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Surviving the "Made in China" stigma: challenges for Chinese multinational corporations

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Surviving the "Made in China" stigma: challenges for Chinese multinational corporations

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SURVIVING THE ―MADE IN CHINA‖ STIGMA:
CHALLENGES FOR CHINESE MULTINATIONAL CORPORATIONS

by
Jessica Marie Kraft

A Thesis Presented to the
FACULTY OF THE USC SCHOOL OF COMMUNICATION
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)

August 2010

Copyright 2010 Jessica Kraft
ii
Table of Contents

Abstract iii

List of Tables iv

Chapter One: China‘s Rise in the Global Marketplace
1.1 The Role of Multinational Corporations in Globalization 1
1.2 An Overview of China‘s Economic Development 3
1.3 China‘s Emergence and Meteoric Rise in the Global Market 4
1.4 Chinese MNCs – Gaining Momentum, But Still In the Nascent Stage 7
Chapter One Endnotes 13

Chapter Two: Challenges for Chinese MNCs
2.1 Challenges facing all MNCs 15
2.2 Challenges facing Chinese MNCs 23
Chapter Two Endnotes 34

Chapter Three: Case Analysis of Huawei Technologies Co., Ltd.
3.1 Research Methodology 36
3.2 Huawei Technologies Co., Ltd. 38
3.3 Industry Background 39
3.4 Huawei‘s Challenges in the Global Market 40
3.5 Huawei‘s Opportunities and/or Solutions 46
Chapter Three Endnotes 58

Chapter Four: Strategic Implications of Huawei‘s Case
4.1 Huawei‘s Emergence as a Multinational Corporation 60
4.2 Opportunities for Chinese MNCs 62
4.3 The Future of China‘s Multinational Corporations 71
4.4 Research Limitations 75
Chapter Four Endnotes 77

Glossary of Terms 78

Appendices
Appendix A: Huawei Technologies Ltd., Tier-One Media Analysis, 84
From January to July 2009
Appendix B: Overview of the Telecommunications Industry 101
Appendix B Endnotes 106

References 107

iii
Abstract

Since the 1980s, China‘s entry into world trade and investments has thrown the country into
continuous exponential growth. Multinational corporations (MNCs), considerably valuable
instruments of globalization, are significant contributors to China‘s economic success and
development. However, as with any MNC, entry into new markets for comes with challenges
such as little brand awareness and cultural, social and political clashes. In addition, as Chinese
MNCs are in a nascent stage of development and expansion and also have distinctive obstacles
which are particularly problematic. Unlike the brands ―Made in Sweden‖ or ―Made in Japan,‖ in
which the country of manufacturing more often has positive or neutral connotations, ―Made in
China‖ fails to positively capture consumer awareness in the Western marketplace. As consumers
in this part of the world tend to group all Chinese manufacturers together, the image of one taints
all. Whether Chinese MNCs already had good business and manufacturing practices or have
begun to reform their practices, the question remains, can one high-profile company turn around
consumer perceptions of Chinese manufacturers or service providers?
In a case analysis of Huawei Technologies Co., Ltd., a telecommunication company, the
study illustrates overarching challenges a typical Chinese MNC may encounter. Although seen by
the Chinese government as a brand ambassador for future Chinese MNCs entering the global
market, Huawei has difficulty in procuring and retaining M&A deals and clientele in advanced
economies. Extensive media coverage and content analysis revealed that many news publications
consistently reported negative associations of Huawei which in turn affected Huawei‘s
relationship with stakeholders. Additional news coverage and research documented Huawei‘s
public relations efforts, explored the company‘s opportunities, suggested public relations and
communication strategies, and identified the implications of Huawei‘s emergence as an MNC.

iv
List of Tables

Table 1: World Economic Outlook (October 2009) / Subject: Real GDP growth 6

Table 2: 2010 Index of Economic Freedom: China‘s Ranking 28

Table 3: ―MIC 2008‖ survey response: How well do the following attributes 30
describe products made in China?

Table 4: ―MIC 2008‖ survey response: Derived importance of attributes describing 32
products made in China

Table 5: POP and POD of Huawei 52

Table 6: Prospective media channels, audiences and messages for Huawei 55
Table 7: What most prevents Chinese brands from succeeding in overseas markets? 62

Table 8: POP and POD of Air China 63

Table 9: ―MIC 2008‖ survey response: In the next five years, I expect a Chinese 67

1
Chapter One
China’s Rise in the Global Marketplace

1.1 The Role of Multinational Corporations in Globalization

The global market has existed since the formation of cross–country trade routes from
centuries past. Some of the most marked historic forms of globalized business include the ancient
Silk Roads of Asia in second century B.C. and the discovered trade routes to the Indies and
Americas by Christopher Columbus and Vasco de Gama in fifteenth century A.D. While the
modes of transportation, technologies, and communication evolved, the desire for a successful,
reputable and renowned business remains constant. Since then, the forms of global engagement
in business have changed dramatically in juxtaposition to the evolution of transportation,
technologies and communication. Economies adopted new business practices and standards and
shifted from smaller, family owned, regional working units or shops to colossal national and
international brands owned or operated by multiple stakeholders. These brands are often fostered
by what we call multinational corporations, or MNCs.
1
Today MNCs are an integral part of the
global economy. An MNC, also known as an international or transnational corporation, is an
enterprise or corporation which operates in more than one country at a time. In order to survive
and thrive, MNCs as a form of global engagement is increasingly prevalent in both developing
and advanced economies. According to the World Trade Organization, the top 500 MNCs
account for nearly 70 percent of the worldwide trade.
2

Some might ask why there is a significant shift from a local to a global market and why there
is an increase in emerging MNCs. The world, as New York Times columnist and author of The
World is Flat, Thomas L. Friedman says, is ―flattening‖ and the global competitive playing field
is being leveled.
3
Globalization and MNCs are closely interconnected, as both are inevitable and
2
present everywhere. These events which have flattened the world have also forever changed the
economic landscape for all.
Recent developments, which broke down international barriers and have greatly integrated
the global economy, include: (1) The fall of the Berlin Wall,
4
(2) When Netscape, a computer
services company and early internet provider, went public, (3) The emergence of work flow
software
5
which allows entrepreneurs to dissect a project into several tasks and distributed in
virtual global offices, (4) The rise of outsourcing,
6
(5) The rise of offshoring,
7
(6) The launch of
Google, Yahoo! and MSN Web search, in which people can now access an information
internationally with these search engines, acting as an instrument for finding alternative overseas
solutions, and (7) The digital, mobile, personal and virtual – there are now mobile, wireless
devices globally integrated and intrinsically converging.

The now single highly enhanced, easily
accessible and social interface allows companies to communicate with existing and prospective
stakeholders in the blink of an eye, a practice which stakeholders now see as standard.
8
All these
flatteners are meant to make people‘s lives easier, more convenient and more connected, and all
of these flatteners are in some way responsible for China‘s economic development and
integration into the global economy.
The challenges within the knowledge or use of these flatteners are how to properly manage
them. Not all the countries‘ MNCs, China among them, have wholly mastered the dynamics of
these flatteners. China has yet to use all of these available flatteners to their full advantage, such
as the developments in information and communication exchange, which could change the
reputation of Chinese-made products or services by overcoming the negative perceptions linked
to its products and services. Most advanced economies were gradually introduced to as well as
had time to adapt to these flatteners and increasingly internationalized markets. Compared to the
economic development of advanced economies, such as the United Kingdom and the United
States, China has leapfrogged through key economic stages, becoming a slightly paler version of
3
these nations. In a matter of just 60 years, China went from being a feudal, rural landscape to an
almost fully industrialized, globalized and integrated economy.

1.2 An Overview of China’s Economic Development

The post-war industrialization of early 1950s China resonated with the ―Soviet approach‖ –
which set an early priority to heavy industrialization – focusing on textile, food processes and
garment industries.

Execution of this economic strategy is credited to Chairman Mao Zedong‘s
first ―Five Year Plan.‖
9, 10
Sometime from 1955 to 1963, the next economic plan enforced by
Chairman Mao, the ―Great Leap Forward,‖
11
called for rural industrialization and
modernization.
12
During this time there was an emphasis on iron and steel production in the
countryside. As a result, makeshift foundries, or ―backyard furnaces‖ sprung up throughout the
country.
13
While China rapidly grew in economic development, the country remained isolated
from most countries. The ―Foreign Leap Forward‖
14
in the early 1960s, a policy which shifted
China from being a self-reliant nation to a more foreign-oriented economy. In the mid 1960s
China experienced trade expansion with Eastern Europe and Japan. From 1966 to 1970, imports
from Britain increased from $32mn to $583mn. In that same period imports from Japan went
from $42mn to $583mn.
15
This swift metamorphosis from a rural and isolated society to an
industrial and international society gave China the opportunity to become a great economic force,
but China‘s business leaders have not had enough time to adjust their business practices and
standards, communication strategies and corporate structure to match the expedited rate of
China‘s industrialization and globalization. While most advanced economies were gradually
introducing themselves to techniques to engage stakeholders, Chinese business leaders are still
playing catch-up.
4
Economic restructuring in the late 1970s and into the 1980s, largely credited to China‘s then-
leader Deng Xiaoping. His more aggressive policy of opening up to the outside world created
―Special Economic Zones,‖ free-trade zones with lower tax rates and fewer bureaucratic
procedures for domestic and foreign businesses. More trade policies followed, designed to attract
foreign direct investment (FDI)
16
and promote export expansion.
17
While actively courting
international investors, critics labeled these economic reform policies as a step toward capitalism
and a rejection of socialism prompting Deng to respond, "Whether a cat is black or white makes
no difference. As long as it catches mice, it is a good cat." Deng thus subtly advocated that
socialism was not synonymous poverty but rather providing a way for the people to thrive.
18

Although China was part of the global economy in some shape or form before the 1950s, as it
one of the 23 original signatories of the General Agreement on Tariffs and Trade (GATT)
19
in
1948, soon after, the country defected in 1949 after its revolution,
20
and it wasn‘t until more than
50 years later that China decided to truly become part of the modernized and globalized economy.
In 2001, China‘s accession into the World Trade Organization marked the country‘s willingness
and eagerness to become part of the global economy. China would carry out a series of
―important commitments to open and liberalize its regime‖ and restrict or abandon some of its
older trade and investment practices. The country could now better integrate into the global
economy. There was now a more ―predictable environment for trade and foreign investment.‖
21

1.3 China’s Emergence and Meteoric Rise in the Global Market

Since the economic restructuring in the 1980s and the country‘s succession into the World
Trade Organization in 2001, China‘s motivation to become more integrated into the global
economy has grown drastically. Public relations professionals now have prospects to explore new
challenges and opportunities within China‘s increased global engagement with businesses, media,
5
communities and other potential stakeholders. To reiterate the significance of pursuing public
relations in China, this section offers a brief backdrop on the existing economic situation in China.
The ―Foreign Leap Forward‖ led to a more aggressive foreign policy and therefore an
increase in FDI. Reduced barriers for trade and the efficient, abundant and inexpensive labor
made China the top destination for FDI in the 1980s and into the 2000s. As of November 2009,
the amount of FDI in China reached $7.1bn, as reported by the Ministry of Commerce in Xinhua
News.
22
Now more products than ever are exported around the world had the label ―Made in
China.‖
Trade statistics indicate imports in China reached $1.3bn in 2008, up $967.4bn since 1999
while exports came to $1.4bn in 2008, up $1.2bn respectively. The biggest source of revenue for
China was electrical and power generation equipment, apparel, iron and steel. The top-three trade
partners and export destinations were the United States, Japan and Hong Kong.
23

In 1999, the Central Committee of the Communist Party of China announced a ―Go Global‖
policy,
24
a strategy which encouraged Chinese enterprises to invest overseas and was designed to
cultivate Chinese brands and MNCs. As of 2005, the National People‘s Congress of China
reported more than 30,000 Chinese enterprises involved with multinational operations from
multiple industries, such as Sinopec, China State Construction Corporation, Huawei and ZTE,
had a firm foothold in the international market.
25

Since China‘s entry into the international market, the country‘s most common models in
global engagement include: developing its own brands, mergers and acquisitions (M&As)
26
and
original equipment manufacturing (OEM).
27
Haier is a Chinese-owned household appliances
producer and is the fourth-largest white goods
28
manufacturer in the world as of 2008, with
distribution in over 160 countries.
29
China's outbound mergers and acquisitions in 2008 were
worth a record $52.1bn.
30
Through extensive brand-building, occasional government assistance,
or competitive costs, Chinese brands are gradually climbing the ranks alongside of global brands,
6
such as computer maker Lenovo, beer producer Tsingtao and commercial airliner Air China.
Those seeking to put their brand on cheaply produced, readily made products or components can
go use OEM, the most common form of global engagement for China.
With the combined attributes of FDI, the aforementioned forms of global engagement and
the upsurge of Chinese-owned MNCs, according to the International Monetary Fund‘s (IMF)
―World Economic Outlook,‖ as of October 2009 (see Table 1), China outperformed emerging,
developing and advanced economies in gross domestic product (GDP)
31
growth. China‘s has been
following this trend since 1980 and it is forecasted China will continue this trend into 2014.
32

TABLE 1: World Economic Outlook (October 2009)
33
/ Subject: Real GDP growth
34

China showed economic resilience during the 2008-09 economic recession. International
Monetary Fund noted that while China did experience a dip in GDP during this period, however,
those losses were not as dramatic as found in other countries. The same is true regarding the
1997 Asian Financial Crisis – there was a dip in China‘s GDP, however losses were not as
significant as other Asian countries encountered.
35
From 2009 to 2010, the global
competitiveness
36
of China improved slightly as a result of the global recession (being one of the
only five nations which improved). According to the World Economic Forum, this is
-5
0
5
10
15
1980 1985 1990 1995 2000 2005 2010
Real GDP growth (Annual percent change)
China, People's Republic of
Advanced economies
Emerging and developing
economies
World
2014
Note: Shaded Area
represents projected GDP
growth, 2009 to 2014
7
comparatively better than a majority of surveyed countries which, for the most part, experienced a
decrease in competitiveness.
37

Although China‘s increased global engagement and its resilience during the recession are
indicators of a country either transitioning into or is already a well-developed economy, a
downside emerges as a result of this change. Since China‘s living standards and salaries have
risen, so has the cost of producing goods and services in the country. Countries like India and
Vietnam offer more cost and time efficient labor which could snatch away FDI and OEM
opportunities from China. In addition, the recession spurred a worldwide rise in economic
nationalism, and with a desperate need to recover lost jobs and collapsed industries, governments
and businesses worldwide lobbied for consumers to buy domestic products and services. While
these previous forms of global engagement, FDI and OEM, still serve as effective sources of
revenue, it will not be long until China‘s transitioning economy must seek new forms of profit.
The next phase for China‘s economic survival and growth it to further establish and expand the
role of MNCs in order to explore and develop new markets. Instead of hoping and waiting for
foreign investors and businesses to approach China – China will extend its own businesses to the
world.

1.4 Chinese MNCs – Gaining Momentum, But Still In the Nascent Stage

In an effort to change its image and no longer be known exclusively as a low-cost and source
of cheap labor, China attempted to expand its role in the global market and increase its brand
equity as a nation. China‘s 1999 ―Go Global‖ policy encouraged the best of the country‘s brands
to go abroad, thus increasing competitiveness. Chong Quan, assistant to the minister of the
People‘s Republic of China Ministry of Commerce, said the country‘s ―going global strategy‖
experienced a $14.6bn boost in four years, from $2.7bn in 2002 to $17.63bn in 2006.
38
China‘s
8
beginning stage of outward investment entailed concentrated investment in natural resources
exploration, industrial processing, transportation, engineering, contracting and labor services,
research and development and agriculture. According to Allan Zhang, head of the China Business
Centre for PriceWaterhouseCoopers and former economist at China's foreign trade ministry.
Chinese MNCs preferred to explore developing markets because they have advantages such as
―more advanced technological acumen, better business management skills, and easier access to
capital—over their counterparts in these countries.‖
39
In fact, as of 2003, there were 7,470
Chinese companies with global reach in 168 economies, with 2,336 of these firms located in
Hong Kong.
40

Even before the ―Go Global‖ policy, some Chinese companies seemed intent on
internationalizing their brands. According to a case study by academics Hong Liu and Kequan Li,
in 1995 Haier, a Chinese-owned household appliance producer, began investing in the United
States and developing countries and succeeded by implementing a well-developed corporate
culture of innovation and market orientation as well as a global vision.
41
As of 2007, it is the
fourth-largest white goods manufacturer in the world, with distribution in over 160 countries. To
date, the company has 30 overseas manufacturing plants and more than 60,000 employees
worldwide.
42
In December 2009, news media reported Haier‘s global market share was 5.1
percent and global revenues grew by 10 percent.
43
Haier is an example of a Chinese flagship
company which shows signs of success in the more developed markets. While Haier has the
opportunity to change perceptions about products and services from China, the white goods
industry may lack the necessary clout to overcome the perceptions of low quality, cheap prices
and counterfeit products, as its success is based on competitive advantages of pricing rather than
reputation and still lacks the resources and advanced technology. Other Chinese MNCs, such as
the telecommunications company, Huawei Technologies Co., Ltd., also base their business
strategies on price more so than reputation. However unlike Haier, Huawei has a greater
9
likelihood of introducing another side to China, as telecommunications is commonly linking to
higher technology, innovation and service. Although Haier and a few other Chinese MNCs have a
promising future in developing their international brands, other Chinese companies are for the
time being not as successful.
In a 2009 survey with Chinese companies involved in international business with outward
investment intentions, conducted by the Asia Pacific Foundation of Canada and China Council
for the Promotion of International Trade, indicated that overseas investment was still in an
―infancy‖ stage.
44
Overseas investment is still small scale – only six percent of respondent
companies said investments exceeded over $100mn while two thirds of companies have
investments less than $5mn. The motivators for these companies investing overseas included
―seeking new markets and advanced technologies, reducing production costs and taking
advantage of preferential policies in host countries, obtaining a well ‐known product brand,
overcoming trade barriers and accessing natural resources.‖ Yet the strongest influencer for these
companies was China‘s ―Go Global‖ policy, as most outward foreign direct investment (FDI)
occurred in the early 2000s when the policy was implemented.
45

Respondents said the most common form of market entry in outward FDI was to establish a
branch operation, create equity joint ventures with local firms and expand marketing networks.
Companies with more international experience are more likely to utilize Mergers and
Acquisitions (M&As) as an entry mode. Companies using M&As did so because it helped them
expand rapidly in targeted markets and improved relationships with local governments.
46
This
means that Chinese MNCs are not yet operating under their own branding power. They still
require extensive support from host countries because they lack the confidence and reputation to
enter a market under a Chinese brand name.
The study also found the major business challenge for these Chinese companies was product
quality and safety. Twenty-seven percent of respondent companies in the study said ―customers‘
10
worries about product quality and safety is either important or extremely important‖ in
challenging their outward investments. Other challenges the companies cited include capital
financing and inadequate knowledge of the ―legal and market risks in new markets.‖
47

In the following section, other obstacles in are discussed in further detail. As with any MNC,
entry into new markets for Chinese companies is not an easy task and comes with challenges such
as lack of brand awareness when entering new markets, cultural, social and political clashes,
poorly executed mergers and acquisitions, and poor corporate governance. However, as Chinese
MNCs are in their nascent stage of development and expansion, in addition to challenges that all
MNCs face, they also must contend with a more distinctive set of obstacles which are particularly
prevalent problems which affect them to a greater extent. In the media and often from the
Western perspective, China‘s product and service reputation is persistently associated with rogue
companies and employees, detrimental government interference with little transparency, and
struggle with infringement on intellectual property and counterfeits. While China‘s government
and MNCs might have taken steps to correct these faults, these perceptions still remain in
Western perspective. These challenges are issues which affect the relationship between the
company and existing or prospective stakeholders and damage market entry and success.
Following the detailed challenges for Chinese MNCs will be a case analysis of Huawei
Technologies Co., Ltd. For China, Huawei is the role model for other Chinese MNCs because of
its massive success in China and its potential for global expansion and its ability to lend
credibility to the somewhat negative ―Made in China‖ label. Huawei is viewed by China as a
high-technology brand which can inspire innovation and expand cooperation in the global
marketplace.
48
The study illustrates overarching challenges and opportunities a typical Chinese
MNC may encounter, as Huawei represents the common struggles of a Chinese MNC. This
particular company, although seen by the Chinese government and consumers as a brand
11
ambassador for future Chinese MNCs entering the global market, had difficulty in the past and
present in procuring and retaining M&A deals and clientele.
Using extensive documentation of media coverage and content analysis, the study reveals that
many news publications consistently reported negative associations with Huawei. Most of these
negative associations are mentioned whenever Huawei failed to procure or retain M&A deals or
clientele and often serve as the reason these deals failed or contracts fell through or dissolved.
Dominating themes in these news reports included: security concerns about Huawei and whether
sensitive information is safe when in the care of Huawei‘s products or services; infringements on
intellectual property in which Huawei was on some occasions accused of stealing patented
technology and therefore questioned the company‘s ability to innovate; Huawei‘s relationship
with China‘s government and military which led to commentators questioning the intentions of
the company entering in new markets; and ambiguous corporate structure and financial
performance which much of the media regards as suspicious. While the media coverage did
present balanced reporting, whether or not these news reports are verifiable and no matter if
Huawei did or did not comment in these news reports, these negative associations in turn affected
Huawei‘s relationship with stakeholders. The study also explored Huawei‘s public relations or
communication efforts in finding solutions to the company‘s challenges, the company‘s
opportunities, and public relations and communication strategies and tactics.
The final section identifies the implications of Huawei‘s emergence as an MNC and whether
the company can truly be a brand ambassador and change preconceived negative perceptions
other Chinese MNC that wish to explore new markets. This section will also identify the
opportunities for Chinese MNCs and the possible outcome in regard to those companies. As
China rises in economic status, the numbers of Chinese MNCs increase in juxtaposition to the
degree unprecedented global engagement each of those companies will experience. Greater global
12
engagement means a greater demand for public relations activities as well as professionals who
understand the dynamics of a Chinese MNC.

