Huawei

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Bachelor at

Xi'an Jiaotong-Liverpool University

Bachelor of International Marketing

MAN303(16/17) Final Year Project

28.04.2017

Written by:

Fabian Alexander Ottho

This paper is done as a part of the undergraduate program at BI Norwegian Business School. This does not entail that BI Norwegian Business School has cleared the methods applied, the results

presented, or the conclusions drawn.

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This thesis examines how Huawei could use e-marketing and strategy to strengthen their global brand. I had three key areas of research, being; customer’s relationship towards the brand, Huawei’s strengths and weaknesses regarding their e-marketing capabilities, and lastly what brand position they have in the global marketplace. To find answers to my research questions, I used both quantitative and qualitative research to cover them more extensively, gathering crucial information to provide enough evidence, backing up my hypothesis. By applying models such as Porter Five Forces, SWOT and a survey, I have analysed my research questions and testing out various hypothesis regarding Huawei’s global foothold in the Smartphone industry.

Through extensive research, I can declare that, whether, in China or the West, the customers want similar approaches when it comes to marketing. We can see a similar pattern regarding special features in the smartphones that consumers tend to find this less critical when

selecting a premium phone, contradicting my initial hypothesis.

2. Acknowledgements

I would like to thank Professor Ewout Van Der Schaft for his extraordinary support in the progress of writing this dissertation. I would also like to thank Edward Qiao for supporting me greatly, supplying me with necessary guidance and recommendations, always being there willing to help me. This project would not have been possible without the assistance of Mr Raymond Yip and Imagination, taking me under their wing, giving me a chance to write a dissertation on their behalf.

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3. Introduction

3.1 The Journey

In September 2016, I exchanged from BI Norwegian business school in Norway, all the way to China and the city of Suzhou to finish the final year of my bachelor degree. In

collaboration with IBSS, I received a supervisor, and his responsibility was to guide me through the process. During our first meeting, we discussed possible companies I could write my dissertation for, and he helped me to get in touch with Imagination. Before Imagination decided to work with me, I had to go through a Skype interview with Mr Raymond Yip, the company’s director in Shanghai. After sealing the deal, we arranged a formal meeting at their office in Shanghai, where I was introduced to Mr Edward Qiao who is a Senior account manager for Imagination. During this session, I got a brief introduction to what the company is all about, their values, goals and what they do that differentiate them from other similar firms. I had the opportunity to select my dissertation topic, and I could pick between either Huawei or Jaguar. I chose Huawei because I’ve worked in retail back in Norway for a total of 4 years, 2 of them being full-time, and two years part-time while studying. Huawei is a

company I know from my retail job, and I have sold countless of products made by them. I’ve always been fascinated by how they managed to make such beautiful products, and yet keep their products at a low price-point.

During my first semester, I had to write a research proposal, containing a comprehensive strategic plan, on how to write my dissertation in the second half of my academic year. The deadline was December 2016, and we sent out drafts to both Imagination and our supervisor.

After receiving some feedback, I decided to travel to Shanghai and meet Imagination to discuss what we could improve, and keep an open dialogue regarding the next steps. After the meeting, I received articles, surveys and secondary data related to my research topic. During our last consultation, we made a timetable where we agreed on dates for certain parts of the dissertation to be finished, and the final deadline. Through the process of this dissertation, I have been working closely with Imagination and our representative, each step of the way. BI Norway, IBSS, and Imagination have provided me with guidelines in how this dissertation should be written, and I have tried to the best of my ability to follow these guiding principles.

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3.2 Introducing the Company Huawei

Did you know that 1 in 10 smartphones sold globally is manufactured by Huawei? (IDC, 2017) Telecommunication and networking equipment providers have been around for more than 100 years, and there is healthy rivalry within these markets. Huawei is one of those companies that looked at this as an opportunity, rather than a threat, and this decision of being bold in a competitive market proved to be profitable for them. Starting off as a small phone company, selling communication services in 1987 mainly focusing on B2B the company rapidly grew to one of the leading telecommunication providers in the world, surpassing 100 million smartphone shipments merely 30 years later. Their primary goal is to improving life in all the corners of the world by establishing connectivity, and thereby their slogan is: “Building a Better-Connected World” (Huawei 2016).

Huawei was founded by Ren Shengfei in 1987 (Huawei 2016), and as mentioned above, their focus was to produce phone switches. Their sales tactics at the time only focused on B2B. Six years later in 1993 Huawei released a phone switch named C&C08, and this was the best telephone-switch available at the time. Huawei’s next advance happened only three years later when Beijing ruled to partially limit overseas telecommunications corporation’s entree to the Chinese market, by supporting local Chinese companies instead. It did not take long until Huawei was promoted by both the Chinese government and the military as the superior choice (Ahrens, 2014). After the Beijing policy had started to take effect, Huawei’s focus on R&D increased (Research and Development), and by 1997 the company released its first wireless GSM solution, expanding their operation into the metropolitan areas of China (Huawei 2016).

In that same year, Huawei managed to win an overseas contract with Hong Kong. The company was so profitable that it opened an R&D centre in the city of Bangalore India, with the sole focus on developing innovative telecommunication software. In the year 2000 the company’s revenue from overseas markets reached the first USD100 million, and a couple of years later this number increased five times, surpassing USD500 million (Huawei 2016).

The first time the company accomplished branching out to Europe was in 2004, with a Dutch company named Telfort, and the agreement was that Huawei was to build a 3^rd generation mobile network (Harney, 2004). The contract was valued at USD25 million, and this was the company’s first breakthrough and largest business deal in Europe at the time. One year later the Company’s international contracts exceeded their domestic sales (Huawei.com 2016).

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In 2007 Forbes magazine released their list of the 200 most influential companies of that year, and Huawei ranked as 189th on that list (Forbes 2007).

The year after they were added to BusinessWeek’s list of “The World’s most Influential Companies of 2008” (McGregor, 2008). By the year 2015 Huawei shipped over 100 million smartphones, and this was 25 million more than the previous year (Huawei 2016), granting them 1^stplace in China and 3^rd place in the global smartphone market. This shows us that their focus has changed since they launched in 1987. The company that used to focus on B2B has started to focus on B2C, changing how the company operates, and their global position among the competitive giants such as Samsung and Apple. Huawei has been the largest

telecommunication equipment producer on the globe, after surpassing Ericsson in 2012 (The Economist 2012). As of today, they employ more than 170 000 people divided over 170 regions and countries (Huawei 2016).

