Huawei maybe the best company many Americans and Europeans have never heard of, and that's a big problem for China, according to a recent report in Newsweek entitled Generic Giants. With revenue of more than $18 billion in 2008, soon it will overtake Nokia Siemens as the world's second-largest maker of telecom hardware, after Ericsson.
The challenge for many Chinese companies as they go global is to build an attractive brand image that motivates consumers to pay premium prices for their products. Headquarters in booming Shenzhen, the telecommunications equipment-maker with a hard to pronounce name made BusinessWeek's latest list of the world's 10 “most influential” companies, alongside Apple, Wal-Mart, Toyota, and Google. Yet Huawei is by far the least internationally recognizable name on the list.
The Chinese government is calling on local companies to build up their brands. According to Newsweek, Premier Wen Jiabao in March called for China to create companies that can innovate and churn out “brand-name export products”—meaning companies with reputations for quality, innovation, and service so strong that customers are willing to pay a premium for their products.
And Huawei is not the only company trying to change its business strategy. In March, Shandong-based manufacturer Haier announced that it was leaving direct manufacturing and concentrating on building the company's brand and service network. Despite Haier's fame as a manufacturer, the move was not unexpected, said Kent Kedl, general manager of Technomic Asia, a market strategy consultancy.
“It's a very natural progression. I don't think that's a surprise… that's the way all brands need to go.” Kedl was quoted in the China Economic Review (CER) as saying. “They start off with the manufacturing
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