13
Chapter One Endnotes

1
See ―Glossary of Terms‖ for definition or further detail.
2
―Trade liberalisation statistics,‖ World Trade Organization, http://www.gatt.org.
3
Thomas L. Friedman, The World is Flat: A Brief History of the Twenty-First Century, (New York: Farrar, Straus &
Giroux, 2005), 8.
4
See ―Glossary of Terms‖ for definition or further detail.
5
See ―Glossary of Terms‖ for definition or further detail.
6
See ―Glossary of Terms‖ for definition or further detail.
7
See ―Glossary of Terms‖ for definition or further detail.
8
Ibid., 48-172.
9
Chris Bramall, Chinese Economic Development, (New York: Taylor & Francis Group, 2009), 87-89.
10
See ―Glossary of Terms‖ for definition or further detail.
11
See ―Glossary of Terms‖ for definition or further detail.
12
Chris Bramall, Chinese Economic Development, (New York: Taylor & Francis Group, 2009, 119-121.
13
Ibid., 125.
14
See ―Glossary of Terms‖ for definition or further detail.
15
Chris Bramall, Chinese Economic Development, (New York: Taylor & Francis Group, 2009, 362.
16
See ―Glossary of Terms‖ for definition or further detail.
17
Chris Bramall, Chinese Economic Development, (New York: Taylor & Francis Group, 2009, 366-369.
18
―Reformer with an iron fist: Deng Xiaoping,‖ CNN.com,
http://www.cnn.com/SPECIALS/1999/china.50/inside.china/profiles/deng.xiaoping.
19
See ―Glossary of Terms‖ for definition or further detail.
20
"WTO successfully concludes negotiations on China's entry," World Trade Organization, September 17, 2001,
http://www.wto.org/english/news_e/pres01_e/pr243_e.htm.
21
Ibid.
22
Wang Guanqun, "Positive FDI data drive Chinese shares 2.7% higher," Xinhua News Agency, November 16, 2009,
http://www.news.xinhuanet.com/english/2009-11/16/content_12468631.htm.
23
"US-China Trade Statistics and China's World Trade Statistics," The US-China Business Council, 2009,
http://www.uschina.org.
24
See ―Glossary of Terms‖ for definition or further detail.
25
"To better implement the 'going out' strategy," Translated by Google Translate, The Central People's Government of
the People's Republic of China, March 15, 2006. http://www.gov.cn/node_11140/2006-03/15/content_227686.htm.
26
See ―Glossary of Terms‖ for definition or further detail.
27
See ―Glossary of Terms‖ for definition or further detail.
28
See ―Glossary of Terms‖ for definition or further detail.
29
―Haier Ready for the ‗Green Olympics,‘‖ Haier, July, 2008, http://www.haier.com/news/view.asp?newsid=1137.
30
Don Lee and David Pierson, "Chinese government denies Coca-Cola's bid to buy juice company," The Los Angeles
Times, March 19, 2009, http://www.articles.latimes.com/2009/mar/19/business/fi-china-coke19.
31
See ―Glossary of Terms‖ for definition or further detail.
32
"IMF Data Mapper - World Economic Outlook," International Monetary Fund, October, 2009,
http://www.imf.org/external/datamapper/index.php.
33
Groups are divided into ―Analytical Groups.‖ Countries or territorial entities are sorted into the following categories:
Advanced economies, emerging and developing economies and world (combined from advanced, emerging and
developing economies). "Country Groups Information," International Monetary Fund, 2009,
http://www.imf.org/external/pubs/ft/weo/2009/02/weodata/weoselagr.aspx#a001.
34
"IMF Data Mapper - World Economic Outlook," International Monetary Fund, October, 2009,
http://www.imf.org/external/datamapper/index.php.
35
Ibid.
36
See ―Glossary of Terms‖ for definition or further detail.
37
World Economic Forum, The Global Competitiveness Report 2009-2010, (Geneva: SRO-Kundig, 2009), 23.
38
Yang Cheng, "MNCs urged to better know investment destinations," Ministry of Commerce, The People's Republic
of China, November 19, 2007, http://english.mofcom.gov.cn.
39
Allan Zhang, "Going Abroad—China's Corporations Go Global," San Francisco State University, September, 2002.
http://userwww.sfsu.edu/~yywong/Zhang.pdf.
40
Friedrich Wu, The Globalization of Corporate China, Analysis Report, (Seattle: The National Bureau of Asian
Research, 2005).
14

41
Kequan Li and Hong Liu, ―Strategic Implications of Emerging Chinese Multinationals: The Haier Case Study,‖
European Management Journal 20, no. 6 (2002): 700.
42
"Company Background," Haier, 2008, http://www.haier.com/abouthaier/corporateprofile/index.asp.
43
"Haier eyes larger global market share in 2010," Hong Kong Trade Development Council, January 10, 2010,
http://www.hktdc.com/info/mi/a/cbn/en/1X06LS8G/1/China-Business-News/Haier-Eyes-Larger-Global-Market-Share-
In-2010.htm.
44
Respondents are Chinese firms which are members of the China Council for the Promotion of International Trade,
have been involved in international business, and have annual revenue exceeding ¥1mn. Findings are based on 1,104
valid responses during the period December, 2008 – February, 2009. Asia Pacific Foundation of Canada and China
Council for the Promotion of International Trade, China Goes Global 2009, Survey, (Vancouver: Asia Pacific
Foundation of Canada, 2009).
45
Ibid.
46
Ibid.
47
Ibid.
48
"Implementation of the Strategy of Rejuvenating Trade Through Science and Technology Came to a New Stage,"
Ministry of Commerce, The People's Republic of China, January 16, 2006,
http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/200601/20060101366145.html.
15
Chapter Two
Challenges for Chinese MNCs

As with any MNC, entry into new overseas markets for Chinese companies is not an easy
task. In addition to the most common challenges facing all MNCs, Chinese companies must
contend with a more specific and distinctive set of obstacles. These obstacles are communication
issues which affect the relationship between the company and the existing or prospective
stakeholders. Stakeholders may be, but are not limited to, investors, consumers, employees,
media (both foreign and domestic), government bodies and regulatory agencies. While some
challenges are obvious, such as a lack of brand awareness and cultural, social and political
clashes, other challenges, such as those discussed in Chapter One, result from the media and the
Western perspective adamantly connecting China‘s product and service reputation with rogue
companies and employees, detrimental government interference with little transparency, and
struggle with infringement on intellectual property and counterfeits. China is more commonly
associated with these images more than any other country.

2.1 Challenges facing all MNCs

Lack of Brand Awareness When Entering New Markets
Most MNCs throughout the world must contend with brand awareness, a major contributor to
a company‘s market share, which is perhaps one of the primary communication challenges for
MNCs going beyond their existing consumer bases. A good reputation for quality, credibility and
loyalty cannot be built overnight. Establishing solid brand equity
1
overseas could take years of
marketing, money and good public relations practice.
16
Using the same strategies for brand awareness does not always transfer as successfully to
overseas markets – case in point: Google Inc., a household search-engine name for many internet
users, predominately in countries such as the United States, United Kingdom or Australia,
receives only a range of attention, from moderate to none, in countries such as Korea or China.
When Google attempted to enter China‘s market, the company treated it like all of its other
markets, failing to strategically position itself, unlike its competitor, Baidu, which maintains 70
percent market share. Baidu, a Chinese-owned company, had the advantage of working in its own
territory, understanding deference to the Chinese government‘s concept of select censorship and
recognizing the consumers‘ needs to use its services as a social device rather than just a search
engine.
2
Baidu developed a stronger brand by building specialized online communities and
relationships for its consumers, thus winning loyalty and ensuring reliance. This case serves as an
example for Chinese MNCs to be aware that while companies like Google may be a giant among
industry giants in countries such as the United States, it only commanded a small fraction of the
market share in China and ended up abandoning that market altogether, ending its relationship
with the country. What happened to Google could happen to MNCs from any country, China
included. Like Google, Chinese MNCs must realize that although their brands may be extremely
successful and popular in one country, it cannot expect the same level of momentum and
acknowledgement they receive in China. They must survey the consumer and media landscape
properly before diving into the market and consider what the solution is to any problems they
foresee with their brand and that market.
The solution to a lack of brand recognition does not mean entirely reinventing a brand‘s
meaning or identity, but it means the company must find ways of building a relationship between
the brand and target market. The magazine BusinessWeek, in collaboration with Interbrand, a
global branding consultancy firm, annually rank companies that best built their images and have
rarely lost their momentum. The brands that rose to the top of their ranking all had ―widely varied
17
marketing arsenals and were able to unleash different campaigns for different consumers in
varied media almost simultaneously.‖
3
No longer is traditional media the sole instrument in
defining and globally launching a brand. Effective and lasting engagement with a brand is
accomplished by using more experiential strategies. Pepsi accomplished this in China in 2009, as
it beat Coca-Cola, Pepsi‘s traditionally dominating rival, and commanded 23 percent of the
country‘s market share in cola products, making it the No. 1 cola in China. The beverage
company launched a battle of the bands contest in 2008 on a variety show. About 6,000 bands
tried out for 10 spots on the show, which was broadcast nationwide and streamed to the company
Web site. According to BusinessWeek, these promotions were inspired by Harry Hui, Pepsi's
chief marketing officer for China. Hui, the former head of Greater China for Universal Music,
served as producer of the battle of the bands and was one of its three judges. "Consumers in
China are bombarded with messages, so merely telling them what they should drink or eat might
not resonate," Hui said. "Giving them a platform where they can talk back fosters a deeper
relationship with the brand.‖
4
Pepsi understood the internet is an increasingly powerful
component in reaching Chinese consumers, as the number of internet users steadily approaches
the 400 million mark. As Hui said, the consumers became desensitized and immune to the
constant messages and only are willing to respond to a brand when they themselves were given a
voice. In China, where the consumer has the ability to be heard loud and clear among a
population of 1.3bn people is considered a unique gift, that gift translates to that consumer buying
a Pepsi product.

Cultural, Social and Political Clashes
As Chinese companies go abroad, into markets where there are different regionalized
behaviors and ideologies, they must prepare for potential clashes with the host countries‘ societies,
cultures and politics. Ideally, an MNC and its country should not be inherently linked, and an
18
MNC should not be subjected to criticisms reserved for its home country, but the reality is this is
often the case. The characteristics of a market can often take after the cultural, social and political
aspects of its country. In an interview, Rachel Catanach, General Manager of Fleishman Hillard‘s
Hong Kong offices, said ―A person on an international assignment has to be able to understand
cultural contexts and be able to adapt their leadership style to that context. What may motivate
people in the West does not necessarily work in the East.‖ For Catanach, success in the public
relations industry means to ―Read widely, consider multiple points of view [and] keep close to the
consumer and to public issues.‖
5
MNCs must demonstrate an aptitude for the subtleties and
nuances of every country they are engaged with and must be kept abreast with the current policies,
regulations and controversies so to not exacerbate already tense situations.
When Chinese businesses operate domestically, meaning within China, the conditions with
which they operate mold the personality of the company, making the identity of China part of the
identity of the company. These businesses are familiar with some of the social, political,
economical and cultural issues within China and how these issues affect them. Sometimes these
issues or influence permeate into and fuse with the nature of a company‘s employees,
organizational structure, philosophy, values and standards. When these same Chinese companies
expand to overseas markets, sometimes there are clashing ideologies or beliefs between the
company and the market‘s consumers, whether it is a cultural, social or political in nature, and in
these cases the market‘s consumers may conflict with the company. No matter if a Chinese MNC
either aligns with or opposes an issue, the consumer may inevitably link that controversy to the
company.
The Western world frequently relates China to disregarding human rights, strongly enforcing
censorship, overlooking labor violations, being lax on global environmental standards, and
corrupting its government. China, as a whole, may have already improved upon some of these
issues, but they will be inextricably linked to the country and many of its industries for years or
19
even decades. Chinese MNCs have the opportunity to disassociate themselves from these
controversies and proactively steer clear from clashes between its‘ consumers or clients by
establishing corporate social responsibility and anticipating the potential social, cultural and
political differences which may affect the relationship between the business-to-business or
business-to-consumer markets. Corporate social responsibility, to be discussed in detail later on in
chapter four, essentially will actively and aggressively address any foreseeable challenges in how
the company deals with social or environmental controversies linked to the company or its
industry. A Chinese MNC has the opportunity of adding value to its corporate reputation by
supporting or volunteering for social or environmental causes which are in some way relevant to
the company and the market it engages. A business commands more respect and loyalty when it
is responsible for its actions and plays an active role in its surrounding community.
In addition to corporate social responsibility, an MNC should anticipate how it communicates
its cultural or social differences to its stakeholders. These differences can be both minute and
significant, such as China‘s emphasis on seniority, collectivism and overall business etiquette,
Sometimes business representatives must compromise or adapt to the social norms and etiquette
of that market‘s society. During business deals, a business representative should also try to avoid
any discussions on current affairs which may rouse criticisms of either China or the market‘s
country. While all of these recommendations may seem commonsense, one should never assume
that all international business representatives have a cultural competency, especially if an there is
a inexperienced MNC that is new to overseas engagements.

The Pitfalls of Mergers and Acquisitions
Floundering post-recession, foreign competitors now provide Chinese MNCs continual
merger and acquisition (M&A) opportunities, an expansion strategy that, as stated earlier, help
MNCs rapidly enter targeted markets and improve relationships with local governments. These
20
local companies which the Chinese MNCs merger with or acquire may have the resources and
credibility which are valuable to market entry. However, how an MNC manages and
communicates with the stakeholders affected by the M&A could determine the outcome of
whether the M&A succeeds or fails. China Market Research Group (CMR), through analyzing
several hundred M&A deals from the past two decades, learned ―shareholders would have been
better off in about 70 percent of the cases if they'd never set off on the path toward [mergers and
acquisitions].‖
6
For Chinese overseas mergers, a 2005 survey further indicates the severity of the
issue, revealing that 60 to 70 percent of Chinese overseas mergers failed.
7
In these cases, share
prices of three quarters of merged companies decreased by more than 20 percent. As M&As are
one of the more common ways a Chinese MNC attempts to enter overseas markets, a 60 to 70
percent chance of failing in an overseas merger means that at this failure rate, Chinese companies
will have a more difficult time building their brands and consumer relationships. If a Chinese
company fails in an overseas M&A, it will be likely that the host market will see that company as
unprepared and ill-fitted for that market.
Why do these overseas M&As fail? Previous cases suggest culture clashes, reputational
standoffs or faltering corporate-management structure are the tell-tale signs of poor stakeholder
relations. ―Too often companies put together matches that look great on paper but are fraught
with management and structural problems that end up turning them into busts,‖ said Shaun Rein,
Managing Director of CMR and writer for Business Week Asia.
8
An example of a seemingly
ideal and foolproof M&A gone wrong between two industry giants is the Bell Atlantic- TCI case.
This case serves to remind Chinese MNCs that no matter how lucrative and credible a foreign
company may be, it does not guarantee a successful merger. Chinese MNCs are often occupied
with how the M&A will boost their brand recognition in overseas markets that they forget the
merging companies require a proactive management strategy. If these M&As continue to fail, it
21
only reinforces the impression that Chinese MNCs are not ready for overseas markets and cannot
meet the needs of its consumers.
To further illustrate the global issues related to M & A, consider the case of Bell Atlantic. In
1993 Bell Atlantic, a phone company, settled to pay $33bn for Tele-Communications Inc. (TCI),
the America‘s largest cable television company of that time. Considered the largest
communications merger of the century, the deal collapsed the following year. The merger
derailed due to a combination of issues – the FCC enforced a cable-rate reduction, trimming
down TCI's cash flow by $1.8bn and thus reducing the company‘s value. In addition, the merging
of the two companies was like the troublesome and incompatible marriage of an ―odd couple.‖
Bell Atlantic‘s chairman, Ray Smith, was an ―an amateur actor and playwright‖ who climbed the
bureaucratic ladder for telecommunications companies while TCI boss, John Malone, was a
―ruthless‖ and ―strong-willed, publicity-averse entrepreneur.‖
9
Differing corporate cultures
10
also
gave rise to distrust. Malone presented Bell Atlantic with a list of 23 questions about its
management and policy methods. Smith had more than 40 questions for TCI with concerns such
as the company‘s flexibility in branching into other fields and whether the company was ready for
the regulatory scrutiny which Bell Atlantic was accustomed to.
11
In the end, negotiations broke
down between Bell Atlantic and TCI, and the M&A never came to fruition.
Many MNCs, Chinese MNCs included, fail to anticipate potential obstacles, such as
corporate culture clashes and employee-departmental consolidation processes. There is a human
and cultural factor during the integration process, and M&A management teams do not anticipate
the amount of attention required when two companies merge and consolidate. Employees feel
apprehensive or disgruntled during the employee-departmental process because they are dealing
either with layoffs or new management, and corporate cultures often clash because of differing
business and communication goals, corporate philosophies or values, management styles,
incentives. These obstacles, if underestimated or neglected, are probable reasons why, like the
22
Bell Atlantic- TCI case, M&As between Chinese MNCs and foreign companies fail 60 to 70
percent of the time.
It is important to understand M&As and stakeholder relations in relevance to the problem
stated earlier— who is affected, how they react and why it matters. To avoid a potential crisis,
stakeholders, after being identified, need to be given a strategy with a set of tactics on how to
better communicate with stakeholders during a merger. Supportive tactics when merging
companies include developing an M&A team, using employees from each company, to manage
the possible stakeholder issues mentioned earlier in the MNC challenges. Human resources and
counseling are necessary to gauge and manage stakeholder reactions. Literature which details
what the merger means to stakeholders, what the companies are doing to ensure the merger is a
success and what the stakeholders can do to ensure the merger is a success, is a helpful
communication tool.

Eroding Confidence in Corporate Governance during a Crisis
Transparency is most valued during a time of when stakeholders feel most vulnerable. In
previous economic crises, or in any type of crisis for that matter, companies sometimes made the
mistake of limiting communication with its stakeholders and cutting budgets for advertising,
marketing and public relations when in fact just the opposite should happen.
Globally, the role of trust in a company‘s reputation is on the rise. The Global Reputation
Pulse, a study on corporate reputation conducted by the Reputation Institute, an international
research organization, found ethics and transparency ―rose in importance around the world to
their highest levels ever.‖ Corporate governance, perceived as ―a responsibly-run company that
behaves ethically and is open and transparent in its business dealings,‖ was the No. 2 driver of a
good reputation globally, and in Canada, India, Thailand and Turkey, governance is now the No.
1 driver of reputation.
12
At this point in time Chinese MNCs must not rely solely on industry
23
productivity and competitive pricing but also must place greater emphasis on reputation
management established through corporate governance and transparency if they plan to enter new
markets. Chinese MNCs already struggle with other challenges, to be introduced and discussed in
detail in the next section, which already are damaging their reputations.
In 2008 the world experienced an economic crisis which revealed critical shortcomings in
corporate governance which, from a public relations perspective, is the relationship between all
stakeholders and the company. The recession generated both internal and external pressures
which gave rise to an unprecedented erosion of consumer, employee and investor confidence in
corporate governance. Corporations had and still have the herculean task of retaining support
from, as well as giving assurance to, their key stakeholders during such a crisis. Consumers
curbed their spending habits, concerned about superfluous purchasing. Employee morale declined
and therefore employee performance suffered because of fears they would become unemployed.
Investors withdrew financial backing, determined to save what money they still had. Negative
stakeholders‘ reactions were a response to worldwide panic and based on past actions of MNCs
during previous recessions. The recession could be seen by Chinese MNCs as an additional
challenge or an opportunity to demonstrate well-established corporate governance. As China and
its business were less affected by the economic recession, compare to Western economies,
Chinese MNCs have the advantage of showing overseas stakeholders, such as consumers,
employees and investors, the organizational or structural strength and solidarity they possess.

2.2 Challenges facing Chinese MNCs

Rogue Companies and Employees
From a public relations perspective, the old adage ―one bad apple spoils the barrel‖ gives
illustrative meaning to rogue companies or employees in an industry. It only takes one
24
irresponsible and disgruntled employee to hurt a company or one unethical and corrupt company
to hurt an entire industry. These situations are a potential crisis for all MNCs, this is a challenge
strongly associated with Chinese MNCs. China has a history of producing faulty or contaminated
products which often leaves the country to be under severe scrutiny by international product-
quality authorities.
The most recent and marked incident in product contamination was in September 2008, in
which Chinese news organizations reported four infant deaths related to milk laced with
melamine.
13
More than 10,000 children were hospitalized and more than 54,000 remained ill from
tainted milk.
14
News organizations believe dairy suppliers cut costs by watering down milk and
adding melamine, a product used in plastics and fertilizers, making the products appear higher in
protein and concealing any protein deficiency in watered-down milk.
15
Although news of the
melamine-laced milk was available to the Chinese government‘s product-quality watchdog,
General Administration of Quality, Inspection and Quarantine (AQSIQ),
16
since June 30, 2008,
the organization failed to address the contamination until the news media widely reported the
incident in September 2008.
17

Trust in milk companies was completely and, in some cases, permanently damaged. Even
milk suppliers‘ products that did not test positive for melamine suffered from the negative impact
of the scandal. Decreased consumer confidence and increased spending on quality control from
the scandal decreased Chinese dairy companies‘ earnings.
18

Foreign countries disassociated themselves from the scandal by recalling milk products and
placing bans on all milk products from China. This incident created ripples of concern beyond
food and beverage industries which export products from China, reinforcing a stigma about the
―Made in China‖ (MIC) label. A 2008 survey indicated that, prior to the milk scandal, 59 percent
of respondents thought the MIC label hurt Chinese brands. After the milk scandal, 68 percent of
respondents felt the MIC label ―hurt‖ Chinese brands.
19
Many marketing experts believe that the
25
milk scandal erased any reputation gains China had from the 2008 Beijing Olympics. For China,
the Olympics was a multibillion-dollar marketing campaign and an opportunity to showcase to
the world how far China had come in terms of technology, culture and environment. Due to state
leaders‘ pressures during the Beijing Olympics to ―carry out only ‗positive reporting‘… problems
in China's dairy industry were off limits.‖ The General Administration of Quality, Inspection and
Quarantine (AQSIQ) failed to warn consumers about the June 2008 milk contamination when it
suppressed news stories, resulting in a larger-scale contamination which could have been
prevented.
20

China‘s milk scandal generated doubts towards the AQSIQ‘s methods in product monitoring
and regulation, threatening the whole exporting industry for the country. China had a track record
for exporting contaminated products, accounting for more than 60 percent of recalls in the United
States in 2007.
21
The highly publicized health and safety violations, coupled with poor standards
and regulations, damaged relations between foreign product safety authorities and AQSIQ,
reinforcing the perception that Chinese products are often low quality, cheap and counterfeit.
Although AQSIQ is not directly responsible for the milk contamination, to stakeholders and
consumers, the scandal reflects poorly on both milk suppliers and the product-quality authority.
To reestablish trust, credibility and respect, AQSIQ needs to increase international cooperation
with competent authorities of foreign countries by collaborating with or becoming part of
international and regional product-quality organizations, committees, or authorities. These
institutions determine what Chinese products are safe or contaminated and can be imported or
banned. AQSIQ must also increase communication and send strong messages to industry leaders,
stressing the severe consequences of unethical business and operational practices. As Western
consumers often combine Chinese products and companies together into a single likeness, any
foundation Chinese MNCs build with their own brand and the perceptions of ―Made in China‖
26
products and services may collapse because one scandal or one corrupt company can overturn any
previous progress.

An Intrusive Government and a Lack of Transparency
The line between China‘s economy and government, for many foreign economists, is blurred.
Jonathan R. Woetzel, a McKinsey & Company consultant, noted in the McKinsey Quarterly that
the distinction between a state-owned and private enterprise and challenges that both face
converge. Chinese companies, both public and private, must have government approval of M&As
and other global activities. Integrating newly acquired businesses and employees is the biggest
problem. The consultant noted that most large Chinese companies with global aspirations ―have
some connection to the government in its capacity as financier, customer, or tax authority,‖ and in
turn the companies face challenges when pursuing ―headline-grabbing international investments.‖
Case in point – When Chinese-owned Lenovo bought IBM‘s personal-computer unit the company
had to accept restrictions after US politicians raised concerns because the state (Chinese
government) was the dominate shareholder.
22
IBM is one of the world‘s largest and most
profitable information technology companies, one that sells to business- to- business and
business- to- consumer markets. Some of their client contracts may also be with government
agencies, which is why U.S. politician might have been so apprehensive about the high- profile
Lenovo-IBM collaboration.
Although government intervention can finance the pursuit to globalize its businesses, in some
cases it can be damaging to a company‘s effort to globalize. A pertinent example is when the
Chinese government intervened and rejected Coca-Cola‘s $2.4bn bid to buy China Huiyuan Juice
Group in March 2009. Los Angeles Times says Coca-Cola‘s attempt to buy the juice company is
―the biggest of a growing number of failed mergers and acquisitions in Asia.‖ The decision,
analysts say, could hurt both state-owned and private Chinese companies‘ efforts to buy
27
companies and assets around throughout world. The case was regarded as ―the first major test‖ of
China‘s new anti-monopoly law. American attorneys were surprised by the government‘s
decision, as Chinese companies continue to buy other foreign companies and restrict foreign
companies from buying into China, they could risk criticisms of protectionism. Yi Xianrong, a
researcher at the Chinese Academy of Social Sciences, said public opinion and political ideology
―swayed‖ Beijing's decision. Xianrong said the event could send the wrong message to foreigners
and have a ―chilling effect‖ on future M&As, eventually hurting China's economy.
23

Coca-Cola‘s case is not an isolated incident and is ultimately a casualty of China‘s stringent
economic regulatory laws. As indicated by the 2010 Index of Economic Freedom,
24
the overall
economic ―freedom score‖ (based on a score of 1-100) of China is 51, making the country
―mostly unfree‖ (see Table 2 for all scores). The economic scores demonstrate the extent of the
Chinese MNCs‘ challenges in freely making business decisions exclusively for the benefit of the
stakeholders and in turn shuts out opportunities for further economic prosperity through
investments, collaborations or partnerships, innovation, trade, and many other facets which allow
a company to expand and flourish. China‘s economic regulations acts as a constraint to a Chinese
MNC‘s ability to think outside of the box and come up with creative ways of engaging and
attracting stakeholders which are key to an MNC‘s development. The score fluctuated slightly
since 1995 and always trails behind the world average.
25
Although Table 2 indicates China has a
mostly high ―trade freedom,‖ the country has a ―business freedom‖ score of 49.7, as it takes more
than the world average of 18 procedures and 218 days to obtain a business license in China, and
the country lacks legal and regulatory transparency.