3.3 Motivation

Thomas Edison once said when trying to invent the lightbulb that he has not failed; he just found 10 000 ways for the lightbulb not to work (Eikhorne, 1967). A river does not cut through rock because of its power, but because of persistence. I have always been fascinated with technology, and how it helps us live our lives the way we want to. Huawei is one of those companies that caught my attention early on, and when I received a chance to write my dissertation about them, saying no was out of the question. My research question was chosen by Imagination and me. I was very lucky to be selected by them to write this dissertation on their behalf. Huawei is one of their largest clients, and we wanted to find out how important Huawei is in the overseas market compared to the Chinese market. Also, we wanted to know what marketing tactics Huawei should use to expand their smartphone division. We also wanted to see what are customer’s relationship towards the brand.

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3.4 Research questions:

The main question for this dissertation is:

“How could Huawei’s e-marketing contribute to strengthening their global brand?”

To find the extent of how successful Huawei’s brand marketing is, you could perform a series of tests. By split the core question into smaller sub-questions, breaking down the overall question. My sub-questions are:

1. What are costumers’ relationship towards Huawei as a brand?

2. What are the strengths and weaknesses of Huawei smartphone division?

3. What brand position does Huawei have in the global IT market?

These questions will be used to gain an extensive understanding of Huawei e-marketing capabilities, and how this effect customer’s judgement towards the brand, and how this understanding can be improved for Huawei differentiating themselves from its opponents.

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3.5 Research Method:

In this dissertation, I have chosen to do a SWOT analysis of Huawei. A SWOT analysis contributes to finding a firms; Strengths, Weaknesses, Opportunities and Threats, and it is commonly used as a tool for brainstorming activities. The objective is to examine internal and external aspects of the firm, to achieve an explicit goal (Humphrey, 2005). This can help me map out where the company is stronger compared to its competitors, using this to their advantage. The internal analysis helps us find features that we can develop further to

apprehend the competitive advantage and, what factors that can potentially hurt the firm. The external analysis is at a macro level, and the results are often offered as a matrix chart. In the SWOT, I will be analysing the strengths and weaknesses of Huawei’s smartphone division.

Furthermore, I have chosen to use a Porter Five Forces analysis. This is an analytical tool comprised of Supplier power, Buyer power, Competitive power, Threat of Substitution &

Threats of new entries (Porter, 1998). This model helps us increasing our knowledge of, and analyse the competitive advantage in the industry. After finding the competitive advantages, the corporation must use these benefits to forming a basis for a selection of competitive strategy. Huawei is one of the major players in the smartphone industry that keeps design local, meaning that the design department is owned by Huawei and is not sourced out of the company. Lastly, there will be a survey where I will collect numeric data using a platform called Qualtrics. The survey numbers will be added to a program called SAS JMP to be analysed to test my hypothesis, to determine whether my theory matches the collected data.

This is to find out what people’s real view of Huawei, and how this can be improved by using e-marketing.

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4. Literature Review 4.1 Huawei and E-Marketing

Information and Communication Technology (ICT) in conjunction with the internet have in many ways changed the face of marketing. It does not matter if a company is a minor shop or a major global brand, e-marketing has changed the game, and at the same time created new ways of communication (Salehi ET AL., 2012). It has created a new marketplace for the customer, and unseen new marketing opportunities marketers could only dream of 20 years ago (Watson ET AL, 2002). These innovations shook the traditional, dominant marketing models, and gave a basis for the birth of e-marketing. The internet has been one of the main drivers for change in the marketing industry, resulting in a new paradigm of the marketing genre.

E-Marketing’s role is to take the business outside national borders using the Internet, and this new marketing strategy has reshaped how firms view the world, and how they perceive global expansion (Strauss 2006). The central question for my dissertation, as mentioned above is how Huawei can use e-marketing/strategy to their advantage, capitalising on this “new”

market trend. The concept of e-marketing is to use innovative technology-based marketing, allowing interactivity between the customer and the company (Chaffey, D 2009). Knowing what the customers want is a critical success factor, and this can change potential new buyers view on Huawei, creating a relationship with the company. It is important that this innovative technology is integrated with a firm’s information system as a strategy to set up and deliver value both to the enterprise, but also to its customers. Never before, have companies had such compelling technologies to interact with their customers, collecting data and information from them to tailor the companies’ offerings accordingly (Rust, ET AL, 2010).

Since the global landscape is changing every year, it is crucial to develop and explore new theories and methods, and e-marketing is an approach that offers a fresher perspective regarding the process of industrialisation. Both Internet and ICT are important for

internationalisation and e-marketing, the problem is, however, that the traditional theories have difficulties explaining the patterns created in the modern marketplace because of how the internet and ICT affect the internationalisation proses. You also need to take into

consideration that the web is both a base for e-marketing, but it is also international in nature (Moini & Tesar, 2005). Using the Internet as a sales channel for a B2C relationship and smartphone sale is a way for Huawei to explore unknown markets in an affordable and efficient style. If the venture turns out to something negative, pulling out is cheap.

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One example of a company that has used e-marketing to its fullest potential in China is one of Huawei’s biggest competitors called Xiaomi. Xiaomi has always sold their products online in China to avoid expensive management fees that retailers demand, and this benefits Xiaomi’s bottom line, increasing their profit margin substantially (Boxall, 2017)

The internet can be used as a sales channel, with a worldwide reach, overcoming scarce resources and foreignness liability, as well to help speeding up the internationalisation process (Arenius ET AL., 2006). Also, the Internet is a great tool to gather information about a

foreign market and improve the communication and networking with stakeholders located abroad (Tiessen ET AL 2001). The only downside of a more global marketplace is since the number of companies entering foreign markets has increased, the market becomes saturated more rapidly than ever before (Axinn ET AL, 2001). Even though e-marketing promise fame and fortune, it is not without controversies and disadvantages. It is highly dependent on technology, and to preserve this advantage, maintenance is expensive. The rivalry becomes more competitive through globalisation, pushing the prices down because of a constant price war. There are also privacy issues regarding the security of the costumers since not all websites are safe (Forneris, 2017)

By using internationalisation concepts such as the Uppsala Model (Johanson ET, AL 2003), we can find guiding principles on how a firm should gradually intensify their activities in the oversea marketplaces. Starting off, a company must first gain experience in the domestic market, then move to foreign markets. The key is to expand to similar like cultures, and then gradually move to more distant cultures over time, adapting and learning from one country to the next. Another proposal from the Uppsala Model is that you start off with occasional export and low quantity sales, and then increase the intensity over time. If the business venture does not go as planned, the model states that the level of a firms’ commitment to that country should decrease (Blomstermo ET, AL 2003). Huawei could use the Uppsala model as guidelines when entering foreign markets, and one example is Scandinavia. If you branch out to one of the Scandinavian countries, it would be less challenging to enter neighbouring countries.

