Huawei Essay

Huawei, a Chinese telecommunications equipment and services company established in 1987 in Shenzhen, China, has drawn worldwide attention in the recent years. Although many people have not heard of it or even pronounce its name right, the fact that Huawei has become the largest telecommunications equipment maker in the world cannot be overlooked. Benefiting from the Chinese economic reform led by Deng Xiaoping, Huawei gained the opportunity to develop its overseas markets; however, it was not enough for a small company like Huawei to achieve incredible success. Undoubtedly, Huawei’s worldwide achievement is due to many cumulative factors, yet, among all of them, the most important factors are the unique strategies Huawei has adopted, especially

In 1997, Huawei formed joint ventures in Russia and Brazil. In the same year, it entered the Russian market. In 1999, Huawei opened a research and development center in Bangalore, India. Soon, Huawei managed to make profits in Yemen, Laos, Thailand, Kenya and other developing countries. By the end of 2002, it had established branch offices in more than 40 countries and its international sales had reached US $552 million (Nakai, Tanaka 2). Most of the countries Huawei targeted in this time period, were periphery regions that had the same GDP and economic levels as China. Long existing discourse of the cheap prices and poor quality of Chinese products in Western countries hampered Westerners’ acceptance of Huawei’s products in a short time period. On the contrary, for developing countries that were looking for affordable and wireless mobile networks, Huawei’s advantage became obvious, since most of these countries could not afford the prices offered by the US and Europe. As for Huawei, entering the market in such countries meant huge profits, because of the lack of competitors. Even though the profit margin was very slim for Huawei by offering prices 5% to 10% lower than Ericsson and Nokia (Huawei’s main competitors in the global market) (3), Huawei was still able to gain remarkable

In fact, Ren Zhengfei served as an engineer in the People’s Liberation Army in his former career, which, in recent days, concerns the Western countries of the relation between Huawei and Chinese military. They suspect that if the communication equipment Huawei manufactured can be viewed as a security threat, even potent weapons during the war. Actually, evidence has already demonstrated that, at least till 2000, Huawei kept sending products to the telecommunications bureau of the PLA. Furthermore, although Huawei is a private-owned company, which does not receive funds from government directly, as a successful transnational corporation, during the period China trying to expand the foreign market, it is logical to inspect that Chinese government is more than willing to offer help either by publishing policy or by providing subsidies. These doubts, combined with the less openness of Huawei compared to other companies since Huawei is not a listed company, have cast a shadow on Huawei’s future development. In fact, back to 2001, Huawei had already set up an office in Plano, Texas, the United States; however, up till today, Huawei still has not managed an effective way to enter into the mainstream market of US. Not only US, in 2010, India insisted on cancelling the rest of the contract with Huawei. In 2012, it is reported that the Australian government also excluded Huawei from a contract on constructing the National