CASE STUDY

This case study explores the globalisation strategy used by Huawei, the world’s
second largest telecommunication company, to enter into the Indian market.

Problem
Huawei is a Chinese business-to-business (B2B) company that rapidly expanded into
the global market since 1997. Before that, its name was literally unheard of outside
China. In 2000, the company decided to enter into the Indian market. However, it
faced various challenges:
 Crowded space: The telecommunication space was crowded with various domestic
and international players. In such a space, the company had to make a distinctive
brand for itself as a reliable partner.
 Politically charged history: Ever since the Sino-Indian wars in 1962, India and
China had maintained a cool distance. Clashes between the two troops in the
disputed northern border were not unheard of. In such a scenario, the Indians
regarded the Chinese company with scepticism.
 Cultural perception: For most Indians, the Communist Republic of China was a
closed country. Although neighbours, the people-to-people exchange between the
two Asian giants was very rare. One reason could be attributed to the language
difference; Chinese were mostly non-English speakers, whereas most of India
used English as their business language. Therefore, Huawei found it difficult to
establish trustworthy relations with the Indian businesses community.
 Quality perception: In India, Chinese products were perceived to be of inferior
quality. This was a negative factor for Huawei.

Solution
To overcome these challenges, Huawei decided to invest some time to understand
the Indian market better. The company implemented the following steps:
 Established R&D centres and service centres in the country.
 Allocated 90% jobs locally to the Indians—a fact that worked very favourably in
building a good reputation of the company among the Indians.
 Set up two production plants in Chennai.
 Conducted skill based workshops for Indians with Huawei staff to make them
aware about the international standards. This also helped the company to clarify
the cultural misconceptions the Indians had about the Chinese.
 Sourced most of its components locally, which made them not only cheaper but
also helped the local companies to achieve international quality standards. Again,
the Huawei staff helped the local companies in skill and technology
enhancement.
 Promoted consumer products such as smartphones by establishing strategic
partnerships with local media channels.
  Fostered a strong brand culture.
 Set up rewards and recognition programs for R&D talent.
 Promoted Indian employees to managerial positions.

Conclusion
There is a misconception among strategy formulators and
marketers that the two Asian giants, India and China, share a
similar culture, which is not the case. For companies on both sides
to enter into each other’s market, it is important to study the
market comprehensively before entering into it.

The Chinese company Huawei found it as difficult to break the

cultural barriers in the Indian market as the Western companies do.
Huawei was able to successfully overcome these barriers by:
 Establishing itself as a trustworthy brand
 Building relationships with the local businesses and personnel
 Committing a long-term, sustainable relationship that would boost India’s
economy and create jobs for locals
 Providing superior quality consumer products

QUESTIONS
1. What were the challenges faced by Huawei while entering the
Indian market?
2. What are the key learnings from the Huawei’s entry into India?

3. What were the steps Huawei took to over come the challenges?

Answers

1) The challenges faced by Huawei while entering the Indian market were

 Politically charged history: Ever since the Sino-Indian wars in 1962, India and
China had maintained a cool distance. Clashes between the two troops in the
disputed northern border were not unheard of. In such a scenario, the Indians
 regarded the Chinese company with scepticism.
 Cultural perception: For most Indians, the Communist Republic of China was a
closed country. Although neighbours, the people-to-people exchange between the
two Asian giants was very rare. One reason could be attributed to the language
difference; Chinese were mostly non-English speakers, whereas most of India used
English as their business language. Therefore, Huawei found it difficult to establish
trustworthy relations with the Indian businesses community

 Quality perception: In India, Chinese products were perceived to be of inferior

quality. This was a negative factor for Huawei

2) The key learnings from the Huawei’s entry into India are-

The Chinese company Huawei found it as difficult to break the cultural barriers in the
Indian market as the West.ern companies do. Huawei was able to successfully overcome
these barriers by

 Establishing itself as a trustworthy brand

 Building relationships with the local businesses and personnel
 Committing a long-term, sustainable relationship that would boost India’s economy
and create jobs for locals

This were the key learnings from the Huawei’s entry into India.

3) the steps Huawei took to over-come the challenges were-

To overcome these challenges, Huawei decided to invest some time to understand the
Indian market better. The company implemented the following steps
 Set up two production plants in Chennai.
 Conducted skill based workshops for Indians with Huawei staff to make them aware
about the international standards. This also helped the company to clarify the cultural
misconceptions the Indians had about the Chinese.
 Sourced most of its components locally, which made them not only cheaper but also
helped the local companies to achieve international quality standards. Again, the
Huawei staff helped the local companies in skill and technology enhancement.