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Scandinavia is quite similar in demography, culture, and language meaning the Uppsala model is relatively easy to implement, and the same goes with North-America. The Uppsala Model is not without controversies, and the main problem is that the model does not explain the phenomenon called rapid internationalisation (Skudiene 2015). Globalisation and hyper- globalisation have changed the way of international start-ups, and this challenges the Uppsala Model and its old view of Internationalisation. The newer internationalisation model needs to be added, and accommodate the forever changing global environment (Becker 2012).

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4.2 Branding and Huawei

If you were to ask a company what branding means to them, they would tell you that branding is everything. Branding is a gut feeling towards a company, and a smart cooperation knows how powerful this tool is if used correctly (Julien (2008). Branding helps a company

differentiating themselves from other competitors. It is important to remember that a brand is not only a name. You have brand elements such as symbols and logos (McDonald’s golden arches, Nike’s famous swoosh, and Coke’s contour bottle) You also have slogans such as BMW’s “ultimate driving machine” and Visa’s “Everywhere you want to be” and these elements play a significant role in branding (Keller ET AL, 2004). Even though some companies spend vast amounts of money on logo design, there is barely any academic research that has explored this topic in depth, on how this affect the costumer’s behaviour towards a brand (Schmitt ET AL, 1999), with one exception. In 1998, Henderson and Cote conducted an empirical analysis of 195 logo designs, to determine if design differentiated costumers view of a brand (Henderson ET AL, 1998). Something that has received greater attention in recent years is how the merchandise a company sells is packed. Research conducted in 2003, by Wansink showed several studies that presented a clear correlation between package size, shape, and consumption (Wansink, 2003). This is a chance for Huawei to show how green the company is, by limiting package size, appealing to the environmental costumers.

If you want to change your costumer’s views and thoughts regarding your brand, you should think of the following: Who am I, and why do I matter? (Galullo, 2013). Brand loyalty is regarded as the most cited concept in marketing literature, and it plays a vital role in strategic management (Hamid, 2015). Consumer loyalty lies at the centre of marketing strategy, and it is an ongoing exploration topic. Some scholars argue that brand loyalty is so important, that it overshadows other marketing tactics such as promotional programs and price cuts (Tepeci, 1999).

Apple is known to have the most loyal customers, being famous for their tribalism (Price, 2017). Another example is Xiaomi’s fan base, calling themselves Mi-Fans, having their fan club and dedicated Mi-Fan day which is April 6^th (Hong, 2017). This creating of loyalty is something Huawei must consider and try to capitalise on. By looking at the latest

development in adherence literature, we see that it is a concern to companies that customers are currently not as much persuaded towards the reliability aspect compared to the past, (Bennett ET AL, 2005).

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It is stated by (Schriver, 1997) that loyalty cannot be presumed as it was 50 years ago. Brand value and customer satisfaction goes hand in hand and is a result of future behavioural

intentions and attitude. This implies that the most important job for a marketing manager is to examine components that affected the loyalty of their customers and then find the constituents of their loyalty. Without this understanding, it is nearly impossible for a company to find loyalty creating actions.

With the ever-developing global marketplace, international marketing theories are trying to resolve newly discovered management problems, and this has changed the way researchers view branding, forcing them to develop new marketing methods and strategies. Marketing researchers frequently speak of branding as a universal technique, and by reading the writings of famous guru’s such as (Roberts 2004), and marketing scholars (Aaker 1999) implicitly assumes that to build a reliable brand name, the procedure is pretty much the same across continents and cultures. Companies need to learn how to operate in the world as one big market, ignoring national and regional differences, and research suggests that marketers need to standardise, instead of customising their global marketing program (Gatignon, ET AL, 1995). Researchers have examined linguistic and cultural aspects of branding, showing how English versus Chinese brand names differs in both verbal and visual representation (Schmitt ET AL. 1994). Marketers should, therefore, focus more the natural tendency of Chinese customers depending on visual depiction, while English native speakers rely on phonological representation. This means that for the Chinese, the meaning of the text is more important, while for Westerners it is important how it rolls off your tongue when you pronounce it.

(Aaker, 1991). One of the crucial success factors for a brand to thrive is memorability (Robertson 1989), Being one of the branding selection criteria (McNeal, ET AL 1981).

By examining brands at different scales of social and cultural context, executives can find and identify problems that are critical to developing a successful brand (Kimberly, 2007). “It is this sense of oneness and connection that turn brands into movements and people into believers” (Galullo, 2013). Even though there has been much progress regarding branding, particularly in the last decade a clear majority of significant researchers suggest that branding will be a hot topic for debate and to conduct research on in the years to come. Many important questions concerning branding and issues are yet to be resolved (Keller ET AL, 2004).

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For Huawei, it is important to know how to position themselves in unexplored foreign markets. How do they want the costumers to perceive them, and how can they change negative views into something positive: Terms such as: “Made in China” used to be something negative, but today that view has changed. Now the term “Made in China” is referred to something more positive, something that is well-built and with quality (Statista, 2017).

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4.3 Huawei and Marketing Communication

Marketing communication is a significant part of communication, preparation, assembly, implementation and monitoring different kinds of communication activities in such a way that it ends up generating revenue. There are many forms of marketing communication tools, and some of them are the Personal sale, advertising, direct marketing, communication, promotion, and public relations (Tomše ET AL, 2014). The term marketing has no fixed definition, but if you take the definitions created by famous marketing gurus, we can conclude that the

essential task of marketing is to find and meet the desires of users in the manner of maximising profit.

The company Huawei is not so reliant on the stakeholder’s desires since the company is privately held by the China-based employees of the company, meaning that anyone working outside China cannot buy into the firm (Moskowitz, 2017). This puts a lot of secrecy and mystery surrounding Huawei, which for some is a red flag. It did not help that the company was accused of spying on its customers (Presse, 2017). Communication, on the other hand, can be defined as “the process of transmission of thoughts between users, or between an organisation and its users” (Shimp, 2003). When it comes to marketing, it is significant to know the difference between marketing communication “channel” and marketing

communication “tool” to better understand marketing communication.

There are various marketing communication tools, and the most frequent are mentioned above. However, as a marketing communication tool, some authors say; the Internet,

sponsorship, exhibitions, fairs, etc. (Shimp, 2003). On the other hand, a marketing channel is a way how communication travel from one source to a receiver (Belch ET AL, 2007).

