Huawei SWOT Analysis

By /

Huawei is a leading player in the smartphone industry and one of the largest technology brands of China. It is based in Shenzhen, China. The company has acquired very fast growth in the global markets based upon its focus upon quality and competitive pricing strategy. It is also a highly innovative brand that invests a every large sum each year in research and innovation. The result has been fast growth of the brand in the global markets. The company is also a 5G leader and is working in partnership with several firms globally for large scale 5G deployment. While on the one hand, Huawei has seen a  lot of growth in the recent years, on the other, it is also facing a lot of controversies and problems at an international scale which have been caused due to the allegations of espionage against it. There are other hurdles too in the path of Huawei, several of which have the potential to derail its plans to become an international 5G leader. However, the brand has kept growing stronger over time and in the near future could acquire much more success given its advantage in 5G which has already become a cause of lots of furious debate in the US.

Read more about Huawei and its international success and competitive position globally in this swot analysis.

Strengths:-

Large product portfolio :-

One of the leading strengths of Huawei is its large product portfolio. The company has grown its range of smartphones fast. It is among the top three smartphone brands and number two overall in the international smartphone market. The number of smartphone shipments of Huawei have kept growing faster year over year. Growth in smartphone sales have also led to higher profits. Apart from ‘Huawei’ smartphones, it also sells ‘Honor’ smartphones. Along with smartphones, the brand has also brought a large range of other products and services which are targeted at individual users and other enterprises. Its entire business is divided into three segments that include consumer, carrier and enterprise businesses.

Technological innovation :-

Technological innovation is also an important strength of Huawei. It has maintained heavy focus upon research and innovation since its early years. The company invest a large sum each year in research and development. Its size of R&D investment has kept growing every year. It is mainly because of its heavy focus upon R&D that  the company has emerged as a leading player in smartphone industry as well as in the field of 5G technology. Apart from 5G, it is also investing heavily in AI to find faster growth. Technological innovation is helping Huawei find faster growth in the international markets. Its smartphones have gained popularity rapidly because of its camera technology.

Leading position in smartphone industry :-

Huawei is a leading player in the smartphone industry and its consumer business which makes and sells smartphones is its leading source of revenue. The number of smartphone shipments by Huawei have grown fast which has also led to fast growth in revenue for the technology brand. Huawei has surpassed Apple to become the second leading smartphone player in the industry. In 2018, its smartphone shipments totalled 223 million units. Apart from being loaded with innovative technology and efficient cameras, its smartphones are priced competitively which has led to fast surge in the market share of Huawei smartphones.

Global presence :-

The global presence of Huawei is also a leading strength of the brand. Its business has expanded globally qute fast leading to fast surge in revenue and market share as well as customer base. Huawei is a Chinese brand based in Shenzhen, China. However, its business operations span more than 170 countries and the company works with a very large network of suppliers, distributors and business partners from various corners of the world.  

Competitive pricing :-

Competitive pricing of Huawei is also a leading strength of the brand and an important reason that it has been able to achieve growth and popularity faster. It has employed a strategy that focuses upon quality and lower prices. The result is a larger market share in the global smartphone market as well as fast growth in revenue. Huawei also brings products for the higher end market. However, it has brought a large range of good quality products that are priced competitively and targeted at middle class consumers mainly.

Weaknesses:

Large number of controversies and tainted image :-

Huawei has faced a very large number of controversies which have tainted its image to a significant extent in the global market. Apart from espionage related controversies there are several more that have tainted the image of Huawei in the western nations and particularly US. While the rivalry between US and China and the close relationships of Huawei and Chinese government can be blamed to an extent for this, Huawei’s image is still considerably weakened. Huawei has previously been accused of using its resources for the purpose of espionage. Since, it lost the support of AT&T in US, it has continued to lose support from other key US partners as well. The arrest of its CFO in Canada was also a proof that the company was in deep trouble.

Weak position in US:-

US is a leading market for smartphone brands but Huawei’s position is very weak in this market. In government circles, people abstain from buying Huawei handsets. While it has faced investigations over several issues in US, Canada as well as Britain, it is nowhere even close to stand on a firm footing in US. Day by day its position in the US market, continues to grow weaker in United States. On the one hand, while the US government is bent on not letting it grow its presence in the US market, on the other its name has kept resurfacing in case related to espionage by Chinese government agencies leading to loss of goodwill in the United States of America.

Opportunities:-

5G and AI:-

Research and development have brought significant opportunities for Huawei. It is a leading player in the smartphone industry and has also gained a significant advantage in 5G technology. 5G and AI both are profitable areas full of opportunities and investing in these might bring Huawei into a leadership position in the global technology industry.

Marketing:-

While Huawei’s position as a technology firm is strong, its marketing strategy relative to its competitors has remained weaker. Instead of using a consistent branding and marketing strategy, the brand has relied mainly on its product quality and pricing strategy to gain market share and grow its customer base. However, for any leading technology brand, a strong marketing strategy is just as important as its core business strategy. Huawei too should focus upon its marketing strategy to create higher brand awareness and for a stringer image in the global market. Its rival Apple is known for its great marketing strategy and if Huawei can manage to improve its image through marketing, its position in western markets could be even stronger.  

Retail chain :-

Globally, the brand mainly uses online channels for sales. Now, Huawei has built a strong position and to further expand its global footprint, it should focus upon building its brand retail chain. Apart from marketing, this could also help to drive sales and customer loyalty higher.

Threats:-

Heavy competition:-

Competition in the smartphone industry has kept growing stronger. While the company has been able to grab a leading position in the smartphone industry, its position is still challenged by other Chinese and foreign players including Samsung, Apple and Xiaomi. To retain its position would require investment in marketing as well as research and development.

Regulatory pressures:-

Political and regulatory pressures are increasingly posing a serious threat to the global technology players. Huawei’s business internationally is also being seriously threatened by political pressures and the trade war between US and China. Not just US, but in other parts of the world too including Britain, Canada and Japan which are leading technology markets, Huawei is facing intense political pressure. It can significantly limit the growth prospects of Huawei’s international business.

Trade tensions between US and China:-

Growing trade tensions between US and China have also become a leading cause of trouble for Huawei. It is mainly because of the string relationships between the technology firm and the Chinese government. This has brought Huawei into limelight and its repercussions have been unfavorable for Huawei’s business. Alongwith Huawei other Chinese brands are also facing higher pressure because of the growing strain in American and Chinese trade relationships.

Conclusion:-

Huawei has strengthened its position considerably in the international markets in a limited time. The company has grown its smartphone business sharply in the recent years. With growth in number of smartphone shipments, the brand has also experienced sharp growth in revenue as well as market share. In the field of 5G also, Huawei is leading the way. However, there are several major hurdles before Huawei and its image in the western markets has been tainted because of its involvement in espionage cases. Growing trade tensions between US and China are also adding to Huawei’s worries.  Apart from investing in R&D, the brand also needs to focus on having a stronger marketing strategy to revive its image and grow brand awareness.