HUAWEI Ren Zhengfei: From Twenty Thousand To 100 Billion Business Story

The twenty thousand yuan myth is the story of a lot of outsiders today. In 1987, Ren Zhengfei, a 43 year old retired regiment cadre of the Liberation Army, founded HUAWEI company with 20 thousand like-minded middle-aged people.

At that time, no one could have imagined that Ren Zhengfei, a small company born in a dilapidated workshop, will soon rewrite the history of communications manufacturing in China and even in the world.

In the early days of the founding of the company, HUAWEI obtained the first barrel of gold by relying on a SPC exchange for a company in Hongkong.

At present, the technology of SPC exchanges in China is basically blank.

Ren Zhengfei is sensitive to the importance of this technology. He has invested all of HUAWEI's money in developing his own technology.

Ren Zhengfei's disappointment was not disappointed by HUAWEI. HUAWEI developed the C&C08 switch. The price of the C&C08 switch is similar to that of the similar products abroad, and the market prospect of C&C08 switches is considerable.

At the beginning of its founding, the strategy of independent development made HUAWEI take a great risk, but finally laid the HUAWEI's moderately advanced technological base and became a major capital for HUAWEI's pride in its future.

However, at that time, most of the international telecom giants had entered China and had been entrenched in various provinces and cities for many years. HUAWEI had to fight directly against these hundred year old stores with abundant financial resources and advanced technology.

The most serious is that, as the domestic market quickly entered the stage of vicious competition, international telecom giants began to slash prices by relying on abundant financial resources, trying to stifle HUAWEI's emerging Telecom manufacturing enterprises in the cradle.

Ren Zhengfei, who had read Mao Zedong's works, chose a marketing strategy which was later known as "encircling the cities in the countryside". HUAWEI first occupied the vast majority of the rural market of the international telecom giants, and gradually occupied the city.

Telecom equipment manufacturing is a demanding industry for after-sale service. After sale service will cost a lot of manpower and material resources.

At that time, most branches of international telecom giants were only set up in provincial capital cities and coastal key cities, and had no time to take account of the vast rural market. This is the advantage of HUAWEI's local enterprises.

In addition, because the purchasing power of the rural market is limited, even if the foreign products are substantially reduced, there is a distance from the requirements of the rural market. Therefore, the international telecom giants have largely abandoned the rural market.

The fact proves that this strategy not only saved HUAWEI from being strangled by international telecom giants, but also made HUAWEI develop rapidly, trained a good marketing team, grew up a R & D team, and accumulated the capital to fight urban warfare.

Therefore, in the same year, thousands of companies that were acting like other products like HUAWEI, and the newly emerging communications equipment manufacturers who had developed similar program-controlled switchboards went bankrupt, and HUAWEI still smiled in the vast rural market.

Ren Zhengfei is a businessman with a strong sense of crisis. When HUAWEI passed through the period of high risk of death and entered the fast track of development, he was sensitive to HUAWEI's shortcomings.

In 1997, Christmas day, Ren Zhengfei visited a number of famous high-tech companies such as the US IBM. What he saw and heard shocked him. For the first time he was so close, he saw clearly the gap between HUAWEI and these international giants.

Shortly after Ren Zhengfei returned to HUAWEI, a curtain of five years of change opened up. HUAWEI entered the stage of learning western experience, reflecting on itself and improving internal management.

This painful process of "cutting the right foot" has made full preparations for HUAWEI's international pformation.

In 1999, HUAWEI employees reached 15000, and sales exceeded 100 billion for the first time, reaching 12 billion yuan.

HUAWEI, which has gained a foothold in the domestic market, has set up R & D centers in Bangalore, India and Dallas to track the trend of the world's advanced technology.

This year, HUAWEI's overseas sales amounted to only $53 million, but HUAWEI has begun to build a huge marketing and service network.

This means that HUAWEI has to play a big role in the international market.

However, technology has not been absolutely ahead. Brand awareness is not as strong as those of a century old shop, and its capital is not as strong as its international counterparts. Where is HUAWEI's competitive magic weapon?

When HUAWEI is speeding up in the European market, the answer is in fact clear.

If the small customers can still be moved by price alone, but for the mainstream customers in developed countries such as Europe and America, the simple price war will be difficult to work. These customers are more concerned about the comprehensive strength of the equipment supplier, that is to say, from the design, production, pportation, installation and commissioning of the equipment to the later stage of service, there must be a perfect and continuous solution.

