A Comparative Study Of Huawei And ZTE's Development Strategy

Along with the development of China economy, there is a box-up change happened in the telecommunication equipment manufacturing industry in the last two decades in China. Huawei technologies and ZTE are the two preeminence representatives of that industry in China. In this article, the two companies' development process can be divided into three phases. The first phase is from the setting up of the two companies to 1995, which is the forepart development moment of the companies. During that period, they developed Program Controlled Switching Equipments with their own intellectual properties, expanded their business from country side to large cities. The second phase is from 1996 to 2000, which is the high speed growing up phase of the two companies. Based on providing only Switching Equipments, they began to provide total solutions in the telecommunication field. Based on domestic market, they began to exploit overseas market. The third phase is from 2001 to present, which is the moment that the two companies went ahead in adjustment period with the change of the environment. They consolidated their status in the domestic market and made more great efforts in the overseas market. The differentiations between the two companies are more and more visible. They have similar jumping-off point, and there is private factor in both companies, and they both developed from workshop to great manufactures without any telecommunication background. At first they focused on the country market, then moved their emphases to the urban market and start carpet occupation in domestic market, and finally they involved in the international competition. As to their products, after the successful Switching Equipment, they expanded their products lines, so they keep up with the pace of the china telecommunication development. There are also lots of differences between the two companies. The saleroom is the most obvious point, Huawei is the later comer surpasses the former and keeps a leading position for about ten years . ZTE is a state owned stock controlling equity interesting company at beginning, then private stock was introduced, but Huawei is a private company at beginning. For their business, Huawei is very aggressive, but ZTE is very steady. There are some distinctive management policies in Huawei, and the efficiency of management in Huawei is great than in ZTE. There are some differentiations in their products strategy, Huawei pay great attention to 3G, but ZTE make profits from PHS and CDMA and mobile phone. The equal environment gives them equal opportunities in their development. The similar strategic eyesight makes them the similar development pace, but the different management level make them have different performance in their development course.