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How Huawei Technologies Succeed in Global Competition

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Huawei, a Chinese telecommunications equipment and services company established in 1987 in Shenzhen, China, has drawn worldwide attention in the recent years. Although many people have not heard of it or even pronounce its name right, the fact that Huawei has become the largest telecommunications equipment maker in the world cannot be overlooked. Benefiting from the Chinese economic reform led by Deng Xiaoping, Huawei gained the opportunity to develop its overseas markets; however, it was not enough for a small company like Huawei to achieve incredible success. Undoubtedly, Huawei’s worldwide achievement is due to many cumulative factors, yet, among all of them, the most important factors are the unique strategies Huawei has adopted, especially in globalization process and labor force. Those strategies, to one’s great astonishment, have striking similarities with the philosophy of Mao Zedong, who is regarded as one of the greatest leader in China, while a controversial figure in the Western culture.

With an initial registered capital of 21,000 RMB (about US $6,000), Huawei started its business by manufacturing private branch exchange switches (PBX) (Nakai, Tanaka 2). However, only by 1992, Huawei had dominated the mainstream domestic market by heavily investing in research and development. With the initial accumulation of capital, Ren Zhengfei, the founder of Huawei, decided to expand abroad for further development. Ren said: “When domestic markets will eventually get saturated, Huawei will die unless we can build an international team in three to five years. (Ahrens 7)” Driven by the intention of larger market access, Ren decided to follow Mao Zedong’s famous philosophy: encircle the cities by winning the countryside. In this...

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