International Trade & Institutions Essay Example | Topics and Well Written Essays - 3000 words

International Trade & Institutions - Essay Example Despite the massive decrease of global investment, China and the United Kingdom (UK) remained to be amongst the expected countries that would continue to deliver growth in their FDI investment (Ernst & Young, 2008). Huawei Technologies Co. Ltd, a Chinese-based company is one the successful foreign companies that entered the UK market. In fact, some of the leading telecom suppliers in UK has been exceeded by Hauwei in terms of market share and revenue growth, which made the company the â€Å"crouching tiger in the UK market† (Blackman, 2010). The main purpose of this paper is to study a certain firm that is involved in FDI and developed an international business opportunity encompassing: business opportunity analysis, environmental analysis, competitive analysis, and strategic analysis. Huawei Technologies (UK) Co., Ltd. Huawei Co. Ltd. is one of the leading telecommunication suppliers since 1988 founded by Ren Zhengfei. Huawei, a private company is currently serving 45 out of 50 leading telecoms operators worldwide and has operations in North America, South America, Europe, Asia, Africa, and Australia. The company offers wide range of products and services such as radio access network, application and software, network solutions, broadband services, transport network facilities, storage and network security services, professional and traditional services, and devices (MarketLine, 2010a). Hauwei is in the special field of research and development (R&D) and they are highly dependent on their overseas markets that contributed 65% of their revenue growth (Griffin, 2007). Every year, the company allocated at least 10% of their annual sale in R&D for this bestowed them a competitive advantage. Huawei also â€Å"took the no. 2 position in the global mobile network gear market in the third quarter, almost doubling its market share from a year ago and surpassing Nokia Siemens† (Virki, 2009). In the global setting, the company’s success is very cruci al considering that the competition is severe; however, they still manage to transcend other telecom providers in areas of optical network (rank 4), DSL (rank 2), next generation network (NGN) (rank 2), and switching network (rank 1) (Wu & Zhao, 2007, p.188). The international market has been attractive to Huawei considering that their domestic sales have been surpassed by their overseas sales. Currently, the company’s revenue is 149,059 million (33%) with an operating profit of 21,052 million (33%), and 21,741 (40%) for cash flow from operating activities (see figure 1). Business Opportunity Analysis A. Advantages underlying the opportunity. According to Lim Chee Siong, Huawei South-Pacific Region Chief Marketing Officer (n.d.), â€Å"We foresee broad market development opportunities in mobile and home broadband networks, fixed mobile convergence, business operation support systems, and smart devices† (cited in Huawei, 2010). The development of broadband in UK for 201 0 is a big opportunity for the company in order to expand its market share and revenue by collaborating and cooperating with UK’s fastest growing operators for broadband access. Based on the company’s SWOT analysis (see figure 2), the growing demand and adoption of broadband (mobile and home) in UK is among the new international business venture that Huawei could undertake. Aside from the