Communication can be a device that transfers a message from an organisation to its publics (Bajde, 2013). To be considered a marketing communication channel, we believe anything capable of sending or transmitting the message, and some examples are radio, the internet, printed media, television, social networks (Pickton ET AL, 2001). By this, you can with confidence say that a marketing communication tool is defined as a way of communication, while marketing communication channel is what allows the broadcast of the marketing message, from source to receiver.

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It is important to remember that the internet and other social networks cannot be treated as tools, but as marketing communication channels. Marketing communication on social networks is to use social networks to reach a communications objective. Marketing mix 4P (Product, Price, Promotion, Place) is something we find in both traditional marketing and digital marketing (Gambhir 2013). When we talk about marketing communication on social networks, we differentiate the campaign and the strategic approach (Zarrella, 2009). A

strategic plan can be a long-term tactic where a company devotes resources for a long time, on a steady basis and this helps to accomplish marketing communication on social networks;

some examples are Blogs, Facebook and Twitter. These platforms contribute to improving a company’s brand building and reputation, and this is something that Huawei must take into consideration to strengthen their global brand.

The people in charge of marketing communication on a social network are required to use various marketing tactics and strategies, and the differentiation should be based on offerings, brand and target audience. It is not self-evident that the same method is fitting for all viewers and all brands, even if the company or the brand owner are the same. To successfully

implement a marketing strategy on a social network, you must create communication that will be perceived as meaningful from your target audience. When you as a marketer find this valuable information, the marketer needs to use them in useful and long-lasting dialogues (Packer, 2011). After some time, a company would have built a portfolio on how to

communicate, and reach out to their customers by using social networks. Communication on this platform is usually reflected in the substantial but temporary changes in sales (Zarrella, 2009).

Even though market communication is a simple part of the marketing mix in traditional and digital media as well on social networks. Social network stands out from the crowd since it offers different marketing opportunities compared to traditional media (Tomše, ET AL, 2012). Researchers found that social networks are far more superior and efficient than traditional media in both brand perception and brand positioning. Furthermore, they

discovered that users exposed to a brand by a blog had a more positive attitude towards the brand, compared to someone who found an advertisement in a magazine. Huawei must take marketing communication into consideration when they want to branch out to new customers.

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If they want to attract new young buyers, they should use the digital media tools such as social network sites such as Facebook, and blogs. Everything mentioned above talks about social networks as something positive, but there are some downsides to this type of

marketing. The most known issue is that managing a profile takes time, a degree of effort, as well as a certain level of knowledge (Zimmerman, ET AL, 2010). Receiving negative

feedback also increases since it is so easy, and chances are the comments received are mostly negative because it is human nature to complain when it does not work, but never telling you when everything runs smoothly (Sandilands, 2013).

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5. Research Method and Data Description

5.1 Methodologies

Methodology is a study of methods used in science. It is systematic, theoretical examination of a given method applied to a study. Methodology is comprised of an academic study of principles and practices linked with knowledge. Method and methodology have different meanings since methodology’s primary goal are not to offer answers (Irny, ET AL, 2005). It just provides a theoretical underpinning for us to find out which method or theories we can use to find the best possible answer to our question, for example how to calculate an exact outcome. It typically includes concepts such as theoretical models, paradigm, phases and qualitative or quantitative research techniques (Webster, 2017).

5.1.1 Qualitative research

“Not everything that counts can be counted, and not everything that can be counted counts”

(FYP Workshop PPT, 2016). In this dissertation, I have used both quantitative and qualitative data, and the reason is to achieve a more useful analysis of my research questions. When you use qualitative data alongside quantitative data, you have a higher chance of avoiding pre- judgements, meaning it can give understanding in why an answer was given. Qualitative data is characterised by its richness and fullness; and gives you an opportunity to explore a subject, like it was “in real- life”. Additionally, in qualitative research, we use techniques that study pictures and words, not numbers.

By using this method, we get further understanding and insight into an issue, in this case, the research is aimed at Huawei. By using literature studies and secondary data supplementing a hypothesis-generating process (Gripsrud, ET AL 2016), the qualitative inquiries help us seek understanding and meanings, and it is vital to use critical and logical thinking. Some

disadvantages regarding qualitative data analysis are that you usually have fewer people studied because it is more time-consuming and expensive compared to quantitative research.

Additionally, it becomes less easy to take a broad view because the sample population is usually small, instead of using percent it is more common to use exact numbers. Another problematic aspect to consider is the skill level of the researcher, particularly in the case of focus groups, observation or conducting interviews (Archive, 2017).

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5.1.2 Quantitative research

Quantitative research technique is a planned empirical examination of observable phenomena using mathematical, statistical, or computational methods (Given, 2008). It is a research tool to investigate larger quantities of respondents, like people, companies or countries. The purpose of the analysis is to test a hypothesis to determine whether an assumption concerning reality, match the data we possess (Dahlum, 2014). One example of quantitative research is to study the relationship between alcohol consumption and babies born, which is a variable.

Examples of variables can differ, but the most common are age and gender (Svartdal, 2014).

Gender is a variable with two possible values, while intelligence and age are variables with the sizeable amount of values.

The values are abstract, meaning they must be articulated in a concrete way to be measured and observed. Using real values are referred to as operationalization, and one example is that strength can be operationalized as “How much weight you can lift” (Damasio, 1999). Since variables are abstract, imply we cannot observe them directly. This means that intelligence and motivation are called latent variables because they are not directly observed, rather inferred from other observable variables (Tabachnick, ET AL, 2001). It is not unusual to use quantitative research in contrast with qualitative research, commonly known as the

examination, analysis, and interpreting of observations. The purpose is to discover underlying patterns regarding connection, including classifications of phenomena and entities (MIT, 2010).

In this dissertation about Huawei, I have chosen to use a survey. The data being produced in a study will always be in numerical order, later analysed by statistical and econometric methods (Dahlum, 2014). I have conducted a quantitative data collection, testing a hypothesis. This will contribute by producing a more representative sample, giving the opportunity for a superior picture, discovering relative connections concerning my research question mentioned above. Some disadvantages of using quantitative data analysis are that the data being

collected reflects a small, occasionally superficial dataset. The results are limited, only producing numerical descriptions, instead of a complete narrative, administering less elaborate amounts of human perception.