28
TABLE 2: 2010 Index of Economic Freedom: China‘s Ranking
26

The government has a tight grip on the financial sector, as state ownership is common in most
industries. With a diminutive ―investment freedom‖ score of 20, foreign investment is heavily
controlled and regulated. Chinese MNCs must follow the country‘s Foreign Investment
Catalogue,
27
which indicates what sectors and foreign investment are encouraged, permitted,
restricted and prohibited. MNCs deal with specific restrictions in China such as ―caps‖ on
foreign ownership and permitted forms of investment, such as those like Coca-cola case
For Chinese MNCs, investors are subjected to ―regulatory, non-transparency, complex and
inconsistently enforced laws and regulations‖ and ―weak protection of intellectual property rights,
corruption, industrial policies protecting local firms, and a legal system that cannot guarantee the
sanctity of contracts.‖
28
To financially support and to lend reputation and credibility to a Chinese
MNC is too risky for some investors. The strong relationship between MNCs and the Chinese
government spurs trust and creditability concerns and is unsettling for overseas stakeholders. For
example, stakeholders, such as investors and employees, from a company that a Chinese MNC
wishes to merge with may resist and even discontinue M&A negotiations if they feel the Chinese
MNC is incapable of looking after their best interests. If M&A negotiations break down, then the
Distribution of Global Economic Freedom Scoring
100 – 80 79.9 – 70 69.9 – 60 59.9 – 50 49.9 – 0
Free
Mostly
Free
Moderately
Free
Mostly
Unfree
Repressed

29
Chinese MNC may not get the resources or third-party credibility for the company‘s brand to
enter a new market. To gain stakeholders‘ confidence and trust requires personal dedication from
the company to offer, within its greatest range of ability, legal and financial transparency as well
as clear and concise communication to internal and external audiences such as investors,
employees, consumers, government bodies and the media.

Inexperienced Business Leaders
In 2008, Forbes.com reported that since 1995, ―only 17 of the top 100 Chinese companies
completed any outward, over-the-border transactions, and only six did more than three such deals.
During the same time, 31 of the top 100 Indian companies have completed cross-border
transactions; 18 of these have completed more than three deals.‖ This is a huge disparity of
achievement, an observation which could only partly be described by consultants of McKinsey &
Company as ―raw inexperience‖ from Chinese companies.
29
In a report by the McKinsey
Quarterly, interviews with Chinese companies offered insight into this challenge.
While Chinese executives agreed that ―globalization is a strategic priority,‖ 93 percent of the
executives interviewed believed they wouldn't reach global aspirations unless they more actively
developed ―suitable leaders.‖ Eighty-eight percent of executives explained that attempts at
globalization were ―hindered for lack of people with real cross-cultural knowledge or experience
managing foreign talent.‖
30
McKinsey consultants believe the hardest part of overcoming this
challenge will be ―changing corporate gears‖ and ―combining Chinese and Western forms of
communication and culture.‖ Most Chinese MNCs prioritize seniority and respect above
responsibility and accountability. Managers tend to be ―risk-averse and non-confrontational,‖ and
they are more reactive rather than proactive. They also act ―risk-averse and non-confrontational,‖
a quality commonly found in ―command-and-control bureaucratic hierarchies.‖
31
Options for
30
Chinese MNCs will be either to train Chinese leaders to communicate and act as global leaders or
to import foreign talent.

“Made in China” (MIC) Reputational Issues
One of the top challenges for Chinese brands going global is the negative reputational
association with Chinese-made products. The term ―Made in China‖ is, for many global
consumers, synonymous with ―cheap‖ or ―poorly manufactured.‖ Interbrand, a global branding
consultancy firm, published key findings in 2008 on the MIC label and the progress of Chinese
brands. Findings, based on responses from audiences outside of Mainland China,
32
indicated the
top association to MIC products and Chinese brands is, indeed, ―cheap‖ and ―low quality.‖
33

As shown in Table 3, only two percent of respondents deemed MIC products ―safe,‖ and
seven percent of respondents thought MIC products were ―innovative.‖ Despite China‘s
―substantial presence‖ on the global market, only 12 percent said the quality of products is
improving. In 2007 and 2008, 66 percent said the MIC label ―hurt‖ Chinese brands.
34
The
negative MIC label is not a theory – it is a reality.
TABLE 3: ―MIC 2008‖ survey response: How well do the following attributes describe products made in China?
35

31
Where do these off-putting perceptions come from? One respondent made an illuminative
note, ―I avoid buying products made in China at all costs. I don‘t trust anything made in China for
a variety of health and safety issues. Just check the headlines over the last few years....‖ Media
can be a best friend or worst enemy. Chinese MNCs have the prospect for progress but need to
communicate more and have a strategic plan which tackles the elephant in the room while
embracing strengths or opportunities.
Chinese brands and manufacturers must acknowledge that there is a problem with product
quality. Their products are often cheaper than other overseas alternatives, but quality is sacrificed
as a result. While consumers find the products overwhelmingly cheap, the same consumers find
the products unsafe and inferior – China must find the balance between price and quality.
Referring back to the AQSIQ, standards and practices must improve, and if that means the price
of Chinese-made products increases, then the AQSIQ must communicate that with foreign
product-quality authorities and overseas consumers – safety and quality come at a price. Chinese
MNCs must show to the media, in a bold way, they are changing. Constant and consistent public
relations campaigns for media to report may fill the void normally reserved for potentially
negative media coverage. Regular factory tours and routine inspection reports, using third-party
intermediaries for objectivity and credibility, a manifesto guaranteeing that the company will not
compromise product quality and safety for price and two-way communication on consumer
feedback are ways for Chinese MNCs to showcase their industry improvements and reinforce the
company‘s brand and reputation.

Intellectual Property and Counterfeits
The appetite for innovative Chinese products is voracious in China‘s increasingly competitive
global market. In 2008, applicants filed more than 800,000 patents with China's State Intellectual
Property Office, more than any other country in the world. However intellectual property-related
32
lawsuits are on the rise.
36
The 2010 Index of Economic Freedom showed a score of 20 out of 100
(see Table 2) for property rights, as copyrights, patents, brand names, trademarks, and trade
secrets are ―routinely stolen.‖
37
This paves way for a wave of counterfeit products, a challenge
which the Chinese government inadequately acknowledges.
China‘s disputes over intellectual property may be one reason why, as indicated earlier in
Table 3, only seven percent of survey respondents described products made in China as
―innovative.‖ However 45 percent of respondents, shown in Table 4, felt innovation was an
important attribute for products made in China. Consumers reveal that want innovative products,
but Chinese companies cannot deliver.
TABLE 4: ―MIC 2008‖ survey response: Derived importance of attributes describing products made in China
38

Counterfeiting and infringing on intellectual property is frowned upon and illegal in the
global marketplace. Many foreign companies are concerned with conducting business with
Chinese MNCs and within China. According to Google, Chinese hackers allegedly broke into
corporate servers and stole intellectual property from the company in January 2010, inciting
anxiety about stolen information and trade secrets and impeded progress for Chinese MNCs.
Although an investigation was pending, Google said it would stop censoring its Chinese search
33
engine over the incident, and highlighted China‘s disputes over intellectual property, privacy,
censorship and human rights. According to the Wall Street Journal, Yahoo was among the
companies targeted in the attack and publicly supported Google in its endeavors. Differing
opinions about the online attack caused a ―rift‖ between Yahoo Inc. and its partner, Alibaba
Group, a Chinese online company. Alibaba reportedly ―slammed Yahoo for its public support of
Google in the conflict,‖ and furthermore said ―Yahoo's statement that it is 'aligned' with the
position Google… was reckless, given the lack of facts in evidence." The incident further
illustrates the problem of the Chinese government‘s lax control over property rights.
39

34
Chapter Two Endnotes

1
See ―Glossary of Terms‖ for definition or further detail.
2
Jordan Calinoff, "Where Google Loses," FP: Foreign Policy, September 29, 2009,
http://www.foreignpolicy.com/articles/2009/09/29/where_google_loses.
3
"Global Brands," BusinessWeek, August 1, 2005,
http://www.businessweek.com/magazine/content/05_31/b3945098.htm
4
Fredrick Balfour and Bruce Einhorn, "Pepsi's Web-Smart Thrust into China," BusinessWeek, September 17, 2009,
http://www.businessweek.com/magazine/content/09_39/b4148051511340.htm?chan=magazine+channel_in+depth.
5
Rachel Catanach, interview by Jessica Kraft, Leadership in the Public Relations Industry, September 28, 2009.
6
Shaun Rein, "Why Most M&A Deals End Up Badly," Forbes, June 16, 2009,
http://www.forbes.com/2009/06/16/mergers-acquisitions-advice-leadership-ceonetwork-recession.html.
7
Yang Mu and Teng Siow Song, "China's Overseas Direct Investment," National University of Singapore's East Asian
Institute, July 17, 2007, http://www.eai.nus.edu.sg/BB340.pdf.
8
Shaun Rein, "Why Most M&A Deals End Up Badly," Forbes, June 16, 2009,
http://www.forbes.com/2009/06/16/mergers-acquisitions-advice-leadership-ceonetwork-recession.html.
9
Sam Allis, Sam, John Greenwald, Thomas McCarroll, Jeffrey Ressner, and Jane Van Tassel, "Disconnected," TIME,
March 4, 1997, http://www.time.com/time/magazine/article/0,9171,980261-2,00.html.
10
See ―Glossary of Terms‖ for definition or further detail.
11
Sam Allis, Sam, John Greenwald, Thomas McCarroll, Jeffrey Ressner, and Jane Van Tassel, "Disconnected," TIME,
March 4, 1997, http://www.time.com/time/magazine/article/0,9171,980261-2,00.html.
12
Global Reputation Pulse is the annual result of over 60,000 online interviews with consumers in over 25 countries on
six continents. More than 150,000 ratings are collected develop measurements of the corporate reputation of over 1,000
companies. Data for the 2009 report was collected between January and February 2009. "The Growing Role of
Transparency," BusinessWeek, September 15, 2009, http://bx.businessweek.com/reputation-
management/view?url=http%3A%2F%2Fwww.reputationinstitute.com%2Fknowledge-
center%2Fintelligence_files%2FTransparency_Article_RepIntel_2009.pdf.
13
Malcolm Moore, "China milk scandal: WHO makes accusations as poisoning spreads," Telegraph.co.uk, September
26, 2008, http://www.telegraph.co.uk/news/worldnews/asia/china/3088748/China-milk-scandal-WHO-makes-
accusations-as-poisoning-spreads.html.
14
Gillian Wong, "10,000 Chinese children still sick from milk," The Seattle Times, October 29, 2008,
http://seattletimes.nwsource.com/html/nationworld/2008243200_apchinataintedmilk.html.
15
Anita Chang, "Chinese parents seek answers on tainted baby milk," Yahoo News, September 18, 2008,
http://news.yahoo.com/s/ap/20080918/ap_on_re_as/as_china_baby_formula_recall.
16
See ―Glossary of Terms‖ for definition or further detail.
17
Gillian Wong, "10,000 Chinese children still sick from milk," The Seattle Times, October 29, 2008,
http://seattletimes.nwsource.com/html/nationworld/2008243200_apchinataintedmilk.html.
18
Wendy Leung and Lee Spears, "China Milk Scandal Spreads; Hong Kong Girl Sickened," Bloomberg.com,
September 21, 2008, http://www.bloomberg.com/apps/news?pid=20601080&sid=a4krf9ZOzsh8&refer=asia .
19
"Made in China 2008: The Challenge for Chinese Brands Going Global," Interbrand, 2008,
http://www.interbrand.com/images/studies/Made_in_China_2008.pdf.
20
David Bandurski, "Press Controls Feed China's Food Problem," The Wall Street Journal. October 7, 2008,
http://online.wsj.com/article/SB122332462058208791.html.
21
Kayla Webley, "List of Problem Chinese Imports Grows," NPR, July 10, 2007,
http://www.npr.org/templates/story/story.php?storyId=11656278.
22
Jonathan R. Woetzel, "Reassessing China's state-owned enterprises," McKinsey & Company, July 1, 2008,
https://www.mckinseyquarterly.com/Reassessing_Chinas_state-owned_enterprises_2149.
23
Don Lee and David Pierson, "Chinese government denies Coca-Cola's bid to buy juice company," The Los Angeles
Times, March 19, 2009, http://articles.latimes.com/2009/mar/19/business/fi-china-coke19.
24
See ―Glossary of Terms‖ for definition or further detail.
25
The Heritage Foundation; The Wall Street Journal, 2010 Index of Economic Freedom, January 22, 2010,
http://www.heritage.org/Index/.
26
Ibid.
27
See ―Glossary of Terms‖ for definition or further detail.
28
The Heritage Foundation; The Wall Street Journal, 2010 Index of Economic Freedom, January 22, 2010,
http://www.heritage.org/Index/.
29
Paul Maidment, "China's Multinationals Creep Abroad," Forbes.com, May 5, 2008,
http://www.forbes.com/2008/05/05/china-emerging-multinationals-biz-cx_pm_0505notes.html.
35

30
Ibid.
31
Ibid.
32
Methodology: The 2008 survey included 776 respondents [51% US/Canada, 17% Europe, 15% Asia Pacific, 7%
Latin America, 6% Australia/New Zealand, 4% Other Regions]. The milk scandal emerged in the middle of September,
adding substantial insight to the study. Respondents participate by e-mail or through links on: www.brandchannel.com,
www.interbrand.com, www.fortune.com. Respondents excluded consumers from Mainland China as the goal was to
collect feedback from foreign consumers. In addition, there was strict control on the number of participants from
Chinese living overseas. The survey was fielded over a three work period, launching in early September 2008,
approximately two weeks after the end of the Beijing Olympics. "Made in China 2008: The Challenge for Chinese
Brands Going Global," Interbrand, 2008, http://www.interbrand.com/images/studies/Made_in_China_2008.pdf.
33
Ibid.
34
Ibid.
35
Ibid.
36
Gary Zhang, "Patent Revolution," Forbes.com, September 28, 2009, http://www.forbes.com/2009/09/25/patents-
china-counterfeit-china-leadership-zhang.html.
37
The Heritage Foundation; The Wall Street Journal, 2010 Index of Economic Freedom, January 22, 2010,
http://www.heritage.org/Index/.
38
Ibid.
39
Aaron Back and Jessica E. Vascellaro, "Fallout From Cyber Attack Spreads," The Wall Street Journal, January 17,
2010,
http://online.wsj.com/article/SB10001424052748704541004575011443044935242.html?mod=WSJ_hpp_MIDDLTopS
tories.
36
Chapter Three
Case Analysis of Huawei Technologies Co., Ltd.

As mentioned in chapter two, Beijing‘s tenth economic initiative, for the years from 2001 to
2005, set forth a ―Go Global‖ policy which encouraged Chinese companies to invest abroad. In
2004, Chinese banks gave Huawei Technologies Co., Ltd, a telecommunications company, a
$10bn low-cost loan to go forth and become key player in the global market.
1
China chose
Huawei to become a role model for other Chinese MNCs because of its massive success in China
and its potential to ―implement international business and brand strategy in credit and insurance.‖
China sees Huawei as a high-technology brand which can ―encourage innovation, promote
exchanges and expand cooperation" in the global marketplace.
2

This particular telecommunications company, although seen by the Chinese government and
consumers as a brand ambassador for future Chinese MNCs entering the global market, had
difficulty in the past and present in procuring and retaining M&A deals and clientele. These
difficulties are attributed to ―Challenges‖ addressed later in the case, based on research from
content analysis of media coverage from top-tier news organizations. Exploration into the Huawei
Technologies Co., Ltd case serves as a glimpse into the public relations professional‘s pursuit of a
more transparent and media-savvy client in China.

3.1 Research Methodology

Primary research for this case study entailed extensive documentation of media coverage
(140 articles from 20 news publications) and content analysis of that media from key influencers
in top-tier news organizations that play a role in the Huawei‘s economic and corporate growth in
the telecommunications industry. Media coverage from these news organizations was within a
37
six-month time period, from January to July 2009, and serve as a point of reference for Huawei‘s
then- reputation and progress thereafter. Additional news coverage after the set time frame of
media analysis is used to document Huawei‘s public relations or communication efforts in finding
solutions to the company‘s challenges, exploring the company‘s opportunities, suggesting public
relations and communication strategies and tactics, and accomplishing other case objectives.
Through gathering media coverage and analyzing media content, the goal is to explore,
accomplish or suggest the challenges which reflect particular challenges of many Chinese MNCs,
solutions to these challenges or opportunities for growth and improvement and implications of
Huawei‘s emergence as an MNC.
For purposes of comparison and contrast, additional, but more narrow, documentation of
media coverage for Huawei‘s key competitors (approximately 15 to 70 articles per company from
the same 20 news publications), along with a brief content analysis of that media within the same
frame of time. Information in the content analysis, found in Appendix A, for Huawei and
competitors, includes the overall tone or opinion found within that particular news source, and are
rated either from ―positive,‖ ―neutral,‖ or ―negative.‖ Ratings are based on the overall message,
connotation, association, and context of the articles. Key reporters‘ opinions or associations of
Huawei (if there is a particular news beat a reporter covers) were also analyzed. The Appendix
also has a message summary, and overt opinions or associations used with Huawei are noted. If
Huawei commented on key issues or messages or was used as a source in an article, which was
also documented (includes Huawei‘s mentions, quotes, and usage as a source). Third party trends,
the key messages, overall coverage tone, and mentions, quotes or sources used for Huawei‘s
competitors, are used for comparison.
Due to the plethora of data used in the media analysis of Huawei Technologies Co., Ltd. and
print limitations, only the report of the content analysis and not the physical content itself (online
38
and/or print news articles) will be included. However material is available upon request via e-
mail at kraftjm@gmail.com.

3.2 Huawei Technologies Co., Ltd

Company Background
Founded in 1988 and based in Shenzhen, China, Huawei Technologies Co., Ltd. is a
telecommunications solutions provider and supplier of telecommunications equipment for both
national and international clientele. The company‘s commodities include wireless products,
network products, applications, software and terminals. It also offers mobile, broadband IP-based
and optical networks.
3
Huawei‘s global research and development (R&D) centers are located in
Silicon Valley and Dallas in USA, Stockholm in Sweden, Moscow in Russia and Bangalore in
India in addition to those in Beijing, Shanghai, Nanjing, Shenzhen, Hangzhou and Chengdu in
China. The company‘s products and solutions reach is in over 100 countries.
4
Huawei has 86,000
global employees and more than 37,000 work in its 14 R&D centers. Huawei reports it invests at
least 10 percent of annual revenues in R&D ($1.8 billion in 2008).
5

In April 2009, Huawei released its annual financial performance report for 2008. The
company generated revenues of $18.33bn in 2008, up 42.75 percent from 2007's $12.84bn
revenues, making Huawei the fifth largest telecommunication infrastructure supplier (in terms of
revenues) in the world. The report also states Huawei's clientele includes 36 of the world's top 50
telecom operators and a number of major carriers such as China Mobile Ltd. (CHL: NYSE) and
Vodafone Group plc (VOD: NYSE). Global markets accounted for 75 percent of the contract
values.
6
However Huawei commands only 20 percent of market share, globally, in the
telecommunications equipment market.
7

39
3.3 Industry Background

Telecommunications provides the services and equipment to link networks, televisions,
radios, cables, telephones, mobile phones, personal computers and laptops, and other wireless
devices into a global system. Technology within the telecommunications industry is designed to
transmit data, images and sound through cables. According to Forbes Digital, telecommunications
industry was formerly comprised of a ―club of big national and regional operators.‖ Globally,
deregulation along with now broken up and privatized government monopolies prompted
abundant competition.
8

Throughout the years, innovations in technology and market competition have spurred
tremendous growth in the industry. High-speed internet access and Digital Subscriber Line (DSL)
has become a commodity. While telephones are the industry's biggest source of revenue,
advances in network technology place greater emphasis on text and images. Other trends include:
(1) Mobile networks and services delivered within them, (2) Cloud computing
9
and (3) Growth of
―smart and embedded devices‖ like netbooks, smartphones, and readers.
The greatest barrier of entry in the telecommunications industry is the prohibitive costs of
owning and running a business. Residential and small business consumers are one of the most
challenging markets for the industry, relying heavily on price, brand names and efficient billing
systems to influence the consumer‘s purchasing decision. However corporate customers focus
purchasing decisions on quality and reliability of telephone calls and data delivery. While there is
domestic and regional competition, for purposes of this discussion, only Huawei‘s main
competitors, which are major international players of the telecommunications industry
specializing in corporate clientele, are mentioned, which include ZTE Corporation (ZTE), Cisco
System, Inc., Telefonaktiebolaget LM Ericsson (Ericsson), Nokia Siemens Networks, and
Alcatel-Lucent (See Appendix B for an overview of the telecommunications industry).
40
3.4 Huawei’s Challenges in the Global Market

Analysis of top-tier media coverage from January to June 2009 revealed that many news
publications consistently reported negative associations of Huawei with security concerns,
infringements on intellectual property, China‘s government and military, and ambiguous
corporate structure and financial performance. These negative associations in turn affected
Huawei‘s relationship with its stakeholders– government authorities intervene in major business
deals, some clients are uncertain their information is secure while using Huawei technology, and
some competitors and clients question the legitimacy and quality of Huawei‘s innovations. Based
on the media coverage, an estimated 75 percent of the articles are considered objective whereas
25 percent of the articles are opinion based or skewed. In cases where the news coverage is
objective, any negative opinions of Huawei are comments made by third-party news sources in
which Huawei was given an opportunity to respond to allegations but chose not to comment or
did not provide an adequate comment. In cases where articles are opinion based or skewed, the
author of the article was communicating his or her point of view or appears to not have offered an
opportunity to comment.

Security Concerns Damage Opportunities
The findings from the media coverage‘s content analysis, seen in Appendix A, indicated that
the most common association with Huawei is a security concern. This assessment is based on
third-party sources‘ statements from government entities and security analysts and opinions from
new business clients that Huawei failed to obtain. While the telecommunications company has
success in developing countries, whenever the bids for prospective deals with clients or
partnerships within the United Kingdom, United States or India come about, multiple news
organizations reported qualms in Huawei‘s capabilities as a reputable and reliable vendor or
41
business partner. Fear of security threats or disruptions in the political-national infrastructure are
presumed consequences should any business associated itself to Huawei.
It is no surprise that business consumers share this sentiment – Huawei has a shady past with
the international media and had a highly publicized failed merger with 3Com in 2007. Huawei
retracted a $2.2bn bid for the American telecom equipment maker after U.S. officials called the
deal a potential ―threat to national security‖ since 3Com provides computer security for the
Pentagon. The company also withdrew an earlier bid for Marconi, a British electronics and
information-technology firm, after U.K. party leaders called for an investigation of ―whether
China's government could use Huawei ties to Marconi to spy on the British defense industry.‖
10

Commentators in these news pieces tended to be industry analysts, political officials, or security-
affiliated think tanks.
While occasionally Huawei‘s representatives replied with comments and denied accusations
of being a security threat, the content analysis indicated that Huawei provided virtually no
evidence or convincing communication efforts which proved the contrary. Simply commenting
and denying the allegations is not transparent enough to effectively sway public opinion.

Huawei, the People’s Liberation Army and the Government – a Suspicious Association
Many concerns about Huawei being seen as a security threat stems from the company‘s
relationship with China‘s military and government. Huawei founder and chief executive, Ren
Zhengfei, is a former People's Liberation Army (PLA) officer who is considered to be ―the anti–
Steve Jobs‖ in the technology industry–he is reclusive and never gives an interview to foreign
media. While the world may know who started the Chinese telecom giant, the ownership structure
of Huawei is, as Newsweek phrases it, ―hidden in the shadows.‖
11
As indicated in the media
analysis, commentators such as industry and security analysts, government officials and telecom
operators question the company‘s ties to the Chinese military and government – many foreign
42
companies see this as a problematic and suspicious relationship. Huawei‘s entry attempts into
India‘s market in June 2009 proved to be a struggle, as any company with ties to the Chinese
military is controversial in the India. The Financial Times pointed out that ―Delhi has waged war
with China in the past over border disputes… and distrusts Beijing over its ties with Pakistan.‖
12

What deals Huawei did make with Indian companies are restricted.
13
Although little can be done
to diffuse the suspicions of overseas commentators over the relationship between Huawei, the
People‘s Liberation Army and the Chinese government, the qualities of truthfulness and openness
will be one step closer to abating the paranoia.
Huawei‘s close association to the Chinese government and military also reverts back to the
security concern. In January 2009, Huawei made a $400mn bid for Nortel Networks, which
meant expansion into the North American market. According to columnist Andy Greenberg of
Forbes.com, Huawei‘s ―murky history‖ with the government ―spooked‖ Nortel‘s customers, some
of whom carry sensitive U.S. government data.
14
Huawei is often linked to the paranoia of
industrial espionage. Any telecommunications links with foreign authorities through contracts
with major networks is considered a possible backdoor entry for Chinese spies. Throughout the
media analysis, much of the negative news coverage reveals that with every failing or stalling
deal and M&A, the most probable culprit is concerns regarding security, military and/or
government involvement.
As this example shows Huawei must also pay close attention to its associations with any
overseas governments or forms of authorities which may draw negative media coverage to the
company. No matter how lucrative, business relationships with any government, whether it is a
client or investor, should be carefully assessed for potential conflicts and consequences. Nokia
Siemens underwent a media-fire back lash when Iranians boycotted the company after it provided
Iran‘s government with a monitoring system in 2008. Iranian authorities are believed to have
used Nokia's mobile phone monitoring system and ―Webwasher,‖ an internet filtering system, to
43
enable Web censorship and to target dissidents, sparking controversy with Iran citizens as well as
with the United States and other Western countries. A Nokia spokesman, Ben Roome, said, "As
in every other country, telecoms networks in Iran require the capability to lawfully intercept voice
calls.‖ One former Iranian detainee, a journalist, said, ―I'd like to tell Nokia that I'm tortured
because they had sold this damn technology to our government." The journalist felt Nokia
exercised poor judgment and business sense and there is no excuse for selling this technology to a
government with a ―very clear background of human rights violence and suppression of dissent.‖
Some Tehran shops removed Nokia phones from displays, and one phone vendor said people felt
ashamed to have a Nokia phone.
15
This incident is frequently cited when media mention Nokia
Siemens. Huawei should keep this debacle in mind as a cautionary admonition of crisis aversion.
Although news media has not reported any controversial overseas business transactions about
Huawei to the same extent as Nokia experienced, Huawei must consider how their equipment is
used by a client. Although Nokia did not directly monitor and detain the Iranian citizens, they
failed to anticipate the likely applications of their products and services and how it affects third
parties. Sometimes in the future (if they have not already done so), Huawei will have to make a
decision about who its clients will be and how their products and services will be used. This
decision will weigh both the company‘s reputation and ethics.

