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Intercultural Studies Research Paper 16
Abstract
This paper analyzed the cultural ba
iers Huawei faced in the past and despite them, managed to emerge one of the leading telecommunication companies. The paper helped to make understand the cutting-edge technology used by this Chinese high-tech firm to reach the top in the manufacturing of mobile phones in the world. For a country like China, it becomes very challenging to compete with the world's top corporations by not opting for a compromise when it comes to cultural depiction. Because emerging economies face more cultural ba
iers to expansion than the developed economies. They are not comfortable leaving their culture behind and the global market is not flexible enough to provide them equal opportunities like others by accepting their culture. The objective of this paper was to explore the reasons and the factors that played a major part in the developing the company to the successful high-tech organization in a shorter period of time. The purpose was to highlight the strategies adopted by this Chinese company to compete in the multicultural global environment. Effective cross-cultural communication strategies and training for the employees have been effective for combatting the cultural and language ba
ier among local communities and Huawei.
Introduction
Established in 1988, Huawei a Chinese company by origin which soon became one of the leading multinational information technology corporations in the world after Apple and Samsung. Huawei achieved the status of becoming the biggest patent applicant internationally in 2008 under the WIPO Patent Cooperation (Li Sun, XXXXXXXXXXHuawei operates in more than 170 nations. The company left behind the Ericsson in 2012 to become the largest telecommunications equipment manufacturer in the globe and crossed Apple this year in the second largest manufacturer of the smartphones in the world, only behind Samsung Electronics.
This company was founded by an engineer named Ren Zhengfei in 1987. When it was established, the company only used to make phone switches but expanded rapidly to other equipment, telecommunication services, and networks and consulting services in the home county as well as in host countries targeting the consumer market. More than half of its total employed people ratio is found to be engaged in Research and Development. Huawei has around 21 institutes of research and development in some counties like Canada, United States of America, Germany, Sweden, Ireland, Turkey, Israel which also includes China. Revenue of Huawei witnessed a major rise in 2008 to 36%, which reflected much better performance than most of its other competitors involving Ericsson, Alcatel-Lucent, Motorola, and Cisco etc. Huawei became popular in the global market due to its possession of high-end technologies as well as cost-effective products in the market as compared to the other telecommunication companies who lacked the high quality in technological products and if some companies excel in technology and quality like Apple and Samsung then their price range are not adjustable for every consumer. Huawei was also listed by Business Week Magazine as one the world's most influential companies, which consists of companies that have revolutionized the world since 2008 with their extraordinary products and services and have the potential to change the course of the corporate sector in coming years. Huawei is leading by example in emerging economies MNE with 75% of its revenue is generated outside China and which after capturing the domestic market, is set to give tough time to its rivals in the global market with the provision of continuous advancement in technological products. The strategies Huawei has adopted in the past few years are the key to its success and they should be studied deeply by other companies too.
This paper sheds some pieces of evidence on the rapid growth of an emerging economy corporation in the global market with its exceptional strategies related to cultural, economic and technological aspects. This paper will analyze the cultural ba
iers Huawei faced in the past and despite them, managed to emerge one of the leading telecommunication companies. The paper will through some light on the cutting edge technology used by this Chinese high tech firm to reach the top in the manufacturing of mobile phones in the world. For a country like China, it becomes very challenging to compete with the world's top corporations by not opting for a compromise when it comes to cultural depiction. Because emerging economies face more cultural ba
iers to expansion than the developed economies. They are not comfortable leaving their culture behind and the global market is not flexible enough to provide them equal opportunities like others by accepting their culture. The objective of this paper is to explore the reasons and the factors that played a major part in the developing the company to the successful high tech organization in a shorter period of time. The purpose is to highlight the strategies adopted by this Chinese company to compete in the multicultural global environment.
Research Question
· How Huawei managed to rule the global market in the presence of apple and Samsung?
· What were the strategies adopted by a Chinese company like Huawei to compete in the multicultural global environment?
Research Objectives
· To explore the reasons and factors that helped the Huawei to stand successfully in the presence of Apple and Samsung.
· To highlight the strategies that were adopted by Huawei to compete in the multicultural global environment.
The methodology which was followed for this particular research question was the strong evidence of cu
ent literature and the trends shown by the organization in the past few decades. In-depth literature was studied and represented denoting that the background of the organization has evolved in so many dimensions and in spite of cultural differences and cultural diversity, it has still managed to make its mark in the book of revolutionary organizations of technology.