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5.2 SWOT analysis:

The Art of War, by Sun Tzu, states that if you know your enemies and you know yourself, you will not lose a single battle. If you only know yourself, but not your opponent you may win or may lose. If you, however, don’t know yourself or your opponent, you are doomed to fail (TZU, 2016). The word SWOT is not a word per se, but an acronym for Strengths, Weaknesses, Opportunities and Threats and this tool can be used to find what challenges Huawei’s e-marketing (Humphrey, 2012). It is used as a planned arrangement technique to evaluate these elements of an organisation, project or business (Humphrey, 2005). It is not a process, rather a tool used to give structure to a specific brainstorming gathering. The research objective of a SWOT analysis comprises of specifying the purpose of a project or business venture, categorising both external and internal aspects that can be unfavourable or favourable to accomplish that goal. The main benefit of SWOT is that it has little to no cost, and anybody who possesses some understanding about a company can perform a SWOT analysis, meaning you can find steps on how to improve your business without consulting a business adviser or external consultant (Business, 2016). The SWOT will be used to find Huawei’s Strengths, Weaknesses, Opportunities, and Threats regarding the company’s smartphone capabilities.

The technique is comprised of an external analysis (Opportunities and Threats) at a macro level (Technology, Legal, Demographic, Cultural, Political, Social and Economic conditions), but also at a participant level (Suppliers, Distributors, competitors, customers). The other part consists of an internal analysis (Strengths and weaknesses) in which an effort to find factors that can be further developed for sustainable competitive advantage and circumstances that can harm the competitiveness of a firm. One example is to do a value-chain analysis (Vikøren, 2013). A value-chain analysis, examines the value of the creation process in an enterprise, to find and grow features that can increase a firm’s competitive advantage (F, 1993). A SWOT analysis is not deprived of limitations, being unable to prioritise issues, and it does not offer answers or alternative solution to a given problem. It is also known to yield much

information, but not all that information is valuable. Even though this might be the case, I believe that an effective way of analysing Huawei’s smartphone division.

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5.3 Porter Five Forces

Porters Five Forces analysis consist of five parts, and those five forces are; Supplier power, Buyer power, Competitive power, Threat of Substitution & Threats of new entries (Porter, 1998). Supplier power can be divided into numbers of providers or their size. Buyer power can be the number of customers and price sensitivity. Competitive power is numbers of competitors in the market, customer loyalty, and quality differences. The threat of substitution can be the cost of change or substitute performance, and lastly, the Threats of new entry can be cost advantages and barriers to entry. These five objectives determine where the

competitive power lies in a business situation, what is the underlying factor that secures long- term competitive power (The Economist Archive, 1994). By performing an internal analysis of Huawei, we find that one of their core principles is to develop cutting-edge technologies, and we can see this by looking at their emphasis towards R&D. 45% of the entire staff works with R&D development (Huawei, 2017).

By using this model, we will find and analyse the competitive forces in an industry (Huawei, and the smartphone) and identify that company’s unique advantages, and using those

advantages to forming a basis for a selection of competitive strategy. One popular strategy is cost leadership, and this is a strategy based on cost effectiveness, where the ability to compete on price is a crucial factor for maintaining a competitive advantage. This is relevant for Huawei since they need to keep production cost low but differentiate themselves on price.

Numerous of Huawei’s competitor's retail smartphones that cost up to USD1000, and blame it on the excellence and uniqueness of their product. How can Huawei use e-marketing to convince their customers that the quality of their smartphones is just as good, even though their price point is 100s of dollars cheaper. Huawei must use differentiation techniques and build their unique advantage in the competitive smartphone market, finding market niches and exploiting them.

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5.4 Data Description:

The survey was performed on a platform called Qualtrics, which is frequently used by researchers to gather and study information, and its regarded as one of the world’s leading research and insight platforms (Qualtrics, 2016). The survey was spread by using social media platforms such as Facebook. I also created a QR code so that students in the library could do my survey using WeChat. Lastly, I kindly interrupted a lecture with 200 Chinese students, asking them to scan my QR code and do the survey. After pulling the study from the internet, I managed to surpass my primary goal of 200 participants. The data accumulated from the survey was used to suggest possible reasons for specific relations between variables, to later produce models based on the relationships (Saunders, 2016). To interpret the data collected by the survey, I added the numbers to a program called SAS JMP which is a program for

statistical analysis. When the data was successfully added to SAS JMP I started to correct the data, deleting extreme outliers and mistakes some people added, (One example was a Chinese student claiming he was 15 000 years old) and eliminating individuals who completed less than 75 percent of the survey (Garbage in, garbage out).

When I ended up finishing the data rinse, I started finding patterns relevant to my research questions, dividing the dataset into clusters that represent a different type of people. Finding out what their perceptions, or what they liked about other brands so that Huawei could change their e-marketing capabilities to greater increase the chance of that customer group (Cluster) buying a Huawei next time they were on the lookout for a new smartphone. The biggest problem I encountered with my cluster analysis was that numerous of the people finishing my survey was too alike and this is a problem because you need variation to be able to create clear clusters (MAN303, 2016). The positive aspects of using a cluster sampling are that it is cheap compared to other methods, and the sample sizes are bigger and more comprehensive.

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6. Presentation and evaluation of results

6.1 SWOT

As stated earlier in the dissertation, I have decided to do a SWOT analysis of Huawei in the smartphone industry. The purpose is to find Huawei’s Strengths, Weaknesses, Opportunities, and Threats within this highly competitive market. Listed below, you will find the four indicators put together in a SWOT matrix. In this matrix, you will discover the most vital factors, and identification of relationships between external and internal features (Martin, 2015). A portion of this SWOT analysis was inspired by MarketLine Industry Profile and their SWOT analysis (MarketLine, 2016).

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6.1.1 Strengths R&D focus

One of Huawei’s greatest strengths is their focus on research and development. 45% of the entire workforce of the cooperation work in the R&D sector and 10% of their average revenue is invested back into R&D. The reasoning for this high focus on R&D is developing new products and updating the existing products. The company has 16 R&D centres and 36 joint innovation centres worldwide. Per annual reports, Huawei’s has spent more than CNY240 billion on R&D the past decade (Huawei, 2017). This gives Huawei a competitive advantage because technological advancements are difficult to replicate by competitors, and it keeps Huawei at a lead and their opponents on their toes. As of December 2015, the overall number of patents retained by Huawei as of 2016 is 62 519, and numerous of these are associated with smartphone development (Huawei, 2016).

