An Examination on Competitiveness Analysis of Huawei Enterprise

Abstract

Background/Objectives: Huawei started with 20,000 yuan in 1987 and grew to achieve sales of 721.2 billion yuan in 2018. Currently, it consists of 180,000 employees in 900 offices worldwide. As the company grew bigger, its market circumstance and strategy were changed. Thus, its competitiveness also changed. Therefore, we are trying to analyze Huawei’s competitiveness change by time. Methods/Statistical analysis: This study analyzed Huawei's competitiveness using Michael Porter's diamond model, showing the transition of Huawei's growth in recent years (2011-2018). There are 4 conditions to analyze competitiveness according to Porter’s model, Factor, Demand, Related and Support Industries, and Firm strategy. Factor condition is measured by the cost of capital, labor and the number of R&D employee. Demand condition is determined by market, consumer, and economic environment. Related and Support Industries are surveyed by related industry and Social Overhead Capital (SOC). Firm strategy is consisted of management performance, government, and rivalry. Findings: The analysis based on Porter's diamond model shows that Huawei's competitiveness is decreasing in terms of factor conditions. On the other hand, it is increasing in terms of demand, its related and support industries, and firm strategy. Particularly, the demand conditions are witnessing a sharp increase. A recent comprehensive analysis of Huawei’s corporate competitiveness shows that the company is becoming increasingly competent. Particularly, it has emerged as a key company among network equipment manufacturers in the 5G industry over the past 2–3 years. Improvements/Applications: Although the U.S. President Trump's sanctions will adversely impact its management performance in 2019, Huawei's internal competitiveness is sufficient, and it has a potential to grow in the future.