The purpose of this research paper will be to describe the opportunities and threats in Motorola’s external environment. The paper will also look at the opportunities and strengths of Motorola. In conclusion, the paper will try to suggest that Motorola needs to keep in place to proceed.
In the telecommunications and electronics market, Motorola is a world-class leader. The company offers integrated communications solutions and set in electronic solutions and is expanding its software operations to add internet access capabilities to its phones and other electronic devices.
Motorola has consistently continued to remain successful as a world-class leader in mobile communication technology. The company has always been at the forefront in creating for itself a market niche cellular telephones, automotive semiconductors, paging devices, and microchips that are used to control devices apart from computers. Although the company has lost a few battles, Motorola has taken on the Japanese head-to-head, alongside the stiff competition presented by Japanese companies.
During the 1980’s Motorola commanded the emerging market in the U.S, with cellular phones and pagers although they weren’t aggressively targeting competing with the Japanese firms. During that time, these Japanese firms began to flood the U.S. market with cheap, superior telephones and pagers, leaving Motorola pushed to the wall and in dire need of restructuring. Faced with much pressure, Motorola heeded the call to battle. Managers at first were not sure which is the best way to take or how to respond, so at first, they decided to leave some business regions and even deliberated on integrating their semiconductors with those of Toshiba. After a lot of serious consultations, they chose to counter and recapture the firm’s lost market position. Motorola Inc. instituted two important strategies which include; learning from the Japanese, and thereafter providing stiff competition to them. To ensure success is realized in executing these policies, the Motorola management board devised strategic options to reduce costs, enhance quality and reduce markets share which it had lost.
Motorola’s present strategies are heavily focused on returning the firm to profitability. In the past couple of years, there has been much dialogue about spinning off the Mobile devices segment as an independent company, similar to what Motorola had previously done with Freescale. Motorola argues that the split creates two top-notch companies hence providing improved flexibility, more custom-made capital structures, and enhanced management focus-as well as more directed Investment opportunities for its shareholders.
Following the economic recession experienced in 2008, Motorola deferred the spin-off until the third quarter of 2009 when it is going to direct its focus on better understanding consumer demands. Besides, it plans to follow a product upgrade cycle and start operational variations to cut overheads and make the company leaner. This requires laying off roughly 3,000 workers – 2,000 of which will be from the handset division. Further, Motorola is contemplating lessening its emphasis on the European market too. In a bid to regain lost markets, Motorola has also invested greatly in the recently developed WiMax technology and expectations are high for WiMax as the next-generation wireless technology. This is since; Wimax supports high-speed data transmission and can comfortably transmit data at speeds between 1 and 5 megabits per second. Furthermore, it transmits over a radius of well over 20 miles.
Motorola believes competing in this technological and product territory is central to its mobility strategy. In November 2008, Motorola declared the placement of its first trial network in Vietnam (Alkhafaji, 2003). Launching of the experimental network for Vietnam
Data communications Company was a move described as another milestone in Motorola’s long history of leading WiMAX development in the industry by the Motorola executives.
Over the years, Motorola did not limit the number of operating systems it backs in the mobile devices section. However, in the recent past, the firm has condensed the number of operating systems it supports to only P2K which is Motorola’s legacy platform for low-end devices, Android, and Windows Mobile. Since the launch of the android platform, Motorola has been a featured partner by Google (Alkhafaji, 2003). The Android platform features social networking applications for example Facebook and MySpace. Furthermore, experts maintain that social networking phones and gadgets are projected to be a success within the 16- to 34-year-old age bracket, and estimated to comprise 23 percent of cell phone users by the end of 2012. In its quest to cut costs, Motorola is exposed to extra risks. Compared to similar firms in this very competitive market, Motorola is faced with an uncertain future.
The Future for Motorola
Motorola has fought to maintain pace with the transformations in technology that consumers need. Certainly, the firm has fought to have a quality product within the mobile devices division since its introduction of the RAZR. Whether a spinoff of this division can support the rest of Motorola’s business progress its financial performance will be the question that management needs to discuss. Also of real importance are the facts that the CEO and top-management team need to institute a positive reputation and limit the turnover that has taken place in upper management. These and other concerns are at the forefront needing the attention of the board of directors and stockholders alike. In terms of financial Performance, Motorola reported financial losses and a decline in annual sales in 2007, and this less-than-stellar financial state has led the management to contemplate different approaches that would best tackle this difficulty (Alkhafaji, 2003).
Motorola has not only cut itself as a successful company in the United States but has also set standards all over the world for similar firms. One of our major and particularly important recommendations for Motorola is to become more focused on customer service. Motorola Inc. would benefit greatly if they institute a strategy that should make it easy to track the available free minutes in its account. The number of minutes they have consumed in total and all other account information, which may also spread over to its pager customers. Secondly, Motorola Inc. should institute strategies that allow the users of its products to clear their bills online by embracing credit card technology or using the monthly bill as an alternative in checking their account bills. Another exceptionally crucial recommendation is the collaboration with an online mail provider to make its customers access their emails.
Motorola Inc. will benefit greatly by instituting strategies such as free minutes tracking and bill payments if properly fixed. This will allow it to offer better, reliable, and enhanced services to its enthusiastic customers. Sound strategies that appeal to customers will entice more customers to embrace Motorola brands which will translate to good sales, more revenue, and a good reputation. These are important receipts for strengthening a business’s competitive advantage.
Alkhafaji, A., F. (2003). Strategic Management: Formulation, Implementation, and Control in a Dynamic. New York: Routledge.