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Global Operation Management - Essay Example

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The Huawei Company in China Introduction Huawei Technologies Corporation (Huawei) was launched in Shenzhen, China, in1988 as a private corporation at the commencement of China’s trade and industry restructuring programs and technical advancement. At present, Huawei has grown to be a high-technology multinational corporation that supplies telecommunication services, and network products…
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Global Operation Management
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Download file to see previous pages There are also more than 25 training centres distributed throughout the world. The official Huawei report of 2007 revealed that the corporation had realised US$12.6 billion in that financial year. Huawei’s overseas profits had increased by 60.4% from the previous year. Huawei’s evident success in such a competitive industry stems from its ventures in the local market. In 1988, Huawei began with a modest capital of RMB 20,000. It participated in reselling telephone switchboards for a period before it started producing its own products. In 1990, the Huawei Corporation invested its capital in channelling proceeds into a branch of research and development into creating its own telephone switches. In 1992, Huawei introduced its new digital switch product which came from its own design and development facilities. The company proceeds that year exceeded RMB95 million. The Huawei Corporation then made the decision to invest more capital in more research and development, which resulted in assisting the corporation to corner the telecom market in China. At the start of the 90s, the Chinese telecom market dominated by equipment providers from the Western democracies. When the Huawei Corporation first introduced its products, it had to deal with the business rivals right in its own nation. Most Chinese consumers of electronic products viewed the products manufactured in the West as having more value as than any goods that were manufactured domestically. The Huawei Corporation at first concentrated on reaching the populations in rural China with its products. This is because these areas were not viewed as having many people interested in electronic products by the multinational corporations that dealt in electronic products. In these areas, Huawei slowly acquired a respected brand name, thus generating a faithful clientele. Then, Huawei then began to market its electronic products, as well as software, to average sized municipalities. The move to corner the market in the bigger towns would come later. The Huawei Corporation experienced a considerable measure of success because the Chinese government, then, viewed the growth of the telecommunications industry as an important part of the nation’s economic objectives. The government of China extended a lot of support in terms of financial investments and policy to the Huawei Corporation. The 90s were actually the golden era of the development of the telecom industry in China. Between 1991 and 1999, the proceeds from the telecommunications industry increased by 2050%. With the support of the government, the Huawei Corporation successfully made use of the chance to be the foremost supplier of electronic goods in China. By 1996, Huawei was realising profits of RMB2.6 billion on an annual basis, making it the leading provider of telecom goods in China. The excellent performance of a corporation in its own nation is generally a fact that stimulates it towards internationalisation. The Huawei Corporation was not contented to dominate the Chinese domestic market, but wished to compete in the international arena against bigger rivals. There were some reasons for this. Even though the telecom industry in China had great potential, fierce competition among corporations that were established in the same decade meant that proceeds would be limited even for the corporation that ...Download file to see next pagesRead More
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