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International business Report Huawei Case Study

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International business Report Huawei Case Study

1. Introduction Of International business Report 

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The management of business activities in an organisation with operation and service markets in more than one countries is termed international management. International management. Such a concept underlines the fact that skills need to be far more sophisticated than national border management. Global business concerns the international and worldwide commerce of commodities, services, technologies, resources and/or knowledge (Premarathna, 2021). Cross-border operations between two or more nations in goods and services are included in this. Economic resources transactions involve capital, capabilities and employees to produce physical products and services internationally, including banking, finance, construction and insurance services. The following report is concentrated on analysing the international business environment of a worldwide renowned technology company, Huawei, and its management functioning in the operation in the UK market. The problems or challenges and opportunities, as well as the difference in the national and international business approaches of the company, will be explained briefly.

2. International Business Environment of Huawei

Huawei Technologies Co. Ltd. is a leading Chinese world supplier of ICT infrastructures and intelligent gadgets. Huawei is committed to providing digital services to all individuals, homes and companies in a completely integrated and dynamic world through sustainable systems across four core domains, such as telecommunications networks, smart devices, IT and cloud services. Kee et al (2019) stated that Huawei is both competitive and safe in the end-to-end product portfolio, solutions and services. The company creates lasting value for its clients, empowers individuals, enhances home lives and stimulates innovation in enterprises of any shape or size by working openly with ecosystem partners. Several powerful reasons have given to Huawei its success in reaching the world market, and organisational culture is one of the fundamental factors behind its success as well.

The distinctive qualities that constitute Huawei’s culture, which distinguish its achievement from other competitions, are worth exploring.According to Chacon & Rajawat (2019), Huawei operates its worldwide operations from the UK, where it built its first office in 2001. In April 2005 BT received a contract to support the modernization of the British mobile network and the combination of existing technology as part of a $12 billion initiative. In 2015, Huawei was ranked as the top in the smartphone market in China and third worldwide. Huawei also has become the world’s leading smartphone supplier by the first quarter of 2020 (Fenn, 2020).

3. Problems and Opportunities in Management of International Business Operations

3.1 Problems or Challenges for International Business Management

  • Culture

Culture shapes every society’s customs, beliefs, behaviour and purchasing choices. A business should examine all the cultural elements of a selected community in carrying out a company strategy in a foreign land (Tenzer, Terjesen & Harzing, 2017). The degree of international trade and travel is increasingly related to cultures and cultural dispersion can affect the meaning of national cultures.

  • Language

Language disparities influence the way people, clients and business partners communicate. The foreign company must determine whether English can be used as a working and advertising language in society or the management of that language should learn the country’s language and develop a strategy on that language. It can be achieved by using the knowledge of the foreign language, basically English, as per Tenzer, Terjesen& Harzing (2017).

  • Team Management

The management of personnel around the world represents another barrier for international businesses. When trying to work as a team, language hurdles, cultural differences, time zones and different levels of technology availability and dependency might difficultly be accounted for.

  • Exchange of Currency and Inflation Rate

The value of a dollar in one country in the currency of another country will not always be the same and the value of the currency will not always be the same quantity of goods and services. The rates that are indicated as a percentage in a general rise in costs in an economy year after year are also necessary to keep up with inflation (Cote, 2020). Inflation rates vary from country to country and can affect materials and labour costs and product prices.

  • Foreign Politics, Policy and Relations

Based on politics, policymaking, laws and relations between nations, business does not operate in a vacuum, as per Cote (2020). Since these interactions can be very intricate, organisations should follow the news of nations where they are doing business extensively. Political leaders can make decisions that affect taxation, labour legislation, costs of raw materials, transit infrastructure, educational systems, etc.

3.2Opportunities from International Business Management

  • New Market and Increased Customer Base

Companies belonging to domestic markets with minimal growth potential always desire to extend their activities in a global approach with a worldwide strategy for profit (van Rossum, 2017). International growth for several companies provides the opportunity to conquer new territory and attract new consumers, hence boosting sales.

  • More Sources of Finance

Organizations can generate funds overseas in several ways. Global corporations have access to global capital markets money by opening up an economy and operating company organisations globally (Connolly & Jackman, 2017). Commercial banking, international capital markets, international agencies and development banks are several international resources from which funds can be created.

  • Economies of Scale

Increasing operations of companies decrease the total product costs, and the integration of vital resource functions leads to optimum economies of scale. By sharing resources and information with other nations on international markets, organisations can build core competencies. The sharing of knowledge assists expand its operations and provide effective cost-effective products and services.