HUAWEI's exclusive bid for QSC's NGN project: HUAWEI's Frank Frank Thelen explains why they finally chose HUAWEI: "QSC, which is known for providing comprehensive business communications solutions, will provide customers with more abundant, convenient and economical communication services.

HUAWEI has impressed us with its rapid demand response capability and technological innovation capability. Its "end-to-end" perfect solution can meet our customizing needs.

When Ren Zhengfei talked with foreign big companies, the other side stated that he had a huge service network, which has obviously become the killer of their competition.

A European veteran telecom operator said: "what we are most afraid of is that after a few years after the equipment is bought back, the equipment suppliers fail, and no one comes to upgrade or maintain. Therefore, we must comprehensively inspect the equipment suppliers for the purchase of equipment. Only those suppliers who have the potential for sustainable development will not be able to enter our field of vision in the products and services without worrying about us."

This requires HUAWEI to enhance its comprehensive strength, provide customers with sustained and stable services, and be able to respond to the needs of customers in the shortest time.

Ren Zhengfei has long recognized the problem of service. He reminded HUAWEI people very early: "the development of Chinese technicians and the service of technology have led to the slow growth of maintenance experts, which has seriously restricted the balanced growth of talents. Foreign companies generally attach great importance to their services.

Without a good service team, we can neither sell nor dare to sell well, and no good service network will collapse.

HUAWEI's rapid response is one of the advantages of the company compared with the veteran European telecom equipment providers.

Deng Tao, vice president of HUAWEI's overseas market, said with his own experience that European companies generally responded slowly, and the user put forward a modification proposal, which often took a year or even a year and a half to improve.

Chinese enterprises can always work overtime and react quickly as long as the users are in need.

It takes 1 years to improve and a month to improve.

The European welfare benefits are good, the work and life are clear, the time outside work generally no longer talk about work, not to mention overtime, and HUAWEI as a growth enterprise, but also because Ren Zhengfei has always advocated the spirit of struggle, HUAWEI people's work and life basically no area, for a single can not go home for the Spring Festival, even the wife can not take care of the children; the task immediately up the HUAWEI has become a work habit.

Ren Zhengfei said: "customer orientation is the basic principle of the company. In order to meet the needs of users, we will make greater efforts."

In 1998, HUAWEI built 33 offices and 33 user service centers throughout the country, and established joint ventures with 22 provincial bureaus, set up representative offices in Moscow, installed equipment in more than 10 countries in Eastern Europe, and provided commercial networks, intelligent networks and access networks for Hongkong.

In China, it has become a world class giant in the developed countries. They have accumulated for decades or even hundreds of years. They have the industrial foundation and industrial environment formed by hundreds of years in Europe and America. They have the commercial deposits and the strong human resources and social foundation of the developed countries. They have world-class professional and technological personnel and R & D system, have abundant capital and world-famous brands, have a deep market position and customer base, have world-class management system and operation experience, and have a huge marketing and service network covering the global customers.

Faced with such a competitive situation, in the face of such technical and market barriers, in China, HUAWEI has no experience to learn from, and only through diligence to make up for it.

Ren Zhengfei summed up the rapid development of HUAWEI in the past 18 years, and said: "in the past 18 years, the top management team has worked day and night. There are few senior cadres who have few holidays. They can not turn off their cell phones for 24 hours, and are always dealing with problems at any time and anywhere.

Now, even because of the jet lag after globalization, we always meet at night.

We do not have international big companies to accumulate market position, connections and brands for decades. There is nothing to rely on, but only a little more struggle than others. Only when we are working hard at other people's coffee and leisure time, can we only treat our customers more pious, otherwise how can we get the order?

In August 6, 2007, HUAWEI released its 2006 annual report. Its actual sales volume in 2006 was 67 billion 200 million yuan.

Some research institutes predict that HUAWEI's sales will reach 100 billion yuan in 2007.

From twenty thousand yuan to 100 billion, HUAWEI spent 18 years.

Ren Zhengfei once said, "entering HUAWEI is entering the grave."

The low cost and fast service provided by this spirit may be the biggest secret of HUAWEI's rapid growth and rapid progress in the international market.