Ten years after expanding abroad, Chinese telecommunications equipment maker Huawei faced espionage accusations from the US government, a claim that shut it out of most of the US market. Now the threat has started to hinder potential deals in Canada, a market it entered only four years ago. This is a market where it has gradually built a market presence with a strategic focus vital to its global research initiatives. Sean Yang, president of Huawei's Canadian operations, must now reaffirm the company's commitment to Canada and regain its customers' trust. This case focuses on the changing competitive landscape in the global and regional environment, and describes the constraints on and advantages of an emerging-markets multinational operating in developed markets. It can also be adopted for teaching external analysis, including PESTEL, five-forces, driving-forces and key success-factor analyses.
1. To understand the impact of external factors on a firm’s strategy and performance.
2. To understand strategic issues regarding how a multinational company from an emerging market can utilize its core competitive advantages to enter a developed market.
3. To evaluate industry attractiveness using five-forces analysis.
4. To understand the relationship among industry-driving forces, key success factors and a firm’s internationalization strategy.
5. To understand the factors leading to a firm’s achieving sustainable competitive advantage.