Question

Provide a detailed PESTEL analysis of Huawei's CSR strategy in light of the 2018 Huawei sustainability report also explaining the opportunities and threats for Huawei following the UN sustainability goals.

Word Count: approx. 1000 words

Answer 1

Huawei has emerged as a leading player in the smartphone and technology industry in the recent years. The brand has surpassed Apple to become the number 2 in the smartphone industry. While its financial position has kept growing stronger over time, the brand is investing a lot in research and development to retain its leadership position and stay competitive. The technology industry is marked by intense competition and each major rival of Huawei invests aggressively in research and innovation to gain market share including Apple and Samsung.

Political

Political factors have gained a lot of importance in the field of international business in the recent years. Particularly, in the technology industry, its impact is now more direct than ever. Apart from trade relationships between countries increased government control and oversight of international businesses is also affecting their productivity and profitability.

Economic

Economic factors are also having a major and direct impact in the bottom line of the technology businesses. Huawei has become a leading smartphone brand since it rose very fast to the second position in the entire smartphone industry.

Social

Sociocultural factors have also gained importance in the twenty first century and apart from consumers’ tastes, regional demand is also affected by social trends and local culture. It is why businesses are increasingly making sociocultural factors an integral part of their business and marketing strategies.

Technological

The technology industry is the fastest growing industry worldwide and now a very large part of the international population uses internet and internet based services. The growth and proliferation of internet technology has aided the growth of international brands like Huawei.

Environmental

Environmental factors have also gained an important role in the international market and the technology industry. More and more technology brands are investing in sustainability to reduce their carbon footprint and minimize their environmental impact.

Legal

Legal factors have also acquired a major role in international business and the technology industry. Amid concerns related to user privacy and data security legal agencies have grown their level of oversight of the smartphone and internet businesses.

Huawei’s philosophy and initiatives :

1. Consider social good in prioritizing business development

2. Be active and part of the communities in which you operate

3. Leverage what you do best

4. Create win-win opportunities

5. Promote inclusion

Huawei is operating with integrity and compliance is one of our key focus areas. We always live up to our core value of inspiring dedication and take good care of our employees. To minimize the environmental impact of our operations, we are exploring ways to save energy and cut emissions, and introducing clean and renewable energies. To build a more sustainable supplier ecosystem, we have comprehensively embedded sustainability requirements into our procurement strategies, processes, and supplier management.

Huawei Sustainability and Work Priorities.

· Bridging the digital divide to enable information access for more people.

· Optimizing our eco-design skills to provide more energy-efficient products and solutions.

· Implementing our circular economy strategy and expanding the Global Green Recycling Program.

· Continuing the supplier energy conservation and emissions reduction program to build a greener supply chain.

Huawei has already reached out to more than 170 countries and regions with a relatively short period of time and serves more than 3 billion people around the world. It is a leading global provider of ICT infrastructure and smart devices. Phones, laptops, tablets, wearables, smart homes, mobile broadband, cloud computing, web security, and mobile device management are some of the popular products and services of Huawei.

Major Opportunities for Huawei

Huawei should pursue the opportunity to increase the smartphone market shares in countries such as India, the UK, Canada, France, Germany, South Korea, and some others around the world. Demands for other tech products such as tablets, wearables, mobile broadband, cloud computing, and web security are also high in many countries, hence an opportunity for Huawei for growth.

As Huawei is a R&D-oriented company, surely many new opportunities are likely to emerge with the passage with of time. Particularly, 5G technology and artificial intelligence (AI) offer the company opportunities for further growth. In fact, the company is now behind two-thirds of the commercially launched 5G networks outside China, including but not limited to countries such as South Korea, Switzerland, the UK, Germany, and Finland .

Major Threats of Huawei

There is no doubt that Huawei is the smartphone market leader in China and some other countries. However, its performance in many countries is very poor. For instance, its mobile vendor market share in the UK as of September 2019 is 9.24% which is weak compared to Apple’s 48.71%, and Samsung’s 29.14% market share. Likewise, its market share in India is 2.83%, while 6.41% in Canada (Source Stat Counter, 2019).

Many people perceive that Huawei as a provider of cheap tech devices and services. This perception has not been helpful for the company. Likewise, it was accused of espionage for the Chinese government. It was also accused of breaching various intellectual property rules. These allegations have negatively impacted on the brand image, though Huawei has rejected them.

Major Three ways “Huawei” support the UN Sustainable Development

Protecting the rainforests

Rainforest Connection is turning used Huawei mobile phones into solar-powered devices that will monitor the rainforests. The AI function in these phones acts as “ears” of the rainforests to pick up the sounds of trucks and electric saws, which point to illegal logging activities.

Ensuring sustainable food sources

Park rangers at the World Wildlife Fund (WWF) are documenting observation data from their patrols the number of birds they spot, for instance in real time in a big data lake, where it can be analysed to better understand how to protect the animals.

Detecting visual impairment in children

Huawei is using AI to detect visual impairment in children early, particularly in rural areas where there is less medical support. 19 million children in the world have a visual impairment condition, but 70% of them could have normal vision if their condition had been detected early enough.