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Managing in a Global Economy: ZTE

Continued

Another component of ZTE's globalization success has been its ability to tailor its solutions for different customer and country needs. In emerging markets, ZTE's success has been based on cost leadership and the breadth of its product line. In developed countries and more-mature markets, ZTE remains competitive by delivering differentiated products and services for multinational operators. The result has been a steady increase in the percentage (currently 45 percent) of sales outside ZTE's home market of China.

Building the Brand

Although ZTE does not rule out the future acquisition of partners or competitors, acquisition is not a key focus of ZTE's globalization process. Instead, the company is still focusing on building its own brand based on customer service and focusing on tailoring its solutions to specific market and customer needs.

"Branding is part of our core strategy and very important; we've registered the ZTE brand in dozens of countries worldwide," says Zaisheng. "We will be a world-class company with an internationally renowned and recognized brand. Having accomplished that, we hope to become the industry's leading provider of total solutions to the market."

Growing a global giant such as ZTE takes more than just creating the right products and services—it also means creating a corporate culture that supports and enables an effective and efficient decision-making process that balances local needs and opportunities against more-global corporate requirements and abilities.

To do that, ZTE has created a centralized decision-making process, along with appropriate delegation of authority for local decisions. Major projects and contract authorizations are all decided upon by the senior headquarters team. Decisions are typically based on project scale, profitability, and risk assessment. Small or regionally focused decisions are delegated to one of ZTE's 12 overseas regions and are to be made in accordance with corporate policies. The headquarters management team provides leadership and oversight, but for ZTE, collective wisdom gained from delegating decisions regionally plays an important role in striking a balance between centralization and democratic process.

For ZTE, the result has been a highly focused and highly effective globalization strategy that's taken the company from selling only within China 10 years ago to competing globally with companies such as Nokia and Ericsson. Today ZTE is focused on delivering innovative custom-developed and manufactured products and services to the world's major telecom operators, helping them achieve revenue growth with increased efficiency.

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David A. Kelly is a freelance writer based in Newton, Massachusetts.

 

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