Published by MBA Skool Team, Last Updated: January 26, 2020
PESTLE Analysis of Huawei analyses the brand on its business tactics. Huawei PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Huawei, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Huawei PESTLE Analysis can be explained as follows:
Huawei is a leading brand that is manufactured mainly in China but it is sold all over the globe. Thus the business relations across the countries affect the sales of Huawei. Relatively European Union is the most popular market across the globe fro Huawei. So if any political instability occurs in the European Union, it becomes challenging for Huawei to make sales. As the US and China are facing a trade war this has resulted in the difficulties in trading companies across the countries. As the trade war is getting worse day by day, the tax imposition of both countries on the imports and exports are getting higher and so companies like Huawei gets affected by the massive tax. Other than external factors like international trading, the Chinese government also affects sales Huawei. The Chinese political conditions influence the economic conditions of the country and thus impact n the profitability of the company. One of the opportunities for Huawei is that the Chinese government promotes the telecommunication sector heavily, and the government also provides loans and incentives for the regional manufacturers.
Below are the economic factors in the PESTLE Analysis of Huawei:
Though Huawei is sold globally and it is a global brand, the main market of the company is the European Union and China.
So if the economic conditions of the European Union i.e. its target market, are stable enough the company will gain profits by selling there regardless of the economic conditions of the other countries. Huawei is unquestionably a leading brand in China so it has adopted a competitive strategy for pricing so that it can and maintain its sales across the market. As China's economy is growing rapidly it has increased the sale of technical gadgets, thus Huawei smartphones sale has also increased. Higher economic stability results in a higher flux of income and thus purchasing power of customer increases and customers are then willing to buy new smartphones of Huawei.
Following are the social factors impacting Huawei PESTLE Analysis:
Many social aspects influence the sale of Huawei products, some of which are demographics of the country in which the sale is considered, segmenting the population according to the target customers, understanding the interests and priority of the customers for their products, etc. With the growing population, the demand for smartphone is also expanding as the youth segment who are the major buyers of the smartphone are increasing. Thus Huawei being the leading brand in China and elsewhere its demand is increasing. To maintain its sale Huawei has to understand the socio-cultural trends of a particular region, these can be integrated with the marketing strategies for the product so to connect with the customers. One of the negative aspects of Huawei is its association with China, many western consumers' believe that Chinese products have a very short life span and poor quality. So looking at its origin people don't prefer to buy Huawei.
The technological factors in the PESTLE Analysis of Huawei are mentioned below:
As technology is growing at a very high pace all over the world, the demand for technical gadgets and services are also following the trend. People across the globe are dependent on internet technologies and thus international brands like Huawei grow rapidly. Huawei invests a lot of funds in innovation and research. And this is one of the reasons that it is a leading brand surpassing other brands of smartphones. It is well known for its technically advanced camera phones all over the world. One more opportunity for Huawei is the proliferation of 5G in communication technology which improves the speed and energy-saving and it also reduces the cost. Huawei is the leading brand for the services 5G and thus the smartphone industry will get profits from the sale across the world.
It has partnered with several other firms for the improvement of a 5G network, to fight the tough competition of technologically advanced smartphones in the market.
Following are the legal factors in the Huawei PESTLE Analysis:
Having been a global brand, legal factors are very important while dealing with international markets. The factors include many laws that need to be considered such as environmental laws, labor laws, patent acts tax rates, etc. Huawei needs to be very precise by the patent rights as it should not hinder any other country's law and also protect its brand. Huawei has many employees in several countries so it has to deal with the labor laws for wages and other incentives concerning each country. Data privacy laws also need to be checked to avoid any kind of legalities which the company can face in avoidance of data privacy laws. There are some consumer laws which has to be maintained all over the world, mainly the European Union (biggest market for Huawei).
In the Huawei PESTLE Analysis, the environmental elements affecting its business are as below:
The technology brands need to invest in sustainability to lessen carbon footprints so that they minimize the environmental impact. Huawei is a global brand so the environmental conditions affect the transportations of raw materials and finished products.
Huawei has successfully raised its energy efficiency by 20% by diminishing the waste materials and by utilizing sustainable raw materials. Technology companies like Huawei have trouble balancing the need for the manufacturing of new products and dealing with environmental factors. It has also tied up with many suppliers and has invested in various solar energy power plants.
To conclude, the above Huawei PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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