Policy and Strategy in Game Competition
Motorola is a company known for its innovations and inventions in the cellular telephone industry. Inarguably, by 1980, Motorola had owned the largest share of the communications market. At that time, one of Motorola’s stiff competitors was Nokia, which had the second largest market share in the same industry. The analysis of Motorola in depth shows that the company felt at the peak of their success and refrained from keeping up with the competition. The company was recorded as the largest mobile phone seller in the UK by the year 2006. However, after then, the market share of the company dropped significantly not only in the UK but on a global basis.
Empirical evidence suggests that the company’s failure was due to the lack of revolutionizing the strategies being employed at the time. The inept lack of understanding different global strategies to implement in the face of changing times is what led to the eventual fall of the company’s share in the communication market (Chiu et al., 2016). Looking into the history of the company, one could not have foretold the impending failure of the company. Their history clearly indicates the company was founded as a producer of radio cars and receivers. A few decades after the company was founded, it expanded into international markets. However, it was not until it invented cellular phone technology that the company’s success in international markets was felt without and within (Peng, 2013).
Apparently, Motorola controlled a huge segment of the US market for cellular phones that was emerging at the time. Motorola faced many challenges in its quest to conduct business abroad. At the time, the Japanese seemed to be their most fierce competitors. However, the company began to fall in this competition. To reverse the situation, Motorola came up with some global competition strategies that ensured their success and regain control of a good share of the cellular phone market (Blackman et al., 2013). These strategies were aimed not only at the Japanese but with an extended focus on the entirety of the global market. This paper will analyze the company’s history with a focus on the global strategies that had a lot of impact in their international business situation.
Existing Vision and Mission Statements
Vision
“Our history is rich. Our future is dynamic. We are Motorola, and the spirit of the invention is what drives us” (Motorola, 2017).
Mission
“We are a global communications leader powered by a passion to invent and an unceasing commitment to advance the way the world connects. Our communication solutions allow people, businesses, and governments to be more connected and more mobile” (Motorola, 2017).
New Mission Statement
“A global information and communications leader is driven by a passion for inventing, innovating and develop products that will provide customer satisfaction as well as aid in the advancement of technological development through finding new ways for the world to connect. Our technological solutions allow the seamless communication between businesses and governments to create more connections with both a lasting social and economic impact on a global basis.”
Company Objectives
Motorola’s objectives vary from the provision of total satisfaction of the customers with their products to those of financial value to the organization. As such, the given objectives are as stated below:
- To achieve sustainable competitive advantage by becoming relatively the best in the aspects of technology, marketing, product, people, service, and manufacturing.
- To obtain total customer satisfaction with their products.
- To increase their global market share in the communications industry.
- To improve shareholder value and achieve superior financial results.
Existing Strategies
In view of the objectives stated above, the company was involved in quite a number of operations aimed at achieving the said objectives on a global basis. One particular strategy the company implemented was called the 2+3+3 strategy in the Chinese cellular phone market (Chiu et al., 2016). The strategy is defined as below:
- 2: To essentially transform China to be the production base and distribution and retain a base of the company.
- 3: To increase the amount of total output, total investments and total purchasing of services and accessories in China.
- To put more emphasis on the development of semiconductors, digital trunking, and broadband.
Another global competition strategy employed by Motorola arguably involved the utilization of joint-business ventures partners with a focus on increasing the expertise in the development and distribution of cell phone technology and their products (Rothaermel, 2015). Entry of the organization into the Chinese mobile phone market was a success due to the implementation of the above strategies that led to their eventual market share growth (Blackman et al., 2013). Furthermore, more credit can be directed towards the detailed market structure that the company used to gain a larger market share in China to increase their global market share.
Analysis of the Firm’s Existing Business Model
The market structure included various players, for example, the distributors, wireless service providers, and retailers. Detailed information on the different players and the roles they played in Motorola’s market structure include:
Distributors
- Larger distributor networks.
- State funded networks.
Wireless Service Providers.
- China Unicom.
- China Modem.
Retailers
- China Mobile.
- Retail Outlets.
- Department stores.
However, with the implementation of these competing global strategies, Motorola still faced a lot of competition on a global scale. For instance, in the Chinese cell phone market, Motorola held a market share of 13% while its most fierce competitor, Nokia, held a market share of 22%. Other companies held significantly lower market shares of 10% for Samsung and 5% for Siemens. Consequently, a larger chunk of the Chinese cell phone market, 47%, was being held by local Chinese firms in the cell phone industry. The remaining 5% of total shares of the Chinese cell phone market belonged to a group of other statistically insignificant firms.
SWOT Analysis
The implementation of new global competition strategies in Motorola can help to gain a significant and sustainable competitive advantage over its competition. These strategies can provide both economic and social development aspects for the consumers in the global market. An in depth analysis of the company revealed the following information with accordance to a SWOT analysis (Motorola, 2017).
S – Strengths
- Motorola has an already established brand that is doing well in international markets.
- It is the world’s second largest mobile phone manufacturer. Motorola also boasts as being one of the world’s leaders in providing semiconductors, wireless communications, and advanced electronic systems, components, and services.
- The company is an inventor of the technology and thereby holds the advantage of the first-mover into niche markets.
- Motorola maintains service, sales, and manufacturing facilities throughout the world and operates on six continents with a total staff population of over 139,000 people.
- The company places emphasis on customer satisfaction, setting new standards of product and service quality and continuous improvement.
- Their existing large factory bases take advantage of economies of scales to create quality mobile phones at a relative extremely low cost.
W – Weaknesses
- The company has grown attached to traditional or rather old strategies that were inconvenient for the global market as they were unambitious and conservative in nature.
- Motorola as an organization had grown content with its leading position in the US market and had, therefore, lost sight of aggressive competition with emerging Japanese firms in the international market.
O – Opportunities
- With the current capacity, market structure and organizational structure of the organization, it has the capability to expand and compete globally.
- Motorola has been in the forefront of inventing new technology in the information and communications industry. In view of this, the company can match the speed of the fast-paced changes that happen in this industry and ensure the discovery of new and innovative products and technological development is to their advantage.
T – Threats
- Motorola keeps facing stiff competition from the Japanese who are more efficient in terms of quality leadership and cost of production.
- Motorola faces threats of emerging firms and substitutes.
- The high degree of rivalry and supplier power creates a very competitive industry to operate in.
- Threats of buyer power among companies that hold significant shares in the information and communication industry.
References
Blackman, I. D., Holland, C. P., & Westcott, T. (2013). Motorola’s global financial supply chain strategy. Supply Chain Management: An International Journal, 18(2), 132-147.
Chiu, J., Chung, H., & Yang, Y. N. (2016). The impact of a conglomerate merger on its vendors and rivals–a case study of Google’s acquisition of Motorola. Technology Analysis & Strategic Management, 28(2), 176-189.
Motorola. (2017). Moto.com. Retrieved from https://www.moto.com/mea/home
Peng, M. W. (2013). Global strategy. London: Cengage learning.
Rothaermel, F. T. (2015). Strategic management. New York, NY: McGraw-Hill Education.