Customer Loyalty

Customer loyalty is one of Huawei’s most important strengths. The Chinese telecom giant posted a 70% growth in its smartphone sales in 2015 (Skilton, 2016). Customer loyalty is vital for any brand to survive and thrive, and the dream scenario for Huawei is to build a client base just as loyal as their two largest global competitors (Apple and Samsung). When your brand has a large base of loyal customers, you only need to target new customers to grow your business, and this is a qualitative factor that will lead to cost decrease (Tong, 2015). The Huawei brand name is a major strength, and this gives the company a competitive advantage because of their ability to charge high fees for their premium smartphones since the customers place additional value in the product (survey results). To apprehend the strong customer loyalty, they design their phones “in house”, and this gives them the opportunity to differentiate themselves from competitors, making them more unique in customer’s eyes.

Additionally, they designed their chipset for their smartphones called Kirin, giving them more control over their phones. Since the chip is one of the most expensive parts of a phone, they gain the ability to be less reliant on suppliers and keeping their profit margins higher by cutting down the length of the value chain (Androidcentral, 2017).

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Annual Growth Rate

Being one of the leading global players in the smartphone market, the company has built up quite a reputation. They have undertaken a transformation the past decade by only supplying low-end phones, to providing medium to high-end phones. This has resulted in the company attracting more business from customers, offering diverse products with high quality for a low price. Consequently, acquiring a strong financial foundation per their annual yearly reports (Huawei, 2017). The company went through a steep growth in margins the past five years, from USD3,098,7 million in 2012 to USD6,867,9 million in 2015, and the operating margin went from 9,4% in 2012 to 11,6 in 2015. The advance is directly connected to the upsurge for the company’s services and products. The growing profit margins of Huawei reflects an efficient cost management, and decision making management at the enterprise, and this high profitability lets the business fund growth plans.

Market Share

As you can clearly see in the diagrams Huawei’s market share is within top 5 both globally and in China. Huawei operates on a global scale, and you can find their services and products in more than 170 countries. The revenue distribution is balanced across geographical regions, but China remains their largest contributor towards their income stream contributing with an impressive 42,5% in 2015 while Asia Pacific and America accounted for 32,4% respectively (IDC, 2017), (Horwitz, 2016).

21 %

13 %

10 % 6 %5 %

45 %

Global smartphone market share, 2016Q3

Samsung Apple Huawei OPPO ViVo Others

6 % 8 %

15 %

17 % 16 %

27 % 11 %

China smartphone market share, 2016Q3

Samsung Apple Huawei OPPO ViVo Others Xiaomi

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Being a major global player reduces the company’s risk related to fluctuating currencies and geopolitical developments. Huawei is actively represented in Asia, America, Africa, Middle East and these areas are stated to expand in the coming years. Unlike the more mature markets such as USA and Western-Europe, meaning, Huawei’s position in especially the emerging markets enhance revenue and scale potential (Huawei, 2017).

Bargaining Power

Being one of the largest smartphone developer and provider in the world, Huawei has great bargaining power when it comes to the suppliers. The cost structure is strong not only because of economies of scale but also because of the low wage cost in China, providing Huawei with higher profit margins (Chinaabout, 2017). Technology companies are typically against price increases since customer’s rebel against it. Huawei has positioned itself in a way that

undercuts the competitors pricing while keeping the quality high. This provides a chance to increase prices co-along as the brand value increases, further growing their overall profit margin.

6.1.2 Weakness Low Market Share

Even though Huawei is a large company, they still have weaknesses. One of the most notable weakness is that they have low market share in two strategic markets (Statista, 2017). Those markets are North-Europe and North-America, and one great contributor is the lack of competence and experience in these markets. The reasons for this may vary, but some of the factors include the spyware accusations and involvement with the Chinese Government, which is poorly perceived in the West. The West cares more about their phone, buying brands that they know are good, such as Samsung and Apples high-end phones, and this is because Huawei lacks an established, popular flagship phone. Huawei also has trouble with

westerner’s preconceptions concerning the “made in China label” which can be perceived as products with reduced quality, underdeveloped CSR and not be environmentally friendly (Lee, 2017).

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Reliant on Competitors

Whether they like it or not, Huawei is to some extent reliant on two of their largest

competitors, being Apple and Samsung. Huawei smartphones do not run on their software such as Apple, but on Android which is developed by Google. This means updates and fixes regarding the software need to go through a 3rd party, implying it is not efficient, nor cost effective, and this is a weakness. Since Huawei does not produce much of the key components for their smartphones, they are highly dependent on others, especially Samsung which

produce most of their components. This can create a lack of overview that may lead to a PR disaster just like Samsung and its battery in the Note smartphones, where some of the phones exploded due to the battery overheating (Kovach, 2017).

Private Ownership

The company is privately held which is a disadvantage if you compare it to its publicly owned competitors when it comes to raising capital. Since Huawei is not a publicly held company, it has lower economic elasticity when it comes to funding inorganic and organic initiatives. This is because public companies have better access to capital markets and can fund acquisitions by using stock transactions, and this directly restrict financing options (McGregor, 2010).

6.1.3 Opportunities Market Growth

The market growth potential for the smartphone industry is massive, and it is expected to grow from 1,4 billion units shipped in 2014 to an estimated 2,1 billion units in 2020 (Scarsella, 2017).

1,57

2,1

2,53

2,87

2014 2016 2018 2020

Predicted smartphone users worldwide

(In billions)

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These new markets allow Huawei to expand their smartphone business and diversify their portfolio of services and products. International markets offer Huawei new opportunities to increase the sales, not only in its home market. The market who buys the most expensive smartphones on average (USA) is expected to have a significant increase in new smartphone users by the year 2019 (Statista, 2017). This growth in the smartphone market is poised to benefit Huawei, growing demand for their phones, thus enhancing market share.

Innovation

As mentioned in the strengths, Huawei is market leading when it comes to research and development. Greater innovation can help Huawei to produce services and products that meet their customers’ demands. Innovation also contributes to building competitive advantage by creating barriers against rivals. Further investment in R&D will increase the chance of becoming less reliant on competitors for smartphone parts and inevitably increase the organisation's profit margin (Huawei, 2017). This opens a new opportunity for Huawei by being able to sell the technology to other smartphone manufacturers, directly competing against Samsung. By narrowing down vertical integration, they will have more control of the value chain, which is an opportunity.

Marketing and Sales

There are still progress to be made, even though Huawei is one of the leading companies in the smartphone industry. Their current global market share is 10%, and one of the best ways to increase that number is to position themselves in markets such as North-America and Europe better (IDC, 2017). Building competence and cultural know-how will result in an increase in market share, and this is going to benefit Huawei in the long run.

