Huawei and ZTE pose security threat, warns US panel

 

Officials from the two firms have been questioned by US lawmakers as part of the probe

 

Chinese telecom firms Huawei and ZTE pose a security threat to the US, a congressional panel has warned after its probe into the two companies.

The two firms should be barred from any mergers and acquisitions in the US, the panel has recommended in its report set to be released later on Monday.
It said the firms had failed to allay fears about their association with the Chinese government and military.
The two are among the world's biggest makers of telecom networking equipment.
"China has the means, opportunity and motive to use telecommunications companies for malicious purposes," the committee said in its report.
"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."
Both Huawei and ZTE have previously denied the allegations.

 

“Start Quote

Purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignores technical and commercial realities, recklessly threatens American jobs and innovation, does nothing to protect national security, and should be exposed as dangerous political distractions”

William Plummer Huawei

Espionage fears

Huawei was started by Ren Zhengfei, a former member of the People's Liberation Army in 1987.

As the firm has grown to become one of the largest global players in the sector, fears about its ties with the Chinese military have frequently surfaced.
There have been concerns and allegations that it was helping China gather information on foreign states and companies, charges that the firm has denied.
Last year, its purchase of American computer company 3Leaf systems, was rejected by a US security panel.
Earlier this year, it along with ZTE, faced allegations that some of their equipment had been installed with codes to relay sensitive information back to China.
Senior executives from the two companies denied those allegations when they appeared before US lawmakers in September.
Political distraction? This latest report comes in the midst of a US presidential campaign in which China has become a political hot topic.
Both President Barack Obama and his Republican challenger Mitt Romney have pledged to increase the pressure on Beijing on issues ranging from China's currency policy to state subsidies for Chinese firms.
Earlier this month, Mr Obama signed an order blocking a deal by a Chinese firm, Ralls Corp, to acquire four wind farm projects near a US naval facility in Oregon.
It was the first foreign investment to be blocked in the US for 22 years.
The Chinese firm has since sued Mr Obama, alleging the US government overstepped its authority.
William Plummer, Huawei's vice-president, said the latest accusations against the telecom firm were politically motivated.
"The integrity and independence of Huawei's organization and business practices are trusted and respected across almost 150 markets," he was quoted as saying by the AFP news agency.
"Purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignores technical and commercial realities, recklessly threatens American jobs and innovation, does nothing to protect national security, and should be exposed as dangerous political distractions."

Source: BBC.com

WHAT IS STRATEGY AND VALUE CHAIN ANALYSIS?

Strategy is the art of creating value. It provides the intellectual frameworks, conceptual models, and governing ideas that allow a company's managers to identify opportunities for bringing value to customers and for delivering that value at a profit. In this respect, strategy is the way a company defines its business and links together the only two resources that really matter in today’s economy: knowledge and relationships or an organisation’s competencies and customers.

But in a fast-changing competitive environment, the fundamental logic of value creation is also changing and in a way that makes clear strategic thinking simultaneously more important and more difficult. Our traditional thinking about value is grounded in the assumptions and the model of an industrial economy. According to this view, every company occupies a position on a value chain. Upstream, suppliers provide inputs. The company then adds value to these inputs, before passing them downstream to the next actor in the chain, the customer (whether another business or the final consumer). Seen from this perspective, strategy is primarily the art of positioning a company in the right place on the value chain - the right business, the right products and market segments, the right value adding activities.

Today, however, this understanding of value is as outmoded as the old assembly line that it resembles and so is the view of strategy that goes with it. Global competition, changing markets, and new technologies are opening up qualitatively new ways of creating value. The options available to companies, customers, and suppliers are proliferating in ways Henry Ford never dreamed of.

Of course, more opportunities also mean more uncertainty and greater risk. Forecasts based on projections from the past become unreliable. Factors that have always seemed peripheral turn out to be key drivers of change in a company’s key markets. Invaders from previously unrelated sectors change the rules of the game overnight.

In so volatile a competitive environment, strategy is no longer a matter of positioning a fixed set of activities along a value chain. Increasingly, successful companies do not just add value, they reinvent it. Their focus of strategic analysis is not the company or even the industry but the value-creating system itself, within which different economic actors--suppliers, business partners, allies, customers--work together to co-produce value. Their key strategic task is the reconfiguration of roles and relationships among this constellation of actors in order to mobilise the creation of value in new forms and by new players. And their underlying strategic goal is to create an ever-improving fit between competencies and customers.

To put it another way, successful companies conceive of strategy as systematic social innovation: the continuous design and redesign of complex business systems.





Tapped from:

Richard Normann and Rafael Ramírez

                                       [Harvard Business Review, July/August 1993, Vol. 71, Issue 4]