  • Access to New Resources

International labour often offers distinct benefits for firms in terms of higher productivity, advanced linguistic abilities and various learning backgrounds, etc. International talent can also increase a company’s innovation performance (Dinu, 2016). It is one reason, for example, that global entrepreneurs and skilled people welcome international marketplaces often in a highly dense and successful start-up ecosystem.

  • Diversification

Market experts like van Rossum(2017) have stated that numerous companies are expanding for diversification of their assets worldwide, a step that helps protect a corporation against unforeseen catastrophes. Most organisations expand and diversify their operations, achieve profitability and unlock new markets to overcome the cyclical patterns of business in various regions of the world. It is one of the causes behind the rapid growth of international commerce.

  • Foreign Investment

The additional investment potential that overseas markets may offer must not be forgotten by companies considering worldwide expansion. Several firms, for example, can generate new resources and create vital links through global market operations (van Rossum, 2017). Multinational companies can also benefit from attractive investments which may not exist in their country of origin.

  1. Current Problems/Challenges and Opportunities of Huawei in the UK Market

4.1 Challenge: UK Policy and Its Relation with China

It was allegedly threatening to repress British corporations, including BP, Diageo, GlaxoSmithKline, Intercontinental Hotels and Jaguar Land Rover, with their presence in China. According to a new report from the parliamentary committee, the Chinese government’s threats should encourage the UK to contemplate a quicker removal of Huawei from its 5G market. Huawei was scheduled to produce 35 per cent of the UK 5G network equipment but is currently projected to hand its role over to several rivals, including Nokia, Samsung and Ericsson (Fenn, 2020). Various other European nations also reassess their relations with the company. Germany is due to decide in September, but Deutsche Telekom, Huawei’s largest consumer in Europe, vehemently opposed blanket prohibitions against individual foreign sellers.

On the other hand, the UK administration has said that, as of 31 December, it will prevent mobile providers from purchasing 5G Huawei equipment and will compel the removal of the kit from its 5G network by 2027. Under proposals of the defence committee of a cross-partners group that led this year’s summer investigation into the state of the 5G industry, UK service providers would be compelled to eliminate this Chinese product supplier by 2025 rather than the present deadline of end-2027 (Morris, 2020). The decision took after the United States warned Huawei that it may jeopardise national security by spying on the nation with its presence in the UK, and perhaps support cyber-attacks, but that Huawei vehemently denies that claim.

4.2 Opportunity: Dependency of UK Technological Infrastructure Market on Huawei

Nowadays the Chinese firm provides multi-stakeholder radio equipment for the broadcast and relay of mobile network signals to the core network. It spans from 5% of O2 technology to one-third of Vodafone technology (Rockman, 2020). Smartphones and WiFi hubs are also sold for millions by Huawei. One reason for Huawei’s choice in this market is that only a handful of firms have been reduced to the global telecommunications market. Security officials in the UK have hesitated entirely to prohibit Huawei since they want a diversity of providers to protect them from threats. As per Chan and Kirka (2020), less company would lead to the matter that the remaining players are focused on security threats. Only three important players, including Ericsson, Nokia and Huawei, have a mobile network infrastructure in the UK.

In this context, there was a strong incentive to purchase everything from a single provider in the day when there were lots to select from. Although Orange was created fully with Nokia, other networks elected to use a multi-source package that provided them with the opportunity to negotiate (Flides, 2018). Besides, Huawei has the greatest market share in 5G network base stations in Europe, towers that receive signals and transmit them to mobile networks from smartphones. The 5G networks are developed in addition to this current equipment that will take several years for Huawei’s gear to be removed and replaced by other firms and will cost billions of euros for its networks.

5. Strategic Approaches for Business Operation by Huawei Management in Domestic and International Markets

5.1 Customer-Centric Strategy in Particularly Domestic Market

The procedures behind the business model of Huawei are derived from the issues it experiences as an ICT company. Such procedures incorporate global hardware and software development and need Huawei to meet the demands of different markets and regions at the highest possible speed, in an environment of continuous innovation in a rivalry with similar competitors (Micheli & Carrillo, 2016). The technological, innovative and organisational fields are the problems that the corporation is facing. The company was born and grown based on competitive market share, adjusting it timely and at the lowest price to the customer’s needs. Such a basic strategy has been created first for the market in China but was applicable in Mexico as well. This means that both electronic items and software programmes in their global markets can be tailored and assembled as quickly as possible.

