Following diagram shows porters competitive advantage

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Following diagram shows Porter's competitive advantage model:The analysis of the value chain activities can be done to understand the competitiveadvantage sources. Huawei can either use the operations, marketing and other relevantvalue chain activities to avail the cost advantages or it can use the human resource,technology, infrastructure, service or other relevant activities to set the strongdifferentiation basis. Broadly, the competitive advantage sources can be grouped into twotypes- cost and differentiation. Huawei can obtain a competitive advantage from one orboth sources, depending on the depth and breadth of its Value Chain Analysis. Next partsof the article present in detail how Huawei can configure primary and/or secondary valuechain activities to achieve the desired cost and differentiation objectives.4. Cost Advantage of Huawei4.1 Cost advantage through Value Chain Analysis ofHuawei
Huawei can avail the cost advantages by reducing the costs associated with the valuechain activities. However, it requires the company to firstly map the activities and thenassociate costs to make necessary adjustments. The connection between the valuechain and cost leadership strategy reflects a parallel focus on the low cost operationalactivities. If Huawei aims to obtain cost advantage, it needs to identify each elementwithin the value chain can be optimised to get the whole effectA Value Chain Analysis Example for Huawei is that it can use the analysis as atool to negotiate the best prices and maximise the in-bound and out-boundtransportation processes.Another Value Chain Analysis Example is using the value chain information tomake modest advertising budget that can reduce marketing costs and offer theproduct at an affordable cost.If Huawei aims for the low-cost, the Value Chain Analysis can optimise the profitability. Ifproduct differentiation is the aim of Huawei, Value Chain Analysis will help the companyin maximising the efficiency and enhancing the product quality by improving processes.4.2 Cost drivers of Huawei Value Chain AnalysisHuawei can control following drivers to add value, set differentiation basis and enhanceefficiency.Organisational policiesIntegrationTimingEconomies of scaleLinkagesInterrelationshipsCapacity utilisationLearning and SpilloverHowever, it is important to note that costs can be reduced only to some extent. HuaweiValue Chain Analysis must also consider the customers’ perceived value that may justifythe higher price charged by the company compared to competitors.5. Company Differentiation AdvantageHuawei can obtain the differentiation advantage by analysing different value chainactivities. For instance, a company can procure the unique and valuable inputs that arenot easily available to competitors. Huawei can either reconfigure the whole value chainor change individual entities to set the differentiation basis. The cost drivers (such astiming, interrelationships, linkages, scaling and integration) can also be altered to developuniqueness.

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Term
Fall
Professor
NoProfessor
Tags
Management, Huawei, Value Chain Analysis Of Huawei

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