Worldwide expansion of ZTE Corportation, Blog # 5

            China’s ZTE Corporation has dramatically grown within the last few years since they sell low cost telecommunication equipment to people in China and now are looking to expand in emerging markets. This corporation has become the world’s number 4-phone supplier by units and expanded their market to North America this year by selling 14 models of handsets.

            They are expected to continue expansion this year, 2011, with the goal to raise revenue growth further than last year’s of 16%-17%. However, this corporation has faced problems with Europe and U.S. governments since they fear ties to the company to the Chinese governments. They say their growth of 16% to 17% last year was due to their expansion in global markets. They are sincerely hoping that the U.S. will allow them a fair chance to due business in the U.S. since their goal is to sell equipments.

            With their hopes to sell in global markets it raises concerns over the dollar exchange. However, Mr. Wei stated, “Telecom-equipment prices should be at the same level for everyone. It's more your products and service that determine your competitive status. Price is not a competitive factor we are relying on in the global market. The yuan's appreciation will cause your prices to rise. But more important is your status in the market.” I think this quote is important since Mr. Wei believes that products and service determine their competitive status with other companies over the price of their products.

            This company is now looking to expand in the global markets by:

            -building handset factories in Europe

            -increasing investment of smartphones

            -advancing from middle to low end buying to middle to high end buyers

            -overseas hoping to build the ZTE brand phones

            The importance of this article is how Mr. Wei is a good leader for this company. He is setting high goals for them to reach but through this interview I believe he is confident that these goals are attainable. I think many years from now it is possible that this corporation will be able to compete in the U.S. and European markets with other telecommunications industries. I wonder if they can truly be successful in the U.S. since we already have Verizon and AT&T who are the main sellers of the Iphone and Droid. In my opinion, they are going to need to invent a smartphone that no other corporation has created so that they generate a want for their product by the consumers worldwide.

Article:

http://online.wsj.com/article/SB10001424052748704476604576157552976315000.html?KEYWORDS=telecommunications