How HUAWEI becomes zero to billionaire !

1. Jiangxi, PR China
International Masters in International Business (IMIB)
School of International Trade & Economics (SITE)

2. Course Title:
Brand Strategy for Multinational Companies
Presentation On:
HUAWEI Success StoryHUAWEI Success Story
(How HUAWEI becomes zero to billionaire)
Date: April 13, 2016

3. Presented To: Dr. SHU Jin
Presented By:
• Esther Mpiirirwe 31540031
• Saeed Ullah 31540046
• Md Ameer Hossen 31540049
• Mohammad Tawhidur Rahman 31540051
• Hortense Stephenson 31540055
• Jamshed Alam 31540057

4. OverviewOverview
Name : Huawei Technologies Co. Ltd.
Type : Private (Employee-owned corporation )
Industry : Telecommunications equipment,
Networking equipment
Founded : 1987
Founder : Ren Zhengfei
HQ : Shenzhen, Guangdong, China
Area : Worldwide
Products : Mobile and fixed broadband
networks, consultancy and managed
services, multimedia technology, smart
phones, tablet computers, dongles
Start-up : $ 3000~4000 (1987~88)
Assets : $ 57.319 billion (2015)
Revenue : $ 60.839 billion (2015)
Employees : 170,000+ (2015)

5. How They StartHow They Start
• During the 1980s, China's government tried to modernize the country's
underdeveloped telecommunications infrastructure.
• Ren Zhengfei, a former deputy director of the People's Liberation Army engineering
corp, founded Huawei in 1987 in Shenzhen. Ren hoped to build a domestic
Chinese telecommunication company that could compete with foreign competitors.
• HUAWEI is the official English transliteration of the firm's Chinese name (simplified
Chinese: 华 为 ). The etymology of the character 华 is derived form " 花 " which
means "flower". This is hinted at in HUAWEI's logo.
• The company reports that it had RMB 21,000 ($ 3000~4000) in registered capital at
the time of its founding. During its first several years the company's business model
consisted mainly of reselling private branch exchange (PBX) switches imported
from Hong Kong.

6. Key PersonnelKey Personnel
Mr. Ren Zhengfei
Founder, Deputy Chairman
of the Board & CEO
Sun Yafang
Chairwoman of the Board
Xu Wenwei (William Xu)
ED, President of the Company’s
Strategy Marketing Dept.

7. Initial JourneyInitial Journey
• By 1990 the company had approximately 500 R&D staff, and began its own
independent commercialization of PBX switches targeting hotels and small
enterprises.
• Huawei’s first major breakthrough came in 1993, when it launched its C&C08
program controlled telephone switch. It was by far the most powerful switch available
in China at the time.
• By initially deploying in small cities and rural areas and placing emphasis on service
and customizability, the company gained market share and made its way into the
mainstream market.
• In 1994, Huawei gained a key contract to build the first national telecommunications
network for the People's Liberation Army of China.
• Another major turning point for the company came in 1996, when the government
adopted an explicit policy of supporting domestic telecommunications
manufacturers and restricting access to foreign competitors.

8. • In 1997, Huawei won its first overseas contract, providing fixed-line network
products to Hong Kong company Hutchison Whampoa.
• Huawei launched its wireless GSM-based products and eventually expanded to
offer CDMA and UMTS.
• In 1999, Huawei opened a research and development (R&D) center in Bangalore,
India to develop a wide range of telecom software.
• From 1998 to 2003, Huawei contracted with IBM.
• After 2000, Huawei increased its speed of expansion into overseas markets.
• In 2001, Huawei joined the International Telecommunications Union (ITU).
• In 2004 Huawei made a contract to build a third-generation network for Telfort, the
Dutch mobile operator. It was the first such contract for the company in Europe.
• In 2005, Huawei’s international contract orders exceeded its domestic sales for the
first time.
• Huawei signed a Global Framework Agreement with Vodafone. This agreement
marked the first time a telecommunications equipment supplier from China.
International ExpansionInternational Expansion

9. • In 2005, Huawei also signed a contract with British Telecom (BT).
• In 2008, Huawei embarked on its first large-scale commercial deployment
of UMTS/ HSPA in North America providing TELUS's new next generation wireless
network and Bell Canada with high-speed mobile access.
• Huawei delivered one of the world’s first LTE/EPC commercial networks
for TeliaSonera in Oslo, Norway in 2009. The company launched the world's first
end-to-end 100G solution from routers to transmission system that same year, to
help meet the rapid growth of network traffic and enhance router efficiency and
reliability.
• In late 2010 it was reported that Huawei is planning to invest around $ 500 million to
set up a telecom equipment manufacturing facility in Tamil Nadu and $ 100
million to expand its R&D center in Bangalore, India.
• Huawei has over 70,000 product and solution R&D employees, comprising more than
45% of our total workforce worldwide. It has 16 R&D centers in countries including
Germany, Sweden, USA, France, Italy, Russia, India, and China, and in 2014
invested $ 6.4 billion in R&D.
International ExpansionInternational Expansion cont.cont.

