recognised as the worlds third man-sizedstsmartphone sacrifice in 2016. For Huawei to continue this rise they have to continueto pursue a business model that can allow them to compete with Apple andSamsung. Adaptation of new business modelsWhenyou look at the rise of the Huawei its clear that the success has come fromadopting new business models to fit current market trends and to ensure thatthey rest competitive towards its competitors. The adaptation and change forits business models over the years has ensured that it mud a dark long horse inthe smartphone industry. Many years ago, Huawei was known for selling cheapand cheerful products, which were renowned to not depart very long. As a company,Huawei has invested millions in R&D to help them pursue better approachesto the industry and to try and get the company renowned as one of the best. Asyou can see from the image below the amount of units that Huawei now sellscompared to back in 2013 is a substantial improvement, which can effectively bedown to several improvements it has made as a company over the period of 3years. The willingness of adapting and changing its ideas to fit and matchcompanies such as Apple and Samsung will be a major agentive role of its success.Huaweis organisational culture Huaweihas a sharp vision, a vision to enrich life through communication. It focuseson its customers challenges and needs and strives to create maximum valuethrough excellent service (Huawei, 2013)The rise and success of Huawei has been intense and the visionary founder Ren Zhengfei who started the company when he had no money and no connections within the technology industry. He has been praised for implementing and sustaining a culture that thrives Huaweis employees in day-to-day business and its this mentality that is continuously praised but has had nearly implications in the past. Back in 2008 once of Huaweis employees jumped to his death in the companys furnish and was the sixth employee to have committed suicide with the same mysterious circumstances. It has been blamed on Huaweis aggressive and ruthless corporate culture of adopting the wolf-culture, which is explained below. In moreover about top companies today, they rely pissedly on act the culture of the organization, which can often relate to beliefs and values which were originally set out when the company was offset printing generated. For Huawei these factors have deter exploit the success of company and it has been stated that this also differentiates them from other market leaders such as Apple and Samsung. Wolf-CultureThemain organisational culture of Huawei, which sets out its key values, beliefsand attitudes, which is followed by all of its organisational members, is knownas wolf-cu lture, this has three main characters, which are defined asCharacter 1 Wolvesare bloodthirsty, employees of the company are extremely sensitive toinformation related to its main competitors and any changed within the marketitself and they could respond now and adapt to any changes to ensure theyremain successful. Character 2- Wolvesare resistant to coldness, the fearlessness of difficulties that may riseand eagerness of making progress are insisted to every member of Huawei nomatter how complicated the challenge may be.Character 3- Takingactions in teams, The atmosphere of team cooperation is particularly strongin Huawei and people are encouraged to develop and share personal opinions witheach other (laoyzy, 2011). The wolf-culture brings Huawei a high level of penetrating insightabout the unsteady market and assists the company to quickly react to any existingopportunities. As a result, Huawei could expand its business volume aboutapproximately twenty percent every year (Heissoug ly, 2010). Huawei vision, mission and core valuesVision To enrich life through communication. Mission To focus on our customers market challenges and needs by providing excellent communications network solutions and services in order to musical arrangementatically create maximum value for customers. Core Values To put the customers offsetDedication Continuous ImprovementsOpenness and initiativeIntegrityTeamworkHuaweis relationships and partnerships in drove countriesHuaweiis the only Chinese company out of 91 mainland Chinese companies listed on theFortune Global calciferol list, which earns more revenue abroad than in China.Huaweis revenue from overseas markets exceeded that from the Chinese marketfor the first time in 2005. For the company this is a massive achievement and astep towards being recognised as the leading smartphone provider. Marketing CampaignsInrecent years Huawei has witnessed itself becoming increasingly popular out ofChina and seen a dramatic rise in its European sales, this surge in sales wasinitiated by the improvement in product quality and the high profileadvertising campaigns it has created. Promotions for Huawei newest products arebeing advertize in several cities across Europe, some campaigns areCovering the trams of RotterdamThey have opened a flagship store in a prominent location atdowntown BrusselsGigantic Banners in Berlinand Lodz (Poland)In the city centre of capital of Polandlooks homogeneous an advertising convention and Huawei is the guest of honourThis successful campaign across European cities has also seen the company sponsor major European football teams such as Arsenal, AC Milan and Paris Saint-Germain. Huawei is not messing about when it comes to marketing, they are figuring out what can generate the most attention and ensuring that they get the brand more recognition as being one of the top smartphone providers. These campaigns across Europe is just a fraction of what they are actually doing, they are also r ecruiting European athletes such as Lionel Messi and Robert Lewandowski to be brand ambassadors along other entertainment stars such as Scarlett Johansson to endorse its high-end products. Europe has become Huaweis most successful overseas territory and they have overtaken Apple and became the worlds second largest smartphone maker by shipment in several countries including Finland, Italy, Poland and Spain. It has ranked number three in Germany and number four in France, (Canalys, 2016). One of the main factors that has influenced Huaweis presence in Europe is its relationship with local phone carriers. sooner they started, selling phones Huawei were building telecom stations for European carriers such as Orange in France and enzyme-linked-immunosorbent serologic assay Oyj in Finland. After previously building a successful relationship with already, well established businesses it has allowed Huawei a quick market entry and allowed them to spend its marketing budget on the best disp lay positions privileged local retailers, (Jeronimo, 2016). Retaining a strong relationship with previous clients has obviously benefited the company in establishing the brand outside of China but there are bigger problems that the company has been encountering. Although it is a huge success Huawei, commencement to be recognised on a global scale but the company hasnt got often closer to its end goal of profitability due to the fact shipment of all the high-end products becalm remains limited. The rise of Huawei does deserve praise when you look at how far they come, when comparing the amount of products its shipped with Apple and Samsung its still only a fraction of what there