In fact, Huawei did not deliberately pursue the subtlety of strategic planning. He spent a lot of energy on the scientific management of strategy execution, which we call DSTE (development strategy to execution). With this framework, we can ensure the formation of a closed-loop dynamic spiral growth mechanism from strategic planning-strategic decoding-strategic implementation-strategic evaluation.
Huawei's strategic management framework (five views and three decisions model) is a very systematic thinking method, which is of great value to the formulation of enterprise strategy.
The above picture can be said to be the core framework of Huawei's entire strategic management, which is called the "five views and three decisions" model, and its whole process includes four parts:
The first part is called strategic insight, which finally outputs strategic opportunity points through "five views" (industry trends, market customers, competition, oneself and opportunities);
The second part is called strategy formulation;
The third part is called policy decoding;
The last part is strategy implementation and evaluation.
I. "Five Views"
1. Insights into industries and trends
From a macro perspective, including how to look at the political, economic, cultural and social changes and development trends at the national level, what kind of impact and changes will these trends bring to the industry? What is the future technological development trend of the whole industry? What will happen?
The strategy is to "sniff" where there is money.
Through the innovation of business model and profit model, it will bring new strategic opportunities.
The reason why an industry exists is definitely because it makes money. But if we pull the whole industrial chain apart, we will find that some earn more and some earn less.
For example, the pork industry chain: we open the entire pork industry chain. Raising pigs is breeding, epidemic prevention, management and so on. Adult pigs are basically slaughtered and processed, and then go to channels, retailers and consumers.
A few years ago, the pork industry in China was miserable. All costs are basically transparent, all costs are superimposed, and the gross profit margin is low. But there are two parts of this industrial chain that are very profitable, one is breeding pigs and the other is channels.
Wen's shares are mainly concentrated in breeding pigs. In the past, breeding pigs were imported, because foreign breeding pigs had high slaughter rate and fast growth. Wen's shares will introduce foreign breeding pigs, and then authorize them to be raised by farmers. When the pigs grow up, they will buy them and sell them to various channels. This makes a lot of money, typically extending the industrial chain to breeding pigs.
The other is Mu Yuan Co., Ltd., which has developed a routine to provide high-quality pork for China.
A few years ago, China's environmental protection policy required the pig industry to stay away from the polluted areas, so the free-range farmers soon disappeared. Consumers are also constantly upgrading their consumption, hoping to eat pork that can be traced all the way. Muyuan Co., Ltd. has done this, shooting and tracking the whole process. Pork is very popular because of its low antibiotic content.
Both of them are typical cases of industrial chain extension, so it is necessary to find out what opportunities there are in the industrial chain. Of course, don't postpone your life to a place where you don't make money, but to a place where you make money.
So we say that the strategy is to "sniff" where there is money.
2. Insight into the market and customers
What is the development strategy direction of our customers in the next five years, and what are the pain points in their development strategy. , are our constant concern. At this point, Huawei has done a very good job.
Who is the client? What do customers buy? What is the demand? This requires in-depth understanding and research, and many strategic opportunities will be found.
3. Insight into competitors
Know yourself and yourself. What kind of development strategy will our competitors have in the future? What is its positioning? The real strength of a competitor is not only the product strength, but also the result, and there are many influencing factors.
Analyzing competitors, if we only analyze competitors' products, it is definitely not enough.
When Huawei Wireless extended to China to issue 3G licenses, Huawei did the work of purchasing, operation and maintenance, marketing supervisor and others of Anhui Mobile, thinking that it could defeat Ericsson.
So, Ericsson found the general manager of Anhui and said that Anhui Mobile is engaged in human resources consulting. Ericsson has the world's top human resources consulting team, and Ericsson can help Anhui Mobile provide services for free. As a result, these job descriptions of Anhui Mobile were all made by Ericsson. It is conceivable that their wireless business was completed and Huawei was beaten by Ericsson. They conduct business marketing through consulting.
Huawei later learned this method and defeated its competitors in South Africa.
