San Ignacio de Loyola University

FINAL PROJECT FIRST PRESENTATION

COURSE: Global Business Strategy (245683)

TEACHER: Ronald Raul Huerta Mercado Herrera 

MEMBERS:            
AÑANCA VASQUEZ, Naomi Margarita
LOBATÓN ROJAS, Kathia Michiko Jazmine
NUÑEZ CUSIHUALLPA, Ammy Cristel
PAJUELO VASQUEZ, Nisa Valeska
SOTELO HOSTTAS, Andrea Fernanda
 VILLAR SILVA, Juan Andrés

Lima-Perú
2020
1. Executive Summary

This report will present a brief history of the creation of Huawei Technologies

Co., Ltd. And as it becomes what it is today. Also, there will be an analysis of

Huawei’s mission and vision statements, as well as the company’s corporate

governance and situation in the market, taking into consideration both internal

and external factors.

2. Brief History

Huawei Technologies Co. Ltd is the leading global provider of information and

communication technology infrastructure that started working as a company

specializing in the development, production and sales of PBX (Private Branch

Exchange) products dealing with telecommunications equipment.

Huawei was founded in 1987 by Ren Zhengfei based in Shenzhen, Canton

Province, People's Republic of China. And it was born with an investment of

only $ 5,600 dollars. It was born as a distributor of imported PBX products,

being this a telephone center that manages internal, incoming, and outgoing

flames. Who after two years manages his own production and sale of PBX.

In 1993 Huawei began to accumulate

knowledge and resources through tests

and attempts and in that year it launched

a digital telephone switch. Starting to

distribute it in rural areas, but then it began to expand to new places, becoming one

of the largest companies in the world.

Huawei began to distribute telephony products to the Hutchison-Whampoa

company in 1996. And it launched GSM (Global System for Mobile

communications), which is a royalty-free system expanding its offer to CDMA

and UMTS technologies, being one of the technologies used by third generation

mobiles.

From 1998 to 2003, Huawei hires IBM, for management and consulting,

transforming, and developing products, with 2001 being the year where Huawei

expands rapidly. In 2007, he joined the North American security firm Symantec

developing security equipment and data storage for operators in the

telecommunications market.

In 2016, Huawei revenue

reached $ 75.1 million,

ranking in the top 50 with a

high rate of research and

development. This company

traded over 100 million cell

phones in 12 months.

According to Forbes magazine, it ranks 88 with a brand value of 7.3 million

dollars. And in 2017 the cell phone of that brand, the Huawei Mate 10 Pro,

became the best cell phone of the year.

3. Mission and Vision

 “To bring digital to every person, home and organization for a fully connected,

intelligent world.”

Huawei has decided to make a single statement to express its mission and vision,

looking for customers to focus on the fact they want to enrich their life through

communication.

- Huawei seeks to offer solutions to the problems of its customers, solving them

by making the most of the services they provide.

- The important points in this statement would be: global approach, care for the

well-being of its customers, mention of technology, among others.

- Huawei’s values that link with the organizations purpose are openness,

collaboration and shared success; reinforcing the company’s strategy of

spreading and making digital communication a secure and easy action.

4. Corporate Governance

Like in any other company, shareholders play a fundamental role in Huawei. Its

shareholders' meeting (the union with its 49 representatives and the CEO), is the

authorized body that makes important decisions related to the distribution of

capital and profits, as well as the selection of members of the main governing

bodies: board of directors and members of the supervisory board.

The board of directors protects the interests of the shareholders as well as the

clients. The board has 17 members, with a president, four vice presidents, three

executive directors, and nine directors.

In the case of Huawei, the supervisory board has 10 members and oversees the

board of directors, the operating and financial status of the company, as well as
its internal control and legal compliance. In addition to the president and four

members, five on the supervisory board are designated "executive members."

Firstly, Huawei is a fully employee-owned, private company. All shareholders

are employees although not all employees are shareholders. Employees are

supposedly hired by the management, and yet they constitute the shareholder

body.

Furthermore, it also has a most novel practice of rotating chairmen in the board

of directors. Each rotating term lasts only six months. There are currently three

directors designated as chairs, and the rotation schedules are fixed in advance.

Huawei has distinctive bodies of governance, there are high membership

overlaps. The chairs of the board of directors and supervisory board are also

members of the representatives' commission. Likewise, members of both these

boards can be in the commission as well, but it is needed a good separation of

roles and viewpoints.

Lastly, the CEO and founder of Huawei, Mr. Ren Zhengfei. He is the central

figure in all the governing bodies of Huawei, except the supervisory board. He

also sits on the representatives' commission as well the board of directors,

though he is not classified as an executive director.

 5. SWOT Analysis
POSITIVE FACTORS NEGATIVE FACTORS
STRENGHTS WEAKNESS
 Automation of activities brought  The profitability ratio and Net
consistency of quality to Huawei Contribution % of Huawei are
products and has enabled the
below the industry average.
company to scale up and scale down
 Not very good at product demand
based on the demand conditions in
forecasting leading to higher rate
the market.
 Highly skilled workforce through of missed opportunities compare
successful training and learning to its competitors.

INTERNAL programs.  Financial planning is not done

FACTORS  Strong Brand Portfolio – Over the properly and efficiently.
years Huawei has invested in  The company has not been able
building a strong brand portfolio. to tackle the challenges present
 Successful track record of developing
by the new entrants in the
new products. 
segment and has lost small
 Successful track record of integrating
market share in the niche
complimentary firms through mergers
& acquisition. categories.
 Strong distribution network.  High attrition rate in work force.
 Strong dealer community.
EXTERNA OPPORTUNITIES THREATS
L  Government green drive also opens  The company can face lawsuits in
FACTORS an opportunity for procurement of various markets given - different
Huawei products by the state as well laws and continuous fluctuations
as federal government contractors.
regarding product standards in
 Stable free cash flow provides
those markets.
opportunities to invest in adjacent
 product segments.  Rising raw material can pose a
 Decreasing cost of transportation threat to the Huawei profitability.
because of lower shipping prices can  No regular supply of innovative
also bring down the cost of Huawei’s products.
products thus providing an  Changing consumer buying
opportunity to the company - either to
behavior from online channel
boost its profitability or pass on the
could be a threat to the existing
benefits to the customers to gain
physical infrastructure driven
market share.
supply chain model.
 Opening up of new markets because
of government agreement.  Growing strengths of local
 New customers from online channel. distributors also presents a threat
 The new technology provides an in some markets as the
opportunity to Huawei to practices competition is paying higher
differentiated pricing strategy in the margins to the local distributors.
new market.

REFERENCES

El Comercio. (2019). ¿Quién fundó Huawei? La historia de la empresa china de

celulares sancionada por Estados Unidos. Lima-Perú: Diario El Comercio. Retrieved

from: [Link]

empresa-china-celulares-sancionada-estados-unidos-google-android-noticia-nnda-nnlt-

637408-noticia/

Huawei. (2020). Corporate Information. Huawei Web Page. Retrieved from:

[Link]

Díaz, C. (2019). Historia de Huawei. Historia-Biografía. Retrieved from:

[Link]

Huawei Latinoamérica. (2018, December 11th). Huawei Misión & Visión. [Video file].

Retrieved from: [Link]

Comparably. (s. f.). Misión, visión y valores de Huawei. Retrieved from:

[Link]