Ever since the Trump administration economic war on China, Huawei has been in the news and center stage in the ongoing drama that has evolved between the two great powers, each with its own political and economic philosophies: the USA with a liberal economic and democratic one and China with its more authoritarian and state-centered model of development.
The drama between the USA and China great power struggle linchpin by Huawei has spilled over to other countries with geopolitical implications. Volume 2 of our series on Huawei explores these geopolitical spillovers and Huawei-specific strategies to deal with other countries and position its brand as a value adding, contributing part to technological progress and economic prosperity. As such, Part I showcases Huawei in different parts of the world, while Part II discusses the company impacts via varying theoretical lens.
1 Part I: The Regional, Economic, and Geopolitical Perspectives
Part I consists of ten chapters examining Huawei operations in Germany, Russia, Poland, Central and Eastern Europe, Canada, Mexico, Ghana, Tanzania, India, Southeast Asia, and Oceania.
In Chap. 2, Mario Glowik, Berlin School of Economics and Law (Germany), compares Germany and Russia. The Chinese company Huawei has strengthened its global market presence during the last decade in Germany and the Russian Federation, among other countries. Russia recently moved into Huaweiâs focus as a result of the economic sanctions launched by western countries. Through a comparative analysis, the market entry activities of Huawei in Russia and Germany are introduced and compared with the aim of figuring out the similarities and differences of Huaweiâs networking efforts in the two countries. Particular attention is paid, through relationship lens, to identify the most important network actors (e.g., telecom providers, industry, and governmental authorities) for Huawei during the course of its international market entry in Germany and the Russian Federation. Research outcomes allow further conclusions for the future in terms of Huaweiâs positioning in the global high-technology telecommunication industry network.
Chapter 3 by Tatyana Tsukanova, Saint Petersburg State University (Russia), sharpens the focus of Huawei in Russia. Convinced that Chinese companies could have a global influence, Ren Zhengfei, the founder of the telecommunications company Huawei, chose Russia as the first country for international expansion. In 1997, when its overseas office opened there, Russia was facing an economic crisis. Many domestic companies had slowed down their operations due to political and financial uncertainty. Huawei seized this opportunity and invested in Russia. However, initially it faced severe difficulties in attracting orders. Today, the Russian market is among the key priorities for Huawei. It has 11 offices, R&D and learning centers throughout the country, and is among the top three suppliers of smartphones. How did this company overcome the lack of presence and other difficulties? This chapter examines Huaweiâs experience in doing business in Russia. In particular, it focuses on the growth strategies that Huawei adopted to facilitate its expansion and examines the challenges it faced in its quest to achieve the leading position in the market.
In Chap. 4, Krzysztof Klincewicz, Laura Zoboli, and Magdalena Marczewska, University of Warsaw (Poland), provide a contrasting example of a neighboring country Poland. The chapter discusses Huaweiâs presence in Poland using various theoretical lenses, including theories on non-market strategy, internationalization strategies, and the institutions. After presenting the specificity of the Polish market for digital consumer products and communication networks, the chapter depicts Huaweiâs business activities and market position in Poland, including partnerships with industrial and scientific actors. Subsequently, the chapter offers an overview of legal developments, which are expected to influence the market dynamics. In particular, it considers the balance between security concerns of the Polish regulators and the openness and competitiveness of the market for 5G networks.
Examining more generally Central and Eastern Europe (CEE), in which Poland is a member, in Chap. 5, Agnes Szunomar, Hungarian Academy of Sciences, Joanna Karas, Warsaw School of Economics, and Iulia Monica Oehler-Sincai, Institute for World Economy, Romanian Academy, analyze Huaweiâs operations in Central and Eastern Europe by focusing on the companyâs activities in Poland, Hungary, and Romania, as these three countries are among the most important European bases for Huawei in the CEE region. The chapter identifies the most important characteristics of Huaweiâs operations, how it cooperates with host country institutions, relates to competitors and how employment relations look like. The authors analyze firm-level data available from desk research and interviews with current and former Huawei managers. The chapter also shows CEE countriesâ approach towards and engagement with the company before and after the Huawei security scandal. The authors examine how China, Huawei, and its growing presence are perceived by the media in the analyzed countries, by using media content analysis.
