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The Chinese market is the second largest economy globally. According to the World Bank (2023), China has a GDP of 17.96 trillion, higher than the next four combined economies (India, UK, Japan, and Germany). The country has experienced unprecedented economic growth since 1978 after introducing reforms that transformed its economy. Since then, it has emerged as a prominent player in the global economy. The market's opportunities have attracted a vast and diverse pool of international investors eager to tap into the market's lucrativeness. The majority of the big brands worldwide have established their footprint in the Chinese market, with the total value of the most valuable brands totaling over $1 trillion. Some of the big brands in this market are Haier, Meituan, Tencent, China Mobile, Kweichow Moutai, China Mobile, Huawei, Nike, ICBC, and Alibaba (Statista, 2023). PESTLE ANALYSIS Factors Description Political Factors China is ruled by the Communist Party China, which has ensured that the country enjoys a favorable and robust political climate with minimal unrest. The government has demonstrated a commitment to fighting corruption (Morrison, 2023), making the Chinese market favorable for business. The taxation rates in China are relatively fair for multinationals. The corporate tax rate is 25%. China has been embroiled in trade tensions with the U.S. since 2018, when President Trump's administration took over. The strife was characterized by embargoes, tariffs, and trade wars, significantly affecting the country's imports and exports. Political unrest in some parts of the country, such as Hong Kong, has caused investors to be anxious about their investments in the short and long run. Economic Factors The country's high GDP means that consumers have high purchasing power. This makes it an ideal market to sell goods and services for multinationals and international investors. Due to the high population, cheap labor is available in the country. Manufacturers, therefore, avoid incurring high operational costs.

Post-Covid 19 pandemic, the economy has been experiencing slow economic growth. The IMF predicts that the GDP will fall to 5.5% by 2024 (Morrison, 2023). Economists warn that China will likely fall into a middle-income trap marked by stagnant economic growth. Another critical economic factor to consider is the increased efforts by the Chinese government to protect domestic industries. This will be achieved through the "Made in China 2025" initiative that aims to boost innovation and dominance of Chinese brands. The move could be beneficial for domestic brands and make it challenging for foreign brands to penetrate the market (Morrison, 2023). Social Factors China has a population of 1.3 billion, meaning it has a huge ready market that can be exploited for goods and services. The face of the Chinese population has been gradually evolving over the years. The country has a well-developed middle class. The one-child policy in China, implemented in 1980 and ceased in 2016, has caused the country to have a high aging population (Morrison, 2023). This is expected to have adverse implications on the labor market in the future due to a declining working population and an increase in the need for elderly support services. When doing business in China, people must know the Chinese business etiquette that dictates the dynamics of professional relationships with customers, suppliers, and other partners. Technological Factors The Chinese economy has shifted from a labor-intensive model to an innovation-driven model. The state plans to make China a technology manufacturer to reduce the country's reliance on foreign technology. Legal Factors Environmental Factors

Due to rapid urbanization, China has experienced high pollution and environmental degradation. It is responsible for 27 % of annual global carbon dioxide emissions, surpassing more than the emission levels in the E.U. (World Bank, 2023). Organizations must streamline their operations to make them more eco-friendly as part of China's commitment to lowering its emission rates and positively improving the climate. Internal Analysis Huawei is a leading provider of ICT infrastructure and smart devices worldwide. The company's mission is "to bring digital to every person, home, and organization for a fully connected, intelligent world." The company was founded in 1987 and operates in over 170 countries across the globe. Huawei has emerged as one of the most popular brands worldwide, with over 200,000 employees. Huawei has been recording continued financial growth and profitability over the years. Some of the devices it manufactures are tablets, PCs, smartphones, wearables, routers, and accessories. Its services include cloud services, computing, and connectivity. The company's gigabit optical and 5G networks have helped it succeed steadily in the Chinese market. The company's revenue in the Chinese market in 2022 was CNY403,999 million. China remains its biggest market, followed by the EMEA, ASIA PACIFIC, Americas, and Others, respectively. Strengths Huawei has bolstered its cyber security infrastructure and prioritized securing the privacy of its customers; in 2022, the company submitted almost 300 proposals to GSMA and the 3GPP on cyber security standards. It also collaborates with other stakeholders to improve innovation in the industry. With a presence in over 170 countries, Huawei has a vast global reach that insulates it from being severely hit by poor performance in a single market. Another strength is that Huawei has a diversified portfolio covering a range of ICT products and services. Such diversity helps cushion the brand against loss due to the negative performance of one product segment. The brand also prides itself in having a unique competitive position ahead of its rivals in the market. It provides high-quality products and services to its customers at the lowest possible cost for a superior customer experience. The strength is that Huawei has invested heavily in R&D to maximally exploit digital and intelligent technologies. In 2022, the brand spent 25.1% of its revenue on R&D, showing its passion and commitment. Finally, Huawei has carved a niche in the market for its expertise in 5 technologies. This has given it a competitive lead over the rest of its competitors in the ICT industry. Weaknesses Huawei has been criticized and tagged as a cyber-security threat by security experts and various governments, including the U.S. government. The critics have argued that the company's products pose significant security and espionage risks, mainly if 5G networks are used. These suspicions have restricted the brand's growth in international markets like the U.S. China's ruling system under the leadership of the Chinese Communist Party obliges companies to support the government in its espionage efforts. There is, therefore, a blurry distinction between Huawei's private and government interests, which has amplified concerns in the public. Huawei's

