See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/337757449

Innovation and Management and New Product Development (IMNDP) -

Assignemnt

Research · January 2019

DOI: 10.13140/RG.2.2.10602.67527

CITATIONS READS
0 3,299

1 author:

Abdurraouf Fathi Sawehli

Asia Pacific University of Technology and Innovation
21 PUBLICATIONS   0 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Abdurraouf Fathi Sawehli on 05 December 2019.

The user has requested enhancement of the downloaded file.

 ASSIGNMENT
TECHNOLOGY PARK MALAYSIA

Innovation and Management and New Product Development (IMNDP)

UC3F1810IT(NC)

HAND OUT DATE: 11 MARCH 2019

HAND IN DATE: 13 MAY 2019

WEIGHTAGE: 60%

INSTRUCTIONS TO CANDIDATES:
1 Submit your assignment at the administrative counter
2 Students are advised to underpin their answers with the use of
references (cited using the Harvard Name System of Referencing)
3 Late submission will be awarded zero (0) unless Extenuating
Circumstances (EC) are upheld
4 Cases of plagiarism will be penalized
5 The assignment should be bound in an appropriate style (comb bound or stapled).
6 Where the assignment should be submitted in both hardcopy and softcopy, the
softcopy of the written assignment and source code (where appropriate) should be
on a CD in an envelope / CD cover and attached to the hardcopy.
7 You must obtain 50% overall to pass this module.

Page 1 of 20
Marking scheme:

Name Abdurraouf Fathi Ali Sawehli

TP TP042816
Intake UC3F1810IT(NC)
Module Innovation and Management and New Product Development (IMNDP)
Lecturer TAJUDDIN BIN A. RASHID

No Criteria Marks Allocation

1 Originality & Innovativeness

2 Application of Levitt’s concept

3 Product Platform Justification

4 Product competitive strategy

5 Application of Ansoff’s growth matrix

6 Reference

Total

Page 2 of 20
Executive summary:

For years, Apple and Samsung have ruled the high-end phone market, launching devices with
advanced features that other players can only aim to follow. Now, however, one Chinese phone
manufacturer is going all-out to change that.

Huawei, which stifled the iPhone’s momentum in China to become the world’s third largest
smartphone maker last year, has set its sights on competing with Apple and Samsung for the
attention of wealthy shoppers in Europe and the U.S. The Shenzhen-based company has been
cutting off lower-end product lines and investing billions of yuan every year in technology and
promotion campaigns – more than any other of its Chinese competitors – to launch smartphones
that are designed to rival the latest iPhones and Galaxies in specifications as well as market hype.

To capture the sales and demand of the smartphone in the USA and European markets, Huawei is
required to develop and introduce new smartphones with new and effective features that simplify
the consumer’s life. The new smartphones also shall outperform existing smartphones in the
market. This assignment elaborates and provides detailed information about a set of new features
for Huawei’s new product (smartphones) which are Huawei Pay and Huawei Wallet.

Mobile payment and Mobile wallet generally refer to payment services operated under financial
regulation and performed from or via a mobile device. Instead of paying with cash, cheque, or
credit cards, a consumer can use a mobile to pay for a wide range of services and digital or hard
goods as well as store all cards or coupons in a digital wallet. Although the concept of using non-
coin-based currency systems has a long history, it is only recently that the technology to support
such systems has become widely available and every company should adopt it.

Page 3 of 20
Contents
Marking scheme: ......................................................................................................................................... 2
Executive summary: ..................................................................................................................................... 3
1. Introduction: ........................................................................................................................................ 5
2. The newness of the new product: ....................................................................................................... 6
3. The innovation of the new product: .................................................................................................... 7
3.1 Problem addressed: ........................................................................................................................... 7
3.2 Opportunity: ...................................................................................................................................... 8
3.3 Benefits or impact created: ............................................................................................................... 9
3.4 Uniqueness: ....................................................................................................................................... 9
3.5 Commercial viability (Market demand & revenue model): ............................................................. 10
4. The application of Levitt’s idea in product development: ................................................................. 11
4.1 Core Level: ....................................................................................................................................... 11
4.2 Actual Level: ..................................................................................................................................... 12
4.3 Augmented Level: ............................................................................................................................ 12
5. The platform option used to develop a new product: ....................................................................... 13
6. Discuss the competitive strategy of a new product:.......................................................................... 14
6.1 Differentiation: ................................................................................................................................ 14
6.2 Positioning: ...................................................................................................................................... 15
7. The new product growth strategy using Ansoff’s growth matrix: ..................................................... 16
7.1 Market Penetration: ........................................................................................................................ 16
7.3 Product Development: ..................................................................................................................... 17
7.4 Diversification: ................................................................................................................................. 17
8. Conclusion.......................................................................................................................................... 18
9. References ......................................................................................................................................... 19

