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Managing in a Global Economy: ZTE

Competing at a Global Level

by David A. Kelly, February 2008
ZTE is China's largest wireless equipment provider and a leading global provider of telecommunications equipment and network solutions. It is also one of the first Chinese telecom equipment providers to pursue business in overseas markets with partnerships with more than 500 operators around the world. Now, ZTE wants to become the market leader in emerging markets in the global telecommunications arena by competing on cost, as well as service and quality. The company depends on its application infrastructure built on Oracle E-Business Suite and other software, including internally developed systems such as ECC Contract Management System and Supply Chain and Logistics Management System, in addition to Oracle E-Business Suite Financials. These systems are allowing ZTE to continue its growth while maintaining efficient and effective management on both a local and worldwide basis.

For many companies, capturing a large share of the market comes down to competing on cost or on service and quality. But ZTE, a China-based telecom equipment and services company and an emerging global giant, is proving that forward-looking companies can do both.

"We recognize that if telecom equipment providers compete solely on cost, we may not survive as an industry and may be overtaken by disruptive new entrants," says Wei Zaisheng, chief financial officer of ZTE. "As a latecomer to the industry, we've put forward a different competitive strategy that focuses on maximizing the value chain for telecom operators, suppliers, and the end users we all service. Value management and the promotion of a harmonious industrial ecosystem have become core to everything we do."

And what it's doing is a lot. ZTE has set the goal of becoming a world leader in communications by 2008 and a world-class enterprise in the near future. It's no small objective, but it's one that ZTE seems well on the road to achieving.

"Our goal is to become the market leader in emerging markets; a credible challenger in developed markets; and, eventually, the telecom industry's leading global supplier of total solutions, including hardware, software, and services," says Zaisheng. So far, ZTE has been successful, with more than 40,000 employees and 2007 revenues of US$3.14 billion.

As a result, ZTE is China's largest wireless equipment provider and a leading global provider of telecommunications equipment and network solutions. It was also one of the first Chinese telecom equipment providers to pursue business in overseas markets. It now has established partnerships with more than 500 operators around the world.

Underpinning this emerging global success is ZTE's reliance on application infrastructure built on Oracle E-Business Suite and other software, including internally developed systems such as ECC Contract Management System and Supply Chain and Logistics Management System, in addition to Oracle E-Business Suite Financials. These systems are enabling ZTE to continue its global expansion while maintaining effective and efficient management on both a local and worldwide basis.

A key component of its growth strategy has been to continue to invest heavily in R&D, even at a time when many other telecommunications equipment providers are cutting back. For example, ZTE has set up 15 R&D institutes in countries around the world and has taken a leadership role in the development of international standards, including ones such as 3G. In addition, ZTE segments its R&D spending into both market-driven R&D, such as its work with Sprint in the area of WiMAX technologies, and customized R&D, such as its work with Vodafone to help the company realize additional value through customized low-end cell phones.

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