The strategic planning is the process of identifying and determining the strategies, decision making and organisational process of allocating resources to achieve strategic objectives. Strategic planning is essential for the business organisation for leading continuous improvement and achieving greater goals with the changing business environment. The aim of the report is to perform the strategic analysis and planning of Huawei Company to develop a valid strategic direction and strategic market plan for improving its performance in the competitive market. Huawei is the organisation of mobile phones, consumer electronics, telecom equipment and networking equipment industry. The company was founded by RenZhengfei in the year 1987. The company has headquarters in Shenzhen, China and IT services worldwide accept the US since 2019. The company deals in a wide range of products that include mobile, fixed broadband networks, consultancy, Management services, multimedia technology, etc. Presently, Huawei is facing various management and business issues which include the high competition which will be analysed in the report.
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Introduction: The analysis of the microenvironment of Huawei Company will be done in the following report with the help of PESTEL analysis framework to identify the impacts of microenvironment factors on the business of the company.
P1 Applying appropriate frameworks analyse the impact and influence of the macro-environment on a given organisation and its strategies.
PESTLE analysis:PESTEL analysis is mostly utilised Framework for identifying and analysing the microenvironment of an organisation to perform environmental scanning and lead the development of components for strategic management. The PESTEL includes analysis of 6 significant factors which include political, legal, technological, environmental economic and environmental factors for identifying the external opportunities and threats of business.
PESTLE analysis of Huawei-
Political factors:The biggest uncertainty for the business of Huawei in the UK is due to the presently ongoing debate on the issue of Brexit. Although the company has a manufacturing unit in India which is a great advantage for the organisation to obtain low labour cost and gaining the price advantages in the EU regulations (Hudrasyah, et. al., 2019). The influence of us China war is a significant threat for the business of Huawei if the UK becomes its part.
Environmental factors: Due to Brexit declaration the economy of the UK become uncertain and a lead slowdown in the growth of 1.3% in the year 2018. The vehicle value of pounds makes the importing product expensive for Britain. It is an opportunity for Huawei to perform cheaper exporting due to yuan is strong against pound.
Social factors:Major issue which is facing by Huawei in UK market is the consumer belief that company has a network with Chinese military which can leave the security issues and spying threat among customers (Krutikova, et. al., 2018). The people of the UK also believe that Android phones are developed for lower-class people which is negatively reinforcing the Huawei budget.
Technological factors:Technology influences the business of Huawei with great deals because the company is an innovator themselves. The company is presently focusing on 5G technology in which $20 billion is invested and it will launch in the UK to lead the highest growth. The technology concern of the company is a potential opportunity for Huawei because the demand for innovative technology and products especially in mobile phones is growing rapidly.
Legal factors:The legal factors such as privacy and data security is highly concerned by the government and customers of UK. As Huawei is already facing criminal charges in the United States which leads the legal policy is stricter regarding the business and noncompliance of the company. The company is facing a loss of profit due to lawsuits and it diminishing brand image. The company is you also facing continuous losses due to noncompliance of security in the UK too.
Environmental factors:Environmental factors are impacting the international business in the UK as the environmental laws are forcing to utilise more sustainable energy and reducing the use of carbon footprints to improve environment sustainability (Zhang, et. al., 2017). Huawei is also focusing on sustainability and improving its resource utilisation for reducing carbon footprint and focusing on waste reduction as well as utilising sustainable raw material.
From the analysis of the macro environment of Huawei, it is determined that there are more threats and loss causing aspects for business in the UK due to currently ongoing arguments including Brexit and US-China war. The company is facing many issues in the political and social factors as the customers of UK does not rely on Android phones and also has a strong perception of data security concerns by utilising Huawei products (Liefner, et. al., 2019). However, investment in the sustainability laws and 5G technology is an opportunity to improve the performance and business revenue of organisation in the UK.
Following are the strategic management directions on the basis of macro environment critical analysis-
Conclusion: From the macro environment analysis of Huawei it is concluded that the present macro environment has many threats for the company but utilising strategic management decisions can improve the business reputation and performance in the UK.
Introduction: Following report include the internal environmental analysis by utilising a short framework to identify organisational capabilities and critically evaluate the internal environment of Huawei to assess the internal capabilities and the skill set of organisation.
SWOT analysis:SWOT analysis is the most appropriate framework to analyse the internal environment of an organisation by critically evaluating the capabilities and weaknesses of the company (Xia, et. al., 2017). SWOT analysis analyses the internal environment by focusing on internal strength and weaknesses of the organisation to address the external threats and opportunities.
