Catch-up and Leapfrogging of Latecomers: Samsung vs. Huawei

This case compares two global giants, Samsung and Huawei, which operate business in the information and communications technology (ICT) field. Both of them have faced similar situations as targets of trade wars between their home country and another developed country. However, they both remained robust despite external hardships. In addition, they grew quickly from latecomers from less developed countries to key players in the global market. The case began by looking back on the story of Samsung overtaking Sony. The external economic shock to the Japanese economy brought by the Plaza Accord radically shifted Sony’s focus from hardware to software and entertainment content, which in turn brought great opportunities to Samsung. Samsung fortunately survived the Asian Financial Crisis and expanded its international business. To catch the new technological wave, Samsung chose to be a fast-follower, while Sony attempted to be a rule-maker in the digital age. Huawei, rising to become a global giant from China, took a path that was similar to the one taken by Samsung. Huawei benefited profoundly from China’s economic boom. It survived by serving the spiking demand in rural areas. Then, Huawei began to learn from Western incumbents and imitate their practices. Meanwhile, Huawei invested heavily in R&D activities and took the lead in 5G through open innovation. The fourth-generation industrial revolution—encompassing the Internet of Things (IoT), AI, and Big Data—created a great window of opportunity for upheaval. Accordingly, some questions naturally follow from the comparison: Is Huawei going to overtake Samsung? Or is Huawei still going to lag behind Samsung for the foreseeable future? What will determine their relative positions in the global market?