Arathi K

Ashwin Mehta
Gitanjali V.
Mary Preethi
Sruthi Johnson
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Brief History
Founded in 1998 by Ren Zhengfei who is a former Peoples
Liberation Army officer and telecom engineer
Telecom equipment at a Lower price than its international
counterparts
Started as a sales agent for PBX switches, began to innovate
His master-stroke was to produce a new telephone exchange
system capable of handling 10,000 switchboardsfive times
as many as his competitors
Focus on provincial markets ignored by foreign companies
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What did Huawei do?

Mao Zedongs military strategy: Grow in
the countryside and expand in cities
Ericssons 4 employees vs Huaweis 200
Sales as well as product strategy,
customization for the rural areas
JV with the local suppliers
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Strategy in focus
Achieved its first breakthrough in 1993 when it
aggressively marketed its digital telephone switches in
smaller towns before expanding all over China
Huawei utilized this same strategy by first targeting
the underserved markets of Russia and Africa before
moving into Europe
Military culture is also epitomized in Huaweis rigidly
hierarchical organization
Association with IBM
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Huaweis international
expansion
Approach similar to domestic market
Attack soft targets first before moving into tough markets

1995-2000: Focused initially on Asia, Africa, Latin

America
Served customers with limited resources who couldnt
afford products of established multi-national companies
Established client base in over dozen countries &
generated revenue of $300 million (enough to gain
foothold in these markets)

2006: Sales in Africa had peaked over $2 billion

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Huaweis international
expansion

Successful entry into Eastern Europe and Southern Europe

Later entered Western Europe and North America
Achievements in International Markets
2009: Preferred supplier to British Telecom and Vodafone
International Revenue > Domestic Revenue
Worlds No. 2 Telecom equipment provider, just behind
Ericsson
New Beginnings for Huawei
New projects from Norway to build 4G cellphone network
Overtook Ericsson and Nokia Siemens in major international
deals
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Success of Huawei as a B2B

player
Stuck to their military strategy in
expanding to new markets
(domestic, international)
Acted like a wolf determined to
sense prey & attack ruthlessly
Desire to build a global consumer
brand

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Research & Development

Huawei selected alliance partners based
on their R&D capabilities
Innovation centers were setup within
major clients
Half of the employees engaged in R&D,
an extraordinary high ratio comparing
with any high tech company

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 More than 50,000 patents issued

Ranking No.2 in terms of patent applications
under the WIPO patents cooperation treaty.
R&D expenditure growing steadily and is
given 10% ratio of its total revenue every
year.
17 research institutes across: Dallas, Moscow,
Beijing,Bangalore, Stockholm etc

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MANAGERIAL TAKEAWAYS
Target and consolidate markets
neglected by strong
competitors
Being quick ruthless and
determined is important to
beat competition
R&D and innovation is the
cornerstone of success
Offering value for money is
necessary to capture market
share in EMEs
Prepare well for contingencies
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