Corporate Disclosure– No News is Not Always Good News
Chinese media like government-owned Xinhua News Agency give positive media coverage
to Huawei, however the company has yet to reach the level of media favorability that Alcatel-
Lucent receives from foreign press. Huawei has little transparency about its structural and
financial background, and because of this the media and commentators will always have concerns,
accusations and reservations about the telecommunications company. As noted in the media
44
analysis in Appendix A, repeatedly, Huawei remained reticent about its significant funding from
the Chinese government or details of its ownership and financial performance.
One of the major components to this transparency challenge is the absence of visible
leadership with Huawei. While there are representative spokespersons for the company, the media
analysis indicates Huawei‘s founder and chief executive, Ren Zhengfei, is the most mentioned
associate. References to Zhengfei often include the PLA, the Chinese government and the
Communist Party (he is a member). While he is frequently mentioned, it is commonly in
reference to his reserved persona with the media. Turning a cold shoulder to the foreign press
provokes heavy, and sometimes irreversible, criticism.
The other components to this challenge are Huawei‘s obscure ownership structure and
financial performance. Although the company alludes to its private ownership by Huawei
employees, media coverage suggests there is still much speculation about its ownership structure.
Huawei‘s annual financial highlights are reported to news agencies, however the company‘s
financial statements, compared to other MNCs, are vague and give little insight into the attributes
of monetary allocation and profits.
The media coverage and analysis for Alcatel-Lucent illustrates that Chief Executive Ben
Verwaayen shows leadership visibility and gave the company a voice in times of financial turmoil
and structural changes. In 2008 the company reported substantial losses of about 5bn EU.
Verwaayen both frequently and consistently defended the company‘s position, saying 2009 would
be ―a year of transition‖ and would get better. This ―transition‖ refers to reshaping the company
and extensive job cuts. However the company says it shows signs of gain and solid
performance.
16
Verwaayen‘s visibility and cooperation with the media proved to be constructive –
he commands a strong voice at CNBC, as he was a guest blogger and did a video spot about the
economic recession.
17

45
Technology Innovator or a Disregard for Intellectual Property
China‘s State Intellectual Property Office (SIPO) reported that Huawei filed 1,737 Patent
Cooperation Treaty (PCT)
18
patent applications in 2008. SIPO‘s director, Tian Lipu, said this
indicated ―that the innovation capability of the country and its enterprises improved."
19
However,
the legitimacy of these patents, as shown in the media analysis, is in dispute. Media coverage
noted Huawei‘s copyright lawsuit with Cisco and possibly stolen classified information from
Nokia and Excelcomindo.
In 2003, Cisco sued Huawei for ―copying computer codes used in routers, forcing the
company to pull the contested products from the market before dropping the case.‖
20
In February
2009, a Nokia spokesperson said the company became suspicious that an employee e-mailed
classified information on new network equipment to Huawei after monitoring employees‘ e-
mails.
21
Huawei made no comment of the incident. A month after the Nokia incident, Reuters
reported that Huawei suspended an employee suspected who tried to steal data during a visit to
Indonesian mobile firm PT Excelcomindo Pratama Tbk. Although Huawei says the employee
acted on his or her own accord, the company nonetheless apologized.
22
Although Cisco settled
with Huawei out of the court and the Nokia-Excelcomindo incidents are somewhat dismissed,
there is a negative association with the Chinese company that media will always recall.
Furthermore, with the existing impression that Chinese technology is not good quality, media
does not take Huawei‘s innovative capabilities seriously. Although Huawei thrives, the content
analysis illustrates that media coverage links Huawei to low-tech and minimal innovation as well
as a ―perceived lack of quality‖ and only thrives because of ―cost-conscious emerging markets or
in cost-sensitive areas of developed markets.‖
23
Huawei does not seem to acknowledge this
challenge. The company shows clout internally – it invests heavily in research and development,
as it has R&D centers in 14 nations, employs top Chinese talent and taps into foreign talent as
46
well.
24
However the innovation Huawei shows is with minor improvements on existing
technology developed by competition.

3.5 Huawei’s Opportunities and/or Solutions

The challenges Huawei encounters, although discouraging for the company‘s growth, are
manageable. Opportunities, which are achievable through public relations and some effort on
Huawei‘s part, involve strategies that can improve the company‘s reputation, performance, brand
awareness and stakeholder relationships. This includes third party credibility, transparent
communications and brand restructuring, all of which are realistic activities Huawei is capable of
accomplishing with its existing resources.

The Power of Third-Party Credibility
One way for Huawei to overcome the challenge of building credibility gaining trust of
prospective clientele and media commentators is to bring in new blood – make visible efforts to
hire or collaborate with third parties who have credible and respected backgrounds. The company
currently has existing strategic partnerships, acting as consultants on corporate management,
human resource management, financial management and quality control, with IBM, the Hay
Group, PricewaterhouseCoopers, Fraunhofer-Gesellschaft, Intel, Texas Instruments, Freescale
Semiconductor, Qualcomm, Infineon, Agere Systems, Microsoft, Sun Microsystems, and Hewitt
Packard.
25
Huawei should continue on this path to gain needed credibility.
In September 2009, Huawei announced that Matt Bross would be its new chief technology
officer (CTO). Bross, formerly a CTO for British Telecom and a veteran of the industry, also
serves on the board of the Alliance for Telecommunications Industry Solutions (ATIS), a U.S.
organization, which focuses on developing and promoting technical and operational standards for
47
international industries of communications and related information technology. Since 2005, he
was commissioner of the Global Information Infrastructure Commission (GIIC) and Regional
Director for Europe.
26
He is an industry leader with a solid resume and comes to Huawei with an
admirable reputation. The company‘s publicized induction of the high-profile Bross is an
indicator that Huawei wants to ―shed its image as an upstart Chinese maker of cheap telecom
equipment rip offs,‖ as BusinessWeek magazine phrased it.
27

However, since the announcement, Bross received minimal publicity. His visibility in the
telecommunication world is limited to perhaps only minor events. In April 2010, Bross will be a
keynote speaker for Cloud Slam Events‘ second annual global virtual event, Cloud Slam ’10, a
five-day virtual conference with the core topic being cloud computing.
28
As an acting
representative for the company, Bross needs to increase Huawei‘s visibility so the company can
gain acceptance in the technology and telecommunications communities. Bross can work towards
this goal by attending more publicized, highly engaged events such as the major
telecommunications conferences and technology or telecommunications tradeshows.
Another approach to gain third-party credibility is through M&As. Huawei‘s attempt to
acquire 3Com failed in 2007 largely because the company provides computer security for the
Pentagon, the headquarters of the U.S. Department of Defense. The connection between 3Com
and the Pentagon made Huawei‘s attempt to enter the U.S. market highly conspicuous and
suspicious, drawing negative media coverage. If Huawei wants its M&A efforts to be successful,
then the company must seek out reputable companies with who will not have an overwhelmingly
negative response to an M&A with the company.
Huawei can also further publicize its involvement or membership with third-party
organizations. The company‘s Web site shows it is a member of several trade associations,
accreditation panels and world-standards initiatives, such as the International Communication
Union and the European Telecommunications Standards Institute,
29
but does not effectively
48
publicize this information. These are assets which the company has yet to effectively use to aid its
attempt to gain credibility. Consistent and active involvement in these organizations, combined
with a media strategy which makes these efforts public knowledge, lends more credibility and
positive visibility to neutralize negative media coverage.

Trust Comes from Greater Transparency
Strong investor relations are a significant multi-purpose instrument to use with stakeholders.
For Huawei to gain key investor, partner/affiliate, employee or consumer support, disclosing
financial support on a quarterly basis rather than an annual basis is important. Evidence of a
strong financial background, demonstrated both in the media and its internal communications,
factors into the decision-making process of whether: (1) companies decide to merge with Huawei,
(2) investors or prospective investors want to support Huawei, (3) employees or prospective
employees want to work with Huawei, and (4) consumers determine the value of Huawei‘s
products or services.
Assessment of financial performance determines the health of the company and addresses
financial concerns of the stakeholders (includes the investors, companies merging with Huawei,
employees and consumers). The investors, companies merging with Huawei and employees have
a more direct tie to the company‘s financial performance. Since any gains or losses Huawei
experiences affect those particular stakeholders, investors want to know what the projected
business plan is for their company‘s future growth, how and where their money is invested and to
what extent they benefit from investments. Companies merging with Huawei want to know how
well the company financially accommodates employees and how the projected business plan
positions merging companies. Companies also want to know how previous mergers affected the
financial performance of Huawei (gains or losses) and what the projected revenue is expected
from Huawei in the future. On the other hand employees or prospective employees want to know
49
how they are financially accommodated and how much job security they have. They also want to
know how much ownership of the company they have (if there is an employee stock ownership
plan) and if there are opportunities for future promotions and increased benefits the longer they
work at Huawei. Finally consumers, although they are not entirely affected by any financial gains
or losses Huawei experiences, want to know if a bigger and more successful company is handling
their account because financial performance can indicate operative and technological
performance associated with a product or service.
According to the Global Reputation Pulse, a study on corporate reputation conducted by the
Reputation Institute, an international research organization, findings indicate that the
telecommunications industry is ―struggling with trust, admiration and good feelings among the
general public around the world.‖ Huawei was among the 600 largest companies around the
world ranked in this study. However, the company was not even within the first 200 companies
ranked in the listings, meaning Huawei‘s reputation may be either is ―poor,‖ ―weak‖ or
―average.‖
30
While this fact appears to be a weakness, there lies the opportunity. As the entire
telecommunications industry suffers from similar struggles with reputation, Huawei can act as an
industry leader and build up trust above its competitors.
Huawei needs to dispel stakeholders‘ concerns about credibility of products and services.
Transparency is essential – that means reasonable disclosure of the Huawei‘s ownership structure,
finances and operations. Stakeholders would take comfort knowing the company‘s projected
plans, of business or communication goals, for the next five to 10 years. The plan could include
new market, product and service expansions or marketing and public relations strategies. This
does not mean Huawei needs to divulge trade secrets, but the company cannot continue to remain
opaque about its ownership and financing details.
If Huawei gets funding from the government, then this should be publicly acknowledged. It is
true that government involvement raises a few eyebrows regarding China‘s intentions, but
50
Huawei can communicate this is a standard business practice in China. As to extent of the
government‘s involvement in Huawei‘s business decisions, it is unknown. However if the
company is to gain foreign (advanced economies) stakeholder trust, then it is suggested that the
government minimize involvement with Huawei and communicate this fact.

Build Brand Equity – a Brand Personality Makeover for Huawei
As mentioned before, Huawei – like many Chinese MNCs – needs reputation management.
Although BusinessWeek magazine listed Huawei as one of the ―world‘s 10 ‗most influential‘
companies, alongside Apple, Wal-Mart, Toyota and Google,‖ in 2009, outside of its cushioned
environments of well-establish markets, it has little brand awareness internationally.
31
Interbrand‘s
Made in China 2008 study reported that Huawei only had 12 percent brand recognition from
consumers outside of China.
32
Huawei may have the resources and financial support which is
comparable to bigger brand names, but the telecommunications company lacks branding power, a
setback its competitors also suffer experience.
In Interbrand‘s Best Global Brands 2009 report, only one telecommunications company
managed to make the list in the top-100 globally ranked brands. The reason is that the
telecommunication industry has ―not yet managed to conquer consumers‘ hearts and minds
internationally. They remain widely seen as utilities providing technical access to mainly local
telecommunication networks.‖ The global branding consultancy firm suggests there are a number
of reasons this perception exists. Most telecommunication companies underwent several
continuing changes in their identities during the last two decades, creating a consumer view that
these companies are not ―fully developed‖ in their position as brands and lack a distinct brand
personality to ―guide their behavior along the customer journey.‖ These companies lack a ―stable
conviction‖ of what product or services they offer, debating whether they should or could be
content providers rather than just carriers and in turn left consumers uncertain of what they have
51
to offer. Most telecommunications companies have a predominately national presence and only
recently went global. This fact, combined with the large number of M&As within the industry in
recent years, creates a challenge in presenting a ―unified and strong‖ brand. Although the
telecommunications industry has changed the world and how everyone sees it, the industry is still
in its infancy.
33

Huawei has an opportunity of gaining an advantage over its competitors if it can identify and
establish its brand by positioning itself using Points of Difference (POD), distinctive features
such as design and innovation strongly associated with the brand or company, and Points of
Parity (POP), fundamental features like quality, function and value commonly expected from a
product or service, and then develop strategies to market assets.
34
If PODs are not advantageous
enough to grab a stakeholder‘s attention, then Huawei must reevaluate and cultivate its assets. As
Huawei sells strictly within a business-to-business market, competition is intense. In bidding for
client contracts, innovative features or services factor more heavily into a purchasing decision
rather than price, and many services and products for networking show little variation and are
usually viewed by clients as a POP, or commodity, as Table 5 demonstrates . With innovation, the
POD, the advantage, lies in being the first company to create new or ground-breaking
technologies before the competition does. The media analysis indicates Huawei usually competes
for contracts with price first and innovation second. The innovations Huawei possess are often
from improvements on existing technologies.
35
The company needs to have PODs which give
Huawei brand equity, a valuable asset for market performance. China is looking for businesses
that can build leading brands in the global market. If Huawei is not willing to make that effort,
then Huawei is not the proper role model for other Chinese MNCs.

52
TABLE 5: POP and POD of Huawei
Points of Parity

Points of Difference
 Offers high-quality networking products
and services
 Availability within 2G, 3G and 4G (―G‖ as
in generation) networks
 Powerful resources and technology
 Basic services are treated as commodities
 Domestic and/or international reach
 Investment in research and development
Existing PODs
 Low operative costs
 Identifiable logo
 As of September 2009, established themes:
―Responsive,‖ ―Collaborative, and
―Professional‖
36

 Builds upon or improves existing
technologies to meet consumer demands
37

Suggested PODs
 Ground-breaking innovation
 Solid marketing and communication skills
 Media savvy personality
 Transparent public relations capabilities
 Leadership visibility

As mentioned in the list of challenges for Chinese MNCs, the obstacle for Chinese brands
going global is reputation management. Interbrand‘s Made in China 2008 report indicated that
common overseas branding issues include inexperience in marketing or promotion, lack of
awareness, poor communication, or low-quality reputation– all of which can potentially be
resolved with an effective public relations strategy (see table 5).
Huawei‘s established themes for service positioning are ―Responsive,‖ ―Collaborative, and
―Professional‖ and are promoted through posters featuring employees as models.
38
When
interacting with stakeholders, this approach is too simplified and ineffective in promoting a
positive brand image and personality. Huawei needs to position itself as the face of quality and
innovation, a champion of better business practices and ethics, a brand ambassador and role
model to China, with a transparent and positive media figure.
Huawei‘s Web site, www.huawei.com, plays host to a plethora of information and
multimedia tools which can get media, clients and other stakeholders acquainted to Huawei‘s
brand. Although Huawei has the opportunity to get people more familiarized with the brand, the
obstacle is how to encourage existing and prospective stakeholders to visit the Web site. Another
53
obstacle is the relatively low level of engagement Huawei has with the media. The company has
smaller marketing and advertising departments compared to Western telecommunications
companies and spend a fraction of what Western telecommunication companies do as a
percentage of revenue, as mentioned in one article of the media analysis. Ross Gan the company's
chief spokesperson, says the reason for such minor investment in media relations is because the
business focuses almost solely on influencing "between 3,000 and 5,000 key decision makers
working in the telecom industry."
39
While this may be a logical rationalization to have fewer
public relations activities, perhaps it digresses from communication goals Huawei should
consider and are lost opportunities. As Huawei works in a business-to- business market,
customers tend to be institutions rather than individual consumers. There are different
stakeholders in these types of markets, and the public relations activities in tend to differ in a
business-to-business market compared to a business-to-consumer market. There are different
audiences, influencers, media channels and messaged involved. In the case of Huawei, the clients‘
purchasing decisions are influenced by what they hear, read and watch in both mass and niche
media – content may include Huawei‘s performance record with previous clientele or any
positive or negative news coverage. Technological developments in communication have ensured
international audiences that what happens between Huawei and a current or prospective client in
one part of the world can easily be read or heard about in another part of the world. Any sort of
negative media coverage can now be amplified by news wires, online news publications, social
media (such as bloggers and niche publications or Web sites), and other multimedia information
aggregates. Clients may also be influenced by Huawei‘s involvement or role in the
telecommunications community, its third-party affiliations, and how it interacts with the
governments of the clients‘ host countries. Some these decision-making factors are trouble spots
for Huawei either because the media, on several occasions, portrayed the company in a negative
light, governments were suspicious of the company because of its lack of transparency or
54
corporate disclosure, or the company did not properly showcase its achievements or deliver
messages to the stakeholders.
As mentioned previously, Huawei needs to position itself as the face of quality and
innovation, a champion of better business practices and ethics, a brand ambassador and role
model to China, and have a transparent and positive media figure. These qualities need to
influence the stakeholders that are most valuable in market entry – Huawei‘s current clientele, the
executives, media platforms that may influence the executives‘ purchasing decisions, fellow
telecommunications companies that may merge with Huawei and the policy regulators and
government watchdogs who determine if Huawei is even allowed to complete a business
transaction (see Huawei-3Com M&A failure).
Table 6 illustrates some prospective forms of communication which can better position the
Huawei brand to its stakeholders. Media channels are chosen based on the extent those media
channels influence the decision making of the key stakeholders. For example, social media and
networks, although they are not responsible for generating positive news coverage for Huawei,
help Huawei enter into a dialogue with key constituents who regularly engage the
telecommunications company‘s target audiences.

55
TABLE 6: Prospective media channels, audiences and messages for Huawei
Media Channels Audiences/ Goals Messages
Mass media, top-tier
publications (print or online),
news wires
(1) Telecom Companies/ Opportunities for
partnerships or M&As to gain market entry
(2) Existing or prospective clientele (industry
leaders of companies or organizations)/
Influence purchasing decision
(3) Government bodies and regulatory
agencies/ Demonstrate transparency to
build credibility for those who might
determine market entry in a host country
Messages position Huawei
as the face of quality and
innovation, a champion of
better business practices
and ethics, a role model of
brand ambassador for
China, and a transparent
and positive media figure.
Messages are as followed:

(1) As a telecom company
that values trust,
relationships and
consumer confidence,
Huawei offers leading-
edge products or
services for a
competitive price.
(2) Huawei understands
telecommunications is a
content-sensitive
industry and offers
secure products and
services.
(3) Huawei is working
towards a more
transparent, socially
responsible and media
friendly environment so
all can gain insight into
the bright future of the
Huawei brand.
(4) By championing better
business practices and
heavily investing in
R&D, Huawei provide
safe and high-quality
products and services.
Niche publications (print or
online) or blogs for:
(1) Telecom Industry
(2) Trade associations for IT,
mobile phones, networks,
electronics, etc.
(3) Industry leaders and
decision-makers
(1) Trade associations/ Gain third-party
credibility or support
(2) Existing or prospective clientele (industry
leaders of companies or organizations)/
Influence purchasing decision
(3) Telecom Companies/ Opportunities for
partners or an M&A to gain market entry
First-party communications
from Huawei‘s:
(1) Media releases
(2) Web site
(3) Industry reports
(4) Blogs/ Social networks
(5) Financial reports
(6) Factory tours
(7) Conferences
(1) Mass media; new wires; bloggers; niche
publications/ Provide information from a
controlled source and generate positive
news coverage for Huawei
(2) Telecom Companies/ Present Huawei‘s
assets and brand value, highlighting
opportunities for partners or M&A deals to
gain valuable market entry
(3) Government bodies and regulatory
agencies/ Demonstrate transparency to
build credibility for those who might
determine market entry in a host country
Trade shows and relevant
industries events
(1) Existing or prospective clientele (industry
leaders of companies or organizations)/
Showcase innovations and market Huawei
brand to influence purchasing decision
(2) Telecom Companies/ Demonstrate
innovative assets to build partnerships or
create M&As to gain market entry
(3) Trade associations/ Gain third-party
credibility or support

Build up Existing Markets, Showcase to New Markets – and Doing it Effectively
Outside of China, Huawei currently offers products and services directly to businesses rather
than individual consumers. The company focuses more on developing markets rather than more
lucrative and advanced economies because there are fewer barriers of entry and fewer
competitors. In China, Huawei‘s key clients are companies that maintain their own networks as
well as telecom operators and financial institutions while overseas, most frequent clientele comes
56
from commercial contracts within developing countries in the Asia-pacific region, Middle East,
Africa and Latin America.
40
Huawei‘s overseas contracts accounted for 75 percent of its contract
values in 2009.
41
Huawei relies almost entirely on overseas sales to keep its operations going, and
although that is seemingly an impressive accomplishment for Huawei in its efforts to becoming a
model Chinese MNC, it must be noted that the company commands only 20 percent of market
share, globally, in the telecommunications equipment market, hardly making it stand out among
its competitors or other foreign MNCs.
42
have clout in the telecommunications industry, there are
key markets which Huawei must pursue but has yet to prevail in– the United States and Japan–
the world‘s two largest markets. Edward Yu, chief executive of Beijing-based researcher
Analysys International, says, "If anyone wants to be a world class telecom gear maker it must be
in those two markets.‖ Huawei has less than two percent share in those markets. Yu says, ―The
best chance for Huawei, if it wants to gain more market share in those two countries, is to
transform itself and become more transparent."
43

Huawei‘s aforementioned challenges– including the company‘s struggle with security
suspicions as a vendor and business partner, its seemingly dubious relationship with China‘s
government and military, its lacking corporate disclosures, and its reputation for being a low-tech
and low-quality innovator – all amass in a public relations setback in which the company is
unable to build its brand and gain market share in the more lucrative and influential economies.
However Huawei‘s challenges can be remedied with fundamental communication strategies
within the opportunities previously discussed which includes third-party credibility, stronger
investor relations and strong brand positioning and communication strategies. As Huawei builds
greater brand equity in already established or developing markets, using strategies previously
discussed, and builds a better relationship with stakeholders, the company increases its likelihood
of gaining ground in markets such as the United States, Japan, Europe and the United Kingdom.
57
In addition to building brand equity before moving into the more developed markets, Huawei
made strategic moves to showcase its innovations to the world as highly publicized venues – at
the CommunicAsia 2009 exhibition in Singapore
44
and the Mobile World Congress in Spain.
45

During these events the company displayed its new line of high-end smartphones integrated with
either a Window or Google Android operating system, and both occasions received positive
reviews. Huawei demonstrated its heavy investment in research and development, and major
exhibitions such as these will attract the attention of sought-after clientele.
In 2008, Huawei gradually gained some ground in Europe, grabbing $3bn of the $30bn
awarded contracts, and as of 2009 the company has a 20 percent market share in Europe.
46

Although Huawei may win contracts through price competition in Europe, the company will need
more than pricing advantages to cut deals in the United States. Huawei may need to start small,
dealing with smaller businesses or networks, building its brand and credibility and later
transitioning to bigger and more influential clientele. If Huawei decides to approach larger
contracts with clients who are considered influential in their home country, it may draw the
attention of government authorities which may in turn slow down or halt Huawei‘s transition into
the United States, as it did before in the 3Com case. This will take a few years, and Huawei may
not have the time or patience to start smaller and build its way up. Other than through M&As,
building an influential client base could be the company‘s most feasible alternative for market
entry in the more developed economies.

