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Competitive advantages and core capabilities:

Huawei Technologies has the competitive advantages including low-cost products and satisfied-customized solutions services. In order to obtain sustainable competitive advantages, a firm must leverage between its strategies and core capabilities. Through nurturing capabilities of cost-cutting, high productivity, strong cash flow (in home market), high-tech clusters and R&D centers, In fact, the input to output of labor working time on research and development in Huawei is much smaller that of leading companies’ in western countries. Moreover, many Huawei’s rivals state that Huawei has gained many shares through lower prices. Besides, it also has strong market base and cash flow due to expansion in other parts of Asia and Africa. In addition, it has accumulated its capability via improving the level of holding patent, which can help eliminate barriers of protecting innovation and cooperating with partners.

Strategic direction

Huawei’s technological innovation strategies can be identified as effective with core competence strategy-fit. Huawei has made a successful transition from technology-based to customer-based innovation strategy. Huawei’s innovation strategy has been improved by replacing “Continuous Innovation based on Customer Needs” with “Continuous customer-centric innovation”. The most apparent difference is the customer. Huawei Technologies have focused on customers with high-quality requirements matched products and services by investing more in research and development.

Choosing innovation projects:

According to Huawei’s product and service of its main business: telecommunication equipments; and their context include: mobile, broadband, core network, transmission network, data communication, value-added services and terminals. Along with the development of telecommunications, Huawei aims to provide the newest telecommunication equipment and stands in the forefront of the industry. However, it is necessary to consider about the risky environment, predict expensive and time-consuming when choosing an innovation project.

Some of the advantages of collaboration include sharing costs and risks of development, combining complementary skills and resources, enabling the transfer of knowledge between firms and the joint new knowledge creation, and facilitating the creation of shared standards. Therefore, based on these benefits, in such heavy competitive telecommunication market, it is quite necessary to collaborate with partners.

In conclusion, Huawei technologies Co., Ltd has run successfully with its customer-centric innovation strategy. It has achieved positive financial records and returns on R&D investment during past several years. And Huawei will keep implementing this strategy in coming years. Besides, with the support of its core capabilities, resources and qualified management teams, Huawei is capable of choosing innovation and potential projects in telecom communications markets. Furthermore, the strength of collaboration through strategic alliance, joint venture and licensing has brought Huawei many benefits and opportunities. And innovation protection has been Huawei’s one competence which was its weakness many years ago. Currently, Huawei Technologies has paid much more attention on China rural markets and European markets, as well as Chinese 3D broadband development. However, one point needed to be concerned is that Huawei should keep attaching much more importance on research and development under current intense competition, because of lack of scale on R&D.