Strategic Marketing of Motorola Company - Case Study Example

1.0. INTRODUCTION Company Background The Motorola Company, a worldwide wireless communication company, provides continuous mobile communications solutions. Motorola designs and sells wireless network equipment such as cellular transmission and signal amplifiers. It is involved in inventing, building and delivering the best mobile devices on the planet. Its main business areas mainly consist of wireless voice and broadband systems. Motorola is the mother of most of the conventions and expertise in the communication sectors. It is attributed to making world inventions that make mobile communications probable. This inventions include the initial base stations and mobile phones. Motorola currently operates in 73 countries. Motorola’s vision is aimed at devising a vibrant prospect and an amusing history made possible by innovation. Its mission statement is becoming a global communication leader powered by passion to invent the world. It pursues to improve the lives of community members using innovative technological activities. This is through identifying the professionalism and talent in employees as well as making capital available and partnering with NGO’s the government of the day and other business and civic organizations. Motorola Company came into existence in 1928. It was first founded at Chicago, Illinois as Galvin Manufacturing Corporation by Paul V. and Joseph E. Galvin. It first produced Car radios and Rectifier for a period of 10 years (1940 to 1950). With time, Motorola grew and developed into a global wireless communication industry. It is during the 1960s that Motorola began developing and venturing into the overseas market. Motorola specializes in the integrated electronic systems, personal communication sector, network sector, semi-conductor sector, broadband communications, embedded systems and wireless networks amongst others. Motorola saw its way to the Chinese market in 1987. It is the largest electronic business in china. (Motorola, 2008) Currently, it has three fully retained initiatives. These are the holdings organisation, fifteen R&D centers, five joint projects and 22 worldwide branches. Brief insight into issues affecting Motorola presently Motorola Company has been subjected to several issues since inception. These are discussed using various strategy analysis. Firsts and foremost, sing the PEST Analysis, several business issues were identified. Motorola faced political issues in china. According to Feng (2007) when a global organisation finds its way to the local market, it is bound to come across collision with the government. Chinas economic division was based on the communist approach. This made it difficult for the company to adopt this new approach. Motorola similarly faced economic bossiness issues. This according to Xu, (2005) was as a result of the poor and unexplored Chinese market. The new technological devices were expensive and thus consumers could not afford these. Social issues also faced Motorola in china, following the fact that most people did not know how to operate these new technological devices. As a result, leading to the decline of consumptions. Finally, the pest analysis also identified technological business issues in china. Technological developments in china were very different from those in USA. This was a major setback for the industry. On the other hand, China faced pricing factors. Most potential clients could not afford Motorola products. This is because Motorola produces high quality and expensive produced as used in the USA. According to Xu, (2005) the company lacked clear knowledge of the Chinese market, leading to a great decline in the market. As identified in the strategic group analysis, the company could not sustain the developmental made towards the objective Chinese market. Xu, (2005) explains that the organisation had to come up with considerable pricing and quality to suit the market. Motorola also faced problems in the importation of raw materials to the Chinese market. This was as a result of the high costs of importation caused by high rates of currency exchange. Potter, (1985) in his value chain analysis, identified that to overcome issues on costs of importation, an organisation has to employ use of local materials. This means that to succeed this problem Motorola has to use local materials from the china market as opposed to importation from USA. This according to porter determines the competitive intensity and therefore attractiveness of a market. Motorola being a new venture in china, also faced the problem of adequate resources. These included both physical and financial resources. Xu (2005). Lack of manpower meant low productivity. Similarly, lack of financial resources lead to slow growth and innovation strategies. Similarly, implementation of these company strategies required qualified personnel to manage and execute the activities of the organisation. 2.0. DETAILED ANALYSIS OF THE BUSINESS ISSUES Strategic management process Motorola’s four-point development strategy in the Chinese market There exist several strategic development processes at Motorola. These are strategies were emergent after facing several business issues in China. They include: Investment and technology transfer localization of management Local sourcing Joint ventures and cooperation projects Investment and technology transfer First and foremost, Motorola Investment and technology transfer strategy was adopted to solve the issue of technological and physical manpower issues. Motorola was able to adopt to the technological innovations of the Chinese market through subjecting consumers to implementation programs aimed at assisting them in understanding the nature and operation of Motorola’s technological devices. This enabled the company to comparatively balance between the price and the quality of these devices. Social issues were also faced out using these techniques. Management localization Similarly, Management localization