10. At a GlanceAt a Glance
170+
Countries
76,000
R&D
Employees
16
R&D
Center
45
Training
Center
~170,000
Employees
14
Regional HQ
28
Joint
Innovation
Center
HUAWEI
A Global
Leading ICT
Provider

11. Expansion StrategiesExpansion Strategies (JV/ investment)(JV/ investment)
• From B2B to B2C
– When willing to enter a country’s market, Huawei will often sign contracts with
government entities, to ensure their image of a reliable brand.
– After several brand awareness steps Huawei finally sell their own brand of
handsets directly to consumers.
• Then Huawei likes to operate as a partner or a vendor for the country’s
telecommunication companies – either for handsets or their network infrastructure,
while studying the market and the culture of the country in the meantime.
• Huawei has joint venture/ investment with-
– 3Com Corporation, USA (2003)
– Siemens, Germany (2005)
– Motorola, USA (2006)
– Telecom Venezuela (2006)
– Symantec, USA (2007)
– Global Marine Systems, UK (2008)
• Grameenphone Ltd. Bangladesh and Huawei won the Green Mobile Award at
the GSMA Mobile Awards 2009.

12. ExpansionExpansion StrategiesStrategies (partnership)(partnership)
• As of the beginning of 2010, approximately 80% of the world's top 50 telecoms
companies had worked with Huawei. Prominent partners include:
– BT (British Telecom), UK
– Vodafone, UK
– Motorola, USA
– Orange, France
– T-Mobile, Germany
– TalkTalk, UK
– Portugal Telecom
– Cox Communications, USA
– Bell Canada
– Clearwire, USA
• In May 2011 Huawei won a contract with Everything Everywhere, the UK’s biggest
communication company, to enhance its 2G network. The four-year deal represents
Huawei's first mobile network deal in the UK.

13. Key ProductsKey Products
MateBookSmartPhone
WiFi Modem RouterNetworking Switch
LTE terminal device

14. Brand StrategyBrand Strategy
• From the very beginning Huawei leverage Word-of-Mouth marketing strategy to
build their brand. But from 2013, they realize proper brand requires a strategy with
“multiple legs” such as advertising in different media and sponsorships.
• Consumer-centric premium brand strategy. In 2013, Huawei launched its "Make it
Possible" campaign aimed at making the connected world a reality for more people.
• Huawei's award-winning Ascend-series of smartphones clearly illustrate how the
company is working to change its image in the mobile handset market-from that of the
low-cost alternative to one of a premium brand.
• Focused on innovation and globalization, Huawei strategically utilizes its resources
according to market demand and has adopted a new marketing approach to enable
this.
• Its work in partnering with telecom carriers around the world is being leveraged as
a way to show people how much of a positive impact Huawei products have on their
daily lives.
• According to global market research company IPSOS, Huawei’s brand awareness
reached 52% globally and 68% in China in 2013, a year-on-year increase of 110%
and 113% respectively.

15. Brand CooperationBrand Cooperation
Huawei is the the Principal Sponsor of Royal
Challengers Bangalore for IPL Season 7
Huawei has become the official smartphone
partner of Arsenal FC
Since the beginning of 2014, Huawei has launched a series of promotional campaigns
worldwide to build its ‘Make it Possible’ brand worldwide which includes sponsorship
activities with leading football and other sports organizations.
• La Liga, Spain
• AC Milan, Italy
• Borussia Dortmund, Germany
• Atlético de Madrid, Spain
• Arsenal Football Club, UK
• Paris Saint-Germain FC, France
• Galatasaray Sportif A.Ş,Turkey.
• RC Bangalore, India

16. Brand PositioningBrand Positioning
Main positioning
approaches of
the leading
Smartphone
brands in the
Chinese market
Features
Style/ Design
Durability
Performance/ Specification/ Customization
China’s telecom giant Huawei has established successful B2B businesses in more
then 170 countries and their Smartphone divisions are fast expanding. Huawei is now
become the 3rd biggest Smartphone brands in the world behind Samsung and
Apple. With solid technical expertise, Huawei has been steadily pushing medium-low
end smart phones to the Chinese and global markets.

