HUAWEI: Cisco’s Chinese HUAWEI: Cisco’s Chinese ChallengerChallenger
HUAWEI: Cisco’s Chinese HUAWEI: Cisco’s Chinese ChallengerChallenger
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Presented By:Presented By:Shrimant (093)Shrimant (093)
Neha Singh (094)Neha Singh (094)Pradeep Singh (095)Pradeep Singh (095)
Dhara Sodha (096)Dhara Sodha (096)Sumit Srivastava (097)Sumit Srivastava (097)
Presented By:Presented By:Shrimant (093)Shrimant (093)
Neha Singh (094)Neha Singh (094)Pradeep Singh (095)Pradeep Singh (095)
Dhara Sodha (096)Dhara Sodha (096)Sumit Srivastava (097)Sumit Srivastava (097)
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Time Line
1960,1970: Few network equipment suppliers.
1980: Introduction of Digital Technology.
1988: HUAWEI was incorporated as a private enterprise.
1990: Commercialization of internet & Privatization of telecom service providers.
1994: CISCO entered Chinese market.
2001: Dotcom bubble burst. American companies accounted for 75% of telecom equipment market in China within which Cisco accounted for 62%
2002: China became largest telecom market surpassing US.
2002: HUAWEI Overtook Shanghai Bell, an Alcatel joint venture. (Become dominant supplier of digital switches and Routers in China)
2005: Huawei became largest Chinese telecom equipment manufacturer, annual Revenue of US$6.7 billion.
2006: Among the rank of China’s “national champions”.
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An innovative and customer-oriented ICT company established in 1988 and fully owned by its staff.
Over 35,000 staff members (over 48% engaged in R&D); more than 10% annual revenue invested in R&D.
Full product portfolio including wireless products, network products, application and software products and terminals.
A leading global supplier with products deployed in over 100 countries, including the US, the UK, France, Portugal, Russia, Brazil, Singapore and Thailand, and serving 28 of the world’s top 50 operators.
Contract sales amounted to US$6.2 billion in 2005. over 58% of which (US$4.8 billion) was from international
markets.
Also called as CISCO of China.
Huawei Technologies
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VISIONTo enrich life through communication
MISSIONTo focus on our customers’ challenges and needs by providing excellent communications network solutions and services in order to consistently create maximum value for customers.
Vision and Mission
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Continuous Growth
Serving 28 of the world’s top 50 operators
Strategic partner with BT, Vodafone, Telefonica, etc.
Contract Sales( USD1 billion )
0
1
2
3
4
5
6
2002 2003 2004 2005
2.67
3.83
5.58
8.2
7
8
9
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Total staff: Over 35,000 employees
Human Resources
Supply Chain: 8%Administration: 6%
R&D:48%Marketing, Sales and
Customer Service : 38%48%38%
6% 8%
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Global Presence
8 regional headquarters, 85 branch offices outside China
3-level customer service system (HQ, regional, local)
ThailandSaudiArabia
India
NepalPakistan
Russia
Kazakhstan
Kyrgyzstan
South Korea
Malaysia
Vietnam
Philippines
Ukraine
Egypt
Germany
Singapore
Indonesia
Australia
Kenya
South Africa
Zimbabwe
AlgeriaMorocco
UK
ArgentinaChile
Peru
Colombia
Mexico
USA
Nigeria
Huawei Technologies(Headquarters)
Tunisia
France Canada
Bangladesh
UAE
PortugalItaly
Brazil
NetherlandsPoland
Sweden
Shenzhen
SpainBulgaria
Uzbekistan
Ecuador
Venezuela
Turkey
TurkmenistanGreece
Romania
Sri Lanka
Cambodia
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Huawei works with top management consultancies to bring world-class expertise to the
company, provides customer end-to-end delivery with high quality .
Management Transformation
consulting
consulting
Organization Transformation
Integrated Product Development and Integrated Supply Chain
Human Resources & ESOP
Financial Management
Quality Control
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Global R&D
Global R&DStockholm, Sweden - Base Station architecture and system design,
Radio technology and RAN algorithmsDallas, USA - ASIC technology and CDMA algorithmsBangalore, India - Software technology/platformMoscow, Russia - Algorithms and RFShenzhen, China - CN, service platformsShanghai, China - RAN, terminals, ASIC chipsetsBeijing, China - Packet CN, GW, TerminalsNanjing, China - BOSS, 3G services
Four R&D divisions (Central software division and
institutes in Bangalore, Shanghai and Nanjing) have been
awarded CMM level 5 certification.
Adopts asynchronous development, unifies product commercialization and
speeds up response to market.
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3G
World-leading wireless network supplier, 18 commercial UMTS networks
NGN
No.1 in global VoIP market.
Intelligent Network
No. 1 in global market (21.6% of users)
Optical Network
No.1 in global market.
Access Network
No.1 in global market.
No.1 in global market .
Data Communication
No.3 in worldwide service provider routers (Gartner)
Industry Position
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Business Operation Models Face Transformation
80s - mid and late 90s Mid and late 90s - early 21st century
21st century
Network layout
Technology updates
Homogeneous
services
Service quality
Network-focused
Service provisioning
capability
Service marketing
Customer increase
Service-focused
Converged network
Converged services
Industry chain re-
structuring
Integrated
information services
Customer-focused
How should operators and equipment suppliers adapt to a more customer-
focused business operation model?
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Strategic Alliances
Nov 2003: JV with 3Com called Hauwei-3Com. (Huawei 51% stake)
- Aimed at selling to Corporate customers.
