C.D.S. - N.S. Huawei Presentation

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Entry Modes For International Markets Nensi Skala Christos D. Sotiropoulos U. Kentucky Global Business Management - MGT610 Prof: Dr. Alina Hyz & Dr. Dimitris Stavroulakis C.D.S. – N.S. C.D.S. – N.S. C.D.S. – N.S. C.D.S. – N.S.

Transcript of C.D.S. - N.S. Huawei Presentation

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Entry Modes For International Markets Nensi Skala

Christos D. Sotiropoulos

U. Kentucky

Global Business Management - MGT610 Prof: Dr. Alina Hyz & Dr. Dimitris Stavroulakis

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Why bother to listen?

• What is Huawei and what made this company international?

• How achieved it?

• What we gain from this?

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Who/What is Huawei?

a. The Dream island with the fancy beaches and the surf? (Hawaii)

b. A Chinese company which focuses on Telecommunication industry?

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Huawei Technologies Co. Ltd

Multinational and one of the top world wide leaders in:

Networking / telecommunications equipment & services

Government Solutions

Manufacturing (electronic communications devices)

• 華為 Huawei means ”flower of China”

• 1987 founded by Ren Zhengfei (Privately owned company)

• 2013 invested $5 billion 21 R&D institutes

• Financial Growth 20.6% with 39.463 milions revenues

• Foreign leader partners (HP, IBM, Oracle etc.)

• Competitors (Cicso Systems, INC. ZTE Co. Alcatel Lucent)

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Factors of Huawei’s Succession in International Market

The products’ and Industry’s features, structures and characteristics

Offered products met the demands of the market

Low cost product and competitive prices

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Factors of Huawei’s Succession in International Market

Innovative due to investing on R&D

The appropriate market entry mode choice

Political/economic and socio-cultural conditions

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Factors of Huawei’s Succession in International Market

The chosen strategy

Find the right people

China’s technology reputation

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Huawei’s International Strategy “A strategy is a solution to move from where you are

now (A) to where you want to be (B)”

Looking for Countries

Developing and NO developed

Understanding of host’s market social and cultural and local market conditions

Countries friendly with China

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Huawei’s International Strategy “A strategy is a solution to move from where you are

now (A) to where you want to be (B)”

Make partnership and join ventures

Make partnership with government

Setup branches and service centers

Take advantage of technological R&D from partnerships

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Huawei’s International Strategy “A strategy is a solution to move from where you are

now (A) to where you want to be (B)”

Apply different market entry mode in different markets and for different products

Customized products & services

Lower prices than competitors

Search for new opportunities

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• 1996 Russian Market Joint venture of Beto-Huawei with Russian

Beto Konzern and Russia Telecom

Invested on R&D

Take advantage of social and cultural condition of host market (information security)

Huawei’s International Process “A process is a defined way of doing a task”

Different entry modes for different markets

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• 2000 South America, Asia and Africa Use export method to enter the market

Set up Branches and Services centers

Based on high flexibility, low resources commitment and low dissemination risk

Huawei’s International Process “A process is a defined way of doing a task”

Different entry modes for different markets

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• 2001 North America, West Europe and other countries Contractual modes by franchising, co-

research, co-production and Co-sales

Cooperation

Joint Venture

Huawei’s International Process “A process is a defined way of doing a task”

Different entry modes for different markets

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Different modes for different products

Huawei’s International Process

Type of Product Type of Mode

Traditional advantage product Join venture & Export method

Products with no advantage Corporation

Technological advantage & no market recourse

Join venture, Franchising or Co-Resource

“A process is a defined way of doing a task”

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Process models of internalization

Uppsala model (Johanson & Wiedersheim-Paul 1975)

4 modes in sequence

No Regular Export Activities

Export via independent representatives

Establishment of overseas sales subsidiary

Overseas production or manufactory unit

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• High technology enterprise and not a traditional one

• Different Modes in different host market at the same stage of internalization

• Host’s market environment not necessarily similar with home environment

• Not investing only in neighbor countries

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Driscoll’s entry mode choice (Driscoll 1995)

3 modes with 5 characteristics each one and 3 factors categorize

Process models of internalization

Desired Characteristics

Control

Dissemination Risk

Recourse Commitment

Flexibility

Ownership

Firm Factors

Environmental Factors

Moderators

Export

Contractual

Investments

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Huawei vs. Driscoll

Emphasizes:

• Industry information and communication

• Product

• Use combination of modes

Emphasizes:

• Firm advantages

• Experience

• Strategy

• Use only 1 mode

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Evaluation

• 1987, was a small company in China with annual revenue of $5,680

• Domestic market (NO in big city centers)

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Evaluation

• Today a Global company with sales volume over $39 billion

• Profit $3,4 billion

• One of the 3 biggest Telecommunication Companies

• Annual rate increase in revenues approximately 20% per year

• Capital increase and profit distribution

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Evaluation

• Presence in over 170 countries and regions

• Serving 45 of the world’s 50 telecom operators and 1/3 world’s population

• More than 70.000 products and services

• Invest over 10% of revenues in R&D

• 170.000 Employees (more of 45% is in R&D)

• 16 R&D Center in USA, Europe, Russia, India and China

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Learn, no imitate!

Use theory appropriately

DO research

Evaluate the market and the opportunities

Chose the right place

Be patient

Take risks & Invest

Cooperate with the right “people”

Aim for customer’s satisfaction

The strongest asset is your employees

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Thank you all!!

Questions ???

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Some useful @@@@ • http://www.ukessays.com/essays/economics/studying-the-

internationalization-process-of-huawei-economics-essay.php • http://www.huawei.com/en/about-huawei/corporate-info/index.htm • http://www.huawei.com/en/about-huawei/corporate-info/corporate-

governance/index.htm • http://www.huawei.com/en/about-huawei/corporate-info/annual-

report/index.htm • http://www.capacitymagazine.com/Article/3284121/ANALYSIS-Huawei-

takes-on-Europe.html • http://core.ac.uk/download/pdf/336576.pdf • https://books.google.gr/books?hl=el&lr=&id=4ou9kh5xrtgC&oi=fnd&pg

=PA103&dq=evaluation+of+internalization+of+huawei&ots=Rmnil36Ehj&sig=mqUUv7ISYKhNFrsh2ftq0Cqs6-k&redir_esc=y#v=onepage&q=evaluation%20of%20internalization%20of%20huawei&f=false

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