17. AchievementsAchievements
• Brand Finance, a UK based consulting firm selected Huawei among World’s Top 100
Most Valuable Brands in 2016, ranked 47th
.
• Huawei became the first Chinese company to rank in Interbrand's Top-100 Best
Global Brands of 2015, at #88 and 2014, at #94.
• Huawei was also chosen by BrandZ in 2015 for its "Global Top 100 Most Valuable
Brands," ranked 16th among science and technology brands.
• Huawei has been awarded 'European Consumer Smartphone 2015 - 2016' by the
EISA for its latest flagship smartphone, Huawei P8.
• Huawei Ascend P7 won 2014-2015 EISA best product- consumer smartphone.
• And many more awards around the globe.
Lionel Messi Joins the Huawei Family of Global Brand Ambassadors

18. Worldwide PresenceWorldwide Presence
• A household name in Asia and increasingly in Western markets, Huawei is also
rapidly becoming a market leader in Latin America and Central Asia, and a major
player in Canada.
• In 2015, Huawei achieved significant results from its focus on the pipe strategy. The
company achieved sustainable growth in the carrier, enterprise, and consumer
businesses. Its annual revenue totaled CNY 395,009 million, a 37.1% increase over
the previous year.

19. ChallengesChallenges
• Lack of brand name recognition outside China. It is partly countering this
challenge by focusing on consumer products.
• It plans to increase its enterprise business, while reducing its telecom
equipment business.
• They also face challenges of quality issues with their smart phones. To
overcome this, it is hiring talent from other global companies such as Nokia.

20. ChallengesChallenges cont.cont.
• Biggest challenge is how to sell its consumer products in the USA. In the US,
one gets a phone along with a contract, so people only know what the cellular
service provider will sell them. Huawei has not figured out how to do the marketing
or retail side of it. One way of countering this challenge is bringing in more
foreign expertise, especially for marketing.
• Only quarters of its employees are foreigners and have no non-Chinese on its
board of directors or in other senior posts.
• Another big challenge is 'fear of Huawei' that it is involved in industrial &
communications espionage. USA and other countries have banned all kinds of
Huawei equipment from its networks.
• Huawei is fighting these allegations by claiming the security concerns are
unfounded & it has been caught up in a trade war between USA and China. In
addition, it has offered these hostile governments with complete and unrestricted
access to its software code and equipment.

21. Current StatusCurrent Status
Revenue
395,009
CNY million
Net profit
36,910
CNY million
Cash flow from operating activities
49,315
CNY million
• A ROADS experience
drives carriers'
digital transformation.
• The MBB 2020
Strategy outlines a
new blueprint.
• Entering the Gigaband
era.
• The BDII guiding
principle fuels
innovation.
• Smart devices with an
inspired experience.
• 4.5G helps carriers tap
into vast new markets.
• Accelerating 5G
development through
extensive innovation.
• Building a cloud
ecosystem.
• Actively supporting
developers.
• Adopting a Product +
Service strategy.
• Establishing partner
alliances.

22. Key to be BillionaireKey to be Billionaire
• To minimize management cost
– Huawei people, both managers and employees, used to work in a small office
that also served as kitchen and dormitory.
• Worldwide market expansion
– For being a multi-national company, it tried to meet the global demand. From
1996-2000, Huawei spent over US$150 million on its transition.
• To ensure high quality output
– It is an important reason, while many other Chinese companies have not.
• Customer-First Attitude
– Huawei distinguishes itself as, its employees turning their eyes to the customers
and their backs to the bosses.
• Employee Dedication
– A dedicated and committed work force makes Huawei more competitive. In fact,
Huawei is not a public company, and is owned by the employees. The idea
behind this is that he wants every official to act like the boss.

23. Key to be BillionaireKey to be Billionaire cont.cont.
• Long-Term Thinking
– By setting the employee-ownership arrangement, Huawei is able to attract and
retain dedicated employees and to plan for the long term.
• Gradual Decision-Making
– Ren Zhengfei avoids making quick decisions and forces himself to take time to
think. His company shows these features as it keeps the decision-making power
under its own control. In addition, Huawei stresses on “the power of thinking”
which is considered as the most valuable thing for the company’s philosophy.
• Finally, see the slogan of Huawei’s helmsman. You can realize something how
Huawei became billionaire!!
– Ren Zhengfei’s favorite slogan in the early days of Huawei is ‘we shall drink to
our heart’s content to celebrate our success (ren sheng de yi xu jin huan), but if
we should fail let’s fight to our utmost until we all die (ju gong jin cui, si er hou yi).

24. Global Leader: Behind the SceneGlobal Leader: Behind the Scene

25. THANK YOUTHANK YOU