was adopted to enable Motorola enter the China local market and to enable implementing of local activities by the company. (Feng, 2007). This also allows major implementation of personnel, corporate culture, materials and other marketing techniques used in the localization of the company’s strategies. According to Xu (2005) management Localization enables a company to be close to the market, which in turn leads to a very high market share. This also ensures that the company is exposed to the local relative benefits of production, low rates of Production or reduce records, short cycle of production, and save transportation costs and thus gain a competitive advantage among other companies in the market. Local sourcing Supporting domestic products was another impeccable strategy by Motorola. Domestic products proved to be more cost efficient and easier to acquire. The cost of production of domestic products was in line with the domestic need of both the country and the company. These was a way of reaching out to both local suppliers and manufacturers, leading to an open local market. Joint ventures and cooperation projects Implementation of joint ventures and cooperation projects also ensured that Motorola could partner with local companies that understood the Chinese culture better. According to (Feng, 2007) local joint ventures and partnership of cooperative ventures ensure that an organisation can be able to fit in a local market well, and still reach out to the local cultures. Between the year 1995 and 2003, Motorola had managed to manoeuvre through the chines market. Joint ventures with Chinese firms enabled investing of over $400 million. Similarly, Motorola took interest in wireless technology. This was on top of the usual investments in production of mobile phones. With this, it introduced GSM, technology in china. The introduction of GSM as well as the manufacture of wireless products guaranteed that Motorola retrieved and established new and better markets opportunities in China. This was so without necessarily having to create new industrial fears. Other partnerships also emerged as Motorola tried to introduce and spread GSM technology all over the state. This included partnership China mobile. Motorola 2-3-3 strategy The four point strategy evolved to this strategy. The number 2 signified Motorola’s focus into transforming China to a global industrial and Research &Development base. The initial number 3 states the new growth areas of Motorola in China. This growth areas include broadband, semiconductors, and digital trunking schemes. The second number 3 defines the goals of $10 billion to Motorola. These objective by Motorola are: yearly invention worth in China to range at about $10 billion by 2006 as well as accrued contributions to China’s economy and at least to influence $10 billion by the year 2006; and Indigenous procurements in China to at least cover over $10 billion in a span of 5 years. This strategy was not so successful at first. It only attained slight victory as a result of lack of proper execution of activities and unfriendly external surrounding. Success of Motorola’s strategy in meeting stakeholders’ needs The Motorola Company participated a great deal in ensuring that the capacity building role in mobile technology industry in china and communication was successful. These affected the various needs of the company stakeholders. External stakeholders External stakeholders do not have direct decision making in a company. Their activities however ensure great impact in organisation. These include the government, local communities and pressure groups Universities and training centres were put up by Motorola. This was aimed at trying to create working opportunities for members around the community. This also established professionalism towards the pull of technology. Motorola actively participated in this activities as a way of interacting with society. All these activities were meant to meet the conditions set out in government policies. While this approach to capacity development is commendable, it can be a highly expensive undertaking for a business considering the complexity of the programmes Motorola had to undertake in achieving industry efficiency. This had a great influence on the capital returns for the company, as it ensured that Motorola could focus more on improving their systems, rather than only the development of product development. Motorola’s focus on meeting government needs reduced its competitiveness since a lot of funds were being dedicated to training and infrastructure development in the Chinese market. This meant the company did not focus on growing international markets leading to slumping sales and falling share prices. Internal stakeholders’ needs Localization of the Motorola management had several factors in store. First, it had to ensure that the Chinese nationals would effectively manage the local operations. In this case, the company had to prepare adequately both financially and physically to accommodate the new change in expansion. Various facilities developed out of the localization process. This included Chinese Motorola University as well as Motorola research institutes. Similarly, the company formed partnership with other local facilities like universities and Chinese leadership to ensure professional training of staff. However, the company failed in meeting the demands of its staff members by training them on worldwide greatest practices in organization and significantly on the practical features of communication skill. (Mintzberg, 2005) The drastic drop in sales of Motorola during the early 2000’s lead to the company being forced to retrench most of its workers. This lead to a lower standard of living and financial difficulties. Those members of staff who were not retrenched also lived in fears of losing their jobs at any time. They were not certain of the future of the organisation and hence lived in great uncertainty. Their morale and motivation levels went down, thereby reducing