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Recommendations on Huawei's Long-term Market-Positioning Strategy in the SmartphoneIndustry

2021-08-02 22:35:41
3 pages
806 words
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Vanderbilt University
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Essay
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Over the recent past, Huawei has developed myriads of measures to ensure that it attains the most significant smartphone market share worldwide. The companys decision to ally with Leica is one such move which apparently has generated the much needed competitive advantage for the firm. As highlighted by Rehm, (2016) Huawei will benefit from such a strategy primarily in the transfer of knowledge and skills.

In as far as distribution is concerned, Huawei should be focusing its products on the younger and trendy generation. According to Teece, (2010) successful business models are at one point imitated by competitors. In other words, successful business models are adopted by other firms as means of benefiting from the advantages. Similarly, Huawei should take some of the ideas utilized by Xiami. The company emerged as the top start-up company in the world due to its unique business approach. The primary method adopted by Xiami was to make direct sales apart from carrying out an active engagement of its customer base. Huawei should, therefore, take such a strategy especially in regards to its sales.

Besides the establishment of a robust distribution and customer engagement approach, the firm should also be keen to develop its in-house operating system. The primary advantage possessed by Apple which is the leading smartphone manufacturer by market capitalization is its development of IOS. Apparently, reliance on the Android operating system will limit Huaweis ability to develop differentiated products consequently restrict its competitive advantage. Currently, most of the smartphone manufacturers worldwide rely on the Android operating system, an aspect which has resulted in congestion and limited space for improvements. Huawei should also focus its resources on the emerging economies like India. Apparently, there is much room for expansion in such countries as opposed to developed countries where smartphone adoption has reached saturation levels.

Huawei should also shift its attention to a high pricing strategy. Apparently, pricing of products above that of the competitors can be one of the best ways to create a perceived value. Apple has managed to utilize this strategy to its advantage as reflected in its vast profits generated with a few sales. Therefore the company should abandon its current plan of focusing on both the high end and low-end customers. Such a measure may not be sustainable in the long run since each category has unique needs.

Verdict on Huaweis dual-brand strategy

Huaweis dual-brand approach is the best the company can utilize in its bid to achieve its aspirations. As indicated in the case of the association with Leica, the company has been able to produce the best smartphone camera in the industry. According to the case study, Linxs cameras which were developed as result of the association between the companies were superior in quality as attributed to the fact that they could produce clear images in low lighting conductions. Apparently, Huawei was taking advantage of the long history and experience held by Leica in the production of cameras. As indicated by Rehm, (2016) the coming together of the two companies allows for the transfer of the much-needed experience in the manufacture of cameras. Leica has over a hundred year experience in the production of cameras which will significantly benefit Huawei. Furthermore, it is also evident that Leica is a well-known brand in as far as the development of camera lens is conceded. The development of camcorders with Panasonic is one area where the Leicas brand produced. Ostensibly, Leicas version of Lumix was sold at 45% higher compared to that of Panasonic in spite of the fact that it was the same product save for the packaging and branding. Similarly, Huawei will stand to benefit from superior product brands that are associated with the German company.

Several other companies have also been able to utilize the dual brand strategy to their advantage. The dual-brand strategy between Sony and Zeiss is one notable example which proves that Huawei can benefit from the same approach. Zeis, in this case, was well known in the photography world while Sony had developed a niche in the electronic segment. Each of the players was therefore bound to benefit from the others exposure. Resultantly, their alliance resulted in the strengthening of Sonys reputation among photographers while Zeiss was able to gain additional market in the electronics industry (Zeiss Len spire team, 2015). Evidently, the merging of active firms from two related sectors is bound to create an ideal association which will benefit both partners in the long run. Therefore it is appropriate that Huawei embraces the strategy.

 

References

Rehm, L. 2016. Huawei P9 Leica-branded dual-cam made by Sunny Optical. Digital photography review. Available at: https://www.dpreview.com/articles/9950789627/huawei-p9-leica-dual-cam-made-by-sunny-optical

Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning, 43(2), pp.172-194.

Zeiss Len Spire Team, 2015. Sony and ZEISS: What photographers should know about the partnership. Available at: http://lenspire.zeiss.com/en/sony-and-zeiss-what-photographers-should-know-about-the-partnership/

 

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