Marketing plan – Huawei Essay
Marketing plan – Huawei
This marketing plan is specially measured to the company Huawei. Huawei is an international company which produces devices for telecommunication, with their phones being the most important product. Their vision is to deliver electronic communicating solutions to make the life of their consumers better. This marketing plan is requested by Huawei to find a way to accelerate the sales of Huawei’s phones internationally, with a targeted 10% raise in market share in Europe. In this report the proposition of the marketing plan can be found, with specific data about the different subjects and explanation of a market winning approach. We will start by analysing the company and the environment, to define the SWOT of the organization. Afterwards we will introduce these conclusions into a matrix where it will be visible what the company’s best aspects are. Then we will choose strategic options and further instruct on the matter. Next, we will create a mix of strategic marketing aspects that will further help to develop the importance on how and where to place the advertisements and stores and so on. Finally, a financial analysis will be done in order to predict the costs Huawei is going to make on this venture, and whether or not their new mission seems feasible. This report has been created by Quirijn, Ruben, Robbert, Amine and Erim.
This marketing plan gives answers to the question whether it is feasible for Huawei to increase brand awareness in Europe by launching a market campaign and to increase market share with 10% within 4 years. The research phase had various angles.
Based on micro, macro and meso level some interesting strengths, weaknesses, opportunities and threats are revealed. The most important ones are: (Strength )Huawei has a great cost advantages in comparison with the competition. (Weakness) Inability to maintain high quality professional service and sales support in western markets (Opportunity) Huawei offers low priced phones, which can be very attractive for people affected by the financial crisis. (Threat) A lot of competition in the western markets.
The internal analysis consist out of various models. The canvas model was created to analyse Huawei as a company. Within the BCG-matrix, Huawei’s smartphones are placed as a question mark. And the computed Abell matrix shows that Huawei targets students and the most important need is the price and the most important technologies are calling and texting, internet and connectivity.
On external level a survey is conducted within this marketing plan. The most striking result is from the question; “Do you know Huawei?”. 53% of the surveyed audience was not aware of what Huawei is as a brand.
Within the Meso level, Porter’s five forces is analysed. The most important findings are: The power of the customers is not particular strong.
The threat of new entrants is not very impactful as Apple and Samsung are the undisputed leaders. If done right the power of substitutes can have an impact on the market. There is no threat in the power of the suppliers
Huawei operates within a highly competitive market, the rivalry is massive.
After doing research on 5 strategies, the best strategy proven is the low-cost strategy. The reason it is a perfect match for Huawei is because they are able, because of their cost-saving combined with their excellent financial situation, to sell their products for a lot less than the competition
The BCG matrix is an analytical tool for companies to evaluate their business units and their business potential. With help from this matrix Huawei can create and adapt marketing strategies, product strategies and more, all to help the strategic management of a company. The BCG matrix connects a company’s market share with a company’s growth rate. The model is divided into four areas, the stars, dogs, cash cows and question marks.
Huawei and its mobile phones are placed in the box of question marks. It’s put in this box because of the fact that the worldwide market share of Huawei’s mobile phone is relatively low, and the market growth rate, again worldwide, is relatively high, with expanding markets all over the world. Market leaders already have established and a lot of companies operate in this market, but because of the wide and depth of the mobile market there is still a lot of potential for Huawei. In the coming time they will find out if their question mark can become a star.
The Abell model is a model for seeing in what kind of market a company operates. With segments, needs and technologies there is a quick overview of what a company or a product is about.
The Abell matrix for smart phone Huawei
Students, young starters and parents are the main segments that Huawei is targeting, excluding senior citizens and children. The most important needs are the price of the phone, together with its appearance and the quality. Convenience is important but not a main objective. The technologies specific to the phone are being able to call and text, having internet, and being able to connect all around the world. Interactive display and such, are also not the main objective.
Strengths & Weaknesses
1. Huawei has very strong financial position. Being financial healthy means that they can investment and start new projects.
2. They have great cost advantages in comparison with the competition, this allows them to produce against low prices and have low production costs.
3. Because of these great cost advantages Huawei is able to sell products against relatively low prices. This gives them a huge competitive benefit
4. Huawei has high brand recognition and is rapidly increasing their brand awareness in their new markets, such as Europe, which gives them fast closure to the big brands.
5. Superior technologies enable Huawei to come with fast efficient solutions, and gives the whole company effective process.
6. Huawei has a very high customer loyalty. Customers are satisfied and keep their preference for the brand, which allows Huawei to focus more on finding new customers.
7. R&D is a very strong department within Huawei technologies, having R&D centres all over the world, to create products that are needed by every person all over the world.
8. Their market share in the African markets is very high and Huawei invests a lot here, which pays off with a high return rate.
9. Huawei has a broad range in products, which give them the beneficial ability to provide end-to-end solutions, keeping more customer processes inside Huawei.
10. They have a strong connection with the Chinese government, which helps
them to maintain their number one position in China.