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cybersecurity has also been marred with incidents of security breaches. There have been reports of unauthorized third parties accessing private information and data moving across networks through Huawei's networks. Such incidents have caused a loss of trust in the brand. In 2019, the U.S. issued sanctions blocking American firms from exporting software and crucial components to Huawei (Kharpal, 2021). The sanctions against the brand caused it to lose its luster amongst customers, resulting in declining market share. Opportunities There has been a rapid adoption of digital technologies by enterprises, governments, and private consumers worldwide. More so, countries increasingly rely on technology to steer their economies toward recovery in the aftermath of the COVID-19 pandemic. The trend towards accelerated digitization creates an opportunity for Huawei to diversify its innovations to satisfy the growing demand for digital transformation. Even though 5G has been rapidly adopted in some countries, user penetration remains relatively low. This means that there is an opportunity for Huawei to enter these markets and promote consumers' adoption of 5G. With the world focusing closely on environmental issues, Huawei has an opportunity to exploit green development technologies and move towards low carbon emission models. Huawei will reinforce its competitive position in the industry by contributing towards a more circular economy. Almost every country globally implements decarbonization, digitization, and intelligent transformation strategies. ICT companies will be at the forefront of helping these countries attain sustainable development. There has been a growing demand for intelligent vehicles that do not rely on fossil fuels. Huawei should optimally tap into this opportunity by partnering with others from the automotive industry to create development tools that can be used in these vehicles. Threats Expectedly, the ICT and smartphone market is fiercely competitive. Some of Huawei's biggest rivals in China are Vevo, Oppo, Apple, and Samsung. The stiff competition keeps Huawei on its toes and means that it must continually evolve and find new ways to meet customers' demands and needs or risk losing them to the competition. The threat of natural disasters, such as earthquakes and floods, can disrupt Huawei's network systems and hamper its operations. Huawei must constantly prioritize keeping cybersecurity at bay. Cybersecurity is a dire threat in the tech world and can lead to loss of revenue, loss of I.P., and infringement of privacy. Huawei must strengthen its cybersecurity to enhance its privacy and boost customer and partner trust. Marketing Mix Product Mix

PRICING Strategy Huawei faces stiff competition in the Chinese market and implements a competitive pricing strategy. A competitive pricing strategy is whereby a business bases its prices on the competitors' prices. Huawei prices its products and services lower than its main competitors, such as Apple and Samsung, which increases its market share. So far, the strategy has helped Huawei to penetrate the Chinese and international markets deeply. In the third quarter of 2023, Huawei's growth outpaced its competitors, such as Apple, with the launch of the Mate 60 Pro in China. Analysts predict that if the chip used in this new phone is placed in Huawei's mid and lower-end phones, it will significantly disrupt the market and recapture its position back at the top five. This demonstrates the power of competitive pricing so long as the quality of the products is not compromised. Huawei's pricing strategy is in line with the market segment. With the large population in China, the company needs to be within affordable reach of most of the market. However, the upper-class consumers in the market may feel neglected because they want to be associated with high-end and luxurious gadgets that symbolize wealth and affluent status. Huawei should release a product line that explicitly targets this segment and use a premium pricing strategy. A premium pricing strategy is whereby businesses keep their prices artificially high to induce a favorable perception from buyers due to the high prices. Distribution Strategy Promotional Strategy References Kharpal, A. (2021). From No. 1 to No. 6, Huawei smartphone shipments plunge 41% as U.S. sanctions bite. Retrieved from https://www.cnbc.com/2021/01/28/huawei-q4-smartphone- shipments-plunge-41percent-as-us-sanctions-bite.html Statista, (2023). Most valuable Chinese brands in 2023, based on Brand Finance evaluation. Retrieved from https://www.statista.com/statistics/259063/most-valuable-chinese-brands/ World Bank. (2023). GDP (current US$) – China. Retrieved from https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN

World Bank. (2023). The World Bank in China. Retrieved from https://www.worldbank.org/en/country/china/overview Morrison, W. (2023). China's Economic Rise: History, Trends, Challenges, and Implications for the United States. https://www.everycrsreport.com/reports/RL33534.html

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