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Procurement Costs

When a company expand and becomes a market leader, it receives the ability to pressure its suppliers like never before. A company like Huawei has a large influence on their suppliers, providing them with more significant purchasing power, giving them lower production cost (PPC, 2017). It is like the economy of scale, but directly related to the vendors, and this is an opportunity for Huawei. This concept applies to everything from; transport, electricity, raw materials, and even pencils (O'Sullivan, ET AL 2003)

6.1.4 Threats

Strong competition

The major threat to Huawei’s smartphone division is the intense competition in the

marketplace. This threat is especially prominent by the giants, being Samsung and Apple in the global market, while in China Huawei’s largest competitors are Xiaomi, Vivo, and OPPO (Horwitz, 2016). Intense competition can lower Huawei’s profits because competitors can entice customers away with superior products. The availability of substitute products can potentially hurt Huawei’s ability to raise prices because it makes it easier for the consumer to switch to a different brand. A way to stay ahead is to continuing concentrating on research and development.

Political Scrutiny

We live in a world where political issues have become a part of our daily lives. One of the main reasons why Huawei have not been able to branch out to the US and other countries is because of political concerns concerning the company (Simonite, 2017). The US demanded Huawei to submit all information regarding their exports to Iran, North-Korea, and other sanctioned countries. Additionally, the US has been suspicious regarding Huawei’s ties with the Chinese government and espionage (Riley, 2013), and this is the main reason why the company has not been able to venture into the US. This shows that the government can deny companies access, by using laws and regulations, and this hurts Huawei.

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Volatile Currencies

Like any other company that is global, you are exposed to fluctuations in foreign exchange currencies, and this makes investing difficult since revenues and cost can change in the blink of an eye, exposing the company to foreign exchange risks. The functional currency for Huawei is CNY, and the company trade with different currencies daily, being mostly Euro and USD (Krugman, 2010). If the CNY were to appreciate against the dollar or the euro, it would have a negative net profit of the company,

Key Suppliers and Distribution Channels

Key suppliers may increase prices of their products, and this is because Huawei is reliant on services and hardware provided by Google and Samsung. This could lead to decreased profitability for Huawei, lowering the overall profit margin. Worse of, key suppliers might even terminate contracts and end deliveries to Huawei indefinitely, the reason being Huawei are becoming too much of a threat. This had happened before where Beats by Dr Dre ended their partnership with HTC and bought back 25% of the shares (Warren, 2013). Back in 2013, it was unclear why this happened, but now we know it was because Apple was going to buy Beats. This shows us that a supplier can go bankrupt or become purchased by a competitor.

Huawei has little to none control over their key strategic distribution channels, which is wholesalers and retailers. This makes the company highly reliant on having a good

relationship with these distribution channels. If one of the distributors become too large and decides to eject Huawei’s business, it becomes a problem for the company.

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6.2 FIVE FORCES ANALYSIS 1 = Low, 5 = High

The second analytical tool I am using is the Porter Five Forces, and this analysis will help me analyse Huawei against the handset industry. The model consists of; Supplier power, Buyer power, Competitive power, Threat of Substitution & Threats of new entries. This model will benefit this research by identifying Huawei’s unique advantages and using these to form a basis for the choice of strategy. The global handset industry is dominated by a small number of large firms, and the competition between these companies is substantial. Byers tend to be large and negotiates favourable contracts, but the necessity to always stock the latest high-end handsets puts pressure on the buyers. In the diagram below you will see where I position different factors, regarding threat level, and by doing this, it is easier to get an overview of the situation. In this analysis, I got much inspiration from MarketLine Industry Profile and their Porter analysis (MarketLine, 2016). The very first diagram is a basic summary, where I have placed Huawei regarding the five features in a Porter Five Forces analysis.

0 1 2 3 4 5 Buyer power

Competitive power

Threat of new entries Threat of substitution

Supplier power

Summary

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6.2.1 Buyer power 1 = Low, 5 = High

The handset industry is regarded as a mature market, where development has stagnated, and the ability to differentiate yourself is becoming more and more challenging. Low pricing is not necessarily a good thing because customers want to invest in the phones since it is a large part of their daily lives implying premium quality is sought after. The overall market can be divided into two categories of buyers. Firstly, we have large retailers such as Walmart, Sears and the European Elkjop who purchase smartphones and sell them to its customers. The second type of buyers are mobile network operations, such as Vodafone, China Mobile, Telenor, and some of these phone companies have their retail stores. Huawei is one of the major players in the handset market, but the brand loyalty is higher in the Asian market compared to the global market (Survey findings). The bargaining power of the buyers is high, especially in the handset market because of the economy of scale. We can see an increased trend of customers switching to e-commerce. Retail over the internet is growing every year, and pricing competition is especially prominent since it is easy to compare one retailer against another. Pricewise Huawei has placed itself lower than its competitors in Western markets, and their price elasticity is high. However, in the Chinese market, the price elasticity is less because of more competition.

0 1 2 3 4 5

Undifferentiated products

Low price

Premium

Brand loyalty China

Brand loyalty West Power of the buyer

Pricing Price elasticity China

Price elasticity West

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6.2.2 Supplier power 1 = Low, 5 = High

Manufacturers are characteristically considerably larger than the vendors, meaning they have the high ground regarding supply contracts, over the provider’s low power level. Some

contracts are considered cut throat contracts because a supplier’s survival is based on that deal and often live for that contract. The suppliers are often replaceable, and as a buyer, you have much power. There is a high potential for backwards integration because Huawei can easily buy its suppliers. However, providers of the handset industry have reached a higher power level the last decade due to the smartphone needing rare earth resources for their

manufacturing, which is difficult to acquire. Manufacturers need to be careful about whom they decide to cooperate with since unethical suppliers can result in negative views of their brand name, one example is the wrong CSR related to factory workers at Foxconn. Since we see a downward trend in global market barriers, it is likely that profitability is going to drift away from the traditional telephone manufacturers. The profitability will move over to critical performance enhancing components producers, both Software and Hardware like Samsung.

Samsung is one of the companies which enjoys a great degree of diversification compared to its competitors. They manufacture a portion of Apples iPhone components, and this shows us that the supply chain of the handset industry is complicated since some major companies act as suppliers.

0 1 2 3 4 5

Switching cost

Buyer power

Backwards integration

Traditional telephone manufacturers Components producers

Diversification Substitute products

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6.2.3 Competitive power 1 = Low, 5 = High

The handset market is primarily dominated by a small number of big, recognised companies.

