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22In the coming years, the company also signalled its ambitious launch of flagship smartphones in the lucrative US market.23Huawei had developed a unique approach to building global value by integrating both globalization and localization across its value chain. It recognized the effect of capital, goods, talent, and knowledge moving across borders, and how this presented an opportunity to leverage its already vast global footprint as a competitive advantage. Key to coupling its globalization and localization efforts was the integration of global resources to bring new products to market, while at the same time offering local innovations to penetrate regional markets. Huawei believed that it should better understand the unique needs of each individual market and offer products and services differentiated according to those respective needs. This was in contrast to the business model for competitors such as Apple that relied on the strength of their brand to push one product or model across different country markets. For Huawei, therefore, it was an imperative of success to build a global value chain that integrated resources from dispersed locations. In practice, this value chain meant collaboration across global R&D and marketing teams and also with its local marketing partners (such as the carrier businesses) or with strong consumer brand names (such as Google). 20Juro Osawa, “Huawei Chips Away at Samsung,” Wall Street Journal, 2 September 2015, , accessed 21 January 2017. 21“Huawei sees 70% jump in revenues at consumer division,” BBC Business News, 6 January 2016, , accessed 21 January 2017. 22Ibid. 23Jonathan Cheng, “Huawei Eyes U.S. Smartphone Market After Stellar Year of Sales Growth,” Wall Street Journal, 5 January 2016, , accessed 21 January 2017.
HKUST Business School Thompson Center for Business Case Studies 11 UST0816-057 Huawei: Diversifying into a Competitive Smartphone Business Brand Recognition Huawei had been gradually positioned as an established brand of choice in new market segments in developing markets such as Asia and South America. Huawei’s Nexus 6P device in partnership with Google was an example on how it tried to boost its brand recognition and extend its reach. Brand recognition was an area that the company executives acknowledged as its prominent Achilles heel in its globalization efforts. Similarly, in Europe, Huawei sought to leverage sports partnerships such as Arsenal and A.C. Milan to increase brand awareness among end consumers. Behind Huawei’s successful consumer business was an extensive R&D activity that could support premium positioning in the market going forward. Huawei had built its consumer business from a considerable Chinese domestic market that would buoy and backstop attempts to expand globally into other lucrative markets going forward. Its R&D capability enabled Huawei to get some advanced features to the market earlier than its competitors. For example, when Huawei launched the world’s