MBA Case - Huawei Truth by fdjerue7eeu


									MBA Case - Huawei Truth
MBA Case - Huawei Truth
MBA Notes from the China Forum

Huawei's strategy, tactics, means, methods and matter are both trademarks
eyes and ears, but they are "local time" of at least three or more
combination of factors led to the inevitable choice. Therefore, in the following chapter,
when you express surprise Huawei continuously, we must constantly stop and ask,
Why? This process is the process of seeking truth from facts.

C & C08 machines: leveraging the fulcrum of the market (1)

Data is that many of Huawei core technologies in the communications equipment the
first breakthrough in 1994 with the launch of 2000 large-scale network switching
equipment C & C08 machine. C & C08 Machine began in 1992.
This year, Huawei's sales of 100 million yuan mark for the first time, tens
of millions of profits, the average employee in each head, nearly 1 million profit.
However, Ren Zhengfei has made a surprising decision: invest 100 million yuan
developing C & C08 machine. Ren Zhengfei's decision on the
many written materials made the following description: before and after 1992,
Shenzhen, knowledge is useless popular, real estate, stock bubble is strong, many
people become rich overnight, more people are immersed in made a fortune in the
dream. Community filled with impulsive, opportunistic style. Really do Co., doing the
research enterprise has been a great blow. Thus, a large number of companies turn to
do to make money fast, relatively easy to trade. However, Huawei is not to be
confused floating interest has always focused on switching products, without adding
such a trend, do not single agents, but they threw onto the risky road of independent
research and development.

January 1992, after Deng Xiaoping's southern tour speech, after three years,
after rectification of the economic, high-speed access to restorative growth. However,
investment in too fast, too large, leading to overheating.

Hundreds of billions of real estate funds "moths to flame," a
camel to invest in several areas south of Hainan 80 billion, the North Sea 30 billion,
Huizhou 15 billion. Quickly set off a frenzy of real estate. "Everywhere in
the start, the house has not yet covered, and even that is a drawing to be transferred.
The project has transferred primary, secondary, third-hand. Development of the people
who make money not speculation faster development may earn 500 yuan a square,
hype people can make about 1,000 yuan -2,000 yuan a square. "immersive
one has said," then even the provincial government departments to raise a
sum of money to Hainan to fishing, a person in one night between a millionaire.
"while not far away from Hainan, Shenzhen, played out another crazy.
August 1992, Shenzhen sold warrants to draw the table shares issued at 500 million
yuan. From 8 date, more than 100 million potential investors across the country
poured into Shenzhen, the city's network of 302 outlets before the
Paiqizhanglong to buy a hundred dollars a draw sheet. 9, on sale in the morning able
to maintain some order in fashion, but after the organization because of some network
problems, resulting in disorder and conflict. During a subscription card is fry to a
thousand dollars, to the August 10 morning, draw the table all sold out. The evening
of that day, thousands of investors do not buy lottery table Shennan Road in the city
parade, playing the anti-corruption slogans and demanding justice, and the formation
of the municipal government and the People's Bank of siege situation. This
is the history of the famous China Securities "8.10" incident.

Stone Group was striding prominent diversified, which include real estate. And pay
attention to "think it over do" and Huizhou Liu also invest in
real estate, the results had to change plans in order to "Internet
city" names for investment, and finally the South for its own production
base. Liu recalled the case of the successive his hot-headed, I said so: If let me once,
so I probably will choose. Huawei shows the first transition in how fanaticism and
insane environment completed. Ren Zhengfei later, "Huawei's
red flag in the end can play long - to the research group of China Telecom and China
Unicom headquarters reporting cadres at and above the forum with the Department,
the statement" mentioned in the article that period: "As you
know, Shenzhen has experienced two bubble economy era, a real estate, one stock.
and Huawei in these two areas have not been into paper, not that what the mud
without being contaminated, but we always engage seriously technical. room real
estate and stock up, we also have the opportunity, but we believe that the future world
of knowledge in the world, can not be such a bubble in the world, so we are unmoved.

Although there is no information to prove, Ren Zhengfei in 1992 over whether the
stock market and real estate involved, however, is certain is that, when living in
Shenzhen, a special environment that Ren Zhengfei, must be the type of non-rational
and the impact of group consciousness and behavior even wavered. Financial
Securities Institute of Renmin University Professor Wu Xiaoqiu fund market in the
second session of International Seminar on China, said: "a home business,
bank account on a stable balance of a lot of money, but the owner of enterprises is
extremely risk-averse , and even dislike securities, the stock he comes to fear, to anger.
I met this one. he is the CEO of Huawei, Mr. Ren Zhengfei, I talked to him twice, he
comes to the stock, on the extreme disgust, he that the stock is simply worthless. he
never said that my company and stock deal, will never and securities dealing. in order
to convince him, I talk a lot of sense to try to explain the capital market will be more
conducive to his development of enterprises, I spent a lot of effort ultimately failed to
persuade him. "So people ask: Why so dislike Ren Zhengfei stock? I think,
maybe should not rule out the possibility he had been involved in the stock market,
and ate loss. Of course, this is only a suspicion. Why on Zhengfei and spend desperate
into C & C08 Machine, the article also made another explanation: Zhengfei
memories of an article later said: China's reform and opening up, in order
to accelerate the pace of development, continue to use incentives to attract foreign
capital, technology, and one time joint venture are surging. At that time, China is still
in a planned economy to a socialist market economy transition period, many of the
policies and regulations are not perfect, the domestic industrial structure,
technological innovation has not been completed, in which case the result of joint
ventures is to make out a large market, state-owned enterprises in a competitive
disadvantage in inequality. This kind of market for technology's price is too
high! He believes that technology is simply self-reliance, not have their own
technology support system, industrial independence is empty talk, no independent
national industry, there is no national independence. Only to save his own, has never
been a savior, no god, China is to develop, we must rely on self-reliance. Therefore,
the start gave Huawei Ren Zhengfei set a clear goal: the development of national
industry, based on their research and development, to keep pace with advanced
technology and aim to capture the Chinese market, and overseas markets, compete
with their foreign counterparts. What is more, said: "Huawei Technologies
was born soon, Ren Zhengfei proposed 'to be a world-class, leading
telecom equipment providers', and Feng Renjiu spread the fantasy. This
idea was so incredible, and even he was called as 'any crazy'.

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