This case tells us that the real strength of a competitor is not only the product strength, but also the result, and there are many influencing factors.
Step 4 gain insight into yourself
Based on the insight of customers and competitors, we can better explore our own advantages and make up for our own internal shortcomings. Through the intelligent analysis model, we can find out where our challenges and opportunities are.
Strategic planning and strategic insight need to find many opportunities, which is addition; And here you have to weigh yourself. Many businesses are not your thing, so you have to do subtraction. The final output is a very visual strategic opportunity.
Step 5 gain insight into opportunities
What kind of investment opportunities do we have in the customer field in the future? How big is its market space for us?
Judging the priority of opportunities through span diagram
For example, a traditional industry has huge market space, but there is no growth rate, which is not a good choice for Huawei. The faster the growth rate, the better, and the more likely it is to change. Huawei has been looking for this faster market.
How to describe strategic opportunities? There are two dimensions, one is market attractiveness, and the other is the competitive position of the company. The competitive position is mainly based on the market atmosphere and this span diagram. If you are in the "star" position, your chances are very good. There are many opportunities for Huawei, but it is mainly to find cultivation areas and star areas.
Jinniu area is an old business, in the harvest period, mainly based on cash flow, mainly to assess the net profit rate.
Huawei seized the opportunity, mainly the span diagram.
Second, the "three decisions"
1, strategic control point
The strategic control point can be simply understood as a kind of medium-and long-term competitiveness that is difficult to construct, imitate and surpass.
There are different levels of strategic control. The simplest strategic control point is called "10-20% cost advantage", and the top level is leading in function, performance and quality, leading in technology for one year, brand, customer relationship, absolute market share and value chain control. The highest level of strategic control point is to have a standard or patent portfolio.
Step 2 set goals
In 20 15, Huawei's revenue was 60 billion US dollars, about 290 billion RMB. When setting the target in 20 16, Huawei announced that the sales revenue challenge target was $81800 million, equivalent to an increase of 36% within one year. Dare to set such a goal, where is Huawei's confidence?
The first is the global strategic opportunity. Ren said: now there is a period of strategic opportunities, which is a period of great opportunities for us. We should dare to gather strength at strategic opportunity points, invest intensively and carry out saturation attacks during this period when the window of opportunity is open.
Secondly, strong intellectual property rights are a big advantage for Huawei to explore the international market. Huawei is the country with the largest number of authorized invention patents in China, ranking first in PCT international invention patents for many times.
Finally, with strong intellectual property rights, we can talk about open cooperation with international giants, and we can also ensure that Huawei's products can pass freely around the world without intellectual property issues. More than 60% of the 520 billion achievements come from abroad!
3. Make a strategy
Take Huawei's overseas internationalization development as an example. In the case of clear positioning and route, how to achieve it? To solve tactical problems.
Just like the Red Army's four crossings of Chishui and the 25,000-mile long March, this is a strategic issue, who to send to hit the market, how to solve the supply, how to solve the military-civilian relationship and so on.
After the initial direction of Huawei's overseas market attack is clear, it needs to design organizational strategy, site selection, research strategy, logistics strategy, after-sales service strategy and even logistics strategy. Various strategies form a system, and only by forming a system can we win.
In 2006, Huawei introduced IBM's business leading strategic model, which is a complete strategic planning methodology. The strategy of western countries is not suitable in China, but there is no doubt that this model is very advanced. After continuous debugging and polishing, Huawei has gradually become a set of methods and platforms for middle and high-level companies to formulate strategies and implement links.
In the process of formulating enterprise strategy, entrepreneurs must think systematically. Thinking about the future development plan with the power of logic, at the level of strategic implementation, there must be scientific and systematic methods to promote the strategy landing.
In the process of growing up, Huawei succeeded in "overtaking in corners" many times and embarked on its own path. Huawei's strategic management system is worth learning and pondering by every entrepreneur.
For more information about Huawei's strategy, please consult in the background.