SWOT analysis of Huawei:
Strengths of Huawei-
Large product portfolio: Huawei has a large variety of product which provide a wide range of options among the targeted customer and increasing sales.
Technological innovation: the company is already known as its innovative company and the Great investment in the latest technology is the greatest strength of the organisation.
Leading position: Huawei has a leading marketing position in the mobile industry and it is growing very fast and bleeding developing revenue by surpassing competitors like Apple.
Global presence: the business of Huawei is expended globally and it is a fast leading surge in market share and revenue and also has the largest consumer base as it works in 170 countries.
Weaknesses of Huawei-
Many cases of controversies: the controversies such as privacy and spying allegations have led the tainted image of the brand and it is also leading the poor brand reputation and sales in UK and US (the Chu, 2017).
Week business position in the US: Due to ongoing arguments and concerns among China and US has diminished the reputation of the organisation in US market that diminishing the overall business and revenue (in the UK).
Opportunities of Huawei-
5G and AI technology: the company is investing in the latest 5G technology and utilising AI technology in the product which is attracting a large consumer base.
Strong marketing: the company has a strong marketing position which is making it step ahead from the competitors in the global market.
Retail chain: Huawei has a strong online retail chain which is expanding the global footprint and building customer loyalty and driving higher sales (GUANGHUI, 2019).
Threats of Huawei-
Heavy competition: The Company has strong growing competition in the smartphone industry including Apple, Xiaomi and Samsung.
Regulatory pressure: The Company has regulatory pressure in the UK and other countries due to the tainted brand image by controversies.
Trade tension among US and China: The trade tension among these great Nations is impacting the business of Huawei due to large uncertainties in future.
Huawei both strength and opportunities which can be utilised by the organisation to address the business threats and opportunities. The company has internal capabilities such as technological advancement and global reach which can be utilised by the organisation to resolve business threats including heavy competition and regulatory factors by increasing the safety and security in products (Xuesong, 2016). The company has the strength of global presence to address the great competition by developing a competitive edge.
Conclusion:From the internal environment analysis of Huawei it is concluded that the company has strength and opportunities such as trending technology investment and global presence to address them global marketing competition and regulatory pressure.
Introduction: The following section lead the appropriate strategies to enhance the competitive edge and the market reason of hubby on the basis of utilising total five forces model to identify and evaluating the present competitive forces in a business environment.
Porter’s five force model: Porter's model of five forces is a framework which is utilized by organizations to perform the competitive analysis from different aspects (Ghafele, et. al., 2019).
Porter’s five force model of Huawei:
The threat of new entrants:The threat of entering new business organisation in the same business market at the same level of Huawei is a difficult process because it requires expensive and skilled HR and uses investment of capital in the business to match Huawei's level. Hence, it is a weak force and it is very difficult for the new organisation to invest in expensive technologies and marketing power such as Huawei.
The threat of substitutes:Huawei deals in a wide range of products which include the smartphones, tablets and satellite phones, etc. and to invest in the satellite phones and providing two-way radio system is required huge operational cost and it also includes interference problem which cannot be done by the substitute company easily. Hence, the threat of substitute is a low force for Huawei.
Bargaining power of customers:The similar products like Huawei are available in the global market of low end with fellow technology organisations which provide similar products such as smartphones and PC's of Xiaomi, Oppo and Lenovo which provide similar products at the similar price range. Hence, the bargaining power of the target buyers of Huawei is high (TEKLU, 2018).
Bargaining power of suppliers:The suppliers of high-quality products which are utilised in the mobile phones and other product of Huawei such as MediaTek which provides memories and ATL chips and it provides the great power to the suppliers to sell the product at possible highest prices. Hence, the power of pliers to bargain is a high force for Huawei.
Industrial rivalry: Huawei is one of the biggest smartphone vendor of low-cost product across the world and it faces a high level of competition in the global market. There are many competitive brands are working in the same business market at the global level such as Xiaomi and Oppo which are the largest competitors of Huawei. Hence, there is a tough competitive rivalry is present for Huawei on the global market.
From the competitive analysis of Huawei, the following set of recommendation to improve the competitive edge and the market position of Huawei are as follows-
Conclusion: From the competitive analysis of Huawei it is concluding that Huawei has a great influence on the bargaining power by customers and suppliers however the threat of new entrants is a weak force. Huawei may utilise a set of recommendations for improving the competitive edge.
Introduction: A strategic management plan will be developed in this section for who are we on the basis of different theories models and concepts such as strategic planning and Taylor's theory of scientific management for critically developing the appropriate strategic directions with tactical actions.
