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PESTLE and SWOT analysis of Huawei 2017

By: Prudence K Magezi & Patricia Nanjekhe


As Trump escalates trade war tensions between the USA and China, Huawei has found itself, like many Chinese mobile and telecommunications companies including ZTE and China Mobile, a victim of the hostile climate the rivalry between the two countries has induced. With investigations underway by the Justice Department on whether Huawei violated U.S. export sanctions related to Iran, Huawei is facing a potential ban on its operations in the US, a fate already suffered by ZTE. Its Mate 10 smartphone has already been blocked from sale in the USA after AT&T and Verizon dropped it due to government pressure, putting Huawei at a competitive disadvantage against major rivals like Apple and Samsung who have established leading market positions in the USA. Using key strategic frameworks including PESTLE, SWOT, BCG Matrix and Porters Five Forces, the report will identify the major drivers of change behind Huawei’s external global environment looking at the general trends and shifts driving the global mobile and telecommunications industry in general. This will help us understand how Huawei can utilise its brand competencies so as to take advantage of ever changing environmental opportunities while at the same time neutralising emerging threats that threaten to chip away at its success.

Analyse the internal and external environment of Huawei and global smartphone industry using Swot, Pestel, Porters five forces & BCG

 

1.0 INTRODUCTION 

Huawei China is a globally recognized telecommunications equipment and service company founded in 1987 with its headquarters in Shenzhen Guangdong china. The company started out as a producer of phone switches but later expanding into building telecommunication network, communication devices and providing operational and consulting services in china and abroad (Shepard 2016). The company serves approximately 170 countries, equivalent to one third of the world’s population (Huawei 2018). Huawei now offers a wide range of services to other companies and consumers such as Internet of Things (IoT), cloud computing, among others.

Huawei was ranked third globally in the global smartphone market with a global market share of approximately 11% after Apple with 12% and market leader Samsung  with 23% as of 2017(Arabian Gazette 2017). Huawei’s smartphone market is an oligopoly with both high end (Apple  and Samsung) and low-end players. Huawei on the other hand is a low-end smartphone vender having an 11.4% market share with major competitors Samsung, Apple and Xiaomi having 22.6%, 15.1% and 8.2% market shares respectively, based on smartphone shipments for the first quarter of 2018 (Statista 2018).

2.0 Huawei PESTLE analysis 2017-2018 (Opportunities and threats)

2.1 Political environment

One of the biggest political issues Huawei faces is US political interference driven by Trumps administration. The Chinese company has had issues with the United States government with lawmakers in congress for instance threatening the company’s success in USA under claims that it is a national security threat, with the perceived threat Huawei phones could be used as a vehicle for spyin

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