figures are. In the first half of 2016 Huawei only shipped 3.6 million smartphones priced high than $600. When comparing this statistic with Apples 77.8 million and Samsungs 31.6 million it just shows that there is still a lot of work needed to be done. Political UncertaintyThe main factor that is restri cting Huawei from achievingfigures as high as its competitors is the fact that its unable to replicate itsEuropean dodging in the US. Reasons for this is that is doesnt have a strongrelationship with any of the big four phone carriers in the US (Verizon,AT&T, T-Mobile and Sprint). The US is a market where phone carriersdominate smartphone sales and without the support of the industry dominators,it has and will continue to make Huaweis US ambitions a failure. In 2012, acongressional report was made stating that Huaweis hardware could be used bythe Chinese government for spying purposes. This is an allegation that thecompany continues to deny but with anti-china dialogue often occurring under theTrump administration this is likely going to continue as a threat for thecompany. For now, Huawei has to carry on with a less effective strategy in theUS of selling phone through lesser known carriers and online stores such asAmazon. Last year Huawei was nowhere near the top five smartphone makers in theUS as it only shipped 1.4 million units (Canalys ,2016). This figure aloneproves to Huawei that not decorous is being done in the biggest market in theworld but with allegations being made politically, does not give them muchconfidence and belief that the issue can be rectified any time soon.Huaweis contribute chain, distribution and logistics strategiesAstrong and reliable supply chain is immanent to the option of any company,for Huawei it is essential that they can rely on all stakeholders within thesupply chain as this enables them to ship products all over the world once theyhave been manufactured. When it comes to logistics Huaweis strategy has beento adopt the asset-light strategy which allows them not worry about any largeexpenditure costs to purchase any large fleet of transport themselves, theywill instead use courier companies to ship products all over the world. HuaweisCEO has previously mentioned that they are hoping to work with suppliers allover the wo rld to help build a business ecosystem in which all stakeholders canall create value to share the risks involved and to wonder the benefits that thesuccess of working with each other will hopefully bring. Huawei believe thatworking closely with their suppliers is essential to building that competitiveedge and this can help them achieve the positive results needed. With theincrease of popularity of smartphones it has led to companies like Huawei to changethe strategy in which these phones are distributed. The most common source ofdistribution has previously been phone carriers distributing the phone themselling it with a monthly payment plan requiring users to sign a fixed squinchduring a fixed duration. Due to the popularity of companies like Amazon, Tescoand Ebay this has given smartphone companies another platform to advertise andsell its products and gives millions of sales each year. It is imperative forcompanies like Huawei to keep up to date with key trends that are trending indifferent markets that its operating in. In emerging markets such as Russiaand Africa it is common for consumers to purchase just the phone and not fixedto any contract with any phone carrier, however, in Europe and the US it isgetting increasingly popular to purchase the phone on a fixed contract basis.When it comes to distribution since 2012 Huawei has been push to be activein as many distribution channels and using the UK as an example it hassucceeded in doing this. In doing so Huawei sets out clear guidelines to itssuppliers and distributors that it expects them to follow. One of the mainfactors that it sets out is to pursue a sustainable approach. Sustainability ispart of Huaweis procurement strategy and to be eligible to be part of Huaweissupply chain they insist that all members must comply with applicable laws andregulations set out in Huaweis supplier sustainability agreement. They usethis agreement to continuously drive supplier improvements and to monitor andcontrol any risks that are can occur.Managing riskAllthese factors enabled Huawei to minimize supply risks, increase customersatisfaction, and boost the scrap of the supply chain. To help thecompany ensure that all companies are complying with this agreement they riskrank and study each company. Each year they will conduct an audit for supplierswhich represents around 90% of their procurement consumption and assign a prioritylevel of high, medium or low. The factors, which determine which level isgiven, are supplier locationProduct/material manufacturingSustainability performanceRisk management systemsEnvironmental risksOnce this audit has been conducted,it then allows Huawei to manage the performance of everyone involved in itssupply chain and they will do this annually and audit the results and anyimprovements that can be made. Performance appraisals are in place to determinethe reliability and performance for Huaweis suppliers and then this allowsthem to determine who they need to vo lunteer improvement to and who needs to bepraised for the continued hard-work and loyalty given to the company. Theappraisal cover a some different factorsLabourHealth and safetyImpact it has on the environment (sustainability)Business ethical motiveManagement systemsIn the event of a new supplier being added to the supply chain, Huawei has a qualification process the company must pass to enable them to become business partners. This process will examine the suppliers capacity and their compliance with applicable laws and regulations set out in their own supplier sustainability Agreement. To ensure that all suppliers comply with the sustainability agreement they provide training and coaching that is undeniable and they also encourage them to include sustainability into their business models and strategies. They do this as they view sustainability as a key to reduce business risks and to perform operations more efficiently. Prohibition of conflict mineralsAs sustainability is the m ain focus of Huaweis supply chain another focus of theirs is that companies must have good business ethics so they prohibit the use of conflict minerals. This refers to minerals that are sold to finance ongoing-armed conflicts in which the countries are mined or smelted. This is a common occurrence in Africa. The problem of this is making not just Huawei but other smartphone providers more aware of the issue and the US and Europe have just passed new laws to help deal with the issue and prevent the armed militias from making an come from top companies. This is not necessarily just associated with smartphone providers but the issue is a complex one that will be resolved through an nonionized global commitment and close cooperation between businesses and governments. All these factors will contribute to a successful and sustainable supply chain. It is also imperative that Huawei stays in a close partnership with other businesses in the same industry this will allow them all to addres s problems that the companies may be facing or to rectify any problems that can occur. 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