Huawei (a Chinese telecom company) is trying to expand its market to the United States, one of the world’s largest markets. However, the US government is holding Huawei back from entering its market, as it does not have opaque governance structures and links to China’s Community Party. Even though Huawei is publicly recognized as being innocent, it is still facing suspicions until all doubts are cleared. Moreover, even if Huawei is allowed to enter, it will face deep rivalry in terms of threat of substitutes. They will be confronted with Apple, Samsung, HTC, which have been dominating the entire US market; also Nokia, who is coming back with its new flagship Win 8 Mobile (Nokia 920). Moreover, the fact that China once was the stereotype for selling cheap and low-quality products is vulnerable for Huawei’s image, even though it’s getting better these years. Lastly, Barriers to entry is relatively high for Huawei in America, not only due to the political reasons mentioned above, but also because of America’s policy towards foreign brands.

Huawei will experience a dramatic development if it is able to get a foothold in America, but before success, it first has to overcome the difficulties above.

link:http://www.economist.com/blogs/schumpeter/2012/10/chinese-telecoms-firms-america