Question

Provide a detailed VRIO Analysis of Huawei in light of the 2018 Huawei Sustainability Report.

The analysis should discuss the resources and capabilities of the company which provides a sustainable competitive advantage.

The response should be 1200 words long.

Answer 1

VRIO stands for Value, Rareness, Imitability and Organization. It is an analytical tool use for valuing company internal resources individually and also with respect to the competition. The different types of resources of an organization include resources like finance, material, human and non-material resources. What makes a business unique is excellent leadership, brand portfolios, partnerships, teamwork, strong financial position, global presence, well managed processes and Innovative ideas. VRIO analysis is about if a resource is valuable or not, rare or not, costly to imitate or not and is a firm organized to capture the value of the resources or not. We need to find out in the VRIO analysis of Huawei that it has the capability to meets all four requirements so that it can bring sustained competitive advantage for the company?

On the basis of 2018 Huawei’s Sustainability Report, they have talked about four main things they will be working on- Digital Inclusion, Security and Trustworthiness, Environmental Protection and Healthy & harmonious ecosystem. Talking about the VRIO analysis of Huawei-

1) Global presence

a) Valuable

They want to touch more of the markets and want to be available worldwide. Having a strong worldwide presence is significantly valuable for an organization attempting to expand its size, deals, and piece of the overall industry. It is a competitive and sustainable method to acquire incomes from new and existing buyers.

b) Rare

Huawei is one of the greatest company all inclusive. Even though there are other worldwide and international chains of competing companies, Huawei has made a distinct name for its quality and offers.

c) Imitability

For the time being, no competition of Huawei could match such an enormous international presence in terms of quality and consistency. It would require critical investment and assets to achieve this.

d) Organization

Huawei is effectively exploiting this capacity.

On the basis of 2018 Huawei’s Sustainability Report,

66% of the world’s households still remain unconnected. As their goal is to bring the technologies to every part of the world, from there such strong position in the market, I guess they can easily reach there. Billion people around the world have no Internet access. On top of that, more than two billion people around the world lack reliable mobile broadband service. Huawei feels that it has a responsibility towards unconnected communities. Therefore, Huawei has launched its global digital inclusion initiative, TECH4ALL.

2) Claim to premium products

  a) Valuable

Huawei offers numerous exceptional and fulfilling products that different contenders don't offer all the time. Huawei additionally incorporates information and detailed ingredients for its products to interest an assortment of clients.

b) Rare

Other competition also offers different products that are offered by Huawei, which means that it is not a rare resource for the company. This is because other players also have access to similar products and portfolios.

c) Imitability

Considering other businesses and players are now using this capacity as a means of expansion and penetration, it can, therefore, be imitated.

d)Organization

By offering an assortment of choices and ceaselessly changing the portfolio through active innovation and new product development, Huawei is exploiting this resource. With plenty of alternatives, the vast majority can discover something they like, and individuals who like to attempt new products and services every now and again can undoubtedly do as such with Huawei.

On the basis of 2018 Huawei’s Sustainability Report,

A fully connected, intelligent world is built upon security and trustworthiness. Huawei has made cyber security and privacy protection its top priorities. Within the next five years, Huawei will be investing US$2 billion in enhancing its software engineering capabilities, to better respond to the cyber security and privacy challenges that are affecting the entire industry.

3) Environmental Protection

a) Valuable

Huawei is contributing to clean efficient, low carbon and circular economy. It is valuable which every company wont be able to do when compared to competition.

b) Rare

Huawei is trying to minimize their environmental impacts during the production and operations and throughout the product and services lifecycle. This is rare because the competition will first try to capture more market and then will come to environmental protection. The completion right now is not that strong in case of Huawei.

c) Imitability

It would not be simple in this case to copy Huawei as this will incur a lot of cost to the competition

d) Organization

Huawei is making an ongoing effort to work with all the industry partners to build a low carbon society.

On the basis of 2018 Huawei’s Sustainability Report,

Huawei supports building a clean, efficient, low-carbon, and circular economy. Huawei is committed to minimizing its environmental impacts during its production and operations and throughout its product and service lifecycles. Huawei uses it innovative products and solutions to help industries conserve energy and reduce emissions, and contribute to a circular economy. The company makes ongoing efforts to work with all industry partners to build a low-carbon society. In 2018, Huawei used about 932 million kWh of electricity from clean energy sources, representing an emissions reduction of about 450,000 tons.

4) Upscale brand name

a) Valuable

The Huawei brand name enables clients to enjoy and feel a bond of association with the brand. This allows consumers to feel emotionally attached with the brand, and experience it as an extension of themselves as well. As such, this becomes a valuable asset for the company.

b) Rare

Huawei is a contemporary brand name that has a premium touch to it and is upscale, modern and lively. Most other companies and competing brands don't have the quality and packaging to urge clients to engage in a way they do with Huawei.

c) Imitability

It would be generally simple for other companies to revamp their packaging and duplicate the plan of action of Huawei. In this way, the upscale and comfortable promise of the offering by Huawei could be imitated.

d)Organization

Huawei is effectively using this resource and enhancing the brand and the brand promise that numerous clients altogether appreciate. The organization is exploiting the stylish way of life that is right now present in numerous urban communities where the brand’s products are widely appreciated and consumed.

On the basis of 2018 Huawei’s Sustainability Report,

Healthy and harmonious ecosystem: Huawei steps up to its responsibilities as a corporate citizen, and works hand in hand with customers, employees, local communities, and industry partners to create a healthy and harmonious ecosystem. In 2018, Huawei organized 177 community support programs worldwide, to support local sustainable growth.