Huawei How Can We Lead the Way Case Study Help
Price
Huawei’s main focus was on keeping its cost as lower as it could, in order to provide lower priced product to its end consumers as compared to its competitors or market leaders which were offering their products at higher prices. By doing so, Huaweiwould have been able to reduce its competitors’ market share. Two versions of same series were introduced in order to satisfy both the high end and the low end customers, such as: Mate pro series and Mate series.
Place
In terms of place strategy, Huawei adopted “asset light” strategy, which accounted for 30%online sales with the help of an online selling site. Honor was Huawei’s internet brand, which was launched in 2011 and helped to cut down 30% of the channel expenses. For the purpose of staff training and other purposes, BTL (below the line) strategy was used, which accounted for 50% of the marketing budget.
The dual distribution channel was used by Huawei in order to capture more customers. Huawei had two main shops at ShopRite and Bagatelle, with an inclusion its brand placement at 75%Mauritianoutlets. Furthermore, retailers were the other sources, including: courts, cash and carry and Orange.
Promotion
Huawei adopted an extensive marketing strategy as compared to its rivals, and spent approximately 6% from its total revenues, for promotional activities. The ATL (above-the-line) marketing strategy was adopted for those areas, which were yielding low returns and had lower brand awareness. The 1000-county plan was launched in order to establish experience stores in the tier-six cities.
For the launch of Mate 9, Huawei endorsed Justin Long as its brand ambassador, in 2017. Furthermore, Henry Cavill and Scarlett Johansson, the movie stars, were hired by Huawei, and in 2016, Lionel Messi, the football icon, became the Huawei’s global brand ambassador.Moreover, the main sources for promotional and marketing strategies included an extensive use of social media, billboards and the TV commercials.
Market Segmentation Strategy
The competitive strategy of Huawei Company is to use the low-cost strategy in order to capture the low-income consumers, by providing them the high and competitive product as compared to the market leaders. Along with the low competitive strategy, Huawei Company hadalso focused on the more high-quality manufactured products in order to delight its customers. In 2012, Huawei launched its new branded phones under four heads. All the four categorieswere designed by considering different targetsegments, which included: entry level smartphones, mid-range smartphones, high-end smartphones and the flagship.(SD Hunt, DB Arnett, 2004).
Positioning Strategy
Huawei is the third leading global company of the smartphone market. Its core competency are its hi-tech and continuous innovations, which are its positioningstrategy in the market. The “Globalizing Strategy” was adopted by the company, which suggested that each international market should be treated and approached in a differentmanner,afteranalyzing the local values and perceptions. The Huawei Company was not focusing on the differentiation strategy,which restrained it from differentiating its products than its rival’s.
Alternative Solutions
After evaluating the entire situation with the help of marketing frameworks and tools, the following alternative solutions are proposed in order to enable the company to cope-upwith the intense prevailing situation.(See appendix 2 & 3).
Alternative Solution: 1
Expand In US Market with Low-Cost Strategy
Huawei should expand its business in the US market in order to increase its consumer base and to earn ample profits in the future. The US market is one of the major smartphones selling markets, which accounts for approximately 30% of the global sales. Thus, it is concluded that the company should have its expansion in the US market.
Pros
The first alternative solution entails following associated pros:
- US is one of the major smartphone selling markets, whichaccounts for approximately 30% of the global sales.
- With the help of mass marketing, the company could approach greater number of customers.
- With the help of lower-cost strategy, the company could earn increased profits and higher returns.
Cons
The first alternative solution entails following associated cons:
- Low-cost strategy could be considered as the low quality product provider, which would yield lower profits.
- The low-income group customers would approach Huawei product because of its strategy.
- An extensive investment would be required in order to penetrate in the US market, because it requires an effective research and a very efficient and effective entering strategy.
Alternative Solution: 2
Expand In US Market with High Pricing Strategy
Huawei should expand in the US market in order to expand its consumer base and to earn ample profits in the future.This option would be considered as the best option, because of its high pricingstrategy, which enables the company to capture upper-class consumers. Huawei online stores would help the company to capture more customers, because elite class consumers are very well established and prefer to use online apps and stores for purchasing.
Pros
The second alternative solution entails following associated pros:
- US is one of the major smartphone selling market, which accounts for approximately 30% of the global sale.
- The upper-income group customers would approach the Huawei product, because of its high price strategy.
- With the help of mass marketing; the company could approach greater number of customers.
- Huawei online stores would help the company in capturing more customers, because elite class consumers are very well established and prefer to use online app and stores for purchases.
- The product would be considered as the high-quality product by the customers, because of its high pricing strategy.
- The company would be able to generate increased revenues and returns for a longer period of time.
Cons
The second alternative solution entails the following associated cons:
- Only upper-class consumers would be able to purchase the product.
- The product would be perceived as an expensive device.
- An extensive investment would be required in order to penetrate in the US market, because it requires an effective research and entering strategy.
Alternative Solution: 3
Expand in Other Potential Markets
The study represented that Huawei should provide strategic priority and should penetrate into Saudi Arabia, Latin America, Singapore, Japan and Australia, because of its strategic importance. This option is viable because these markets would enable the company to earn more increased revenues.
Pros
The third alternative solution entails the following associated pros:
- Saudi Arabia, Latin America, Singapore, Japan and Australia are the attractive consumer expanding markets, because of thestrategiclocation.
- This option is viable because other markets would enable the company to earn more increased revenues.
Cons
The third alternative solution entails the following associated cons:
- A huge investment would be required in order to penetrate in a number of increased countries.
- The company is inexperienced with the local needs of the consumers, and Huawei’s strategy is fully dependent on identifying the basic consumers’ needs.
Recommendations
A thorough analysis has been performed with the help of associated pros and cons of these alternative solutions, in order to examine the best solution for the company that would help it in coping up with this intense situation. Thus, it is recommended that the second alternative solution is best as compared to the rest of the options,becauseof its high pricing strategy that enables the company to capture upper-class consumers. Huawei’s online stores would help the company to capture more customers, because elite class consumers are very well established and prefer to use online apps and stores for purchases. The product would be considered as the high quality product by the customers because of its high pricing strategy. The upper-income group customers would approach Huawei products, because of its strategy. Huawei’s online stores would help the company in capturing more customers, because elite class consumers are very well established and they prefer to use online app and stores for making purchases.
Conclusion
It is concluded that the increased penetration of telecommunication companies in the market made the company to pursue the CBG strategy to sustain itself in the market. The competitive strategy of Huawei is to use the low-cost strategy, in order to capture the low-income consumers by providing them the high and competitive productsin lower prices as compared to the market leaders. Technology is the game changer, which makes one company a leader and another a follower. One who focuses more on technology would become an industry leader.In 2017, the IOS devices increased along with the number of available apps, which accounted for 2.2 million. Huawei adopted an extensive marketing strategy as compared to its rivals, and spent 6% of its total revenues for promotional activities.It is recommended that the second alternative solution is best as compared to the rest of the possible options, because of its high pricing strategy, which enables the company to capture the upper-class consumers.....................................
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