Huawei is a Chinese multinational company dealing in various technologies. The company designs, manufactures, and markets telecommunication equipment, smartphones, tablets, and consumer electronics (Ahrens, 2013). Its headquarters are in Shenzhen, Guangdong. Huawei was founded by Ren Zhengfei in 1987. The company started by selling phone switches to telecommunication service providers. Since then it has rapidly expanded and provides equipment to various telecommunication providers inside and outside of China. It has deployed its products in more than 170 nations across the globe (Vance & Einhorn, 2018). After the acquisition of Ericson, Huawei became the largest telecommunication equipment manufacturer in the world. It is also the second-largest manufacturer of smartphones in the world just after Apple (Gibbs, 2018). In 2018, the company earned revenue of $121.72 billion and had more than 194,000 employees (Huawei, 2019).
Following are the four dimensions of the Ansoff Matrix for Huawei:
Market Penetration
When an organization sells existing products in existing markets, the company attempts market penetration. Huawei does this in various ways. The first strategy the company uses is to spend huge amounts on the marketing of the products it is selling. This can be through various marketing channels. It also has strategic alliances with various contractors across the globe that prefer to purchase and install Huawei telecom equipment. This helps to ensure continuous sales. The company also offers improved versions of its existing products to motivate consumers. Another strategy the company uses is to highlight the benefits of the new versions of the products to motivate existing users to purchase new models. Ensuring quality and after-sales services is another strategy the company uses to penetrate markets. The company also lowers the prices of older models of its products to ensure their sales continue. Huawei has also acquired various other organizations to reduce competition and increase its market share. These strategies help Huawei grow and increase their sales.
Market Development
Market development is done when an organization works on promoting its existing products in new markets. The first strategy that Huawei uses in this regard is to launch its products in new geographical locations through contractors. Some of the products are directly marketed by the company while others are marketed through contractors. It has already expanded into various nations but holds the potential to expand even further. However, various economic sanctions on China limit the capability to which the company can expand. The company also develops its markets by offering products of different specifications based on the requirements of the consumers in the market it wants to serve in. For example, the company sells smartphones at various prices that range from low-cost to premium prices. The models launched in any nations depend on the purchasing power of the consumers. This strategy helps ensure that any market development effort is a success and the chances of failure are reduced.
Product Development
When new products are launched in existing markets, product development takes place. Being a technology company, product development is an important part. The first strategy the company uses is to launch new products. This can be in the form of new products being launched under the brand name for the first time or new models of products the company already sells. For example, new models of smartphones and telecom equipment are regularly launched that offer improved specifications to meet greater technology needs. Each new product passes through various steps during the product development process. Detailed research and development take place in this regard. When a new product is successful, it is marketed aggressively to attain consumer attention. The company works to minimize the time to bring the product to market.
Diversification
The launching of new products in new markets is the concept of diversification. The company has already diversified horizontally into various related industries such as smartphones, consumer electronics, telecom equipment, and so on. However, it can continue further with this approach and enter into various other related industries such as computers, software, machinery, and so on. It can also diversify into unrelated industries such as garments, sports equipment, heavy machinery, beverages, fast-moving consumer goods, and so on. The strong brand name can help the company gain success in these diversification opportunities. Although risky, the return can be greatly beneficial for the company.
References
Ahrens, N., 2013. https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/130215_competitiveness_Huawei_casestudy_Web.pdf. [Online] Available at: https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/130215_competitiveness_Huawei_casestudy_Web.pdf [Accessed 13 Jan. 2020].
Gibbs, S., 2018. Huawei beats Apple to become second-largest smartphone maker. [Online] Available at: https://www.theguardian.com/technology/2018/aug/01/huawei-beats-apple-smartphone-manufacturer-samsung-iphone [Accessed 13 Jan. 2020].
Huawei, 2019. Who are us? [Online] Available at: https://www.huawei.com/en/about-huawei/corporate-information [Accessed 13 Jan. 2020].
Vance, A. & Einhorn, B., 2018. At Huawei, Matt Bross Tries to Ease U.S. Security Fears. [Online] Available at: https://www.bloomberg.com/news/articles/2011-09-15/at-huawei-matt-bross-tries-to-ease-u-dot-s-dot-security-fears [Accessed 13 Jan. 2020].