There was a need to consider this topic for the research paper was because Huawei has evolved in the last few years and since then it has undertaken different partnerships in order to achieve customer satisfaction. The company was formed in 1987 but it is most active since 2001, with cultural limitations in the global market, it still managed to perform quite well as compared to some of its other rivals. Chinese do no compromise on their culture when it comes to business. They feel pride in their nationalism and cultural traits as compare to other companies.
This paper is divided into a few sections. The first section introduces the topic under the study and gives its
ief background also with objectives and research questions. The second section then discusses the research findings relevant and appropriate to the research topic and the third section analyzes the discussions along with conclusions in the end.
Research finding
Internationalization means when a firm conducts its business operations outside its home country. When it comes to internationalization, many research methods are used. According to the MNE theory, many MNE's exist because they are able to exploit their knowledge in the external market and they have a much competitive advantage (Li Sun, 2009).
Huawei was founded with a bank loan and 30 employees in 1988 and grew to a company of 6000 employees in 1998. In 2008, it jumped from a local player to the global competitor. Since 2007, it surpasses the Nortel Networks and became world’s fifth largest equipment manufacturer. Since it started, it reinvests more than 10% of the sales in research and development. It provides innovative services and products to its customers. Its global R&D centers are located in India, Russia, USA, and Sweden and in China(Beeson & Xu, 2016).
Domestic to Overseas Market
Huawei has been highlighted as having the military background but it actually receives a little contract from China's military. Discipline, hard work are the main drivers of Huawei's employees. Huawei is known for its excellent technology and low price. Huawei's aggression and unkindness made it the number one supplier even before Nokia and Ericson. Huawei keeps a furious attack with its low-cost R&D and enjoys a cost of US$25000 per annum in research (Duanmu, 2014).
Huawei is Pain in the US
The company started in 2001 aggressively in North America. Its products had 30% less price as compared to the Cisco. The competitors recognized Huawei router's quality. Huawei IPR's were accused by Cisco in 2003, which prevented the company from selling its products in the US market. After this, it emphasized competition and established joint R&D labs in Texas. By June 2005, it had 10 joint research labs. Cu
ently, it has joined 83 ISO and is taking part in international settings (Li Sun, XXXXXXXXXXIt has also submitted a total of 3072 proposals in 2007 to build its global network (Beeson & Xu, XXXXXXXXXXIts domestic market provides earning by doing experience. Huawei sets IBM as its strategic partner and IBM laid its foundation for Huawei's competitiveness.
MNE’s from Emerging Economies: Huawei Case
It is hard for local firms to apply the knowledge of advanced technology firms innovation strategies evolve in the different stages of technological adaptions. Different dimensions of absorptive capacity play roles in these stages. Local firms in these economies enhance ACAP in the transformation process.
Huawei Internationalization Process
There are four modes for internationalization according to the Uppsala Model, which include no regular export activity, establishing overseas sales subsidiary, export via an independent representative and overseas production units. Huawei used different modes to enter the international market; the company founded in 1988 specializes in its research and development (Li Sun, XXXXXXXXXXThe first step in its internationalization is providing customized designs of numbers portability service in Hong Kong to Hutchison Telecoms. It spends the tenure of just three months and the price less than that of other competitors (Li, C. & Cui XXXXXXXXXXAfter that, the company decided to enter the international market and the first selected were Russia and Southern America. In 1996 it entered the Russian market and set-up a joint venture Beto-Huawei with Russian Beto Konzern. It got its first order in 2000 and after that, the Russian market started to grow rapidly. In 2003, it got the sale volume of about USD 0.3 billion in Russia and the other su
ounding markets. It also acquired 50% of the
oadband market and on the other hand, its performance in Southern America was not very admirable. The sales were less than USD 0.1 billion up to 2003 (Wu XXXXXXXXXXLater after 2000, the target market of Huawei was extended to Southern Asia, Middle East, and Africa as well. Through the local agents, Huawei's products were sold in West Europe in Germany, Spain, France, and the United Kingdom (Liu, H., Zhang, & Li, 2016).
After the success of Huawei’s internationalization, Huawei applied the different market entry modes to enter the different geographical and product market (Wu & Zhao, XXXXXXXXXXThe international business began at Russia as the company opened a joint venture with Russian Beto Konzern and Russia Telecom. Being the new player in the market it faced hardships n developing itself in the international market as