Huawei-Leica Case Study

Huawei-Leica Case Assignment

1. Huawei Technologies Co., Ltd. is a Chinese telecommunications equipment firm whose main objective is to become the world’s leading smartphone manufacturer. Huawei engaged in a strategic alliance with German camera company Leica Camera AG in an attempt to achieve their goal. More than half of Huawei’s success can be attributed to their vertical integration strategies and their ability to establish their own processors in order to keep prices low and to have better management over their products. In 2012, the U.S. Congress published a report claiming that Huawei was guilty of espionage and deterred American companies from working with them. In an attempt to reconstruct their image, the company opted for selling more subtle products, and also partnered with other brands like Google and Swarovski. However, Huawei’s determination to become the world’s top smartphone manufacturer was unabating.

Huawei discovered that India displayed a market pattern that was comparable to China’s a few years earlier, and believed that the growth in India could potentially label them as the global leading smartphone manufacturer. Huawei needed to strengthen their brand name while simultaneously enacting a dual-brand strategy within India. The firm finally made the decision to create an alliance with Leica because they are widely known for their high quality lenses and rangefinder cameras. In Huawei’s standpoint, the alliance was initiated so that they could operate under Leica’s well-established brand name, and benefit from their expert engineers in order to manufacture a smartphone that would be unparalleled within the market.

Huawei presents both strengths and weaknesses within the alliance. The firm allows Leica to enter into a new product market with a company whose products and services are being utilized by a third of the world’s population. Huawei has proven to be an extremely successful company, with the world’s third-best-selling smartphone, and they have sixteen research and development centers located around the world. The firm has implemented profitable strategies such as dual-brand and vertical integration, and also applies high-profile advertising campaigns. On the other hand, Huawei is associated with espionage which may deter customers from purchasing any product that they are affiliated with. Instead of Leica’s organization creating brand awareness for Huawei, it may produce the opposite effect and tarnish Leica’s name.

2. Leica Camera AG is believed to have pioneered the best lenses and rangefinder cameras in the world. Their lenses are inspected over sixty times by expert technicians, and they undergo thirty production processes. The company places a lot of importance on the quality of their products, which is why their brand is so well-received. In the 1990s, the demand for digital cameras rapidly increased, and as a result, Leica almost went bankrupt. They had insufficient resources and their equipment slowly became obsolete. Leica realized that in order for the company to survive, they needed to adapt and redesign themselves as not only a hardware business, but also as a software and services company that continues to maintain their expertise in engineering.

Leica decided to expand into a new product market and partnered with Huawei. Their objective was to develop a form of smartphone photography that was unlike any other in the market. Leica saw this alliance as an opportunity to attract new consumers and enter into a prosperous market. The partnership would enable customers to purchase a product that presented the beneficial value of both brands, integrating quality with innovation.

Leica yields a number of strengths and weaknesses within the alliance. Leica’s red dot logo is associated with the best quality of German engineering, and dramatically increases sales on any product that it is associated with. Leica’s brand was at one point a cultural icon, and their technicians and engineers are experts within