Why Huawei?

  1. Why Huawei?

Huawei, which is commonly been referred as the sleeping giant awakened, has grown to become the largest telecom vendor and Information Communication Technology (ICT) developer in China (Ahrens, 2013) and the third largest telecom vendor in the world by revenue (Low, 20007). Founded in 1988 by Ren Zhengfei, Huawei was basically a low-priced phone (switches) distributor, targeting regions of China, which have been neglected by the large companies (Liu, 2013). The transformation of Huawei from a low-priced and mediocre quality phone distributor to one of the leading giants in the smartphone and telecommunication network industry makes it an appropriate company for analysis in the present study (The Indian Express, 2010).

It was during the years 2004-2005 that the company first came into the limelight when it reported annual sales of US$5.58 billion with an 81% increase from its sales of 2001 (Low, 2005). This was the time when several other cellular giants like Motorola, Alcatel, and Lucent reported a decline in their sales and revenue performances (Liu, 2013). According to Low (2007), the major credit should be given to the R&D and innovation commitment of Huawei, investing over 8% of its total revenue (US$480 million) into the R&D budget (Huawei, 2013). Apart from this, the entrepreneurship approach of the company allowed them to broaden their horizon and gain a multifold increase in their market share and revenues (Luo, et al., 2011). Thus, Huawei presents a strong case study for better understanding the implementation of entrepreneurship and innovation into the real corporate world.

Huawei also started as a technology imitation firm and transformed to a technology innovator. It went through all the transformatory-stages and executed a systematic transformation approach. So, comprehending the case of Huawei will give an idea of the systematic transformation approach in becoming a technology leader, considering all pertinent socio-economic and political constraints.


 

  1. Why Developing Countries (China)

China presents very unique and fascinating example of economically and technologically strong developing countries. According to Ratten (2014), imitation of technology from the developed countries is an important step of technological upgradation in the developing countries, which also boosts their economy. China is regarded as one of the most sophisticated producers of counterfeit products and this greatly helped steer the local economy. With the technological capability it possesses, it is high time for China to move to the next stage of technology enhancement, which is through innovation-based entrepreneurship. Developing countries like China have the advantage of low labour and resource cost. So, if this advantage is removed, the economy will become highly volatile and this has been the case with China and several other developing countries over the last few years. A sustainable growth in economy can only be ensured through technological innovation as it cannot be easily superseded by other competitors. Naude, et al. (2011) claimed that developing countries can improve their overall social and economic outlook by following the footsteps of the developed countries rather than simply imitating what firms in the developed countries do.

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