58
Chapter Three Endnotes

1
Joshua Kurlantzick, Charm Offensive: How China's Soft Power Is Transforming the World, ( New Haven: Yale
University Press, 2007.)
2
"Implementation of the Strategy of Rejuvenating Trade Through Science and Technology Came to a New Stage,"
Ministry of Commerce, The People's Republic of China, January 16, 2006,
http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/200601/20060101366145.html.
3
―Huawei Technologies Co., Ltd.," BusinessWeek, 2009,
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1259829.
4
"Corporate Information," Huawei, 2009, http://www.huawei.com/corporate_information.do.
5
Ray Le Maistre, "Huawei Reports 2008 Revenues of $18.3B," Light Reading Europe, April 22, 2009,
http://www.lightreading.com/document.asp?doc_id=175673.
6
Ibid.
7
Tarmo Virki, "Ericsson market share jumps in Q4: Dell'Oro," Reuters, February 16, 2010,
http://www.lightreading.com/document.asp?doc_id=175673.
8
Forbes Digital, "The Industry Handbook: The Telecommunications Industry," Investopedia, 2010,
http://www.investopedia.com/features/industryhandbook/telecom.asp.
9
See ―Glossary of Terms‖ for definition or further detail.
10
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
11
Ibid.
12
Kathrin Hille and Joe Leahy, "Huawei rejects Indian security concerns," Financial Times, June 3, 2009,
http://www.ft.com/cms/s/17865954-5066-11de-9530-
00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F17865954-
5066-11de-9530-00144feabdc0.html&_i_referer= .
13
"Huawei wins 2 bln USD orders from India company," Xinhua News Agency, May 20, 2009, www.xinhua.com.
14
Andy Greenberg, "Nortel's China Syndrome," Forbes.com, January 12, 2009,
http://www.forbes.com/2009/01/11/nortel-huawei-buyout-tech-enter-cx_ag_0112nortel.html.
15
Saeed Kamali Dehghan, "Iranian consumers boycott Nokia for 'collaboration'," Guardian.co.uk, July 12, 2009,
http://www.guardian.co.uk/world/2009/jul/14/nokia-boycott-iran-election-protests.
16
AFP, "Alcatel-Lucent reports 5-bln-euro loss in 2008," Dow Jones Factiva, February 4, 2009,
http://www.factiva.com/.
17
"Alcatel-Lucent CEO: Tired of the Doom Sayers," CNBC, January 29, 2009,
http://www.cnbc.com/id/28911496/site/14081545.
18
See ―Glossary of Terms‖ for definition or further detail.
19
Xuequan Mu, "China moves up in international patent application rating ," China View, February 4, 2009,
http://news.xinhuanet.com/english/2009-02/04/content_10764477.htm.
20
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
21
AFP, "Nokia threat to quit Finland unless law changed: report," Dow Jones Factiva, February 2, 2009,
http://www.factiva.com/.
22
Kirby Chien, Andreas Ismar, and Tarmo Virki, "Excelcomindo says stops Huawei man stealing data," Dow Jones
Factiva, March 20, 2009, http://www.factiva.com/.
23
"The flaws in Chinese business," The Economist, February 19, 2009,
http://www.economist.com/businessfinance/displayStory.cfm?story_id=13145129.
24
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
25
―Huawei Technologies Co., Ltd.," BusinessWeek, 2009,
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1259829.
26
"Cloud Slam 10'," Cloud Slam Events, January 14, 2010, http://cloudslamevent.wordpress.com/2010/01/15/cloud-
slam-events-call-for-papers/.
27
Om Malik, "Huawei Unveils Grand Ambition in Naming Bross CTO," Businessweek, September 30, 2009,
http://www.businessweek.com/technology/content/sep2009/tc20090930_035131.htm.
28
"Cloud Slam 10'," Cloud Slam Events, January 14, 2010, http://cloudslamevent.wordpress.com/2010/01/15/cloud-
slam-events-call-for-papers/.
29
"Standards Organization," Huawei, 2010, http://www.huawei.com/standards/standards_organizations.do.
59

30
Global Reputation Pulse scores are based on questions measuring trust, admiration and respect, good feeling and
overall esteem (captured in the Pulse score on a 0-100 scale). "2009 Global Reputation Pulse," Reputation Institute,
May 8, 2009, http://www.corporatereputation.it/idee/docs/Global_Pulse_2009_Free_Global_Report.pdf.
31
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
32
"Made in China 2008: The Challenge for Chinese Brands Going Global," Interbrand, 2008,
http://www.interbrand.com/images/studies/Made_in_China_2008.pdf.
33
"Best Global Brands 2009," Interbrand, September 16, 2009,
http://issuu.com/interbrand/docs/bgb2009_magazine_final.
34
Kevin Lane Keller, Strategic Brand Management, 3rd Edition, (Upper Saddle River: Pearson Education Inc., 2008),
104.
35
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
36
"Huawei Service," Huawei,2010, http://www.huawei.com/publications/view.do?id=6046&cid=11341&pid=2043.
37
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
38
"Huawei Service," Huawei,2010, http://www.huawei.com/publications/view.do?id=6046&cid=11341&pid=2043.
39
Craig Simons, "Production lines at Huawei are perfect. Marketing isn't.," Newsweek, June 18, 2009,
http://www.newsweek.com/id/207381.
40
"Company Profile - Huawei Technology," MarketAvenue, June 1, 2009,
http://www.marketavenue.cn/download/profile/CompanyProfile_Huawei_2008%28Final%29.pdf.
41
Ray Le Maistre, "Huawei Reports 2008 Revenues of $18.3B," Light Reading Europe, April 22, 2009,
http://www.lightreading.com/document.asp?doc_id=175673.
42
Tarmo Virki, "Ericsson market share jumps in Q4: Dell'Oro," Reuters, February 16, 2010,
http://www.lightreading.com/document.asp?doc_id=175673.
43
Kirby Chien, "China's Huawei needs makeover to win big markets," Reuters, July 1, 2009,
http://www.reuters.com/article/idUSTRE5601DX20090701.
44
"Huawei Branded Smartphones Showcased at CommunicAsia 2009," Huawei, June 16, 2009,
http://www.huaweidevice.com/worldwide/newsIndex.do?method=view&newsId=105.
45
Kent German, "Huawei shows new Android phones," Cnet, February 18, 2010, http://reviews.cnet.com/8301-
13970_7-10456117-78.html?tag=mncol.
46
Zijing Wu and David Merritt, "Huawei Sees European Market-Share Gain, ‗Breakthrough‘ in U.S.," Bloomberg,
August 24, 2009, http://www.bloomberg.com/apps/news?pid=20601087&sid=aTGMh0rzqkM0.

60
Chapter Four
Strategic Implications of Huawei’s Case

4.1 Huawei’s Emergence as a Multinational Corporation

The intention of the case analysis for Huawei thus far has been to illustrate that the
telecommunications company has (1) Challenges which reflect particular challenges of many
Chinese MNCs; (2) Solutions to these challenges or opportunities for growth and improvement;
and (3) Implications of its emergence as an MNC.
At the moment Huawei operates within business-to-business markets, most of which are in
developing nations, but as the telecommunications company expands to more the more influential
markets of the United States and Europe, it gradually gains brand awareness. The first few years
of Huawei‘s entry into the more advanced economies are critical, and the company‘s first
impression in both developing and advanced economies alike may be a lasting impression.
Huawei must keep in mind that although there are fewer barriers to entry or competitors in the
developing economies, there are still challenges in those countries which echo the challenges of
advanced economies. Huawei needs to maintain a consistent brand personality and business
conduct in all countries. Journalism is now globally integrated, and any negative media coverage
in one country can now easily be read about in another country on the other side of the world.
Although the company has many challenges entering these markets, instead of being reactive
to obstacles such as the negative media coverage it receives, failed M&A attempts and
government scrutiny and interference, Huawei must be proactive and recognize these challenges
can turn into opportunities if it establishes solid public relations strategies sooner rather than later.
Developing strong investor relations, brand positioning, communication plans and credibility can
61
be accomplished and sometimes better managed when Huawei understands and is prepared to
address a new market‘s dynamics early on.
Huawei recently won a large contract with a Scandinavian government, said Allan Zhang,
director of China Business Centre of PriceWaterhouseCoopers UK, a possible indicator that the
company‘s status as a telecommunication provider is transitioning into a better position.
1
Near the
end of 2009, Norwegian telecoms group Telenor picked Huawei to replace its entire mobile
infrastructure in Norway, first built by Ericsson and Nokia Siemens Networks. This was a major
development for the company within the telecommunications industry. While Telenor awarded
the contract based on price, it also factored in Huawei‘s demonstrated growth as a technical
innovator. ―Huawei has established itself as a serious competitor,‖ said Morten Karlsen Sorby,
the head of global business development at Telenor. ―They have been able in a very short period
of time to build the necessary competence and innovation.‖
2

As Huawei is in a sensitive industry, the telecommunications company is trying to
accomplish as much as it can on a commercial basis, said Zhang. Although Huawei is gradually
improving its brand and stakeholder relationships, Zhang said products made in China are still
regarded as low price and low quality. Chinese people want to change that negative image and in
recent years became more technologically focused, he said.
3
Huawei is gradually paving the way
for other Chinese MNCs, however this does not mean that Huawei is improving the reputations of
other Chinese MNCs. Rather the company is opening a door for foreign consumers to reconsider
existing assumptions that Chinese products and services which are offered under Chinese brands
are low quality, cheap and lack innovation. Huawei is making the world look at China in a new
way. The telecommunications company is gradually breaking through negative media perceptions
and is becoming a case example of China‘s potential to be more than the world‘s biggest low-cost
factory. Once unfamiliar brand names are now being recognized and the global corporate order is
changing with companies from China climbing the ranks.
62
4.2 Opportunities for Chinese MNCs

Brand Building: Challenging the MIC Stigma
As mentioned in the list of challenges for Chinese MNCs, the problem with Chinese brands
going global is the lack of reputation management. Interbrand‘s Made in China 2008 report
indicated that almost all overseas branding issues, such as inexperience in marketing/promotion,
lack of awareness, poor communication, or low quality reputation, have the potential of being
resolved with a good public relations strategy (see Table 7). Kevin Lane Keller, author of
Strategic Brand Management stresses that to build good brand equity the company must identify
and establish brand positioning and plan and implement brand marketing programs.
4

TABLE 7: ―MIC 2008‖ survey response: What most prevents Chinese brands from succeeding in overseas markets?
5

For a Chinese MNC to build a competitive advantage for its product or service, it must
position itself using Points of Difference (POD), distinctive features such as design and
innovation strongly associated with the brand or company, and Points of Parity (POP),
fundamental features like quality, function and value commonly expected from a product or
service.
6
A good example of a Chinese MNC using POD and POP is Air China, a state-owned
Chinese multinational commercial airline (see Table 8 for details). The airline established a
recognizable logo and meaning for its brand, a core corporate culture, a mission of ―Four Hearts‖
63
service of reassurance, satisfaction, easiness and sensation to its passengers, and free services not
standard of many airlines.
7
Air China has an clear identity, a brand position which boasts its POP
and POD, brand associations, and qualities which are valued by the consumer.
TABLE 8: POP and POD of Air China
Points of Parity

Points of Difference
 In-flight service
 Safe flight experience
 First class, business class and coach flight
choices
 Domestic and international destinations
 Memberships and promotions

 Multilingual flight attendants
 Signature logo with a meaning (a ―lucky‖
phoenix shaped like VIP)
 Signature employee uniforms
 Free food and beverage services
 Free and individual in-flight entertainment
 "Four Heart" services of: reassurance,
satisfaction, easiness and sensation.

After identifying and establishing their brand‘s personality MNCs must develop a program to
market their assets. As indicated earlier in Table 4, the most valued attribute in Chinese products
is not the benefit of low price (which only six percent of respondents attributed). Instead, a more
familiar connection to the MNC and championing of attributes like quality, safety and innovation
is important for success. Tsingtao, a Chinese-owned brewery, entered the U.S. market in 1972,
and since then has become the number one sold Chinese beer in the United States. The key to the
company‘s success was its relationship marketing strategies.
Like Air China, Tsingtao offers POPs like the standard qualities and benefits of other beers in
the industry, but also offers PODs through its experiential campaigns across America and a
window to the beer maker‘s Chinese roots within its online strategy which ultimately improved
the company‘s brand reputation. Overall, media coverage did not make any connection between
the beer and the negative perceptions commonly associated with ―Made in China‖ products or
brands. Instead, media coverage is generally positive and only mentions Tsingtao‘s public
relations campaigns, its history as a beer producer, and its rich Chinese heritage. The constant and
consistent public relations campaigns left little else for the media to report, filling the void
64
normally reserved for potentially negative media coverage. In 2009 alone, Tsingtao beer did a
cross-country tour with master chef and national U.S. television host, Martin Yan, in the ―2009
Yan Can Cook Road Show.‖ Yan appeared at professional tradeshows, supermarkets, festivals
and consumer events, offering cooking demonstrations while using Tsingtao beer either as a food
pairing or key ingredient.
8
Tsingtao‘s online strategy, rather than using a Westernized outward
appearance, warmly invited visitors into Chinese national pride and heritage, offering links to
China‘s travel, culture and business. Tsingtao also entered a strategic partnership with the
Cleveland Cavaliers, an NBA team, as the official Chinese beer of the team‘s sports arena.
9

Leveraging an MNC‘s assets (not including low price) while building relationships with the
stakeholders is a priority. Communication tactics must not be cold, calculated and veiled – that
only incites distrust and suspicion. Chinese-owned MNCs must have a more open, light and
somewhat more sophisticated personality. Just as Air China and Tsingtao have a face and a
personality to their companies, so should more Chinese MNCs. It is not enough for a Chinese
MNC to offer or guarantee the basic points of parity in a product or service in exchange for
stakeholder trust and loyalty. The relationships between a business and its stakeholders are built
based on the quality and level or engagement. Engagement with any of the stakeholders can take
on many forms such as additional services or product benefits, community involvement, media
outreach, advocacy for better industry standards and practices, internal relations, investor
relations, etc. Engagement is used when a company wants to seriously consider the stakeholders‘
views and involvement with the company and wish to communicate a mutual care, respect,
acknowledgement, understanding and commitment to fulfilling the stakeholders‘ wants and needs.
This two-way communication not only helps to shape and define a brand personality but also may
even help drive long-term sustainability and shareholder value by reducing any cynicism or
distrust associated to stakeholder neglect.

65
Mergers and Acquisitions of foreign brands – will it help or hurt?
As mentioned earlier, the prospect of M&As for any MNC is a great challenge when there are
clashes in corporate cultures, reputational standoffs, and a drop in stakeholder confidence,
however, that is just one possible outcome for an M&A. What makes an M&A successful really
depends on the company that chooses to take the lead.
In 2009, Ford Motor Co. put Volvo, the Swedish automotive brand, up for sale, and multiple
Chinese automakers showed an interest in buying.
10
Jodi Xu, writer for the Wall Street Journal
Deal Journal blog, listed a few concerns raised by stakeholders should a Chinese automaker
decide to merge, with the key question being— ―would buying a brand with a reputation as one of
the safest cars in the world buck up a Chinese buyer or tarnish Volvo?‖ The blog mentioned some
key concerns demonstrative of the reputation issues of most Chinese MNCS. While Chinese
automotive technology has improved, there were still doubts of whether Chinese automakers
were at the ―level of the international benchmarks.‖ It was a question of if a Chinese company
could and would maintain the quality of production that Volvo was so commonly known for –
would the production line be in Sweden or China, and if it goes to China, would the ―Made in
China‖ reputation ruin the Volvo image. Another concern was if a Chinese buyer would keep
Volvo‘s existing production team, as there were M&A challenges in ―cross-hybridization,
revenue synergy and how to make different cultures work‖.
11

Xu also mentioned a Chinese overseas M&A failure that happened five years earlier, in
which Lenovo Group Ltd. and International Business Machine Corp. (IBM) merged its personal-
computer division—―Consumers had a hard time gaining confidence in the new ownership even
after the Chinese acquirer decided to keep most of IBM‘s original sales and technical supports
teams‖ – U.S. market share declined.
While all of Xu‘s points are daunting and show little optimism for Chinese MNCs, there is
always room for growth and opportunity. By merging with a well known and reputable global
66
brand, an M&A lends credibility and brand awareness. While Lenovo had a shaky start in its
merger with IBM the company survived and proved its resilience after a major recession. The
Chinese-owned computer company is considered the ―only major successful takeover of a foreign
brand by a Chinese company.‖ Lenovo had $3bn in revenues before the IMB deal and is today a
$15bn global PC company and is placed on the world stage.
12

In March 2010, Geely Motors, a privately owned Chinese automaker, bought the Volvo Car
Corporation. The company is relatively unknown outside of China, and it core vision is to "Build
affordable cars for the masses," a strategy that may not bode well for the Volvo image. Geely will
have the choice to maintain operations in Sweden, known for its high-labor costs, or to transplant
production to China. Echoing Xu‘s sentiments, Michael Dunne, president of Dunne & Company,
an investment advisory firm, questions how well Geely will preserve the Volvo brand.
13
The best
course of action is to preserve the car company‘s pristine image while enhancing the Chinese
company‘s reputation with teamwork and compromise from both Volvo and Geely. If Geely takes
care in maintaining the Volvo brand, then perhaps the car company will experience a boost of
consumer confidence in its own brand.
When IMB and Lenovo merged, they made the effort to address the cultural differences.
Yang Yuanqing, the former Lenovo CEO, declared English as Lenovo's official language. Yang
also understood that despite national pride, IMB‘s insistence on keeping a headquarters in New
York, rather than having dual headquarters in U.S. and China, was the better choice, saying,
"Putting the headquarters in New York tells our global customers that we're a global company."
14

Supportive tactics that may lead to a successful outcome for merging companies is to develop
an M&A management team, using employees from each company, to gauge and handle the
possible stakeholder issues or reactions, mentioned earlier in the MNC challenges. Stakeholders
include employees, investors, consumers and media. The message that the merging companies
67
must communicate are what they are doing to ensure the merger is a success and what the
stakeholders can do to ensure the merger is a success. .

Becoming Industry Leaders
When first globalizing a brand, a MNC has the opportunity to take responsibility and give a
strong and meaningful first impression, allowing the brands success and becoming a global leader
of its industry. That means delivering on promises to the stakeholders and offering a brand
personality that is contrary to the negative MIC reputation.
In Interbrand‘s Made in China 2008 report, the industries in which respondents expected
China to be a global leader were predominately personal computers and laptops, personal
electronics, mobile phones and home appliances (see Table 7). Interbrand attributes this to the
acquisition of recognized and valuable brands, like the Lenovo-IBM merger and Haier‘s 2005
acquisition of a number of local U.S. brands.
15

TABLE 9: ―MIC 2008‖ survey response: In the next five years, I expect a Chinese brand to be a global leader in:
16

An industry leader is not solely defined as the company with the greatest market share, profit
or sales, rather it is a company that also sets standards for products and services and builds a
strong public brand. For emerging Chinese MNCs to thrive and become leaders within their
68
industry, companies must either hire foreign talent or train domestic hopefuls who understand the
dynamics of working in and leading a international company. While different industries require
different sets of skills and knowledge, for any company to become a top-tier in its industry, it
requires top management to wear multiple hats and work on a 24/7 business cycle. Emerging
multinational leaders are often expected to work with inexperienced or ―other experienced‖
management teams in these emerging MNCs and therefore must be more hands-on the first few
years a company goes global and have international or regional support infrastructures in its
developing markets.
17

In addition to establishing well-developed day-to-day operations, internal communications
and corporate governance, Chinese MNCs must demonstrate industry standards which guarantee
high-quality products and services while adhering to a code of strong business ethics. A statement
of purpose or intentions and a list of corporate ethics or standards will not suffice, and a Chinese
MNC must show its commitment to ethics and industry standards. Core audiences which
influence public opinion and financial and operational performance should never be ignored.
Constant feedback from consumers, employees and news sources is the ideal way of updating
standards to surpass the competition and also a way to ensure that business ethics are never
compromised. Efforts to uphold high standards and ethics take time and money, but as a company
raises its status to become a top-tier industry leader, stakeholders reciprocate by trusting and
lauding a company‘s products and services.

Establishing Strong Corporate Social Responsibility
During a seminar on corporate social responsibility, Lord Michael Hastings of Scarisbrick,
KPMG International's Global Head of Citizenship and Diversity and board member of the
International Business Leaders Forum, suggested corporate ―irresponsibility,‖ such as superfluous
executive salaries and ill-conceived policies, was prevalent and partly an attribute to the
69
economic downturn in 2008. Hastings said the economy was driven to the edge by corporate and
individual irresponsibility, which are connected in tandem. Business leaders must become part of
a ―new era of responsibility‖ and determine a new business and individual agenda by practicing
restraint, responsibility and generosity.
18

Corporate social responsibility (CSR) is an emerging trend in which a company addresses
social or environmental issues domestically or internationally. Stakeholders, such as employees,
media, consumers and investors, are now assessing a company‘s reputation and value based on its
CSR. One study showed 70% of European consumers say that a company's commitment to CSR
is important when buying a product and 1 in 5 would be willing to pay more for socially and
environmentally responsible products, while 1 in 6 shoppers frequently boycott or buy products
based on the manufacturer's reputation.
19
According to the Reputation Institute‘s 2008 Global
Pulse Study, 65.7 % of the U.S. general public would recommend the top-20-ranked socially
responsible companies to others compared to only 25.9% recommendations for the bottom-20-
ranked companies. More than 27% would not recommend the companies that are not seen as
socially responsible.
20
Based on the following consumer opinions, a Chinese MNC must lead by
example and champion corporate social responsibilities, thus encouraging other Chinese MNCs to
emulate the same practices. This will not only improve business- to- consumer relationships but
also improve the company‘s reputation.
Chinese MNCs have the opportunity of adding value to their corporate reputation by
supporting or volunteering for social or environmental causes which are in some way relevant to
the company. For example, if news media and consumers discovered a company‘s products are
made in factories using child labor in a developing nation, then the company‘s reputation is
endangered – human rights groups or government authorities might intervene and consumers may
boycott the products. Children work in these factories because families cannot afford an
education or child care for them. Shutting down the factory will both hurt the families laid off and
70
the company, and families will likely find another factory for the children to work in. So how
does the company address the issue? One possible solution is for the company to get to the root of
the problem and set up education or child care programs to keep the children out of the factories.
This is not just a social improvement but also reputation enrichment for the company.
Chinese MNCs with fewer resources to support major causes or create large-scale programs
can motivate employees to volunteer for CSR. Diana Tsui, KMPG International‘s Director of
Corporate Social Responsibility, found that Generation Y potential employee recruits, in almost
every single encounter, wanted to know about the company‘s CSR status. Using an employee‘s
skills can empower people, whether they are internal or external stakeholders, stated Tsui. She
also suggested that to drive CSR internally, communication is the key— a special Web portal,
quarterly or annual reports and alerts to the stakeholders of CSR activities are some simple ways
to generate enthusiasm.
21

Corporate social responsibility is also about the internal relationships with employees.
Workers‘ rights are a hot-button issue for many consumers and prospective employees and are
another factor in a company‘s reputation. As working dynamics change and jobs become more
global, the work- life balance becomes ―work- integration.‖ Employees no longer have 9- to- 5
jobs and there is a change in the work-family social structure. Low-cost technologies enable a
stronger connection for employees and the work place.
22
While this may be to the advantage of
the company, Chinese MNCs must also consider how to find the acceptable work-life balance to
maintain employee productivity and retention. Employee programs for child care or education
assistance, stress management workshops, and work options (such as compressed work week,
mobile, work at home, individual work schedule, leave of absence) are conducive to the work-life
balance and highlight a company‘s dedication to corporate social responsibility.