In Chap. 6, Hadi Chapardar, William Wei, and Houssam Chamseddine, MacEwan University (Canada), take us to North America, which is where some of the strongest global confrontations the company experienced. Scholars of business have long studied how government politics, as one group of exogenous macro-level factors, can influence cross-border firm strategies. This chapter investigates Huaweiâs business in the USA and its close ally, Canada. Adopting a case-study approach, the authors review the disruption of Huaweiâs business in the USA and how this countryâs growing pressures, epitomized by the arrest of the companyâs chief financial officer (CFO) in Vancouver, impacted Huaweiâs strategy in Canada. In contrast to what the conventional wisdom may suggest, the arrest did not lead to a defensive strategy by Huawei and the company aggressively preserved its business in Canada. Adopting the perspectives of strategic resources and non-market capabilities, the authors discuss business-politics dynamics of multinationals from developing countries in sensitive industries such as IT.
Traveling just south of the USA, in Chap. 7, Jorge Carrillo and Jordy Micheli, Profesor-Investigador, Departamento de Estudios Sociales, El Colegio de la Frontera Norte, analyzed Huawei in Mexico. The presence of Huawei in Mexico is significant. Its growth strategy has been aggressive: it has built assembly and logistics capacities for the region, R&D activities, a global call center and important participation in the shared network. Notwithstanding the foregoing, the growth and upgrading trajectory of Huawei Mexico is at a crossroads due to pressure from the Trump administration. The Huaweiâs expectations of greater growth in Mexico seem to have been left behind, which has resulted in its new strategy. For instance, it has positioned its branch of devices in Mexico with a new subsidiary. Starting from the analytical perspective on the new innovative multinationals that should be reactive in changing national contexts, this chapter shows the organizational evolution of Huawei and points out the dilemmas of its future strategy.
Examining the global south in Chap. 8, Kwame Ohene Djan and Wilberforce Owusu-Ansah, School of Business, Kwame Nkrumah University of Science and Technology (Ghana), assess the African context of Ghana. This chapter provides an empirically grounded assessment of Huaweiâs contribution to the Ghanaâs ICT infrastructure and evaluates the performance of the Huawei brand on the Ghanaâs mobile phone market. Analysis of field data suggests that, by far, Huawei is the largest foreign IT company with significant investments in the total Ghanaâs IT infrastructure managing and controlling the nationâs central datacenter. Within the mobile telephone market, Huawei phones are considered to be of high quality with its unique performance features. On the other hand, customers and potential customers of Huawei mobile phones consider its prices comparatively higher. Relevant stakeholders tend to deny fears of any negative consequences of the recent US sanctions against Huawei as far as the latterâs operations in Ghana is concerned.
Chapter 9, by Serina Al Haddad and Sheryll Namingit, Rollins College (USA), analyzes another part of the global south, Southeast Asia. This chapter discusses Huaweiâs carrier business in Southeast Asia, focusing on 5G roll-out in the region. It covers the extent of business relationships between the telecommunication companies and Huawei, as well as the role that Huawei has played in the development of existing infrastructure. This chapter also attempts to study the probable direction of the infrastructure development in Southeast Asia and how US policies, territorial issues, and other factors affect Huaweiâs future business in the region. To provide a comprehensive picture of Huaweiâs carrier business in Southeast Asia, this chapter also discusses Huaweiâs supply chain management in the region.
As a dominant player in South Asia, the case of India is particularly interesting and is the subject of Chap. 10 by Deepraj Mukherjee, Associate Professor of Economics, Kent State University (USA). Huawei is not yet a major player in Indiaâs competitive smartphone market. The company has a low-end brand, called the âHonorâ brand in India, and it expects that the Indian smartphone market will use Huawei brand for high-end devices. Both brands had a combined market share of 3.4% in 2018. Huawei, by the end of 2018, has chartered out a three-year plan for the Indian market through its dual-brand strategy, backed by investments of over $100 million starting from 2019 with an expansion of local manufacturing activities. Will this global telecom giant become a major player in India? The current chapter explores the issue in light of the Sino-India relationship and the alleged security issues related to Huawei.
In the final chapter of Part I, Jake Lin, Universität Bielefeld (Germany), examines the case of Oceana. Oceania has long been a pioneering overseas market for Huawei. Huawei became an active provider, or even strategic partner, of telecommunication network in Australia, New Zealand, and the South P...