Page 4 of 20
 1. Introduction:

Huawei is one of the leading worldwide providers of information and communications technology
(ICT) infrastructure and smart devices with integrated solutions across four key domains – telecom
networks, IT, smart devices, and cloud services. Huawei which was founded in 1987 as a private
company fully owned by its employees is committed to bringing digital to every person, house and
organization for a fully coupled, intelligent world. Huawei's end-to-end portfolio of products,
solutions and services are both competitive, secure and affordable. Through open collaboration
with ecosystem partners, they create lasting value for customers, working to empower people,
enrich home life, and inspire innovation in organizations of all shapes and sizes (Huawei, 2019).

Huawei’s innovation focuses on customer need by investing profoundly in basic research,

concentrating on technological breakthroughs that drive the world forward. Huawei has more than
180,000 employees, operate in more than 170 countries and regions and manages around 36 Joint
Innovation Centers and 14 R&D Institutes & Centers/Offices.

Throughout digital transformation, enterprises face many challenges of how to deploy and
integrate new technologies, including cloud, AI, and big data. To keep pace with changes,
enterprises need to adopt new strategies, organizational structures, processes, R&D,
manufacturing, marketing, and services and this is where powerful digital platforms come into
play.

These platforms will enable enterprises to harness new technologies and agilely innovate to deal
with changes and new competitive forces. Mobile payment and digital cards are an essential part
of a successful digital transformation. These digital solutions are trendy new technologies and
people are adapting quickly as they prove they are matured enough and bring many advantages.

While payment systems like cash and credit and debit cards still dominate the payment landscape,
the latest trend among retailers is a mobile payment. A mobile payment app lets you send money
from your phone, either to other people or to a payment terminal to buy something in a store.

Page 5 of 20
 2. The newness of the new product:

The new smartphone for Huawei will focus mainly to overcome payment issues and simplify the
way we transfer and receive money as well as to digitize all cards in one place to encourage people
to move to the cashless channels and store our cards in a safer place. In the new product of Huawei,
all smartphones will support features related to the cashless payment that bring payment methods
to a new level and make it easier and effortless to process payments. The two main features are
the Huawei Wallet and Huawei Pay. While Huawei Wallet is a feature that allows smartphone
users to keep their credit, debit, and prepaid cards, store cards, boarding passes, movie tickets,
coupons, rewards cards, student ID cards, and more in one place, Huawei Pay is easy to use and
works with Huawei devices to make secure purchases in stores, in apps, and on the web as well as
to send and receive money from friends and family as sending messages with the aim to bring even
a more straightforward experience than using the physical card, and safer too.

Huawei Wallet:

Huawei Wallet is a feature that digitizes all the cards that are overflowing someone’s billfold or
pockets. The Wallet stores virtual versions of all user’s passes, tickets, coupons, credit cards, debit
cards, and loyalty cards so they can effortlessly access and use them at any time and anywhere.
The Wallet is location-aware and always online so that it can update the cards information
immediately, provides real-time updates and users always know how much balance they have or
where they need to go (Kenton, 2019). Besides, it supports digital ID cards to access building and
identifications purposes in airports and public places and can be used as a legitimate way to identify
any person by simply waving their Huawei smartphones in front of the reader. The Wallet or
Passbook is shipped in all Huawei devices as an application that pre-installed by default within the
Android operating system used by Huawei smartphones to store Wallet-passes and can be used to
check in for flights, get and redeem rewards, get into movies, or redeem coupons. The wallet stores
useful information like the balance on the credit card, coupon’s expiration date, seat number for a
concert, and more in one central location.