71
4.3 The Future of China’s Multinational Corporations

Since China‘s implementation of the ―Go Global‖ strategy in 1999, the world witnessed
Chinese MNCs such as Lenovo, Tsingtao and Air China gain momentum in their international
aspirations, yet at the moment the globalization strategy is in its nascent stage. In an interview
with Allan Zhang, director of China Business Centre of PriceWaterhouseCoopers UK and former
economist at China's foreign trade ministry for 14 years, he compares an article he wrote seven
years earlier, ―Going Abroad—China's Corporations Go Global,‖ with the present and future
progress of Chinese MNCs‘ reputations. Zhang said, in the past, Chinese companies concentrate
overseas investment largely in developing nations, where they are considered more
technologically advanced, have better business management skills, and easier access to capital
over their counterparts in these countries. Chinese companies operating under their own brand
were met with reputation issues, since merchandise is often regarded as ―cheap, low-tech and of
poor quality‖ and cannot market their brand as well as foreign competitors.
23

In the interview, Zhang says the 2008 worldwide financial crisis offered more opportunities
for Chinese companies in some markets which were once well operated. These once more
competitive and exclusive markets are now more open to handling sales from China. Since Zhang
wrote the article, he says the situation remains more or less the same.
24
China's overseas
businesses are still met with a series of domestic regulatory barriers, staff not trained in global
business operations, and limited knowledge about the local markets.
Zhang said that, in reality, management often wants to find shortcuts to market entry, such as
merging with an already established corporation. While M&As are a helpful tool to gain market
entry, they do not necessarily translate immediately into added brand equity for Chinese
companies. While Chinese-owned companies like Lenovo gained success after merging with IBM,
72
he said Lenovo relies too heavily on IBM to improve sales and only marginally improved its
brand equity.
25

Things are improving for Chinese MNCs, Zhang said, but not a great deal. The challenges
within China‘s ―Go Global‖ strategy are long term. For Zhang, it is difficult to determine whether
or not Chinese Brands will find success in the wake of other succeeding Chinese Brands because
it takes a long time to build a brand. At this time people are not seeing many successful stories.
Branding challenges, Zhang said, has something to do with structural problems. Chinese
companies‘ management only stays in a position for a limited number of years before moving on
to another promotion or employer. Building a brand takes a long time.
26
The state of China‘s
MNCs is essentially a case-to-case basis, and engaging international markets is a time-consuming
and costly learning process.
However one thing is for certain— times have never been better for Chinese companies to go
abroad, grow and change the status of China‘s role in the global economy. The circumstances are
reminiscent of Japan‘s economic boom of the 1980s. Although there are some social, educational
and political factors that cannot place Japan directly parallel to China‘s economic development,
there still some semblance of comparability between the two countries. In the 1950s, Japan, then
burgeoning industrial society, was once notorious for producing low- quality products sometime,
however decades later, starting in the 1980s, the country‘s reputation dramatically changed and it
became the face of innovation and quality. For Japan, exports played a key role in propelling its
economic expansion, with the United States being a key trading partner, just as it is happening
now for China. In addition, according to Professor Paul Herbig, dean of the Ketner School of
Business at Indiana's Tri-State University and author of Marketing Japanese Style, the Japanese
has developed three basic international marketing strategies which have mad Japan the image of
innovation, quality and respect in the electronic and automotive industries. The first strategy has
Japanese companies, such as MNCs, go to developing markets in order to build up their home
73
market. Later these same companies make the transition into more developed countries to
capture market share. Herbig stated this strategy is often used for the automotive and consumer
electronic industries. The second strategy involves companies entering the market and capturing
market share with low-priced, improved products or services. These companies also lower
manufacturing costs then expand into developed countries as demand increases. The third
strategy is for Japanese companies to sell products in developed countries in which those home
markets , as Hurbig said, are ―not prepared to absorb‖ products such as certain electronics.
Hurbig explained that each strategy can be modified in some way for less technology-driven
exports, however all three strategies require efficient overseas distribution systems in order to
succeed.
27
Most Chinese MNCs have the resources and distribution systems and have already
started to use modified versions of these strategies, but Chinese MNCs have yet to emphasize the
improved-product aspect within the aforementioned second strategy. Chinese manufacturing has
not yet achieved the same level or perceived level of quality and precision manufacturing as
Japan, hence the use of brand ambassadors like Huawei. Aside from overseas marketing
strategies, Japan‘s MNCs took decades to develop their reputation for quality and innovation by
fine-tuning their internal operations and communications, much like what Chinese MNCs are
working towards now.
Although Japan‘s economic bubble burst due to domestic policies and the Asian Financial
Crisis in the 1990s and again suffered financial hardship with the global recession in 2008, China
demonstrates a unique financial vitality. As stated earlier in Chapter One, Table 1, with China‘s
GDP growth and increased global competitiveness, the country may not succumb to a similar fate.
However, before Chinese MNCs can flourish, they need to address internal and external
challenges, some of which Japanese corporations may never have encountered during economic
expansion. Similar to the state of Japan about 30 to 40 years ago, Chinese MNCs are in their
nascent stage of development and expansion. Chinese MNCs still have an indeterminate number
74
of challenges that they must address. Many companies still lack of brand awareness when
entering new markets and often have national reputation issues which negatively associate their
product or service to low cost and low quality. Cultural, social and political clashes, inevitably
linked to the company, affect sales and stakeholder relations. Seemingly ideal M&A opportunities
which could improve a Chinese company‘s strength and credibility may fail because the merging
companies neglected or did not know how to properly manage the employee-departmental
consolidation process. Chinese MNCs still place more emphasis on productively and competitive
pricing than on corporate governance, a driving factor in reputation in the developed markets.
Corrupt companies and employees and poor health, safety and product quality standards taint not
one but all industries and brands from China. Unnecessary interference or restrictive economic
regulations from the Chinese government limit Chinese MNCs‘ opportunities to develop and
expand overseas, and lax enforcement on the infringement on intellectual property and
counterfeits leaves foreign consumers and competitors questioning the overall innovation and
trust of China‘s MNCs. Not all Chinese MNCs are diagnosed with the same problems, and
different industries and markets require difference resources and approaches. However many of
these challenges are solvable by implementing the aforementioned opportunities or solutions
from the previous section, such as brand building, carefully monitoring strategic mergers and
acquisitions, establishing and practicing the same standards and corporate governance as industry
leaders and establishing strong corporate social responsibility.
If in the next 10 years these Chinese MNCs are able to acknowledge these challenges which
hold back their full potential and are capable of addressing them, then perhaps in 20 to 30 years,
like Japan, China‘s MNCs will experience a metamorphosis, from a reputation of questionable
manufacturing quality and little innovation to high-technology, sophistication, quality and value.
If Chinese MNCS can rise to the occasion and address any of the challenges repeatedly stated
75
throughout the thesis, China‘s brands could thrive and have reputations which rival or surpass
today‘s well-established and iconic MNCs.

4.4 Research Limitations

Language Barriers
As this is a report based on China‘s economy and MNCs, it was expected that research would
be met with language barriers. Only research within English-language resources was unassisted.
Research required assistance with translations and explanation of concepts, via electronic
programs and colleagues. However some colloquial or symbolic expressions in the Chinese
language at times were not always fully conveyed or understood.

Statistical Figures, Reports
Many of the reports available online or on databases, while offering information which may
have aided research efforts, were not complimentary and required either purchasing or
membership login. In both cases, the fee for procuring the reports exceeded the funding available
to obtain the information. In some reports are were subjective or did not adhere to credible
research standards– in these cases findings are not included.

Huawei Case Analysis
As this case was based on research through observation and analysis, giving appropriate and
effective public relations recommendations proved to be a challenge when trying to analyze the
existing ownership, financial and organizational structure of Huawei. Huawei provides only
general information on the ownership of the company and gives financial statements annually
rather than quarterly. Web site access to internal communications on www.huawei.com was
76
limited and required login. When attempting to register for entry into community forums,
frequent technical errors or difficulties did not allow for entry.
Unable to determine which niche information sources are the most credible and most relied
upon in the telecommunications industry, only top-tier media coverage and analysis of Huawei
and its competitors is presented. All research is presented as is at the time it was accessed, and the
time of writing, all information was current and up to date. As media now runs on a more hour-
by-hour news cycle, any new developments or updates since the research may be unknown and
may or may not be available or acknowledged in the case analysis.
While financial performances are posted daily for Huawei‘s competitors on stock exchanges,
Huawei itself does not post its stock performance publicly. If the company does post it, then it is
presumed that notifications are done on a private platform for internal stakeholders. Because
information on Huawei‘s financial performance is so veiled, it is therefore more difficult to
evaluate performance of public relation strategies.

77
Chapter Four Endnotes

1
Allan Zhang, interview by Jessica Kraft, Chinese Corporation Going Global - Then, Now and the Future, February 24,
2010.
2
Kevin J. O'Brien, "Upstart Chinese Telecom Company Rattles Industry as It Rises to No. 2," The New Yor Times,
November 19, 2009, http://www.nytimes.com/2009/11/30/business/global/30telecom.html?pagewanted=1&_r=1.
3
Allan Zhang, interview by Jessica Kraft, Chinese Corporation Going Global - Then, Now and the Future, February 24,
2010.
4
Kevin Lane Keller, Strategic Brand Management, 3rd Edition, (Upper Saddle River: Pearson Education Inc., 2008),
38.
5
"Made in China 2008: The Challenge for Chinese Brands Going Global," Interbrand, 2008,
http://www.interbrand.com/images/studies/Made_in_China_2008.pdf.
6
Kevin Lane Keller, Strategic Brand Management, 3rd Edition, (Upper Saddle River: Pearson Education Inc., 2008),
104.
7
"Company Profile," Air China, 2010, http://www.airchina.com.cn/AboutAirChina/Introduction/default.shtml.
8
Monarch Import Company, Tsingtao Beer, 2009, http://www.tsingtaobeer.com/.
9
"Tsingtao Becomes Exclusive Chinese Beer of Quicken Loans Arena in Multi-Year Partnership," NBA.com,
December 14, 2009, http://www.nba.com/cavaliers/news/tsingtao_091214.html.
10
Jodi Xu, "Would a Chinese Purchase of Volvo Help China or Hurt the Car Maker?," The Wall Street Journal, June
16, 2009, http://blogs.wsj.com/chinarealtime/2009/06/16/would-a-chinese-purchase-of-volvo-help-china-or-hurt-the-
car-maker/.
11
Ibid.
12
Katherin Hille, "Lenovo proves it is a somebody," Financial Times, January 5, 2010,
http://www.ft.com/cms/s/0/0715eb2a-f999-11de-8085-00144feab49a.html.
13
Michael Dunne, ―Geely Just Bought Volvo. Now What?‖ The Wall Street Journal, April 6, 2010,
http://online.wsj.com/article/SB10001424052702303493904575167480687303628.html?KEYWORDS=geely
14
Katherin Hille, "Lenovo proves it is a somebody," Financial Times, January 5, 2010,
http://www.ft.com/cms/s/0/0715eb2a-f999-11de-8085-00144feab49a.html.
15
"Made in China 2008: The Challenge for Chinese Brands Going Global," Interbrand, 2008,
http://www.interbrand.com/images/studies/Made_in_China_2008.pdf.
16
Ibid.
17
Lawrence Allen, "Finding China leaders:the challenge for emerging MNCs," Heidrick & Struggles, 2008,
http://www.heidrick.com/NR/rdonlyres/6C36540C-DA7D-4D31-AA71-4BBF8E841127/0/FindingChinaLeaders.pdf.
18
Michael Hastings, "Keynote Speaker Address," Corporate Social Responsibilities (CSR) in Turbulent Times: Luxury
or Necessity? (presentation, Hong Kong: KPMG, June 11, 2009).
19
Radley Yeldar, "Why bother with CSR?," csrnetwork, January 2, 2004, http://www.csrnetwork.com/story.asp?id=55.
20
"Reports Study Actual, Perceived Corporate Social Responsibility Scores," Environmental Leader, October 18, 2008,
http://www.environmentalleader.com/2008/10/19/reports-study-actual-perceived-corporate-social-responsibility-scores/.
21
Diana Tsui, "Motivating Staff through Corporate Community Investment," Corporate Social Responsibilities (CSR)
in Turbulent Times - Luxury or Necessity? (presentation, Hong Kong: KMPG, June 11, 2009).
22
Mara Teng, "Increasing Productivity with Work-Life Balance," Corporate Social Responsibilities (CSR) in Turbulent
Times: Luxury or Necessity?, (presentation, Hong Kong: IBM, June 11, 2009).
23
Allan Zhang, "Going Abroad—China's Corporations Go Global," San Francisco State University, September 2002,
http://userwww.sfsu.edu/~yywong/Zhang.pdf.
24
Allan Zhang, interview by Jessica Kraft, Chinese Corporation Going Global - Then, Now and the Future, February
24, 2010.
25
Ibid.
26
Ibid.
27
Randall Frost, ―Can Japanese Brands Go Global?‖ Brand Channel, November 11, 2002,
http://www.brandchannel.com/features_effect.asp?pf_id=130.
78
Glossary of Terms

2010 Index of Economic Freedom - The Index creates 10 benchmarks (business freedom, trade
freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial
freedom, property rights, freedom from corruption and labor freedom) that gauge the economic
success of countries around the world. Studies in this and previous editions of the Index show
relationships between economic freedom and positive social and economic values. Details about
the Index, its methodology and country rankings are available at www.heritage.org/index.

Asian Financial Crisis - In 1997, weak financial systems and poor economic governance caused
most Asian economies to experience a financial meltdown. The crisis led to sharp declines in the
currencies, and stock markets prices. The International Monetary Fund intervened with bailouts
and other forms of assistance, however today many Asian economies are still recovering or have
been permanently destabilized because of the crisis.

Berlin Wall - The wall geographically and socially divided East Germany and West Germany,
starting from 1961. It was erected in the city of Berlin for the purpose of preventing East
Germans from escaping to West Germany. As communism collapsed as the Cold War ended, the
Berlin Wall was torn down in 1989. The event symbolized the liberalization of captive people in
the Soviet Empire and other countries and a shift toward free-market-oriented governance.

Brand equity - Brand equity is the perceived overall value of a brand which arises from the
differences in consumer response and perceptions of a brand which translates to consumer loyalty
and the willingness to pay more for that brand. There are multiple dimensions and sources of
brand equity, but the key drivers of brand equity are brand awareness, consumer attitude toward a
79
brand and perceptions of the brand. Brand equity is somewhat difficult to measure because many
of the brand assets are intangible; however marketers have developed brand equity measurement
systems within brand recall, associations, and valence as well as the nature of brand relationships.

Cloud computing- A distribution system which connects many computers and internet-
connected devices, sharing resources such as computational power and storage. The term "cloud"
is a metaphor for the internet, a phrase which dates back to the early days of network design,
when a network engineer would use cloud symbols to depict connections in a network.

Corporate culture- Corporate culture is the collective beliefs, values, attitudes, and behaviors
which make up the character or identity of a company. This identity or character extends to the
way a company communicates to its stakeholders and how it achieves its goals or objectives.
External, societal conditions, such as local customs or social norms, may influence a company‘s
corporate culture.

Foreign Direct Investment (FDI)- An investment made by a foreign individual or organization
in a country; also known as a measurement of assets from foreign ownership such as factories and
land (used to measure growth of economic globalization).

Five Year Plan - A series of economic development initiatives which started in 1958 under the
leadership of Mao Zedong. Since then, every five years the Central Committee of the Communist
Party of China plans and approves these economic goals and strategies.

Foreign Leap Forward- The ―Foreign Leap Forward‖ is a period from 1977 to 1979 in which
the government attempted to increase importing to and exporting from from China. It also was an
80
opportunity for China to import new technologies and production methods to stimulate the
progress of its development.

General Administration of Quality, Inspection and Quarantine (AQSIQ)- The AQSIQ is the
product quality watchdog and ministerial administration ran by the State Council of the People's
Republic of China. It is in charge of national quality, metrology, entry-exit commodity inspection,
entry-exit health quarantine, entry-exit animal and plant quarantine, import-export food safety,
certification and accreditation, standardization, as well as administrative law-enforcement
throughout the 31 provinces of China. The AQSIQ is also in charge of international cooperation
and exchanges in the fields of quality supervision, inspection and quarantine. This responsibility
entails consultations and negotiations with the countries that import to or export from China.

General Agreement on Tariffs and Trade (GATT)- A set of multilateral trade agreements
designed to abolish quotas and reduce tariff duties among the contracting nations. GATT was
created in 1947 and was originally intended to become a part of the International Trade
Organization (ITO). However, GATT was left as an independent organization after the ITO failed
to be created. In 1994, GATT was superseded by the World Trade Organization (WTO).

Global Competitiveness- According to the World Economic Forum, competitive economies are
those that have established conditions which drive productivity, which their present and future
prosperity relies upon. Competitiveness helps the economy endure business cycle downturns and
while ensuring solid economic performance for the future. Since 2005, the World Economic
Forum has based its competitiveness analysis on the Global Competitiveness Index (GCI), a
comprehensive index which gauges the microeconomic and macroeconomic foundations of
national competitiveness.
81
“Go Global” Policy/Strategy- In 1999, the Central Committee of the People‘s Republic of China
approved a strategy which creates policies and provides state-assisted financial support in order to
encourage Chinese enterprises to invest overseas. Designed to further develop and expand
China‘s economy, the strategy also encourages companies to cultivate Chinese brands outside of
China. In addition to encouraging many of its domestic companies to become MNCs, the Chinese
government selected specific companies which had the greatest potential of enriching China‘s
national image to act as brand ambassadors.

Great Leap Forward- The first Five Year Plan attempted to modernize China, which focused on
industry and agriculture by reforming China into a series of communes. People gave up
ownership of their property to the commune. In 1959, the plan began to fail. Machinery which
was rushed to be built for rapid industrialization easily fell apart, and steel production was
inferior and substandard. From 1959 to 1960, China experienced bad weather conditions, making
for a poor harvest. In addition, as a result of over recruitment for industrial labor, much of the
harvest was neglected, and in the spirit of competition for Mao‘s praise, agriculture leaders over-
reported their harvests to their superiors in Beijing, and what was thought to be surplus grain was
sold abroad. At the end of 1961, China had an estimated 15 to 30 million people died of
starvation, making the Great Leap Forward the largest famine in history.

Gross Domestic Product (GDP)- The measure of an economy, the entire market values of goods
and services produced by workers and capital within a nation's borders during a given period
(often calculated on an annual basis).

Offshoring- The relocation of business processes from one country to another, such as
production, manufacturing or services.
82
Original Equipment Manufacturing (OEM)- Usually refers to a company which uses a
component made by a second company in its own product, or sells the product of the second
company under its own brand.

Outsourcing- When a company sends work or a particular task to an outside provider or
manufacturer in order to cut costs. Outsourcing can be domestic or international.

Mergers and Acquisitions (M&A)- The event in which two companies become one. In a merger,
two companies integrate and consolidate their operations, management, stock, etc. In an
acquisition, one company buys another. In cases of an acquisition, the acquired company may
still assume the same name, renamed or marketed under the name of the new owner.

Multinational Corporation (MNC)- A corporation or enterprise which operates in more than
one country at a time; an MNC is also known as an international or transnational corporation.

Patent Cooperation Treaty (PCT)- The PCT is an international treaty that was established in
the 1970s designed to preserve the rights to file a patent application in member countries (there
are 128 countries that are members).

White goods- Refers to the products in the household appliance industry. The name derives from
tradition of large household appliances which were once finished with white enamel but now are
often colored.

Work flow software- Workflow software saves time and improves efficiency by taking the
human element out of routines such as data entry and e-mail filtering, enabling computers and
83
other digital devices to interact over the internet so that work can be done by people anywhere in
the world.

84
APPENDIX A
Huawei Technologies Ltd., Tier-One Media Analysis,
From January to July 2009

Publication AFP
Overall
Coverage
Tone
One balanced, one negative (limited media coverage)
Reporters’
Tones
 N/A ( no reporters identified) – balanced/ negative
Key
Messages
Summary
 Security issue mentioned
 Huawei product launch featuring Google technology
How key
issues
addressed
 Security issues mentioned (Nortel employee possibly leaked info. to Huawei), however news
overshadowed by Nortel crossing boundaries with employee confidentiality
Mentions,
Quotes,
Sources
 ―According to Helsingin Sanomat, Nokia began lobbying politicians for a new electronic
information surveillance law after it became suspicious that one of its employees had emailed
classified information on new network equipment to its Chinese competitor Huawei”
 Huawei, in both articles, only received minor mentions
Third
Party
Trends
Alcatel-Lucent
 Despite AFP reporting substantial losses of about 5bn EU for 2008, company reps
(predominately Chief Exec. Ben Verwaayen) extensively defended the company‘s position and
reassured that 2009 is ―a year of transition‖
 The ―transition‖ attributes to the reshaping of the company and extensive job cuts, but the
company says it shows signs of gain and solid performance
 Any job cuts, the company says, are justified by a report released a few months previously

Ericsson
 Weighed down by its mobile phone unit
 Profits below expectations, joint ventures affect the company; announced 5,000 job cuts
 VP Hans Vestberg responds to a majority of articles, balances negative with Ericsson‘s POV
(optimism and visibility)

Cisco
 Serious competition in the future with HP, and Cisco reps, like chief tech officer, Padmasree
Warrior, are very aware and say they are ready to compete; in a statement, Warrior said "We're
going to compete with HP. I don't want to sugarcoat that…There is bound to be change in the
landscape of who you compete with and who you partner with."

Nokia Siemens
 Nokia Siemens Networks (NSN) said technology it sold to Iran in 2008 could be used to
monitor calls, but denied claims it can be used for web censorship
 Petition called for boycott against Nokia has begun circulating over the Internet
 Company responses:
o ―There is a lot of misinformation out there," NSN spokesman Ben Roome said, pointing
out that NSN is a separate organization from Nokia
o "We have received some (feedback), but not on a large scale. To those who have
contacted us we have told our opinion and our position in this," Arja Suominen said
(Nokia spokesperson)

85

Publication Xinhua
Overall
Coverage
Tone
Either balanced or positive, slightly more balanced
Reporters’
Tones
 Wang Hongjiang – positive
 Zhang Xiang – positive/balanced
Key
Messages
Summary
 Huawei shows that China‘s innovations improving (2009, No. 1 ranking patents registered)
 Huawei attempting to go global and is strengthening ties with other countries
 Despite financial crisis—still expanding and making profits
 Introducing countries to the ―Information highway,‖ tech. improvement/expansion projects
through investments or CSR programs; third parties who receive are either appreciative or
optimistic about the future of technology in their country due to Huawei‘s efforts
How key
issues
addressed
 Addresses issues with trust and Huawei‘s brand awareness in the global market, yet indicates
Huawei will overcome this issue
 Notes that Huawei may be forced to give up contracts in India for military/political reasons, yet
notes the company already procured several high-profile contracts (counters the previous issue)
Mentions,
Quotes,
Sources
 State Intellectual Property Office (SIPO) Director Tian Lipu (About Huawei‘s No.1 patent
ranking), "I think this showed that the innovation capability of the country and its enterprises
improved," Tian said
 Huawei representatives frequently quoted (eg. Pres. Yang Hua)
 Government officials, third parties involved with tech. expansion projects are quoted—often
positive
Third
Party
Trends
Alcatel-Lucent
 Only a minor mention of the company in reference to a client (underwater infrastructures);
balanced article

Ericsson
 5,000 job cuts after losses, also other cost-cutting programs initiated (R&D, staff consolidation)
 Najmi Jarwala steps down as Sony Ericsson U.S. Chief, pursues other job opportunities (March)

Cisco
 Layoffs: 600-700 employees, "company wide" and involve "multiple departments"; CEO John
Chambers said more are to come: in February, 2,000 positions would be eliminated from Cisco's
global work force of about 66,560 because of the restructuring
 In an effort consolidate Cisco‘s data center business, it is agreed to buy Tidal Software for
$105mn; Cisco recently unveiled its Unified Computing System, a next-generation data center
architecture (Tidal Software could complement this sector)
 Gary Moore, senior vice president of Advanced Services at Cisco said that acquiring Tidal
would ―lead to significantly reduced operational costs" and accelerate company performance

Nokia Siemens
 Relationship between Nokia and its distributors in China was once amiable, now hostile as
Chinese consumers, vendors and businesses are boycotting its products
 Beijing News reported: 100 wholesalers in Hunan and Shandong provinces sent a letter written
by a lawyer to Nokia, accused company of monopolizing prices to get extra profits
 Conflict existed for several years, derives from Nokia‘s sales channel policies – has strict policy
enforcement as a way to manage unauthorized distribution outside a distributor‘s sales area

ZTE
 Consumer frenzy in Venezuela for ZTE‘s $15 mobile; no other major news reported

Publication CNBC
Overall
Coverage
Tone
 Mostly balanced (1/3 positive, one negative)
Reporters’
Tones
 Tarmo Virki – balanced
 Kirby Chien – negative
86
 N/As – balanced
Key
Messages
Summary
 Leader in telecom market
 Key reputation and associative concerns about Huawei are noted
How key
issues
addressed
 Huawei‘s government ties and secretive reputation is reason U.S. decided against plans to buy
3Com, but also notes Alcatel-Lucent‘s past issues
 One article notes many of Huawei‘s faults
o PLA / government ties
o Copyright issues
o 3Com security issues
Mentions,
Quotes,
Sources
 Business Wire and PR Newswire most common info. distributors
 Huawei ―is secretive and its ties to the state are one of the reasons the U.S. government nixed its
plans to buy 3Com Corp with Bain Capital last year‖
 About joining the Multicore Association as exec. board member –"As a leader in the network
telecoms market, Huawei makes a notable addition to our membership… Huawei's knowledge
of multicore technology and experience in this industry will help influence the hardware and
software vendors to define and adopt standards that will help to promote better development
environments for multicore solutions," said Markus Levy, Multicore Association president
Third
Party
Trends
Alcatel-Lucent,
 Alcatel-Lucent – ―history has been dogged by weakening demand, merger-related costs,
political infighting and uncertainty over product integration‖ (in Huawei media coverage)
 Either positive or balanced (more often positive) reporting
 CNBC relies on press releases from Alcatel-Lucent for news (normally pertains to product
launches, capabilities, services, research/market reports which are predominately positive0
 Chief Exec. Ben Verwaayen shows leadership visibility as a guest blogger and even does a
video spot about the economic recession
 Alcatel-Lucent has a strong voice at CNBC