- JV captured about 35% of Chinese corporate market.
- Expected to overtake CISCO to be the largest equipment
provider in china.
- Entered into JV to leverage 3Com’s strong brand.
2003: Formed a 3G research JV with Japan’s NEC and Matushita.
Early 2004: JV with Siemens, called TD-Tech
Signed a global framework agreement with VODAFONE Group to supply mobile phone network to any Vodafone company worldwide.
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CISCO STORY
• In 1984 two Stanford computer scientists ,Len Bosack and Sandy Lerner started Cisco.
• By 1987,the company managed to secure a sizeable venture capital from Silicon Valley for its large-scale expansion.
• In the early 1990s,with the growth of internet , Cisco expanded from a one product company into a service based leader in networking business.
• From 1995,Cisco took a series of acquisitions to broaden its service and product portfolios.
• To move into new market segments ,Cisco formed extensive strategic alliances with companies in the networking value chain.
• By the end of 1990s,Cisco had become a virtual manufacturer of networking products , running network of outsourced operations.
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CISCO STORY (cont.)
• In order to meet global demand for its products ,Cisco made alliances with local OEMs and distributors.
• Cisco entered China in 1994 with the opening of its first office in Beijing.
• In 1998,the company began to focus its attention on China to expand its business. Cisco opened its own subsidiary instead of forming Joint Ventures with local partners.
• Cisco also embarked a number of education initiatives to develop favorable relations with Chinese authorities.
• It launched its new R&D center in Shanghai in 2005.
• Cisco became the largest telecom networking company in the world , with 35000 employees and an annual revenue of US$22 billion in 2003-04.
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SWOT Analysis
STRENGTHS•International expansion provides company with access to many customers
•Low operating costs (low cost engineering) that support low-cost pricing strategy
•Broad portfolio of products to support end-to-end solutions
•Ability to leverage power and influence of government of China
•Installed base of Tier 2/3 telecom operators in emerging markets
•Inexpensive and highly qualified R&D workforce
•Undertaken joint R&D laboratories with foreign companies
•Early and heavy investment in 3G mobile communications technology
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SWOT Analysis (cont.)
WEAKNESS•Ties to Chinese government could limit international investment opportunities
•Lack of strong global presence, including in US and Europe
•Lack of credibility with Tier 1 telecom operators
•Strained relationship between U.S. employees and Huawei executives
•Difficult to adopt foreign accent for Chinese employees
•Failure of low price strategy in U.S. markets
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SWOT Analysis (cont.)
OPPORTUNITIES• Expand rapidly into high-growth geographies
• Expand rapidly through strategic alliances in Tier 1 accounts
• Become a top leader in professional services
THREATS• Partnerships and alliances are unsuccessful due to lack of experience in managing relationships
• Looming European recession could have a global effect and negatively impact product sales
• Immature organization implodes due to stress of rapid expansion
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SUGGESTIONS:
• Image changeover:
-- From low cost image to reliability.
• Improving track record in U.S markets by:
-- Accruing firm having sustained and consistent emphasis on R&D and Innovation.
• Creating brand awareness in U.S. through positive marketing and promotion by:
-- By concentrating more on CSR activities.
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SUGGESTIONS:
• More focus on network security.
• It should raise IPO to increase its funds in order to enhance its technical strengths.
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Huawei Technologies Co. Ltd. : Current Status
• 110,000 employees• 46 % engaged in R&D• 20 R&D institutes worldwide• In 2010 invested USD 2.606 billion in R&D• In 2010 revenue recorded USD 29.14 billion• Products and services deployed in more than 140
countries• Currently serves 45 of the world 50’s largest telecom
operator.
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Comparison of Cisco Systems & Huawei technologies Co. Ltd. (2010 statistics)
ParameterParameter Cisco Systems Cisco Systems HuaweiHuawei
Revenue (USD) 43.21 billion 29.14 billion
R&D investment 6.04 billion 2.60 billion
R&D investment as a percentage of Revenue
14 % 9%
Number of employees 110,000 71,825
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Product Portfolio Comparison
Huawei Technology Co. Ltd. Cisco Systems
Mobile and fixed broadband networks
Networking Device
Consultancy and managed services Network Management
Multimedia technology Cisco Software
Smartphones Interface and Module
Tablet computers Optical networking
Storage area networks
Wireless, Telepresence
Datacenter
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Huawei Technology India Private Limited (HTIPL)
• 1988 - Huawei established its R&D center in Bangalore – Huawei has set up one of the largest R&D centers in
Bangalore, to develop a wide range of telecom software– Currently employing – 2000 R&D center.– Has invested USD 200 million till date.– CMMi level 5 certified organization – Huawei's largest and fastest growing R&D center outside of
China• HTIPL's activities span
– end-to-end ownership of products– testing and delivery– to enhance the core competence for the global market.
• Growing Customer base in IndiaHuawei India’s clientele includes Top 10 telecom service
providerssuch as Bharti Airtel, MTNL, Vodafone, Reliance, Tata
Teleservices,Aircel, BSNL and other new operators.
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Cisco India
• Cisco India commenced operations in 1995
• Cisco has 7 Sales Offices in the region - New Delhi, Mumbai, Bangalore, Chennai, Pune, Kolkata and Hyderabad.
• India headcount is 7600+ including R&D, sales and business support staff
• Cisco Global Development Center is in Bangalore, this is the largest outside of the US– Joint Development Centers with Wipro Technologies and Infosys
Technologies in Bangalore; HCL Technologies in Chennai and Zensar Technologies in Pune
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THANK YOU
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