Chapter 48 Take the indirect route to expand

Looking at Huawei's business practice for more than 20 years, in the process of globalization with repeated defeats and battles, it has gone through the impulsive and unscrupulous "coyote era", and an indirect strategy of "surrender without fighting" has become increasingly clear. The famous management expert Wang Yukun wrote in the book "The Strong: Entrepreneur's Dream and Obsession": In the eyes of a lion, what is a coyote?It is to encroach on the edge of the lion's battlefield with a force of 100 to 1 to the heart; it is to launch a price war with a purpose that the lion cannot understand, so that the profit of the lion plummets; it is to use the unparalleled adaptability and understanding of the Chinese local market to use All kinds of "irregular means of competition" flexibly shuttle in the complex interest relationship, making the lion's technical advantages pale and weak.

The coyote's strong desire for success, its terrible persistence and endurance in the face of setbacks and repeated defeats, its ability to adapt and survive in a changing environment, and its way of fighting collectively at any cost, all prove to the lion that it is fierce and tough. opponent. Ren Zhengfei also hopes that Huawei will become a lion.But he didn't seem in a hurry.Foreign consulting companies hired by a lot of money are wielding their swords at Huawei, but the scope of wielding is limited to Huawei's support system.And Ren Zhengfei is still in his usual way, commanding the main team to fight in the main business market in its own way.The so-called main business is sales and the market for Huawei.Compared with those companies that entrust themselves to foreign consulting companies, Ren Zhengfei is by no means a person who easily hands over his lifeline to others for transformation.

Huawei's "coyote era" refers to the period when Huawei concentrated its efforts in the domestic market.Ren Zhengfei used the indirect route strategy to manage the customer relationship that attracted the attention of competitors the most. This was the strangest and most controversial move in Huawei's history.At the beginning, Huawei formed many joint ventures with local telecommunications bureaus, such as Shenyang Huawei, Chengdu Huawei, Anhui Huawei, and Shanghai Huawei.These joint ventures have been empty shells from the day of their birth, which is very different from the mission of joint ventures in the usual sense.Huawei has never included products, especially products with technical content. The role of these companies is only to sign the bills and take the bills.The funds invested by local operators and the government in joint ventures can even be paid in advance by Huawei.It's a brilliant idea to have someone in the joint venture sell the equipment and collect payments from the customer who is the shareholder.Obviously, this has both boosted Huawei's sales and straightened out long-term customer relationships.Moreover, this kind of interest bundling may also play a subtle role when the enterprise is in crisis.

Using an integrated economy to solidify the relationship with customers not only ensures the naturalness and security of customers, but also ensures the cohesion and centripetal force of the team, making it unimaginable for those companies that set hard targets for front-line employees and key customers in order to grab orders .In the local market, the skillful use of this indirect route strategy has enabled Huawei to concentrate enough energy to attack the global market. In 1999, Huawei, which has been focusing on the manufacture of telecommunications equipment for a long time, launched its own data product—access server—in China for the first time.Within a year, Huawei, which is highly aggressive in the market, grabbed 70% of China's newly added access server market, and then extended to mainstream data products such as routers and Ethernet. In 2001, Huawei's market share in routers and switches in China was close to that of Cisco, making it its biggest competitor.

Perhaps the partial victory has injected some kind of stimulant into the Huawei team, making them think that they can be invincible in the global market by maintaining the attitude of an indomitable attacker. In June 2002, FutureWei, Huawei's US company, was established.Huawei, which has just made its debut in the United States, has made no secret of its desire for Cisco's share. Its advertisements in the American media are highly targeted and suggestive: "The only difference between them is the price." The background of the pattern is the Golden Gate Bridge, which is exactly what Cisco Company logo.

In the low-end market, Huawei provides products that are 50% lower than Cisco's prices.In the eyes of American analysts, although Huawei and some other low-cost competitors did not pose a serious threat to Cisco's position at the time, they will eventually affect the profitability of Cisco's core switch and router business.These products account for 80% of Cisco's sales and profits. On the first day of 2003, Reuters' editorial issued a warning: "Huawei will be Cisco's global nightmare." Cisco's lawsuit against Huawei is a big lawsuit that changes the structure of the information industry.Previously, people said that "the information industry has changed because of Cisco", and since then people have said that "Cisco has changed because of Huawei".In fact, it is Ren Zhengfei and Huawei that have been profoundly changed.

On January 23, 2003, Cisco Systems filed a lawsuit in the US District Court of Texas, accusing Huawei of plagiarizing its router code.Ren Zhengfei immediately flew to the United States to take command of the front line.Huawei quickly responded by stopping the sale of the products accused by Cisco Systems in the United States, removing the product information from its US website, and recalling such products sold in the United States. Finding strong support is the most beautiful move of Ren Zhengfei's "anti-encirclement and suppression campaign".One of the most effective means adopted by Huawei in this lawsuit which is obviously against itself is the cooperation with 3Com.Americans can look down on Huawei, but they can't ignore the existence of 3Com. They can ignore Huawei's defense, but they can't take 3Com's testimony seriously. 3Com formally intervened in the lawsuit, requesting a judgment that the products produced by its joint venture with Huawei were not infringing, so as to ensure the smooth sales of the products of its new joint venture with Huawei.After introducing an independent third party to conduct technical audits, the results shocked the world.The core source code of Huawei's router products is completely different from Cisco's, but it is completely similar to Cisco's products in terms of edge technology and design such as user interface, command interface, and product appearance.Huawei's technical breakthroughs worked quickly, and a new version of the design was submitted to a third party for review.Facts have proved that Huawei has the technical ability to come up with its own design, but it is just a kind of inertia to follow the strategy, which makes Huawei ignore the troubles that imitation of edge technology can bring. On July 28, 2004, Cisco and Huawei each issued a statement announcing that the lawsuit, which lasted for one and a half years, ended with an out-of-court settlement.

It can be said that the Cisco lawsuit is a watershed in Huawei's globalization strategy.The Cisco lawsuit made Huawei directly realize the strategic significance of the alliance.When entering an unfamiliar market, Huawei establishes a joint venture with a local company because the other party understands the local market better.Ren Zhengfei raised this issue to a higher level.He said: "We must keep a low profile, learn from Rabin, exchange land for peace, and would rather give up some markets and some interests, but also cooperate with friends and businessmen, become partners, and jointly create a good living space and share the benefits of the value chain. "

Wang Yukun believes that the "coyote era", a tactical expedient measure, has become the guiding ideology at the strategic level in the era of globalization.A non-standard operation has become a consistent principle for Huawei to build partnerships.This is the knowledge exchanged for blood. The general creed of Chinese enterprises is: make every effort to create the most perfect product, create a brand, and conquer the world.Huawei has further realized the value of indirect strategies and has achieved extensive cooperation with multinational companies.Not many customers in developed countries know about Huawei, but no one knows about Nokia, Ericsson, Siemens, General Motors, Microsoft, IBM, Sony, Alcatel, 3Com, etc.Forming a strategic alliance with these giants is undoubtedly an indirect strategy of borrowing a boat to go to sea.Customers recognize the Huawei brand through these giants.Relying on its own products and technologies, Huawei has achieved the expansion of Huawei's global technology footprint based on technology through equity participation or holding shares, and leveraged on well-known brands and channels. This is the essence of indirect strategies.