Ericsson
 Ericsson to invest in R&D centre in South Korea, adds 1,000+ staff
 Ericsson has invested heavily in the Long Term Evolution (LTE) mobile communication
technology
 Sony does not plan to buy out Ericsson's stake in their mobile joint venture Sony Ericsson and it
wants the partnership to work, said SONY CEO Howard Stringer

ZTE
 ZTE beat out Huawei (in contract award percentage)3G network expansion tender by China
Mobile Communications Corp; for third-generation network covering 200 mainland cities,
involving the installation of 39,000 base stations
 Company response: has said it aims to become of the top three vendors in five years

Publication Bloomberg
Overall
Coverage
Tone
One balanced, two positive
Reporters’
Tones
 Hanny Wan – balanced
 Dave McCombs—positive
 Jiang Jianguo – positive
Key
Messages
Summary
 Advancing in market share, profits
How key
issues
addressed
 No real issues addresses
Third
Party
Mentions,
 A few unknown sources, China Business News, Huawei reps
87
Quotes
Third
Party
Trends
Alcatel-Lucent
 Balanced reporting – although reported that it made an 8
th
straight loss, company management
could ―bring fresh breath of air‖ (Source: Amadne Gerard, Richeliu Finance)
 New management trying to sort out the company and identify its core business, Chief Exec. Ben
Verwaayen shows leadership and visibility;
 Company is cutting jobs (Existing concern with Alcatel-Lucent)
 Note : few articles communicating messages; mostly stock updates or contracts, often referred
to as the ―world‘s largest maker of fixed-line networks‖

Ericsson
 About how Huawei is now outperforming Ericsson: ―Part of the reason for Ericsson and
Alcatel's difficulties has been because Europe and the U.S. account for so much of their
businesses." Ericsson had no comment

ZTE
 Signed an agreement for a $15bn loan facility from China Development Bank to support its
overseas operations; confirms and supports the company‘s goal of becoming a MNC

Publication The Guardian
Overall
Coverage
Tone
Negative (note only one article within last six months)
Reporters’
Tone
 Crispin Blunt – negative
Key
Messages
Summary
 Highlights the need for leadership in cyber security issues
How key
issues
addressed
 Proceeds to list issues of Huawei as a reference to the need for digital leadership
o Huawei associated with government/ PLA (notes its former director)
o National security issues led to block of 3com deal
Mentions,
Quotes,
Sources
 ―Huawei receives significant funding from the Chinese government and is run by a former
director of the telecoms research unit of the People's Liberation Army. The components are
feared to have given China the ability to disrupt or shut down key parts of the UK's critical
national infrastructure. Ministers have refused to consider replacing the components on cost
grounds and competition policy. In the US a proposed merger of Huawei with the US firm
3Com, which provides computer security for the Pentagon, was blocked last year on the grounds
of national security.‖ (Crispin Blunt)
 Government authorities get flack for not upholding or improving standards of security; not
active enough – e.g. ―The private sector complains that some of the agencies set up to advise
and assist them in protecting their networks, such as CESG, are good at gathering information,
but reluctant to disseminate it.‖
Third
Party
Trends
Alcatel-Lucent
 Similar to Huawei in regards to limited press coverage,
 Mentions the company‘s restructuring and consolidation, many jobs lost and budget cuts; Chief
Exec. Ben Verwaayan shows visibility and states this is typical activities for a merger and a the
cuts reflect the economic environment
Ericsson
 Carl-Henric Svanberg, chief executive of Swedish telecoms group Ericsson, will take the top
spot at BP; defends his position as a man who ―transformed [Ericsson]from a small business
with 500 staff to one with more than 30,000‖
 Jumping on the environmental band wagon –Sony Ericsson provides green handsets to cut
carbon footprint (less packaging)
Nokia Siemens
 Iranian boycott of Nokia -- provided Iran with a monitoring system and accused of providing
―Webwasher,‖ an internet filtering system
o Some Tehran shops removed Nokia phones from displays; one phone vendor said people
88
feel ashamed to have a Nokia phone; Nokia refused to comment about the sales
 Nokia spokesman Ben Roome said "As in every other country, telecoms networks in Iran
require the capability to lawfully intercept voice calls‖ (Iranian authorities are believed to have
used Nokia's mobile phone monitoring system to target dissidents)

Publication Nikkei Electronics Asia
Overall
Coverage
Tone
Mostly balanced, slightly positive
Reporters’
Tones
 N/A – no reporters identified
Key
Messages
Summary
 Industry updates, contract and tech. announcements – sticks to industry and technological
developments rather than mentioning issues
 Breaking down the technology gap – e.g. rural areas
 Product/service developments cut costs and are more efficient
How key
issues
addressed
 No issues addressed
Mentions,
Quotes,
Sources
 Source: Huawei representatives are quoted on product/industry developments
 Source: ABI Research referenced and quoted
Third
Party
Trends
Alcatel-Lucent
 Received significantly less media coverage than Huawei
 Mentions notable shift in market infrastructure from Alcatel-Lucent to Huawei
 Notes one product development, but highlights high cost the company is trying to deal with

Ericsson
 ―The best performance among the top 5 wireless semiconductor suppliers in 2008 was posted by
ST-Ericsson, whose revenue rose by 88.4% for the year‖

Cisco
 Cisco announced that it has signed framework agreements with China Telecom, China Mobile
and China Construction Bank; Cisco and these companies will explore areas of collaboration;
companies will consider procurement of advanced data network equipment/services from Cisco

Nokia Siemens
 Nokia Siemens Networks says it is one of the first vendors to complete the phase two
deployment of China Mobile's (CMCC) 3G network based on TD-SCDMA technology
o Completed video calls in January 2009, delivered and completed the implementation,
integration testing and network commissioning across the four provinces (in China) ahead
of schedule
o No other comments by Nokia Siemens (announcement a vie for consumer confidence?)

Publication New York Times (NYT)
Overall
Coverage
Tone
Balanced (note one article from NYT, all duplicates found in International Herald Tribune; refer to
IHT for more comprehensive analysis of NYT)
Reporters’
Tone
 Kirby Chien, Michael Wei – balanced
Key
Messages
Summary
 Huawei and other telcom companies to benefit in contracts from the 3G network expansions,
How key
issues
addressed
 Consumer switch to 3G technology will be difficult, having to choose between ―unappetizing
choice between proven technology from players with spotty or no operating records, or
unproven technology from an industry titan‖ – never stated which category Huawei falls under
but is still not a positive reference
Mentions,  No sources noted
89
Quotes,
Sources
Third
Party
Trends
Alcatal-Lucent (same contents found as International Herald Tribune)
o Despite AFP reporting substantial losses, company reps (predominately Chief Exec. Ben
Verwaayen) extensively defended the company‘s position and reassured that 2009 is ― a year of
transition‖ (this message is constantly reinforced in a number of articles)
o This ―transition‖ would be a long-term project involving extensive cutbacks, including several
thousand layoffs

Ericsson
 Sprint Nextel networking deal with Ericsson, Sprint will keep ownership—partnership expected
to improved Sprints poor record with customer service( the largest carrier Ericsson has handled)
(July)
o Analysts concerned about future of Sprint-Ericsson partnership, Jan Frykhammar (Ericsson
Global Services head) and Steve Elfman (Sprint pres. of operations) defend the choice fervently

Nokia Siemens
o In April media reported that the monitoring technology provided by Nokia Siemens Networks
was used in Iran by its authoritarian regimes, enabling Web censorship and the ability to capture
any dissidents -- sparking controversy in US , Iran and other countries (potential PR crisis)

ZTE
o Qualcomm and ZTE to collaborate to enhance the capacity and performance of UMTS systems,
operators can boost their UMTS data throughput by up to 60 % and deliver a user experience
that is comparable to LTE in a similar channel bandwidth (form of competition with LTE tech?)

Publication International Herald Tribune (also in NYT)
Overall
Coverage
Tone
Two balanced articles, one negative
Reporters’
Tones
 Steven M. Davidoff – negative
Key
Messages
Summary
 Balanced articles note Huawei will have tech. presence in Africa as the country improves ties
with China
 Huawei has issues with national security
How key
issues
addressed
 Negative article references Huawei in regards to national security issues and 3Com, nothing
countered this mention in the article
Mentions,
Quotes,
Sources
 About M&A deal – ―The Chinese have had a poor track record obtaining Exon-Florio clearance
from the Committee on Foreign Investment in the United States, or Cfius, the administrator of
the process (think Cnooc and Unocal, and 3Com and Huawei)‖
Third
Party
Trends
Alcatal-Lucent
 Despite AFP reporting substantial losses, company reps (predominately Chief Exec. Ben
Verwaayen) extensively defended the company‘s position and reassured that 2009 is ― a year of
transition‖ (this message is constantly reinforced in a number of articles)
 This ―transition‖ would be a long-term project involving extensive cutbacks, including several
thousand layoffs

Ericsson (same contents found as International Herald Tribune)
 Sprint Nextel networking deal with Ericsson, Sprint will keep ownership—partnership expected
to improved Sprints poor record with customer service( the largest carrier Ericsson has handled)
(July)
 Analysts concerned about future of Sprint-Ericsson partnership, Jan Frykhammar (Ericsson
Global Services head) and Steve Elfman (Sprint pres. of operations) defend the choice fervently

Cisco
 ―Cisco Systems has disrupted the political ties among the world's largest technology companies
and thrust itself into a new, hostile market‖ – about the company revealing its first server
90
computer; CEO John Chambers is quoted to say ''What we are really talking about here is
catching the next market evolution'' (virtualization software)
 Analysts said Cisco‘s product is the biggest strategic shift in the server market to occur in years;
―transformative play,‖ said James Staten, a Forrester Research analyst

Nokia Siemens
 Nokia Siemens referenced in an article about political sanctions, about when they sold Internet
monitoring equipment to Iran
o Buyers described as ''police and secret services''; and ―equipment itself appears to have
been used to hinder communication this month among demonstrators in Tehran‖

ZTE
 Joining the bandwagon of green products ZTE, announced they would introduce first solar-
powered, low-cost mobile phone in Barcelona; phone could make mobile communications
available to two billion people who cannot use cell phones because they have limited or no
access to electricity

Publication The Economist
Overall
Coverage
Tone
Two balanced, one negative
Reporters’
Tones
 N/A – no reporters identified
Key
Messages
Summary
 Although thriving, Huawei is refered to as low-tech, minimal innovation – perceived to lack
quality
 Huawei has top spot for submitting patents (possibly counters the previous message that the
company lacks innovation?)
How key
issues
addressed
 Although Huawei is not directly mentioned in the message, it is noted in one article that an
impediment in China is the lack of intellectual property protection and innovation
 Security concerns about Huawei upgrading UK‘s telephone system
 Network equipment may have a backdoor for ―Chinese snoopers‖ to easily evade
detection
 Mentions 3Com
Mentions,
Quotes,
Sources
 ―Chinese companies have been plagued by an actual or perceived lack of quality. Only a few
have built respected brands. The underlying causes of this are a weak system of property rights
(including intellectual-property rights) and a financial system skewed in favour of big, state-
controlled companies‖
 ―Where they (Chinese companies) have thrived is either in cost-conscious emerging markets or
in cost-sensitive areas of developed markets defined by clear specifications and minimal
innovation. The greatest examples of this have been ZTE and Huawei, makers of telecoms
equipment‖
 In regards to security issues with telecom equipment, only Huawei was mentioned
Third
Party
Trends
Alcatel-Lucent
 One article makes a brief mention of the company in regards to telecom companies extending
their services by running networks
 The second article makes an announcement of significant financial losses, no response from the
Alcatel-Lucent

Ericsson
 No major news developments were posted in the last six months, only minor references

Cisco
 Reports Cisco‘s announcement of entry into the server market
 HP, Cisco and IBM will be in a ―war for the data centre;‖ companies will spend about $100bn
data centers, according to IDC, a market-research firm

ZTE
 Hugo Chavez launches a $15 mobile (a ZTE/Vetelca); novelty name ―Vergatario‖ is considered
91
an obscenity in the local dialect (While a tech breakthrough, also a novelty article)
 In other news: ZTE has aspirations of becoming a major MNC

Publication Forbes
Overall
Coverage
Tone
Two negative articles, one balanced
Reporters’
Tones
 Andy Greenberg – negative (only Forbes writer to report about Huawei)
Key
Messages
Summary
 Security worries regarding potential Nortel-Huawei deal
o Huawei and Chinese companies‘ ―murky association with Chinese government‖
o 3Com – Chinese government could gain access to sensitive info.
o Telecom links to foreign authorities through contracts with major networks – possible
backdoor entry for Chinese spies
How key
issues
addressed
 One article addressed security concerns regarding Huawei, yet offers Huawei representatives an
opportunity to respond – also mentions possible road to redemption with prospective Nortel deal
 Other two articles address security issues, citing and quoting several references are mentioning
the security issues (none are positive); Huawei representatives not quoted or did not respond
Mentions,
Quotes,
Sources
 RAND and the Heritage Foundation pointing out the military background of Huawei's chief
executive and the company's close ties to the Chinese government
 Sources: Synergy Research, IDC Research, Verizon representatives
Third
Party
Trends
Alcatel-Lucent
 Mainly Lionel Laurent reports stories (balanced)
 Despite numerous consecutive losses, Chief Exec. Ben Verwaayen maintains leadership
visibility and has a quote for nearly every article, extensively defending the company‘s position
 Repeated message: ―in a transition‖ and will get better
 Extensive cutbacks, company appears vulnerable, yet response remains optimistic and solid

Ericsson
 Multiple criticisms that Sony-Ericsson should get ―divorced‖ and Sony should ―fly solo‖; Sony
Ericson reps continually defend their choice to keep partnership
 Some analysts say Sony may eventually take control of the partnership
 New CEO Hans Vestberg: says even though he is new man to lead, there is still a strategy in
place, more cash focus

Cisco
 Targeting corporate buildings as consumers; Cisco launched Building Mediator (device works
with Cisco's networking hardware to monitor/regulate energy); possible core business sector for
Cisco and is seen as a next-gen power system
 Although iPhone‘s video capabilities seems to beat out Cisco‘s aquisiton of PureDigital (maker
if Flip video), Forbes reported that Ken Wirt, Cisco's vp of consumer marketing, said the Flip
acquisition was made with other ideas in mind
o (future Internet protocol video system or a "telepresence" system for the home)
o Cisco will not reveal details about telepresence, but ―the company hinted at the idea of
living-room video conferencing when it acquired PureDigital‖

Nokia Siemens
 In an article about potential legislation which could reward U.S. companies that help online
activists in Iran and punish those that suppress them, Nokia Siemens referenced with its past
business with Iranian authorities
 Company response: Nokia Siemens corporate blog— ―denied that it had participated in Internet
censorship,‖ only admitting that it allowed the "legal intercept" of voice calls that it and other
telecom providers allow law enforcement agencies in many countries, including the U.S.

ZTE
 Making rapid market entry into US, including a $100mn in contracts with companies such as
Sprint Nextel and regional carrier Metro PCs
 Company is looking to its consumer-focused handset business for growth, become tier-one
 Studying smart-phone trends and visiting AT&T and Verizon Wireless in hopes of landing
92
contracts
 ZTE running a handful of U.S. research centers, prepares to branch into Stateside
 Potential U.S. customers associated ZTE with low-cost equipment for emerging markets such as
India and Africa

Publication Financial Times
Overall
Coverage
Tone
Balanced
Reporters’
Tones
 Katerine Hillie – balanced
 Maija Palmer – negative
Key
Messages
Summary
 Security issues in India; any prospective deals may be compromised with murky past
 Nortel-Huawei – a possibility, though talks have not advanced
How key
issues
addressed
 Security issues in India – Huawei representative strongly defends company throughout article
o Mentions Huawei ties with Pakistan
o India-China border disputes
 Security issues for Olympics— (Huawei, 3Com referenced)
Mentions,
Quotes,
Sources
 David Blunkett, former UK home secretary – made a ―veiled reference to recent concerns raised
by intelligence chiefs that equipment installed by Huawei…could be used by China to shut
down key UK infrastructure‖
Third
Party
Trends
Alcatel-Lucent
 Ben Verwaayen may have restored some morale at the troubled Franco-American telecoms
equipment maker
o He says he wants to turn Alcatel-Lucent into a ―normal company‖ and dismisses the idea
of making extravagant acquisitions or picking off Nortel assets
o He also says his strategy is to simplify the group and make it more responsive to clients
 Concerns in the industry that Verwaayen appears to have been ―seduced by the old Alcatel
illusions of technological grandeur‖
 Analysts also are concerns that the company does not have the necessary assets to compete
 Writer suggests company could return traditional core business of fixed-line and become
industry leader of that sector

Ericsson
 The announcement made by the S. Korean government of proposed investment the country, the
company says announcement was ―premature‖
o Ericsson officials said it was possible that investment in S. Korea could reach $1.5bn in
future, but insisted such is uncertain now
o Ericsson disputed Seoul‘s term of investment as a R&D centre, choosing instead to use the
term ―competence centre‖ – led to embarrassment of the S. Korea government
 Ericsson said it had appointed its current chief financial officer, Hans Vestberg, to replace Mr.
Svanberg as chief executive of the Swedish telecoms company; previous CEO had successful
track record with Ericsson (concern that the quality of leadership with change?)

Cisco
 Makes a unique showcase of company/product capabilities as Cisco Systems held its annual
summit via a virtual conference system (a market it is venturing into); the use of their virtual
conference system is reported to have ―saved millions of dollars that had been racked up on
previous retreats‖ (incentive for consumers to purchase the technology)
 ―Cisco has been moving closer to the consumer by acquiring the makers of inexpensive Linksys
wireless routers and Flip digital video cameras.‖

Nokia Siemens
 Nokia investing in and pushing for mobile services
o Spending billions to acquire the relevant capabilities ($8.1bn in 2007 to buy Navteq, the
digital maps company)
o Forbes said ―Nokia's new statement of intent was partly a response to skepticism by some
industry analysts about whether the company can move beyond its position as the world's
93
largest mobile phone maker to also become a successful services company‖
ZTE
 China is becoming a major economic power/presence in Africa, and ZTE illustrates their MNC
capabilities, being cited as ―the de facto monopoly supplier – the kind of deal that western
companies such as Siemens had in Nigeria in the past but rail at now‖

Publication Business Week
Overall
Coverage
Tone
Balanced
Reporters’
Tone
 Bruce Einhorn – positive
 N/A, all others unidentified – balanced
Key
Messages
Summary
 Huawei continues to expand globally – signs deal with Germany
 Despite rising costs – although Huawei is hurt, still growing
 Huawei may have a shot in India after all – writer retracts previous statement
How key
issues
addressed
 Huawei‘s issues with India, as perceived by the writer, may have changed once they released a
report of possible India deals to the Press Trust of India
Mentions,
Quotes,
Sources
 Huawei reports and news releases serve as sources of info
Third
Party
Trends
Alcatel-Lucent
 Only Carol Matlack reports three articles on the company (slips from balanced to negative from
January to May)
 Notes the extensive job cuts, 9
th
quarterly losses (attributed to the troubled merger), cited by
unidentified bloggers and analysts
 Brief company voice by Ben Verwaayen, but overshadowed by a noted 30% drop in stock once
he came to power
 Strategic job cuts of potentially corrupt consultants (history of bribery), managers and
consultants from company complain but unknown company source defends the job cuts

Ericsson
 Speculation that Sony-Ericsson might break up amid the plunging market value; the two
companies insist it is not an option
 Sony-Ericsson issues: Midrange handset sales plunging, its US Operations Chief quit in March
 Normura International extensively quoted on the topic

Cisco
 Will lead a $1bn smart-grid infrastructure build out for Duke Energy; consumer portion –
―largely be deploying its own smart-energy home hardware‖
o Mark Miller, director of business solutions for Cisco, said the company has been working
on various energy management products (another business venture?)
 Business Week reported Cisco is closely watching Google Inc.'s entry into unified
communications,‖
o Cisco plans to offer some IP voice technology as a hosted service; Business Week says
Cisco‘s decision could be a direct response to Google's limited release of its Web-based
Google Voice and Google Wave comm. tools
o "We think video is going to be very key in driving the next level of collaboration—
Internet video, desktop video and consumer TelePresence," said Padmasree Warrior,
Cisco's chief technology officer

Nokia Siemens
 Company highlight of Nokia Siemens‘ unique approach to communication: an intranet soapbox
last spring known as Blog-Hub (opening it to employee bloggers around the world)
o People could complain ―for everything from its purchasing practices to the speed of
mobile-phone software‖
o Company says this practice credit its growth to a history of encouraging employees to say
whatever's on their minds, with faith that smarter ideas will result
o In addition, continuing to boost overall R&D spending, with 39,000 R&D staff to turnout
94
new products
ZTE
 Hou Weigui, founder and chairman of ZTE, made a statement about the company‘s strategy
o Transform his company into the mainland's most successful consumer-focused MNC
o Resisted temptation to grab down-on-their-luck Western brands; instead focused on
building the business with its own resources by starting with handset in China, then
moving to developing markets across Asia and Africa.
o ZTE is targeting Europe and North America with higher-end phones

Publication Time
Overall
Coverage
Tone
Balanced
Reporters’
Tones
 Douglas A. McIntyre – negative
 Simon Elegant, Lin Yang – positive
Key
Messages
Summary
 Huawei can compete in the market because of competitive prices and government support
 Concern about key companies and industries passing into Chinese hands (reference to Huawei
and 3Com)
How key
issues
addressed
 Reference to Huawei and 3Com security issue – no comment from Huawei representative or any
other parties to counterbalance the issue
Mentions,
Quotes,
Sources
 BDA says Huawei and ZTE will gain market share because of their "low prices, competitive 3G
products and government support for domestic vendors."
Third
Party
Trends
Alcatel-Lucent
 Difficult to take market share for next-gen products
 Murky past with its merger; accounting scandals and massive employee layoffs
 Merger turned into restructuring/cultural nightmare
 No company voice

Ericsson
 Ericsson and Alcatel-Lucent now account for roughly two-thirds of the 2G market. That figure
is expected to decline when 3G is fully in place with foreign companies accounting for only
about a third, no company response given

Cisco
 Listed under ―Ten American Companies That Won't Cut Jobs‖ by Time Magazine; reasons why:
―Cisco probably has as much or more cash on hand as any tech company in the U.S., holding
$27bn in available funds. The company is in the midst of a very rapid expansion into the server
and data center business. That will require extra personnel and may involve acquisitions. Cisco
is in several businesses which are nearly recession-proof and should continue to do well.‖

ZTE
 In regards to the 3G market, BDA says that alongside Huawei:
o Market will be taken by China's two largest equipment vendors, sharing half the contracts
o Will gain market share because of their "low prices, competitive 3G products and
government support for domestic vendors."

