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Huawei in Canada: Can It Become a Trusted Player? Case Solution & Answer

Huawei in Canada: Can It Become a Trusted Player?

The population of Canada has been moving to more modern technology, smartphones etc. Telus and Bell, the two major telecommunication and service provider companies set up infrastructure collectively, and used Huawei, and Nokia Siemens as Network Providers.

Technological

World has been growing faster in terms of technology. The telecommunication industry has been growing at a fast pace. Considering the larger data transmission speed and customers demand for seamless and uninterrupted internet, the network developed rapidly in the past decade. Firstly, 3G was introduced, which is followed by 4G LTE technology. Huawei was the one who has been a pioneer in technological development.

Environmental

Canada has a developed transportation system, which includes about 1,400,000 Km of roads and 10 major international airports and more than 300 commercial ports.The country has developed infrastructure. Moreover, the government has been promoting the telecommunication sector of the country and has been providing due support to the industry.

The company is operating globally and most of developed markets, which is a success factor for the organization. The strategic position of the company is strong but the company is operating in a competitive and uncertain environment in which market economies are globalized due to increase in production cost and shortened product life cycle.

Therefore, the company is facing certain challenges, as the Canadian government is more conscious about protecting the environment. Hence, the company should adopt sustainable production processes in order to minimize the impact of production processes to protect the environment, which could be the source of an advantage over its rivals.

The company is dealing with local communities along with business communities. Therefore, it is considering playing a part in protecting the environment in order to improve its reputation in the country.

Legal

The company is operating in a stable environment in which there are clear rules and regulations for local communities and for businesses as well. Therefore, the target market of the company is favorable with this respect. In addition to this, Canadian legal structure with respect to taxation and interest policies is also favorable for foreign companies, hence operating in Canada is also suitable with this respect also.

 It is expected that there are many Canadian employees working in the firm and they receive greater rights as compared to the employees from other companies, but stable legal conditions of Canada also protects Huawei from any wrong legal actions that most MNC’s face while operating in other country other than their home country.

Porter’s Five Forces

Supplier Power

There is less supplier power. Huawei has several suppliers and it has control on its suppliers. Most of the suppliers are dependent on the company for revenues. Moreover, there are numerous vendors in Canada, and each of which depends on the business from these large companies.

Buyer Power

Customers have high bargaining power as they demand high speed connection and at the lowest prices and with add on services. Since both the other two major companies, Ericsson and Nokia Siemens have divested their enterprise solutions and handset business to focus on carrier segment; more room is left for Huawei to exploit these unfilled segments. For Huawei, there will be low customer bargaining power for these services as the buyers has no other major substitute for enterprise solution and handset business.

Competitive Rivalry

There are two biggest competitors in the industry, which are Ericsson and Nokia Siemens Network. Both the companies collectively own about 55% of market share. Ericsson is the older player and has more market share than others. It has latest 4g technology. Top mobile services operators are being served by Ericsson………………

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