Huawei-Leica Alliance

 

Question 1

The primary reasons of the partnership between Huawei Technologies Co., Ltd. (Huawei) highlight the pursuit for sustainable competitive position by quality in various markets. The business collaboration involves aspects of brand reestablishment intended to hit products of Huawei’s competitors in both the domestic and global markets. For instance, the company faces rigid rivalry from its competitors including Apple Inc at the domestic telecommunications market hence the need to strategize on quality improvement. Market proceedings’ of the pat indicate that Apple Inc and Samsung continued to thrive in the premium markets over Huawei’s products owing to a difference in product quality (Kittilaksanawong & Mason, 2017). For that reason, Huawei utilizes its partnership with Leica to produce a Smartphone with advanced camera features that meets consumer requirements.

Strengths

Huawei is a diversified company, which grabs it a sustained opportunity for increasing consumer business. According to Kittilaksanawong and Mason (2017), the company has a large consumer business providing a diversity of products including Smartphones, tablets, and other products and services in the telecommunications industry.  Importantly, the increasing growth of its consumer growth grounds a commendable share in the global telecommunications market. The case denotes that Huawei has continued to build an excellent reputation in the market, which attracts a good number of consumers. On the other hand, the company registers a huge amount of revenue that boosts its resource capability. For instance, it invests highly on research and development (R&D) and also, Huawei has the ability to employ the feasible number of labor force in operations (Kittilaksanawong & Mason, 2017).

The feasible growth of consumer business and a complex base of resources facilitated by large returns from Smartphone sales, for instance, in 2015, Huawei plays an important role towards the success of this alliance (Kittilaksanawong and Mason, 2017). Thus, the dual-brand (Smartphones) registers adequate rates of sales in different markets across the world considering that its products had been previously reputed in utmost 170 countries by 2015. Huawei’s intentions for the partnership insinuate quality improvement, and its revenue enhances goal accomplishment. Through revenue, the union has and continues to employ performance oriented workforce thus facilitating operational efficiency towards quality production.

Weaknesses

Market saturation in the telecommunication industry builds Huawei’s major weakness in the market. Most of its existing markets such as the European and Chinese markets are saturated since nearly everyone in the industry has a Smartphone (Kittilaksanawong & Mason, 2017). Market diffusion illustrates that the company has to strategize on both its business networks in search for potential emerging markets while quality of its Smartphones. Its product segment encompasses gradual technological transformations with a lot of players in the supply chain. The escalating number of Smartphone producers posits instant threats to its competitive position since competitors continually embrace technological advancement to better their services as well as providing services at reduced prices. As a result, Huawei is forced to formulate a production strategy that is able to facilitate quality and low product pricing, which reduces the alliances returns in sales.

 

 

QUESTION 2

Leica faced significant challenges when selling its expertise in optical technology, particularly, hindrances to declare its flexibility and ability to engage in another product segment. It lacked an opportunity to show the aptitude to contribute for quality improvement in a new product sector. As a result, the alliance with Huawei facilitated its determination for engaging in a novel market section considering that Huawei is in a different product segment (telecommunication). In addition, the business coalition was intended for the development of a practical background that is able to attract consumer companies in different product segments (Kittilaksanawong & Mason, 2017).

The camera landscape is incessantly receiving sufficient threats of consumer decline caused by the rise Smartphones. Smartphones are replacing the camera industry considering that they contemporarily compose less complicated optical features, which deter the use of former gadgets in the photography market. Consumers of the latter optical technologies are turning to simple gadgets over traditional since they provide better services with efficiency and also at affordable prices. Smartphones underline the logic of effectiveness and affordability in relation to traditional cameras, which highly motivated Leica to form a union with Huawei (Kittilaksanawong & Mason, 2017).

Strengths

The German based company has a long history in the photography landscape and importantly, with a good consumer image. Kittilaksanawong and Mason exemplify that Leica is well known by stating that its products had been waving in the former photography (2017).  Specifically, the authors critique the “red dot” as the major brand that established a reliable consumer base for Leica. Considerably, Leica was referenced as the home of quality in photography before the latter establishments of digital transformation (Kittilaksanawong & Mason, 2017). Leica includes a set of essential contributions that are able to cause positive outcomes of the alliance. For instance, former consumers have the will of experiencing its quality-expertise in the digital format thus enhancing the progress of dual-brand strategy.

Weaknesses

Leica encountered significant challenges in the digital photography since it lacked adequate resources to cause technological transformation. It thus suffered a meltdown of its revenue considering that Smartphones are continuously replacing traditional photography. Its lack of digital diversity compresses Huawei’s financial investments considering that to a large portion Leica depends on Huawei to establish its business mission from the alliance.

Question 3

Though in different product segments, Huawei and Leica are two companies which have had long standing dominance in specific segments. Huawei grabbed satisfactory attention in the telecommunication industry in regards to the performance of its products in different markets. It is among the top ranked performing firms in telecommunications although it receives stiff competition from its core rivals owing to quality difference of encompassed features. Concurrently, Leica is a quality performing firm in photography with extraordinary abilities regarding consumer preferences but lacks superiority in some product segments. Therefore, the two are complementary partners based on the fact that they both clarify aspects of quality production.

The outsourcing is aligned with increased quality of the dual-cameras in the P9 branded Smartphone. This is a marketing advantage to Sunny Optical considering that the firm lacked market exposure despite of its technological abilities in photography. The market success of P9 exposed operations of Sunny Optical to the global market while advertising the viability of its technological contributions to quality improvement not only in photography but also in other product segments. Conversely, Sunny Optical considers outsourcing just as an opportunity to market its technological capabilities which in turn deters chances for improving service provision in its product market. For example, Sunny’s consumers are slowly turning to Huawei’s product segment, a movement that minimizes its revenue in the photography world.

The Huawei-Leica coalition proposes a successful future in the encompassed markets. Huawei is a competent competitor in the telecommunications sector excluding the lack of market superiority in photography (Kittilaksanawong & Mason, 2017). In contrast, Leica needed exposure in the consumer market, suggestible, in a new product segment in spite of its fascinating photography capabilities. The coalition holds sustainable market advantages for both companies. The collaboration offers Huawei the chance to develop its standing in photography whereas helping Leica expose its capabilities in other product segments.

 

 

 

 

 

References

Kittilaksanawong, W. & Mason, R. F., (2017). Huawei-Leica Alliance: Reinventing Smartphone Photography or Building Brand Image? Ivey Publishing