Huawei Pay:

Huawei Pay is service that allows smartphone users to make secure purchases in stores, in apps,
and on the web as well as the ability to send and receive money from friends and family right as

Page 6 of 20
simple as sending messages. Going cashless is essential nowadays, and it is easy with this new
service. Huawei Pay is not just for credit/debit card users as it comes with credits that can be used
to top up at any time. Using Huawei Pay with smartphones is faster than using a credit or debit
card since spending money shouldn’t mean spending more time at the register. It allows making
purchases in all kinds of apps. Pay for a ride, a food delivery, or a new pair of sneakers with just
waving your device to only checking out in a fast and secure approach. Besides Huawei Pay can
be used to pay and get paid instantly using the cards already used in Huawei Wallet without the
hustle to depend on third-party applications. When money is being sent to the user’s account, it is
added to the Huawei Pay card that is built in the Wallet app. Then, users can start using the amount
right away to make purchases using Huawei Pay in stores, in apps, and on the web as well as even
transferring the Huawei Pay balance to a bank account (Sorensen, 2018).
Even though these features have existed in the market, Huawei should ship these features in all
smartphones to capture the sales and demand of the smartphones in the USA and European markets
and simplify the way users handle payment transactions. Huawei Pay and Wallet are a fast, simple
way to pay online, in stores, send and receive money with ease and more. They bring together
everything users need at checkout and protect payment info with multiple layers of security as well
as they can manage their accounts cards in a digitized way.

3. The innovation of the new product:

3.1 Problem addressed:

A cashless culture may sound like something out of science fiction. However, we are already on
our way to that especially in the US and Europe market as their economy is heading towards the
cashless transaction and most of the payments are made online. Many stores in this area aim to
take away human cashiers and go to “cashier-less” transactions in which customers can use online
payment methods to purchase their stuff through mobile payments service like the proposed feature
Huawei Pay. The trend of cash-free stores is growing more common on the East Coast in the US
and other parts of Europe (Balaji, 2017). The move to a cashless society is picking up steam, and
Huawei does not adopt this type of services in their products which plays a key factor for the
people there who are accustomed to the online and cashless transactions. Thus, Huawei might lose
a market share and customers since they do not support this type of services which is widely
adopted in the US and Europe.

Page 7 of 20
Moreover, transferring money, or collecting money from a group of people can be a hassle and it
takes a lot of effort without cashless solutions, and a person would have to handle all of these
transactions with cash and checks beside the need to gather all this money in person or via snail
mail. Thus, in this rapid-paced world, this takes a long time and effort to do, but mobile wallets
have made everything from splitting dinner with friends to collecting team fees or club dues
meaningfully easier to handle. Also, carrying out several physical cards can be challenging, and
there is a big chance they got lost easily if no digitalized solutions are in place that store all cards
information, identifications, flight tickets in a centralized app and carry them anywhere without
the need to bring additional documents (Yuen, 2019). Features like Huawei Wallet can make life
easier and lighter to carry every day compared to a typical wallet, and it eliminates the need to take
so many cards you might have and even can be used as a legitimate identification to access public
places.

3.2 Opportunity:

Mobile phones were only used to make calls and reply to texts. No one could have imagined that
mobile wallets would replace traditional wallets, debit and credit card. Mobile wallets are slowly
making a mark as a form of payment method. Experts from different sectors including network
operations, banks, express that, mobile payments will quickly replace traditional wallets over time.
Recent studies show that consumers’ awareness has increased mobile payment usage. Below are
a few opportunities for Huawei Pay and Wallet services (Alfred, 2018):

- Payments and Loyalty:

Most people in the US and Europe have mobile payment services like Huawei Pay, and they think
it simplifies the way payment is made. Research shows that most consumers are reluctant in using
these solutions if a Smartphone app does not support it. A total of 69% of people reported that they
continuously use mobile wallets if it was on their phone. The secret to mobile payment usage is
loyalty, not payment. Consumers engage more with brands that they are loyal to and companies
can gain consumer engagement by offering discount and rewards within mobile wallets. Thus,
Huawei can gain more profit if they included these types of services.