1. the supply chain of Huawei has a lot of flaws, with late and insufficient deliveries occurring. This is partly because of the high amount of products and the market penetration in the US and Europe.
2. the customer service is not what it should be, not dealing with customer complaints properly, mainly because there starting services in Europe and the lack of integration with supporting services.
3. Inability to maintain high quality professional services and sales support in Western markets.
4. Except for China, Huawei lacks the strong global physical presence that a company needs to establish itself as a true market leader.
5. contracts with the most important and biggest server providers are not optimal, which prevents an efficient integration between product and server.
6. Huawei excels at telecommunication, but does not have much experience in their new services, and does not have the same knowledge to overcome difficulties that some of their big competitors do.
7. The brand image of Huawei is mostly focused on their mobile process and selling, and customers are on a large scale unaware of the other practices of the company
8. employee satisfaction is high within Huawei, but a lot of complaints arise from workers that operate in Huawei’s supply chain, which has a negative effect on how ethical Huawei is.
9. Huawei still depends on their low-pricing strategy, and has no alternative selling strategy’s for their products.
10. Huawei’s ties to the Chinese government are a strength, but is at the same time a weakness, as it complicates creating relationships with other specific governments, such as the US.
Strength: R&D, patent ownership, growing their innovative and advanced technological products which have earned their global recognition Weaknesses: Lack in transparency and image of secrecy, worrying companies and governments who might otherwise trust the brand to protect valuable security information. Huawei has failed to understand the US legal system and market demands, as well as its image as a risk to national security which has resulted in its failed acquisitions. Opportunities: Continued innovations and technology advances. The continued growth and expansion of technology usage and literacy offer both brands unlimited growth opportunities, so long as they stay ahead of the competition though continued improvement. Threats: R&D takes time, if the competition provides solutions first, the brand will struggle to compete. Development in this industry is simply risky as the business relies upon continued growth of the internet and internet-based-systems. Merger and acquisitions have no assurance and are inherently risky, particularly in this industry due to the advanced, high-technology companies with particularly high overhead and sunk costs. Global politics and exchange rates are also a threat to international trade as a whole.
Porter’s five forces
Now that Huawei is entering the European market there are certain things to take note of. Porter’s Five Forces helps us define which types of pressures could be present that have to be identified before entering a competitive market like the smartphone business Huawei is entering on a regional scale. Power of customers
The power of customers in the particular market is not that strong. There isn’t a lot of influence into the product directly by the consumers.
Whatever features are implemented into the product is similar to those of the competition, and is mostly influenced by the R&D departments. So the customers will mostly decide on preference of design or depending on the price that is being offered. Altogether there are not endless choices for the customers to choose between. This means that the customers simply don’t have the power to strongly influence the market by demanding critical changes from a product or brand. Power of new entrants
The threat of new entrants is also not very impactful for the market Huawei is entering. This is especially due to the reason that it takes a certain brand awareness to convince a large number of the (potential) buyers into buying the new product they are bringing to the market. However, when this product is offering a whole range of new features or improvements that seem very attractive, this may threaten the existing products on the market, making them harder to promote against a superior product. But in almost any case it doesn’t seem feasible to go up against popular brands like Apple and Samsung. This means that, overall, new entrants aren’t expected to be a huge threat. Power of substitutes
Huawei is financially very strong and strives for operational excellence in which they score relatively high already. This means that they are able to offer considerably low prices compared to competitive brands on the market. At the same time they are able to offer stylish designs and similar features to other brands. This means that Huawei is able to give consumers a choice that they will most likely not regret, but before they do so they are going to have to decide to trust Huawei into offering them a worthy product. The marketing campaign must show the difference Huawei is bringing to the market, and with that they have to convince the consumers of something worth buying. This will prove difficult however, due to the fact that a lot of people have already been convinced by the flashy designs of Apple for instance. The brand is already widely-known and both Apple and Samsung enjoy a great deal or the market share today. This means that eventually the power of substitutes is rather high at this point and probably the biggest problem on the board for Huawei. Power of suppliers
The power of suppliers doesn’t have to be seen as a threat to Huawei. They are importing from their region of origin, namely South-East Asia. They enjoy low labor and production costs overall, which goes in combination with high efficiency meaning they are able to keep costs very low. There are many different suppliers for the raw materials that needed for the production process which also lowers the power of the suppliers. Rivalry
Eventually the market proves to be a highly competitive one, especially if we start talking about Apple and Samsung who are highly involved in the mix. They are offering high quality products, one for relatively high and one for relatively low prices. They have similar features but some small differences, mostly in handling the device. It mostly comes down to the design of a smartphone, as almost all brands offer pretty much the same features. This means that the product with the strongest marketing campaign offering the flashiest design will most likely hit the jackpot and win the hearts of most customers which means that this is going to be very challenging for Huawei to compete against. So basically the market growth is rather high as technology development is an ongoing process and there are several key players in the market meaning that they are calling the shots. Huawei has to gain trust in potential customers and attract them by offering as flashy as the newest model Apple has brought to the market, and give it some extra features in order to make the difference.