This indicates a high competitive power and rivalry between these enterprises. The industry is set to have a high growth rate, with a growing market and this is especially attractive for competitors to try to steal market share. Blackberry used to one of the major players in the phone industry before the smartphone was introduced, and their revenue has dropped

significantly the last decade since the customers have moved to competitor’s offerings. This is because large companies like Apple and Samsung provide more attractive products and services, and it is easy for a customer to choose among suppliers. Market saturation is high, and if you take phones that are not under contract into consideration, the market penetration is higher. This puts smartphone production companies under pressure, forcing them to develop new technologies continually and investing in R&D to persuade existing customers to upgrade their phone. The loyalty level of customers is relatively high, especially in the premium phone industry. Companies heavy invest in technology that helps to keep the

customers loyal. Some examples are Apple and iCloud, that seamlessly integrate and connects your devices across different platforms.

0 1 2 3 4 5

Competitor size

Competitive power

High growth rate

Low switching cost R&D investment

Easy to expand Ablity to upgrade

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6.2.4 Threat of Substitution 1 = Low, 5 = High

The threat of substitution products in the handset industry is small. One possible substitute for the mobile handset is fixed land lines, but this risk has decreased the past years since cell phones provide larger geographical reach due to wireless connectivity. In the last decade, cell phones began to offer benefits, directly subsidising other products earlier not associated with mobile phones. This includes cameras, MP3 players, laptops and television. Even though laptops offer comparable benefits as a smartphone such as an internet access, GPS, video calling, and portability, it is not a healthy substitute product. This is because mobile phones have other benefits such as size and weight. A larger threat would be Tablets, but the phone industry has conquered this problem by producing large screened phones, called “phablets”, and this reduces the risk. We can conclude that the smartphone is a solid product and will continue to stay strongly represented in the time to come. There will be significant upgrades to the smartphones in the future, but they will pretty much stay the same, with added

functions to the software and hardware.

0 1 2 3 4 5

Substitute products

Threat from tablets

Threat from laptop

Threat from landlines Solidity of the smartphone

Cheaper alternative (Smartphone)

Beeficial alternative

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6.2.5 Threats of new entries 1 = Low, 5 = High

Numerous newcomers have effectively entered the market in recent years, and this has made an immense influence on the overall handset industry increasing the competition, giving the large manufacturers such as Apple and Samsung a run for their money. Some examples of newly established competitors are Huawei and OPPO. Entering a market as a minor company can be problematic due to having limited market capital and resources. R&D and production facilities are costly, and competing with larger brands becomes nearly impossible. However, manufacturers such as Huawei has succeeded in entering new markets, directly competing against the European giants such as Samsung and Apple with a noteworthy cost-benefit. We are currently at the mid-growth stage in the industrial lifecycle of smartphones, and this implies that new advancements in technology and research will happen, and this can be a threat against Huawei since they might not be able to provide that type of technology quickly enough. Brand identity often goes hand in hand with brand loyalty and is hard to replicate.

This is an advantage because, as Huawei acquire loyal customers they can increase the prices of their products, while still maintaining high-profit margins. Lastly, software companies like Facebook, WeChat and Snapchat could develop hardware, and one example is HTC and their Facebook phone line-up, which flopped (Beavis, 2011).

0 1 2 3 4 5

Future competition

Minor companies

Huawei threatlevel

New technology Brand identity

Brand loyalty Software companies

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7. Survey

7.1 Cluster Analysis

I decided to use 3 clusters because they turned out to have clear differences that are easy to relate to. The variables used for clustering are linked towards my first sub-question, being customers’ relationship towards Huawei as a brand. The variables are age, income,

nationality, design importance, price importance, feeling towards – value for money. My main goal with the cluster was to visualise customer relationship towards Huawei as a brand,

finding out if age and nationality makes a difference concerning their feelings towards the brand.

In the first cluster, the average age is 54, and most of them are from Europe with a high monthly income. The design is important when they buy a smartphone, but the price is not that significant, likely related to their high income. Their feeling towards Huawei as a brand is neutral, on the verge of negative. Then the 3^rd cluster we see a much younger audience,

averaging 19 years old. Their monthly income is 1/3 of cluster 1, and the majority are from Asia. Price and design are important factors when choosing a new smartphone. Their feeling towards Huawei and its value is high, almost doubling the first cluster. Lastly, we have the 2^nd cluster where the average age is 23 years old, mostly Europeans They have a modest income placing them in between cluster 1 and 3and Design is somewhat important to them. However, the price is not a major factor for when choosing a new smartphone. Their feelings towards Huawei is stronger than cluster 1 but weaker than cluster 3.

The 3 different clusters

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Cluster 1 Cluster 2 Cluster 3

Age Average 54 23 19

Monthly income Average USD5000+ Average USD2500 Average USD1700

Nationality European European Asian

Importance of Design

Agree Somewhat agree Strongly agree

Importance of Price

Between Neutral and Agree

Neutral Agree

Feelings towards Huawei – Value for money

Neutral Between Neutral and Strong

Strong

7.2 Hypotheses 7.2.1 Hypotheses-test

By using SAS JMP and Qualtrics, I have conducted a survey, analysing 217 respondents. By looking at the data, I decided to perform two T-Tests. I will use the qualitative data to develop my quantitative analysis. The outcome of these test will give a wider understanding regarding the research questions.

A: There is a correlation between nationality and perceived value for money regarding Huawei.

B: Men and women have different views regarding smartphone prices.

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7.2.1.1 Hypothesis A:

H0: NC ≠ NE China (C) and Europe (E) Do NOT have the same perception of value for money, and nationality (N)

H1: NC = NE China (C) and Europe (E) Have the same perception of value for money and nationality (N)

By using a confidence interval of 95%, we have a significance level of 5%, meaning we allow a 5% chance of a miscarriage of justice. The significance level is 0,0045*, that means the p- value < 0,05, I then reject H1 because I have found significant proof that the perception of value for money, is perceived differently between Europeans and Chinese. I can confirm this by looking at the t-value – 2,87521 > Confidence quantile value 1,97132. This means that people’s feelings towards Huawei, and the value for money aspect is perceived differently compared to where you are from. Interesting find, but nothing revolutionary here, since people will always be more loyal to their home brands, just like Swedish costumers prefer Volvo and IKEA, of course, the Chinese favour Huawei.

Huawei

Bachelor at

Xi'an Jiaotong-Liverpool University

Bachelor of International Marketing

MAN303(16/17) Final Year Project

Table of Contents

3. Introduction

5. Research Method and Data Description

6. Presentation and evaluation of results

Global smartphone market share, 2016Q3

China smartphone market share, 2016Q3

Predicted smartphone users worldwide

(In billions)

Summary

7. Survey