Page 8 of 20
 - Increase in Number of Huawei Smartphone Owners

Many surveys were carried out to show the growth of Smartphone ownership. 4 in 10 people own
a Smartphone, and the number is still overgrowing. With the high increase in Smartphone owners,
so is the number of mobile payment users. Thus, consumers can use their smartphone to make
mobile payments if the feature is supported which forms a significant number of users that can use
the service especially in places like the US and Europe where these types of services are common.

- Increased Interest in Mobile Payment among Smartphone Owners

Many smartphone owners understand and are interested in cashless payment than before. This is
proven in the younger and the more tech-savvy population. The Federal Reserve survey pointed
out that 3 in 10 people are open to using cashless payment if the opportunity arises. An example
of that is with the shopping apps in which most of the consumers would be interested in using their
mobile wallets instead of credit cards for some reasons like security, more comfortable and
sometimes Huawei can provide discount coupons to attract customers to use its mobile payment
solution.

3.3 Benefits or impact created:

Using mobile payments and digital wallet reduce fraud. The data stored in mobile wallets are
encrypted, meaning the actual card numbers are not transmitted while making a payment. They
also rely on certain security features such as biometrics, to authorize a payment or view the stored
information. Cards number is not displayed in the mobile wallet so that no one can know the card
number for future use. With a mobile wallet, users can pay quickly by holding your phone over
the payment terminal and verifying the purchase which saves time and complete transactions in a
few seconds. Also, they can store loyalty and gift cards allowing users to have them on always on
hand. Lastly, users can shop online on the go without typing in card numbers for every e-commerce
app which reduces the number of places where card numbers are stored. Also, users would still
receive rewards like cash back when using the service (Rampton, 2017).

3.4 Uniqueness:

The proposed features are unique compared to other solutions because of the way it stores
information. The service is secure to make payments since when a user purchases anything, the

Page 9 of 20
app will use a combination of the device code and unique transaction code to complete the
transactions, so the card number is never stored on the device or Huawei servers, and when the
user pays, the card numbers are never shared with merchants. This method does not protect
customers only; it also prevents any man in the middle attacks that try to inspect the credentials
while making the payments from Huawei servers to the users. The card information is hashed with
a robust encryption method so all data in the wallet cannot be decoded to a readable text. Also,
these features are unique as they utilized wave and NFC frequencies when consumers use them
which does not allow a close touch to the reader and can be done within a close distance without
the need of physical contact, and they are handheld wireless POS terminals (Pozin, 2015). Lastly,
these features come with a loyalty program based on points and users will be offered discounts
and gifts based on how many points they collect.

3.5 Commercial viability (Market demand & revenue model):

Mobile Payments services like Huawei Pay and Huawei Wallet are the future of commerce. More
than 5 billion people have access to mobile phones, and around 1.2 billion have bank accounts
which means that more people have access to mobile phones than bank accounts. Thus, this reflects
how big the demand and the revenue can be for companies that support these services. An example
that shows the extensive usage of these is that subway stations in London accept mobile phones to
pay for trains and in the works for New York City subways as well.
The use of mobile payments is also growing and as a testament to the popularity of these
applications in Europe, last year Sweden-based mobile payment company iZettle gained $150
million in profit (Lunden, 2017). Business Insider is predicting that in the U.S. alone mobile
payments volume will increase to $503 billion by 2020 and will be used by 56 percent of the
consumer population during that year. Same goes to Europe countries like UK and France which
are already on their way to becoming cashless societies. While this reflects on the huge demand,
this also represents the significant amount of revenue that can be generated by dominating this
market (Intelligence, 2016).
Huawei can compete effectively and make a profit with these features by focusing on millennials
as they represent the largest group of consumers in the U.S and Europe. They are also the least
likely to carry cash, and most likely to rely on their smartphones for everyday tasks including
making purchases. 83 percent of them own a smartphone, and nearly 40 percent engage with their

Page 10 of 20
phone more than anything else. Catching the attention of this group is essential to expand market
demand. Lastly, the revenue model can be based on interest revenue strategy by depositing the
money kept in wallets as well as the advertising revenue model by including advertisements in the
content provided.

4. The application of Levitt’s idea in product development:

Levitt’s idea views a product on three different levels that will help to extract all the benefits that
a product offers and what values it adds to customers. They should see the product as a complex
bundle of benefits that satisfy their needs. The diagram below shows the three levels that make up
the whole product concept (Hon, 2017).

The figure shows Levitt’s idea (Hon, 2017)

4.1 Core Level:

Level one is the most basic level and looks at what people set out to buy and what benefits the
producer would like their product to offer buyers (Bhasin, 2017). For Huawei’s new features, users
nowadays do not only buy a cell phone that can call and text or take a picture, but they try to find
a mobile phone that offers beyond that to simplify the way they live and make things more
comfortable and more accessible. Thus, with Huawei Pay and Wallet as new features of the phones,
users will have a secure platform to keep and digitalize all their credit, debit, and prepaid
cards, store cards, boarding passes, movie tickets, coupons, rewards cards, student ID cards, and
more in one place and use them for a seamless identification. It also allows them to make secure
purchases in stores, in apps, and on the web as well as to send and receive money from friends and
family right in their phone in a cashless approach. This will increase the security level and decrease

Page 11 of 20
the possibility of frauds and even more straightforward than using physical cards. The core
functions as following:
- Secure way to make payments
- Faster and simpler check out
- Data is more secure
- Send and receive money
- Store all documents like boarding passes, tickets, rewards cards, and more in one place.
- Access places like a dorm and the library with a digital ID.

4.2 Actual Level:

Level two is about translating the list of core product benefits into an actual product that people
will buy. There may be competitor products offering the same advantages so the aim at this stage
is to design a product that will persuade people to purchase the product and it this involves
developing product features, design, quality level, brand packaging (Fripp, 2016). Huawei’s new
phone styling, features, packaging are carefully combined to deliver the core customer value with
a focus on the new features that make customers think to buy the product because it has unique
features and more functional than before. Using Huawei Pay and Wallet with all Huawei products
is faster than using a credit or debit card as spending money shouldn’t mean spending more time
at the register or carrying a pile of cards in the pocket that can be digitalized and used a legitimate
identification. Below are the actual product and the proposed features.
- Different type of colors and User Interfaces.
- Design Pattern
- Packaging design
- Smartphone accessories
- All existing features in Huawei phones such as the great camera, face recognition,
biometrics and so on that can be utilized to enhance the Huawei Pay and Wallet experience.

4.3 Augmented Level:

Level three involves deciding the additional non-tangible benefits that a product can offer. The
augmented level of products includes core value and the actual product. The augmentation product
will be a complete solution when the connectivity problems are defined by the core customer value
as it also offers the customer service, support, benefits when consumer purchase the product

Page 12 of 20
(Claessens, 2015). This level can also create customers loyalty due to the perception that an
organization provides more than what they expected. Below is the augmented level list:
- Warranty and service incurrence
- Rebate cash, gifts, and coupons.
- Charge less rate of interest for the merchants that use the service.
- Product Support as long as the phone is licensed.
- After sales and repair services for the phone itself.

5. The platform option used to develop a new product:

Since Huawei phones are using Android as a primary operating system, the services are developed
using a programming language that supports Android like Java. Android is the mobile operating
system based on the Linux kernel, and it also developed by Google. The features are shipped as
peer-to-peer payment apps that allow to make electronic money transfers and store sensitive
information like card numbers. The services are included as default device features rather than an
app in Huawei devices and leverage card tokenization and device-based thumbprint authentication
for enhanced security and ease of use. However, Android is only a part of the new product
development and use several technologies. They use decentralized peer-to-peer systems to set up
resource allocation and protection requirements to prevent storage and bandwidth overuse. Also,
they utilize NFC technology to transfer information about payments and digitalized cards which
is one of the contactless remote technology that functions on the distance up to 10 cm and provides
users with secure and contactless payment between smartphones and the reader.
Both services also require real-time features to enrich the payment methods with speed, valuable
messaging capabilities and immediate availability of transaction status and retrieving data.
Nevertheless, a legal team that knows the field of mobile payment necessary even before the
development process. Mobile wallet regulations vary extensively from country to country, so the
Huawei team will need to be up to date with the regulatory requirements in the US and Europe.
Lastly, hosting the features backend is another vital thing which should use a ’Mobile Service as
a Backend ‘(MBaaS) provider as it saves significant mobile backend development and
management effort.

Page 13 of 20
 6. Discuss the competitive strategy of a new product:

Competitive strategy of the new Huawei products is designed for a long-term plan that helps the
company to get competitive advantages in the market and sell as many products as it can to get a
significant portion in the market. Identification of competitive advantage factors can be helpful for
managers in the reduction of decision-making risks. Competitive strategy is successful when the
company profit rate is higher than the average rate of the related industry and retains the high profit
rate for several years (Hosseini, 2018)

6.1 Differentiation:

Businesses use the marketing strategy of product differentiation to distinguish their products from
those of their competitors. Huawei has successfully used that to separate its products from those
of other electronics manufacturers by developing innovative features. The primary differentiation
of the new Huawei is the technology used behind the mobile payment and wallet. Huawei
smartphone has always offered the superior quality of the hardware to handle and control the AI
technology and the great camera which implies the company can innovate in areas like peer to peer
payment and blockchain the can be used in to develop the proposed features. Another significant
aspect comes from product design. Products that consist of a different visual style include different
features or handle various tasks stand out from those offered by the competition. Thus, the features
can perform several functions behind one term such a sending and receiving money, checking out
quickly on the mobile, web and even stores, store cards information and digital identifications and
more. Besides, all other great features from Huawei are included by default like biometric and AI
camera.
Another key in the product differentiation plan is to continue the company's pricing strategies that
aim to level up the quality while maintaining high-profit margins which gives consumers a sense
of high value and exclusivity for their products. Huawei always works on reducing cost at every
level to remain the competition by setting a price which is lower than other competitors that
producing the same product. The company should be excellent at promoting the products by
focusing on the quality of the mobile phone and new features like Huawei Pay and Wallet with the
same affordable price. Lastly, the brand loyalty factor is an important key which Huawei is already
among the most successful technology companies in the development of that matter. Therefore,
With the new features, the same pricing strategy and good quality as well as the excellent

Page 14 of 20
marketing methods and brand loyalty, Huawei win a significant market share and be differentiated
from other competitors in the market.

6.2 Positioning:

A product positioning strategy is one of the essential marketing initiatives a company needs when
introducing new features. Product positioning refers to the inherent qualities that distinguish the
item from comparable items marketed by competitors, and the company should present the benefits
of the product to users previously as this could impact the consumer perceptions about the product.
Positioning might affect the success or failure of the product based on what the company conveys
to the market. For Instance, the marketing team should demonstrate the features correctly to the
customers and the difference between other company’s products like security concerns, price
strategy and so on.
The new features in new Huawei phones have strong competitors like Apple Pay, Google Pay, and
Samsung Pay as well and these products quite have quite similar features to Huawei Pay and
Wallet. While they provide excellent quality and design, most of them charge extra fees to use the
service and their devices quite expensive to buy and benefit from the features. Huawei’s mobile
phone that provides new features will attract customer to purchase the product because they find
the right quality and new technology and features with the same affordable price. Also, Huawei
uses value-based and user benefit positioning strategies on the products offered to the customers
which differentiate the services from similar products on the market. The core value of the Huawei
and Wallet is essential to address in the positioning strategy. The proposed features
simplify the way payment is made and how digitalizing all cards and IDs can be more secure,
faster and effective than the traditional methods. Lastly, mobile payment and digital cards are
overgrowing in the US, and Europe countries and many customers think it is a positive approach
they would use if a proper and complete service is developed. Creating a difference when a product
shares many characteristics with competitors requires creativity to create the perception of
differentiation which also requires not focusing on the features only, but even the design and other
feature the mobile provides like in Huawei case, the AI camera and exceptional performance.

Page 15 of 20
 7. The new product growth strategy using Ansoff’s growth matrix:

The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business
Review in 1957, in an article titled "Strategies for Diversification." It has given generations of
marketers and business leaders a quick and simple way to think about the risks of growth. It
consists of four strategies that can be used to grow and analyze the risks associated with each one.
The idea is that each time you move into a new quadrant (horizontally or vertically), risk increases
(Manktelow, 2018).

The figure shows Ansoff’s growth matrix (Manktelow, 2018)

7.1 Market Penetration:

It is a strategy involves focusing on selling existing products or services into the existing markets
to gain a higher market share. The competition is intense in the US and Europe marker for mobile
payment and wallet which requires Huawei to go out of its way to increase market share to grow.
To penetrate and grow the customer base in the existing market, Huawei should continue to cut
prices to attract existing or new customers, improve its distribution network, invest more in
marketing and increase existing production capacity. In addition, they should maximize the use of
distribution channels by making attractive deals and promotion with large distributors. Lastly,
acquiring a competitor in the same marketplace can be a pivotal factor in the market penetration
strategy.

7.2 Market Development:

It is the second market growth strategy that is used when the firm targets a new market with
existing products. In this case, Huawei tries to capture the US and Europe market for expansion
Page 16 of 20
and reaching new customer segments. The strategy is most successful if the company owns
proprietary technology that it can leverage into new markets like the Huawei Pay and Wallet or
consumers in the new market are profitable and possess disposable income like the targeted.
market. After penetrating the markets, Huawei mobile phone with the new features will enter into
a new domestic market (expanding regionally) in the US and Europe market as the big demand
there. Even though Huawei had the position in China phone market, the company can maintain
the security for the existing products at the same time try to enter the new markets by opening
various sales channels.

7.3 Product Development:

It refers to companies that have a good market share in an existing market and therefore might
need to introduce new products for expansion. Product development is required if the company
has a good customer base and that the market for existing products has reached full capacity. So,
it needs to develop and sell new products to existing markets. The company might make some
modifications in the existing products to improve value to the customers or develop and launch
new products alongside a company’s existing product offering. It also forms in the shape of
profoundly investing in Research and Development (R&D) to come up with new and innovative
drugs every now and then or acquiring a competitor’s product and combine resources to create a
new product that better meets the need of the existing market. Lastly, it can also by establishing
strategic partnerships with other companies to gain access to each partner’s distribution channels
or brand.

7.4 Diversification:
This refers to when a company enters new markets with new products that are either related or
completely unrelated to a company’s existing offering. Though like a strategy is the riskiest as
market and product development is required, the risk can be alleviated through related
diversification. There are two types of diversification a company can use which are Related
diversification and Unrelated diversification. While the first one has possible interactions to be
realized between the existing business and the new product/market, the other has no possible
interactions to be realized between the existing business and the new product/market. The
recommended one to be used by Huawei is the Related diversification.

Page 17 of 20
 8. Conclusion:

To sum up, vendors like Apple and Samsung have dominated the high-end phone market,
introducing devices with cutting-edge features that other players can only aim to follow. Now,
however, Huawei is a rapidly growing company that managed to compete with them successfully.
Most of the mobile phones nowadays have reached the highest specs like a great camera, high
speed and efficient GPU and CPU. Thus, the author focused on proposing new features into all
Huawei devices rather than introducing a new phone with higher capabilities which already have
taken place and existed. Adding higher specifications would not provide a significant difference
for the end users as the existing already support that until the point a mobile phone now has the
same amount of Ram a laptop has.

This assignment proposed cutting edge features for Huawei phones that are not supported yet
which are Huawei Pay and Huawei Wallet. While Pay is a mobile payment method that simplifies
the process of sending, receiving and making payment in stores, Huawei Wallet is a digital wallet
that can store credit cards, gifts, coupons and even IDs like passports and can be used as legal
identity for anyone at anywhere like public places and within university and school. Using these
features will make life easier and avoid any fraud as the data is securely stored and encrypted.
While implementing these features has a few challenges like getting approvals in each country to
operate the services as well as proving constant support and making sure the features work
smoothly, Huawei has proved that it can handle and overcome them easily as it incubates a large
number of brilliant and smart people who are able to make that happens.

Page 18 of 20
 9. References
Alfred, 2018. The Future of Mobile Wallets: Opportunities and Challenges for the Wallet Integration.
[Online]
Available at: https://www.dotcominfoway.com/blog/opportunities-and-challenges-for-the-wallet-
integration
[Accessed 17 5 2019].

Anon., 2018. CFI. [Online]

Available at: https://corporatefinanceinstitute.com/resources/knowledge/strategy/market-positioning/

Balaji, S., 2017. E-wallet Payment Option – How’s the Scene in the US, Europe, and Asia Pacific?. [Online]
Available at: https://www.chargebee.com/blog/online-mobile-wallets-payment-options-usa-europe-
asia/
[Accessed 13 5 2019].

Bhasin, H., 2017. Three Levels of a product. [Online]

Available at: https://www.marketing91.com/levels-product/
[Accessed 23 5 2019].

Claessens, M., 2015. Three Levels of Product – Core Value, Actual Product, Augmented Product. [Online]
Available at: https://marketing-insider.eu/three-levels-of-product/
[Accessed 12 5 2019].

Fripp, G., 2016. Five product levels in marketing. [Online]

Available at: https://www.marketingstudyguide.com/five-product-levels-in-marketing/
[Accessed 2 5 2019].

Hon, K., 2017. Augmented Product Concept. [Online]

Available at: https://www.learnmarketing.net/threelevelsofaproduct.htm
[Accessed 20 5 2019].

Hosseini, A., 2018. Competitive Advantage and Its Impact on New Product. [Online]
Available at: https://www.mdpi.com/2199-8531/4/2/17/pdf
[Accessed 8 5 2019].

Huawei, 2019. Corporate Introduction. [Online]

Available at: https://www.huawei.com/my/about-huawei/corporate-information
[Accessed 19 5 2019].

Intelligence, B. I., 2016. THE MOBILE PAYMENTS REPORT:. [Online]

Available at: https://www.businessinsider.com/the-mobile-payments-report-market-forecasts-
consumer-trends-and-the-barriers-and-benefits-that-will-influence-adoption-2016-5/?IR=T
[Accessed 19 5 2019].

Page 19 of 20
 Kenton, W., 2019. Mobile Wallet. [Online]
Available at: https://www.investopedia.com/terms/m/mobile-wallet.asp
[Accessed 3 5 2019].

Lunden, I., 2017. iZettle raises $63M more at a $500M valuation to expand from mobile payments.
[Online]
Available at: https://techcrunch.com/2017/01/10/izettle-raises-63m-more-at-a-500m-valuation-to-
expand-from-mobile-payments/v
[Accessed 17 5 2019].

Manktelow, J., 2018. The Ansoff Matrix. [Online]

Available at: https://www.mindtools.com/pages/article/newTMC_90.htm
[Accessed 22 5 2019].

Pozin, I., 2015. 3 Trends In Mobile Payments You Need to Know About. [Online]
Available at: https://www.forbes.com/sites/ilyapozin/2015/09/10/3-trends-in-mobile-payments-you-
need-to-know-about/#240d9ae4d39f
[Accessed 12 5 2019].

Rampton, J., 2017. The Benefits and Risks of Mobile Payments For Your Small Business. [Online]
Available at: https://due.com/blog/benefits-risks-mobile-payments-small-business/
[Accessed 14 5 2019].

Sorensen, E., 2018. Different types of mobile payments explained. [Online]

Available at: https://www.mobiletransaction.org/different-types-of-mobile-payments/
[Accessed 4 5 2019].

Yuen, M., 2019. Cashing in on e-wallets. [Online]

Available at: https://www.thestar.com.my/news/nation/2019/02/03/cashing-in-on-ewallets-its-a-
growing-trend-more-people-are-using-ewallets-in-their-phones-these-days/
[Accessed 13 5 2019].

Page 20 of 20

View publication stats