5.2 Joint Venture, Export and Contract Partnership in Most International Markets

Nevertheless, in the case of joint ventures in Russia, the US and Europe, exports for Latin America and contracts for Africa, Huawei are always looking for an initial sale, although it takes time to do so when established in any region. After joining the UK, the corporation has concentrated on the joint venture approach to build its overseas market business. To the end of 2019, Huawei has built more than 28,000 global partnerships and for the 8th year in a row, it had yearly growth rates above 10% (Surong, n. d.).The approach of “being integrated” for enterprise clients is Huawei’s corporate strategy at international level. This kind of business has proven appropriate for Huawei and functions as a type of self-restraint for the organization. Such an integrated approach allows Huawei not to compete with partners nor to emphasize empowering them as well.

6. Conclusion

Internationalisation, a move towards a global economy that is more interdependent and linked, generates more international commerce opportunities. This globalisation, where trade obstacles are decreasing and customer preferences are changing, is suitable for different types of markets. It may also be seen as far as production is concerned, in which a company can readily obtain goods and services from others as Huawei does in the UK market.Innovation in Huawei concentrates on the needs of customers, which is followed in business strategy, mostly in the domestic market, whereas the company mostly follows partnership strategy for international business operation. The tech giant invests heavily in fundamental research, focusing on technological advances that develop the world.

References

Chacon, M. D. M., & Rajawat, A. (2019). A case study on Huawei technologies. Journal of the Community Development in Asia (JCDA)2(3), 29-36.

Chan, K. and Kirka, D. (2020). UK faces choice on Huawei with global implications. Retrieved on 24th June, 2021 from https://apnews.com/article/ac163175d0c63fa4e194d09aab465644

Connolly, E., & Jackman, B. (2017). The Availability of Business Finance. RBA Bulletin, December, 55-66.

Cote, C. (2020). 5 COMMON CHALLENGES OF INTERNATIONAL BUSINESS YOU SHOULD CONSIDER. Retrieved on 24th June, 2021 from https://online.hbs.edu/blog/post/challenges-of-international-business

Dinu, A. M. (2016). International expansion through joint venture-risks and benefits.Knowledge Horizons. Economics, 8(1), 139.

Fenn, A. (2020). How Huawei’s European growth started in the UK. Retrieved on 24th June, 2021 from https://newseu.cgtn.com/news/2020-07-15/How-Huawei-s-European-growth-started-in-the-UK-S9uyuAsAiQ/index.html

Flides, N. (2018). How Huawei used the UK to become a global giant. Retrieved on 24th June, 2021 from https://www.ft.com/content/16381afa-f986-11e8-8b7c-6fa24bd5409c

Kee, D. M. H., Chee, C. K., Ng, C., & Yao, T. (2019). Analysis of Challenges faced by Huawei on the launching of 5G Technology and the Strategies to Overcome it. Asia Pacific Journal of Management and Education2(3), 37-44.

Micheli, J., & Carrillo, J. (2016). The globalization strategy of a Chinese multinational: Huawei in Mexico. Frontera norte28(56), 35-58.

Morris, I. (2020). Huawei should face earlier UK ban if China threats grow, say officials. Retrieved on 24th June, 2021 from https://www.lightreading.com/5g/huawei-should-face-earlier-uk-ban-if-china-threats-grow-say-officials/d/d-id/764486

Premarathna, I. (2021). INTERNATIONAL BUSINESS MANAGEMENT CHALLENGES AND ISSUES UNDER FOREIGN LAWS AND REGULATIONS: A STUDY BASED ON THE SOUTH ASIA REGION. 01. 156-170.

Rockman, S. (2020). 7 Reasons Why The UK Should Work With Huawei. Retrieved on 24th June, 2021 from https://www.techadvisor.com/feature/network-wifi/uk-5g-huawei-3781863

Surong, F. S. (n. d.) Win Together: Huawei’s Ecosystem Partners Grow from 500 to 28,000. Retrieved on 24th June, 2021 from https://e.huawei.com/in/publications/global/ict_insights/201907041409/special-report/win-together

Tenzer, H., Terjesen, S., & Harzing, A. W. (2017). Language in international business: A review and agenda for future research. Management International Review57(6), 815-854.

van Rossum, J. E. (2017). 5 benefits of international expansion. Retrieved on 24th June, 2021 from https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2017/12/5-benefits-of-international-expansion.html

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