The scientific management theory demonstrates that science can be utilised by the organisation to perform analyzation, optimisation and standardization of workflow to improve the harmony and cooperation within organisations and perform the development of each. According to this theory, Huawei is required to analyse and optimise the working operations by leading standardise workflow to improve the efficiency of business operations to increase the quality of product and services (Drahokoupil, et. al., 2017). Huawei is also required to utilise the development of each employee at the workplace to lead the greatest efficiency and business prosperity for achieving the competitive edge in the business market by achieving employee satisfaction.
Fayol’s administrative management theory:
According to this theory, for improving the business performance and achieving the desired outcomes in the competitive market it is essential to improve the management of the organisation by enhancing interaction with employees. The principles of theory such as discipline, remuneration and division of work have many advantages for Huawei such as it will facilitate the organisation to improve the business structure and motivate the employees to perform their best for achieving common goals. This theory possesses that it is essential to lead the improvement in senior management of organizations such as Huawei is required to improve business administration for resolving privacy issues.
Concepts of the strategic planning process:
Strategic planning concerts include the clarification of vision, collecting and analysing relevant information, formulation and implementation of strategy and the process of evaluating and controlling business operations (Zhang, et. al., 2019). Huawei should focus on its requirement for improving the competitive edge and performing strategic implementation of plans to achieve the desired outcomes. Huawei is required to collect all relevant information regarding all business issues such as privacy concerns and depleting image of the organisation. By analysing the elephant information an appropriate strategy is required to develop and its continuous evaluation and control are also essential.
Issue-based strategic planning model:
This model focuses on providing more dynamic and fluid strategies to perform strategic management by addressing the issues facing by the organisation. The strategic planning focuses on the recognition of different factors which are impacting the capacity of the organisation to achieve desired goals by internal and external influence (Larasati, et. al., 2019). Huawei has many business issues which are required to be addressed effectively because the present issues such as diminishing reputation and negative controversies are impacting the businesses and profitability of the company in a negative way. Huawei can utilise different strategies to improve the competitive edge such as utilising technological power and global presence.
Scenario strategic planning:
The scenario planning of the scenario analysis is the method of long-term planning which are utilised by organisations to improve the adaptation and the generalization by different scenarios to identify the future outcomes that can influence the existing and potential challenges facing by organisations in the present and future context. Huawei may utilise scenario strategic planning for leading methodological foundation in the organisation to improve the corporate practices and quick application of strategies to improve the decision making and strategic thinking for improving the comprehensiveness of business to address the current business issues (Liao, 2019).
STRATEGIC MANAGEMENT PLAN OF HUAWEI-
Improving brand image
Developing a stronger competitive edge
Getting out from negative controversies
Objectives to be done
· Launching flagship smartphones
· Consistent improvement
· Establishing online influencing
· Utilizing technological richness
· Improving privacy aspects of products
· Utilizing controversies and positive marketing
· Establishing value check branding
· Improving business culture (TEKLU, 2018)
· Show unique product’s quality (5G & AI)
· Highlight advantages
· Hold marketing campaigns to improve brand understanding
· Generate better promotion activities
· High-priority campaigns
· Being authentic
· Define niche
· Thyself and perform alignment
· Utilize social media
· Improve value proposition
· Improvement in brand image
· The loyal and committed consumer base
· Positive changes in targeted consumer base (Krutikova, et. al., 2018)
Conclusion: From the application of a wide range of theories, models and concepts such as Taylor’s and Fayol's theory it is concluding that the Huawei is required to focus on its brand development with different strategic directions. The strategic management plan is appropriate to improve the current situation of Huawei because it is based on the business priorities, tactical strategies and objectives.
From the overall discussion of analysing the current situation of Huawei for performing the strategic analysis, it is concluding that the company is facing challenges due to political and legal factors due to various negative controversies and privacy issues. The Company is also facing the negative perceptions of UK customer such as I'm the company is relations with the Chinese military which can harm the people and Nations by utilising their personal data. It is identified that Huawei has many opportunities and strength such as strong brand presence in the global market and has a huge investment in the latest technology including 5G and artificial intelligence which can improve the brand competitive edge and its issues. It is also identified that the bargaining power of customers and suppliers is a strong force which is influencing the sales and profitability of organisation however the company can utilise demonstrated strategies to gain competitive advantages. It is concluding that the strategic management plan should follow by an organisation to improve its current business issues because it is efficiently based on the tactical strategies and business priorities to achieve the objectives.
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