the productivity of the company. Performance also deteriorated as employees could not commit their future to the organisation’s activities. Motorola was unable to meet the important needs of its internal stakeholders. This strategy aims at teaching internal stakeholders of company information, strategies and technological innovation. These stakeholders may in one way or the other decide to join Motorola competition or as well become new entrants in the industry. This may lead to threats of substitution or even elimination from the market. As a result of new entrants in the market or even in availability of substitutes in the market, the buying power of consumers is affected. This is because consumers are faced with multiple buying decisions from the new entrants and substitutes. Similarly, these issue results to the bargaining power of suppliers. This is because the suppliers need not only supply to Motorola and Partner Company, but to many other stakeholders in the industry. To identify threats and opportunities, a company has to anticipate strategic management tactfully for both internal and external environment. (Du Toit, Erasmus & Strydom 2012) Connected stakeholders Motorola’s development strategy in China recorded mixed results in meeting connected stakeholders needs. Firstly, Motorola undertook a massive training and capacity building initiative in China to ensure suppliers acquired technology, technical knowhow and managerial efficiency. This enabled suppliers to provide high-quality materials, components and services to Motorola in its quest to expand into the Chinese market and beyond. Suppliers were eventually able to export their surplus to other global markets. On the other hand, Motorola was not able to satisfy its customers by not being able to innovate fast enough to adapt to changing technology and consumer needs. The transition to digital technology did no work out well for Motorola. It took time in transforming to mobile telephony and also into upgrading its systems to the Smartphone market. Competition therefore overtook them as other rival companies took the lead in this. For instance Techno, Samsung, Google, Nokia and Apple obtained Motorola’s customers. Lack of Motorola to meet the client’s needs in development and upgrade of technology made them chose rival products over Motorola’s. The company therefore suffered low returns and lead to a fall in the market shares. This is because the sale of products was falling making Motorola not meet its shareholders and financiers needs in form of anticipated income. Motorola solutions share price since 1978 Source: Google Finance Leadership style The continued fall of sales in Motorola lead to a big loss. This amounted to approximately $4 billion in 2004. Motorola saw the urgent need to revert this cause. It imposed an imperative shift to save the company from further losses. However, this was difficult due to the leadership style of the company at the moment. At this critical time of crisis, the company followed a drilling style where procedures were seen to be more important than the company results. However rival companies like Apple used reliance on Steve Jobs, a well-known and appealing leader. These style of leadership ensured that the workers at Apple were motivated to working towards achievement of results. Motorola inhibited workers’ partnership determinations to take advantage of joining knowledge in the application of digital and mobile telephony. The two divisions were greatly affected by high levels of competition in the market. This included corporate structure techniques. The company’s ability to participate in developing opportunities cellular digital application and Smartphone technology diminished. The opportunities were much affected by Motorola’s strategic human resource policy. It affected the interests of the stakeholders, employees and the company at large in a bid participate in company activities. Conclusion Development of an organisation is affected by its position in the industrial market and economic circumstances surrounding it. Changing technological trends have lead to the management of available opportunities in the as well as the organizations core values. It turn, organisations have built a long lasting relationship targeting well-planned strategies aimed at producing successful organisations. These however fails due to various reasons. First and foremost lack of a company’s understanding of a company’s conforming proficiencies or even relationships may lead to failure of the organisation. This includes strategies that do not conform to the organisations objectives. It is for this reason that organisations should ensure that planning is well carried out to ensure effective implementation of a company’s Strategic plans. They should contain a well thought out and lasting vision and mission. An organisations culture should also be taken into consideration. Lack of understanding this cultural activities is likely to cause failure in an organisation. This is because every company has exceptional practices, principles, strategies rules and techniques that acts as a leader of success. Laying out strategies that fall under the organisations cultural objectives is very important. Therefore, conflicts are avoided. There is however no identifies first hand strategy for planning an organisations activities. Management depends on the plans and objectives of a company. If a company does not device its strategy sufficiently, it may lead to disappointments. Implementation guarantees that every strategy is effectively without chances of failure or disappointment. Carried out and that everything runs well. Interference by legal or ethical issues is also fished out during strategy implementation. This ensures that an organisation has a smooth flow of activities all through the process. In order for Motorola to effectively catch up with the industry, it should strive to end the barbarian wars of the clones. 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