Publication Reuters
Overall
Coverage
Tone
Balanced
Reporters’
Tone
 Kirby Chien – Negative
Key
Messages
Summary
 Majority of balanced articles refer to contracts and deals, no tone indicated – indicates that
Huawei has market growth and global expansion
 Security issue
95
o Huawei employee steals data from a company
 Two articles note many of the ―horrors‖ of Huawei (Kirby Chien)
o PLA / government ties
o Copyright issues
o 3Com, security issues
How key
issues
addressed
 On one occasion, Huawei‘s close ties to government are mentioned, balanced tone/statement of
fact
 Huawei responds to incident in which employee steals data, suspends employee and apologizes
Mentions,
Quotes,
Sources
 ―Founder and CEO Ren Zhengfei's military background and the privately-owned company's
lack of transparency have raised eyebrows and triggered alarms in countries such as the United
States‖… ―Those concerns derailed an attempt by Huawei and partner Bain Capital to buy U.S.-
based 3Com in 2007, and last month the Financial Times reported that Huawei had blamed
unfounded security concerns in India for hobbling its growth there‖ (Kirby Chien)
 Makes ―meteoric rise to challenge top gear makers‖ primarily in secondary markets
 Wins ―client kudos and market share, especially in developing markets where pricing is a more
critical factor‖
Third
Party
Trends
Alcatel-Lucent
 Majority is balanced coverage – based on information release by the company regarding
contracts and market updates
 Most news coverage which depicted issues such as job cuts or extensive losses offered
responses from company reps such as Chief Exec. Ben Verwaayen or other unidentified reps
 Bernstein analyst Pierre Ferragu used for some quotes

Ericsson
 Sony Ericsson, Ericsson's joint-venture with Sony, has been hit by a slumping global handset
market, however Ericsson secured key orders from China Unicom , Verizon in the United
States, as well as an outsourcing deal with Britain's Vodafone in the first quarter
 Of 25 analysts who disclosed their recommendation on the Ericsson share, five were positive,
seven neutral, and 13 negative

Cisco
 Cisco Systems Inc plans to set up a research centre in South Korea and invest or lend $500
million in the country's technology and telecom sectors; Korean government said but Cisco
refused to comment

ZTE
 Announced its 5bln credit line for five years, used to accomplish founder Hou Weigui‘s
strategies (mentioned in Business Week)
o strong in low-cost phones and is also expanding into smartphones based on Microsoft's
Windows Mobile and open-source Linux
o Solar phone unveiled at Mobile World Congress in Barcelona, to be sold in Africa
o Reinforced that the company had no intentions of making aquisitions

Publication Wall Street Journal (Asia, Europe)
Overall
Coverage
Tone
Positive
Reporters’
Tones
 Loretta Chao – positive
 Sara Silver – positive
 Aaron Back—positive
 R Jai Krishna – negative
Key
Messages
Summary
 Once the laggards, now ahead of the game thanks to competitive pricing and government
support (also mentions ZTE); market share greatly improved
 Balanced articles will note contracts and deals; indicate growth in market share updates
 Extremely competitive and shows outstanding performance, competitive pricing and technology
How key
issues
addressed
 Indian companies have issue with Huawei regarding security: out of six competitors, Huawei
the only company not open to bids because of security issues (R Jai Krishna)
 Notes company‘s private nature – does not disclose ownership structure or financial details
 Higher sales in developing countries, difficult to break into US market because of rivals and
96
national security concerns – some analysts dismissed this as a prejudice; issue may come to pass
due to increasingly cost-conscious clients
Mentions,
Quotes,
Sources
 Sources: varying Huawei representatives, industry analysts, security analysts
 ―Huawei has had particular success selling its products in developing countries, and, while it has
struggled in the important U.S. market, it has recently made inroads into other developed
countries.‖ (Aaron Back)
 ―Big challenges for the Chinese manufacturers are political and national-security concerns.
Some companies fear they may lose U.S. government business if they pick Chinese vendors for
their networks, some analysts say.‖ (Amol Sharma and Sara Silver)
Third
Party
Trends
Alcatel-Lucent
 Making strategic partnerships in order to accommodate for the rapidly changing telecom
infrastructure
 Still relying on the old tech of fixed lines, has weak wireless tech and merger leaves them
unprofitable – some of the challenges
 ―The change in management is bearing fruit‖
 Sources (always a company voice in the articles)
o Company body and Chief Exec. Ben Verewaayen (new management) quoted in a majority
of articles; Pierre Ferragu, an analyst, quoted several times; Others included analysts like
Zhang Jun, Zhang Chen Chao and Richard Windsor

Ericsson
 Chief Executive Carl-Henric Svanberg is leaving his position to become chairman of British oil
giant BP PLC, replaced by Chief Financial Officer and Executive Vice President, Hans Vestberg
 Ericsson Chairman Michael Treschow said that while the company would continue on the same
strategic path, it needs to become stronger in services and running networks.
 Among the big foreign companies, Analyst Zhang Jun says, Ericsson's market share has
remained roughly stable, while those of Alcatel-Lucent and Nokia Siemens, a joint venture of
Nokia Corp. and Siemens AG, are declining.

Cisco
 HP and Cisco constantly clash as ―telepresence market becomes battleground as tech spending
slows‖; Cisco snatching HP clients left and right (e.g. Marriott International Inc.)
 Cisco ―poured millions into marketing campaigns to promote telepresence‖ (e.g product
placement in "Transformers" movie)

Nokia Siemens
 Offered $650mn to acquire Nortel assets, part of its effort to expand its mobile services;
company did not comment

ZTE
 ZTE now ahead of big foreign firms (all competition previous listed in report, with the exception
of Huawei); "Huawei and ZTE's prices are lower, and they're offering good technology," says
Zhang Jun, analyst for research firm Wedge MKI LLC in Beijing.
 ZTE forced to focus overseas because "domestic market was sewn up," says Duncan Clark,
chairman of BDA China
 The company announced it received a $15bn credit line from China Development Bank to
finance its projects

Publication Dow Jones
Overall
Coverage
Tone
Balanced
Reporters’
Tone
 Aaron Back (WSJ) – positive
 Therese Poletti (DJ) – negative
Key
Messages
Summary
 Higher sales in developing countries— pricing is a major factor and competition is less severe
 Security is a factor for the U.S. market, and this is one of the major concerns when considering
Huawei as a vender
97
How key
issues
addressed
 Notes the company‘s private nature – does not disclose ownership structure or financial details
 Higher sales in developing countries, difficult to break into US market because of rivals and
national security concerns – some analysts dismissed this as a prejudice; issue may come to pass
due to increasingly cost-conscious clients
Mentions,
Quotes,
Sources
 ―The weak global economy could help Huawei grow more in developed markets, analyst say, as
telecom carriers there become more price conscious.‖ (Loretta Chao WSJA)
 Source: Often refers to WSJ articles for Newswire releases
Third
Party
Trends
Alcatel-Lucent
 China is a key market; company also plans growth in Europe and Africa
 A majority of news comes from announcements or press releases from the company, almost
equally balanced/positive tone;
 Regular responses and quotes from the company‘s reps: CEO, CFO Paul Tufono and Chief Exec
Ben Verwaayen; announce company movements/decisions (partnerships, plans for growth)

Ericsson
 Ericsson and Huawei Technologies Co. shortlisted for Bharat Sanchar Nigam Ltd.'s 93-million
lines mobile phone project, project is estimated at $6bn (May)
 Ericsson awarded contracts to provide fixed broadband access to the three Chinese telecom
operators, China Mobile (CHL), China Unicom (CHU) and China Telecom (July)
 Ericsson restructuring, cuts about 5,000 additional jobs to cope fall in demand for telecoms
equipment

Cisco
 Some concerns earlier on about Cisco‘s sudden entry into servers –―Competitors and critics
complained that Cisco would run a closed system that would require businesses to buy all new
equipment, and commit only to the networking company. Cisco, which unveiled some pricing
information, was aggressive in dispelling those concerns‖

Nokia Siemens
 Reported telecom orders for Vietnam and Nigeria; no other major news developments posts
(mainly repetition, market updates)

ZTE
 India's Sistema Shyam TeleServices Ltd., or SSTL, said Wednesday it has signed a contract;
possible collaboration in the future (contrasts with Huawei-India relations regarding security and
government ties, especially since ZTE and Huawei are parallel companies)

Publication
AP (note: a majority of articles were not included because they are minor mentions in research
reports for the telecom industry and market share; did not yield relevant enough info)
Overall
Coverage
Tone
Positive
Reporters’
Tone
 N/A (no reporters are identified) – balanced/positive
 Peter Svensson – positive
Key
Messages
Summary
 Quality products/services; high performance
 Finally made its first entry in the high-barrier US market (possibly an indication that it will
overcome concerns over security?)
How key
issues
addressed
 No real issues addressed
Mentions,
Quotes,
Sources
 ―Mindspeed's M21156 retiming crosspoint switch and Huawei's networking systems offer the
industry unprecedented levels of performance, integration and cost effectiveness," said Kurt
Busch, Mindspeed's senior vice president and general manager, high-performance analog.
Third
Party
Alcatel-Lucent
 Press releases heavily used, subjects ranging from product launches to CSR reports – always in a
98
Trends positive tone, consistent messages of progress and survival
 Press releases reports often mention Genesys, seen as a trusted and efficient company (a
company of Alcatel-Lucent)
 In articles which shined spotlight on Alcatel-Lucent (noting the major restructuring and
unprofitable years), Chief Exec. Ben Verwaayen was visible and responsive.

Ericsson
 Sprint Nextel signs $5bn networking deal with Ericsson, Sprint will keep ownership—
partnership expected to improved Sprints poor record with customer service; Analysts concerned
about future of Sprint-Ericsson partnership, Jan Frykhammar (Ericsson Global Services head)
and Steve Elfman (Sprint pres. of operations) defend the choice fervently
 Hans Vestberg as new CEO is called a ―natural heir,‖ although is ―untried,‖ has big shoes to fill
as the previous CEO leadership formally led Ericsson into a rather profit postion (before
recession)—leadership uncertainty?

Cisco
 Introduces the next generation technology of ―telepresence,‖ one of the reasons they are heavily
investing in video technology for both home and commercial use – first target consumers are
businesses (conferences, cuts down traveling expenses and improves long-distance
communication)

Nokia Siemens
 In an auction for Nortel‘s assets, a company that Nokia Siemens has openly been vying for, was
out bided by MPAM Wireless
 Company response: "We're looking at the options but we really do just continue to believe that
our offer is the one that ensures a long-term partner with global scale and proven experience in
the telecom infrastructure space," said Nokia Siemens spokeswoman Chantal Boeckman

ZTE
 AP notes in 2007, $330mn Philippine government deal with China's ZTE Corp. to set up a
nationwide broadband network cancelled by President Gloria Macapagal after allegations that
she, her husband and a former elections chief benefited from huge kickbacks, which they
denied; ZTE also denied any bribing
 Scandal was a huge upset to Chinese companies

Publication Interfax
Overall
Coverage
Tone
Balanced
Reporters’
Tone
 N/A (no reporters are identified) – balanced, one positive
 Zhang Danwei—balanced
 Chen Sasha – balanced
Key
Messages
Summary
 One article notes a number of the ―horrors‖ which contribute to Huawei‘s issues in overseas
market-entry barriers
o 3Com history; ties with the Chinese government; lack of transparency; national security
issues if offered a contract (leaking sensitive data)
 Product launch announcements; tech advancements (e.g. video calling)
 Global presence – deals with technically developing countries
How key
issues
addressed
 Article that mentions the ―horrors‖ offers one way to eliminate the suspicion and overcome
overseas market-entry barriers: publicly listing
Mentions,
Quotes,
Sources
 Sources: varying telecom analysts, official Huawei press statements/announcements, various
Huawei reps
Third
Party
Trends
Alcatel-Lucent
 Majority of articles disregarded (only give percentage updates on market share/stocks – conveys
no message)
99
 The two articles included list agreements with Chinese telecoms and Alcatel-Lucent‘s expansion
into China/Pakistan

Ericsson
 Sony Ericsson cuts more staff in China (February); unknown source at the company states the
financial crisis as the attribute

Nokia Siemens
 Nokia Siemens Networks is cooperating with Nokia to release its first TD-SCDMA handset by
the end of the year, following China Mobile's request earlier this year that Nokia produce a TD-
SCDMA handset
 Will Kong, an analyst from iSuppli "If Nokia cooperates with China Mobile, Nokia Siemens
Network will certainly benefit from their cooperation due to its relationship to Nokia." But he
also warned that this sector is somewhat immature, so companies such as Nokia Siemens need to
monitor the spending incurred as it enters the field

ZTE
 Announced and showcased its ―green‖ capabilities with the world's first low-cost solar-powered
mobile phone (targeted at two billion people who have no or limited access to electricity)
o Gavin Byrne, an analyst at telecom research group Informa, said there would be demand
for a solar-powered device in countries where electricity is scarce
 In other news: release 10 new smart phones later in the year (A switchover to high-tech?)

Other
Pubs.
Newsweek and Fortune
Overall
Coverage
Tone
Balanced
Reporters’
Tone
 Carolyn Whelan (Fortune) – Balanced
 Craig Simons (Newsweek) – Balanced
Key
Messages
Summary
Fortune
 Mentioned one of the ―horrors‖ of Huawei
o Government and tech officials say Huawei, like many Chinese companies, engage in
―unsavory behavior in order to win business;‖ – Intelligence agencies believe Huawei
sold telecom gear to Saddam Hussein and to Afghanistan under the Taliban
o Chinese way of business differs compared to other industries; offer "bundles" to
emerging-market countries – e.g. buy from a Chinese telecom company and you get raw
materials sourced

Newsweek
 Huawei lacks brand awareness despite its meteoric rise in the industry in China; Competes on
prices, not innovation (accusation about copyright infringement and Cisco in 2003)
 Huawei prefers little consumer interaction, preferring to sell to vendors and not directly to
consumers – may contribute to the lack of brand awareness
 Lacks leadership visibility and transparency, and as a result the company appears suspicious and
are not trusted by foreign companies
 Much speculation about national security and Huawei‘s ties with Chinese military and
government
How key
issues
addressed
Fortune
 Company denied association with Saddam Hussein and to Afghanistan under the Taliban
 Supporters and customers of Huawei and say competitors are bad-mouthing the Chinese
companies to explain their declining sales

Newsweek
 Huawei execs dismiss the national security claims as ―ludicrous‖
 Response from company's chief spokesman, Ross Gan (about how company ―makes a
"microscopic" investment in product design‖) – It's not necessary, since the focus of the business
is almost solely on influencing "between 3,000 and 5,000 key decision makers working in the
telecom industry"
100
Mentions,
Quotes,
Sources
Newsweek
 ―Even if Huawei wanted to, it would face big hurdles selling itself to the public, when its
leadership and ownership are hidden in shadows. The company offers only a one-paragraph bio
about its CEO, which leaves out details such as Ren's membership in the Communist Party.‖
 ―Its founder and CEO, Ren Zhengfei, is the anti–Steve Jobs—he has never given an interview to
the foreign press. (NEWSWEEK's requests for an interview were declined.)… But because
Huawei rarely sells goods directly to consumers, few people outside of China know about its
products.‖
Third
Party
Trends
Fortune
 ZTE: Lawmakers in the Philippines, meanwhile, are investigating claims that ZTE paid bribes to
win business there – ZTE declined comment

101
APPENDIX B
Overview of the Telecommunications Industry

Market Trends
Throughout the years, innovations in technology and market competition have spurred
tremendous growth in the industry. High-speed internet access and Digital Subscriber Line (DSL)
has become a commodity for both residential, small business, and corporate clients. While
telephones are the industry's biggest source of revenue, advances in network technology place
greater emphasis on text and images.
Other trends include: (1) Mobile networks and services delivered within them.
1
In 2009, the
number of mobile-phone users worldwide approached 4 billion, and telecommunication
companies are beginning to share networks, focusing less on infrastructure and more on service
innovation.
2
(2) Cloud computing, a distribution system which connects many computers and
internet-connected devices and also shares resources such as computational power and storage,
3

has a market size expected to exceed $200bn by 2015.
4
However this technology is still
somewhat new and unexplored, and there are concerns of government or corporate control of
these ―clouds,‖ the state of security, and online inequality.
5
(3) Growth of ―smart and embedded
devices‖ like netbooks, smartphones, and readers will account for 1.5 billion of the 2.5 billion
connected ―data-centric devices‖ used worldwide by 2014.
6

Barriers of Entry
The telecommunications industry is an expensive business. Competitors need resources and
money to handle the costs of expanding networks and services that suddenly become obsolete –
transmission systems are replaced in about two-year cycles. Big companies with extensive
networks, particularly those with local networks for homes and businesses, must interconnect
102
with other companies to get calls and data to final destinations, are ―less reliant.‖ Smaller
competitors must pay for interconnection more often in order to finish the job, and have many
barriers for growth without the financial backing to keep up with technological innovations and
depreciations.
7

Consumers: Residential, Small Business vs. Corporate, Big Business
Residential and small business consumers are one of the most challenging markets for the
industry. Hundreds of competitors in the market rely heavily on price, brand names and efficient
billing systems to influence the consumer‘s purchasing decision. However corporate customers
focus purchasing decisions on quality and reliability of telephone calls and data delivery. Price is
sometimes a priority for consumers such as multinationals, which spend a great deal on a
telecommunications infrastructure to sustain ―far-flung operations.‖ With an additional charge,
that most clients pay, businesses can have ―premium services‖ such as highly secure, private
networks and videoconferencing.
8

The increasing dependence on telecommunications is apparent throughout the growth of
mobile phone, television, internet and computer industries. Globalization and the embrace of
cross-cultural and international communication further ensure the necessity for
telecommunications, stirring keen competition for market share. While there is domestic and
regional competition, for purposes of this discussion, only Huawei‘s main competitors, which are
major international players of the telecommunications industry specializing in corporate clientele,
are mentioned.

Brief Overview of Huawei’s Competition
ZTE was founded in 1985 and based in Shenzhen, China. ZTE Corporation (ZTE) designs,
develops, produces and installs telecommunications systems and equipment for residential and
103
corporate consumers in the global market.
9
Media coverage often mentions the
telecommunications company alongside of Huawei, as they compete in the same markets, are
both based in the same city and use a low-price strategy to compete. However, unlike Huawei,
media coverage suggests that ZTE‘s news coverage is overall more positive, as the company is
not criticized for involvement with the Chinese government and is not under scrutiny for national
security and trust concerns. The only media backlash the company received, which was a fairly
large upset for Chinese companies, was from an alleged 2007 bribery scandal with the Philippine
government, which both parties denied. According to stock charts (763: HKE), ZTE has since
recovered from the scandal.
10

Cisco designs and manufactures products for Internet Protocol (IP)-based networking and
other products in the communications and information technology industry. Cisco System, Inc
(Cisco) works with both commercial and residential markets globally, including the United States,
Canada, European Markets, Emerging Markets, the Asia Pacific, and Japan. The company has
strategic partnerships with companies including, but not limited to, Accenture Ltd., AT&T Inc.,
Intel Corporation, International Business Machines Corporation (IBM), Microsoft Corporation,
Nokia, Nokia Siemens Networks, Sprint Nextel Corporation, and Tata Consultancy Services
Ltd.
11
The media analysis indicates that during the media coverage period, publications highly
publicized Cisco‘s entry into the server market and its extensive job cuts during the company‘s
restructuring in early 2009. The company saw a sharp drop in stock value (CSCO: NASDAQ)
and began to slowly recover in March 2009.
12
Although no specific posting of Cisco‘s market
share is available, it is reported that the company commands the most of the market share and is
the biggest competitor Huawei must contend with.
13

Alcatel-Lucent started in the communications industry early. Headquartered in Paris, France,
the company was formerly known as Alcatel starting from 1898 and changed its name to Alcatel-
Lucent in 2006. The company offers products and services involving networking, software and
104
multimedia communications. Alcatel-Lucent has strategic partnerships with Edgeware,
Convergys, and Airvana.
14
Reports of Alcatel-Lucent‘s constant restructuring and consolidation,
budget and job cuts, and substantial 2008 financial losses are found in a majority of the examined
media coverage. However, as shown in the media analysis, any negative news coverage was
overwhelmingly neutralized by the constant defending and consistent messaging of newly
inducted and highly visible chief executive, Ben Verwaayen. However the company has since
seen only a slight fluctuation in its stock value (ALU: NYSE),
15
and while the Alcatel-Lucent‘s
market share is not posted, reports say it has been slipping.
16

Nokia Siemens Networks is actually a joint venture between Nokia Corporation, a mobile
and internet equipment and service provider founded in 1865 and is based in Espoo, Finland, and
Siemens Aktiengesellschaft, an electronics and electrical engineering company founded in 1847
and headquartered in Munich, Germany. Together the two companies offer wireless and fixed
network infrastructures, communications, and networks service platforms. They also provide
services to operators and service providers.
17
The company accounted for 21 percent of global
market share in the last quarter of 2009.
18
The two most frequently mentioned topics in Nokia
Siemens media coverage were the companies‘ business presence in the China market and a media
back lash when Iranians boycotted the company after it provided Iran‘s government with a
monitoring system. The media analysis indicated that Nokia Siemens acknowledged the
transaction with Iran but did not adequately or properly address the crisis. Stock charts indicate
that in the months following the Iran incident, Nokia (NOK: NYSE) experienced a sharp drop in
value and has yet to fully recover
19
while Siemens (SI: NYSE) suffered a similar outcome,
although to a lesser extent.
20

Ericsson is one of the world‘s largest sellers of telecommunications equipment. Founded in
1876 and headquartered in Stockholm, Sweden, Telefonaktiebolaget LM Ericsson (Ericsson) also
offers services and multimedia solutions to both mobile and fixed network operators to a global
105
market.
21
Ericsson accounted for 35 percent of global market share in the telecommunications
market in the last quarter of 2009.
22
The media analysis indicates new commentators criticized
Ericsson on multiple occasions for its marriage to Sony Corporation, supplier of electronic
equipment for industrial and consumer markets. The joint venture is said to have slashed jobs
and budgets as there was consolidation of research and development as well as staff. Stock
performances show some fluctuations, though nothing significant in the past year for Ericsson
(ERIC: NASDAQ).
23

106
Appendix B endnotes

1
Forbes Digital, "The Industry Handbook: The Telecommunications Industry," Investopedia, 2010,
http://www.investopedia.com/features/industryhandbook/telecom.asp.
2
Bengt Nordstrom, "Share Mobile Networks, Seduce Customers," Business Week, June 24, 2009,
http://www.businessweek.com/globalbiz/content/jun2009/gb20090624_782722.htm.
3
Liu, Jim, interview by Jessica Kraft, Cloud Computing, January 20, 2010.
4
"Huawei's Vision: Telecom Industry Trends in the Next Decade," CyberMedia India Online Ltd., January 22, 2010,
http://voicendata.ciol.com/content/ContributoryArticles/110012201.asp.
5
Charles Leadbeater, "Let's open up cloud computing," Guardian.co.uk, January 22, 2010,
http://www.guardian.co.uk/commentisfree/2010/jan/22/protect-open-cloud-computing.
6
"Huawei's Vision: Telecom Industry Trends in the Next Decade," CyberMedia India Online Ltd., January 22, 2010,
http://voicendata.ciol.com/content/ContributoryArticles/110012201.asp.
7
Forbes Digital, "The Industry Handbook: The Telecommunications Industry," Investopedia, 2010,
http://www.investopedia.com/features/industryhandbook/telecom.asp.
8
Ibid.
9
"ZTE Corp-H: Snapshot," BusinessWeek, February 4, 2010,
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=763:HK.
10
"ZTE Corp-H," BusinessWeek, February 4, 2010,
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=763:HK.
11
"Cisco Systems Inc.: Snapshot," BusinessWeek, 2010,
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ALU:US#.
12
"Cisco Systems Inc.," BusinessWeek, February 4, 2010,
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=CSCO:US.
13
Ray Le Maistre, "Huawei Reports 2008 Revenues of $18.3B," Light Reading Europe, April 22, 2009,
http://www.lightreading.com/document.asp?doc_id=175673.
14
"Alcatel-Lucent-Sponsored ADR: Snapshot," BusinessWeek, 2010,
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ALU:US.
15
"Alcatel-Lucent-Sponsored ADR ," BusinessWeek, February 4, 2010,
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=ALU:US.
16
Leila Abboud, Sinead Carew, Sven Nordenstam, Tarmo Virki, and Asa Wallentin, "Ericsson, Alcatel win 4G
telecoms deal from AT&T," Reuters, February 10, 2010, http://www.reuters.com/article/idUSLDE6191MK20100210.
17
"Siemens AG-Spons ADR: Snapshot," BusinessWeek, 2010,
http://investing.businessweek.com/research/stocks/snapshot/snapshot_article.asp?ticker=SI:US.
18
Tarmo Virki, "Ericsson market share jumps in Q4: Dell'Oro," Reuters, February 16, 2010,
http://www.lightreading.com/document.asp?doc_id=175673.
19
"Nokia Corp-Spon ADR (NOK:NYSE)," BusinessWeek, February 25, 2010,
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=NOK:US.
20
"Siemens AG-Spons ADR," BusinessWeek, February 25, 2010,
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=SI:US.
21
"Ericsson (LM) TEL-SP ADR: Snapshot," BusinessWeek, 2010,
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ERIC:US.
22
Tarmo Virki, "Ericsson market share jumps in Q4: Dell'Oro," Reuters, February 16, 2010,
http://www.lightreading.com/document.asp?doc_id=175673.
23
"Ericsson (LM) TEL-SP ADR." BusinessWeek. February 25, 2010.
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=ERIC:US (accessed February 25, 2010).

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Asset Metadata

Creator Kraft, Jessica Marie (author)

Core Title Surviving the "Made in China" stigma: challenges for Chinese multinational corporations

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 06/18/2010

Defense Date 06/15/2010

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag China,international business,International relations,multinational corporations,OAI-PMH Harvest,Public Relations

Place Name China (countries)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Wang, Jay (Jian) (committee chair), Floto, Jennifer (committee member), Lynch, Brenda (committee member)

Creator Email jkraft@usc.edu,kraftjm@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m3141

Unique identifier UC1479091

Identifier etd-Kraft-3309 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-350472 (legacy record id),usctheses-m3141 (legacy record id)

Legacy Identifier etd-Kraft-3309.pdf

Dmrecord 350472

Document Type Thesis

Rights Kraft, Jessica Marie

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu