d.

With reference to an organisation of your choice, examine how change in the external
environment impacts strategy

Change refers the adaptation of business organizations’ objectives, strategies and

operations in response to competition, new technologies and trends in consumer
behaviour. Strategy refers to the significant long-term planning decisions that
organizations make in order to meet the needs and wants of their stakeholders.

Founded in 1987 in Shenzhen (China), Huawei started as a networking and

telecommunications equipment and services company. Today, Huawei is the world’s
largest telecommunications equipment manufacturer one of the world’s leading brands
of mobile phones. With its goods and services spanning over 170 countries and
catering for more than one third of the world’s population, Huawei a truly a
multinational business organization.

STEEPLE analysis is an investigation to the external environment faced by an

organization. One change in the external environment that impacts on Huawei's
strategies is social factor. With more and more disposable income, people's living
standards and consumption outlook have gradually changed, mainly reflected in the
higher and higher requirements for products and after-sales service and the lifestyle
tends to be personalized. However, nowadays, there are a large number of similar
products and brands in the market, which means that if premium services and
products cannot be provided, consumers can choose other brands instead. By
providing differentiated products and services, Huawei makes itself more competitive
and builds customer loyalty. For example, the mobile phone is divided into five series,
corresponding to five different groups. Creating differentiated products and services
costs more for market research and innovation, and these products and services cannot
be provided by competitors, which means customers need to pay more for the
products.

Policy is a second STEEPLE factor affecting Huaweis strategy. Government policies

can provide both opportunities and threats for businesses. From May 15, 2019, the
United States announced that it would include Huawei in the list of export controls.
On Augusr 17,2020, the US Commerce Department prohibited factories from using
US equipment to produce chips for Huawei. In order to deal with the shortage of
chips, Huawei has focused on its high-end products. At the same time, it has decided
to invest US $2 billion to improve software capacity and reduce its dependence on
chips through software improvement. Xu Zhijun, vice chairman of Huawei, said at the
global analyst conference that "we strive to improve the software capability to a
higher level within the five-year cycle, so as to reduce the impact of chip vacancy."
This strategy could mitigate the losses caused by foreign policy restrictions at some
extents. But lower sales due to material shortages are still inevitable, which means
Huawei's shareholders would get lower profits.
Another change in the external environment that impact on Huawei's strategies is the
ethics. Business ethics are the moral principles that are, or should be, considered in
business decision-making. Nowadays consumers are becoming more socially aware –
they are increasingly demanding products from ‘environmentally friendly’ businesses,
and this can become a marketing advantage. Huawei has always regarded energy
conservation and emission reduction as one of the most important standard of the
company's innovation. For example, Huawei has formulated the "6r1d" green
packaging strategy. 6r is right packing, reduce, returnable, reuse, recycle, recovery
and 1d means degreadable. Liang Hua, chairman of Huawei, said: "Huawei is willing
to work with its global industrial partners to promote green, low-carbon, energy
conservation and environmental protection through technological innovation and
achieve the United Nations sustainable development goals." This change in strategy
generates good publicity and public relations for Huawei. Howecer acting ethical
would also greatly increases the cost. Huawei has invested a large amount of capital in
developing new materials and processes and promoting their application.

In conclusion, changes in the external environment factors (such as political, ethical,

social factors) have a great influence on Huawei’s changing objectives and strategies.
The change of external environment will bring opportunities and threats to an
enterprise at the same time. Huawei has to continually adapt to changes in these
factors quickly to remain its position as one of the strongest networking and
telecommunications equipment companies in China.