Motorola Inc.: Strengths and Weaknesses
Motorola Inc is a multinational telecommunications firm that is located in Schaumburg. Illinois. The Company was divided into two different companies on 4th January 2011.That is the Motorola mobility and Motorola solutions. This is after the company incurred huge looses from $4.2 billion from 2007 and 2009.Motorola solution is the successor of the Motorola Inc. Motorola Inc offers telecommunication services to a wide range of customers located in different parts of the world.
The number of companies offering telecommunication services in the world has increased and hence led to competition in the communication industry. This has in turn forced firms to develop competitive advantage strategies. Like other telecommunication companies. Motorola has strengths and weaknesses. First, the company has a strong brand. The Motorola brand is one of the best brands in the world. The strong brand has enabled the company become competitive in the industry.
Apart from having a strong brand, the company also has good manufacturing experience. The company is also a dependable phone maker and this has made it easy for the company to develop products without getting assistance from other companies. Thus, this has made the company have a strong reputation. Moreover, the company has a diverse product line and this has made it easy for the company to meet the needs of different customers in the market. Also, the company supports social causes.
For example, the company supports the Chicago climate exchange. The company also has a voluntary emissions reduction program. The program is aimed at reducing the emission of green house gases in the world. The company is also the first mobile manufacturing firm to get the US environmental protection agency’s energy star qualification. Additionally, the company has a loyal customer base. Most of the customers associated with the company are loyal as they get quality services and products from the company. Also, the participation of employees and commitment has given the company a competitive advantage (Ireland, Hoskisson &Hitt, 2008).
However, the company has various weaknesses. First, the organizational structure in the company is not efficient. The organizational structure has been affected by the complexity of the company. The inefficient of the organizational structure has made it hard for the company to manage subsidiaries, branches and firms in different parts of the world. Additionally, the company faces competition from other companies in the industry. For example, the company faces competition from firms like Verizon wireless, Sony ericssson and Nokia. It also faces competition from Samsung. The competitors have a product line that is similar to the product line produced by the Motorola Inc.
The companies manufacture 3G mobile phones like Motorola. Also, the company has not been able to develop strategies to prevent the impact of competition and this has affected sales in the firm. For example, the company has not been able to improve its product line and hence become competitive. The sales in the company have declined for the last few years due to poor strategies and failure to meet customer needs. Thus, the company should develop strategies to help overcome the challenges and attain its goals (Ireland, Hoskisson &Hitt, 2008).
Current strategy of Motorola
Motorola has a global strategy. A global strategy refers to a strategic guide in the organization that leads to globalization. A global strategy that is effective should be able to show the extent of market presence in main markets in the world. It should also help build global presence required. It should also show the optimal locations for value chain activities in the world. Lastly, the global strategy should show how to help firms achieve global competitive advantage. Global strategy requires companies to coordinate their product and price strategies across global markets. Most of the firms that use global strategy are highly centralized (Ireland, Hoskisson &Hitt, 2008).
The company has established a computerized global communication network. The network is aimed at improving coordination between subsidiaries and affiliates. The computerized global communication network allows stakeholders in different parts of the world to share information. It also helps the stakeholders in different countries to communicate when developing new products. The global strategy has made it easy for Motorola to develop quality products and reach a wide range of customers in different parts of the world.
Apart from having a computerized global communication network, the global strategy is evidenced by the strategic alliances and joint ventures in other countries. The company has formed different joint ventures and strategic alliances in various nations. The company acquires other forms using purchase accounting. The results of each acquisition are incorporated in the financial statements of the company for the period after the acquisition date (Ireland, Hoskisson &Hitt, 2008).
The acquisitions and mergers have helped the company improve its market size. For example, the company has been able to improve its market size by venturing into other market segments. This has in turn improved the customer base in the company.
Apart from forming mergers and acquisition, the company has been also participated in global activities. For example, the company has participated in climate change in different parts of the world like Chicago. It has also participated in biodiversity issues and education issues in different parts. This has helped the company preserve its public image and enhance it (Ireland, Hoskisson &Hitt, 2008).
The global strategy is also depicted by its marketing strategies. The marketing strategies in the company have been effective and this has made it easy for the company to create brand awareness. The company’s brand is one of the best brands internationally. People from different areas of the world are aware of the brand offered by the company. For instance, people who are not familiar with mobile communication are aware of the Motorola brand. This is because of its quality and global strategy. Though the company has developed a global strategy, the company does not have a strategy to improve its competitiveness at home. This has made it difficulty for the company to use resources that are available at home. In addition, it has made it had for the company to overcome competition from other firms (Ireland, Hoskisson &Hitt, 2008).
Alternative strategy
Like other telecommunication companies. Motorola faces competition from other firms in the industry. The global strategy implemented in the organization has not been effective in making the company competitive. The company has not been able to compete with other firms in the telecommunication industry. For example, the company has not been able to compete with Samsung, Ericcson and Nokia. The rival companies offer products and services that are offered by Motorola. As a result, the company has to devise another strategy so as to remain competitive and maintain its market share. There are various things that the company should change so as to become competitive and retain its market share.
First, the company will need to improve its spectrum holding so as to become competitive. The current strategy being used in the organization only responds to opportunities in the local market, but not global market. It also responds to competitive advantage that was created in different markets in different countries. The company competitiveness in other markets relies on the capability of the management in the organization and position in the industry. This implies that the company will be adversely affected if the company becomes uncompetitive in the international market. The alternative strategy should address the issues listed above so as to make the company competitive (Ireland, Hoskisson &Hitt, 2008).
There are various strategies that the company can use to retain its competitive advantage and maintain its market share. First, the company can use differentiation strategy to enhance its market share and maintain its competitive advantage. The differentiation strategy is used to differentiate products in the company. Most of the companies in the industry produce a product line that is similar to the product line produced by Motorola. This has affected sales in the organization. This is because most customers are not able to differentiate products offered by the company and products offered by the competitors. The differentiation strategy will help enhance Motorola brand and make it easy for customers to recognize the brand. This will increase sales in the organization and ensure the company maintains its market share by attracting new customers and retaining old customers (Ireland, Hoskisson &Hitt, 2008).
The differentiation strategy is used where the customers targeted by the firm are not sensitive to prices. It is also used where the market or industry is competitive so as to help firms achieve competitive advantage. In addition, differentiation strategy has been used where the customers have specific needs. This is because it makes it easy for companies to meet the needs of the customers located in different market segments. Most companies that have used product differentiation strategy have been able to develop products that meet the needs of customers in the target market.
They have also been able to customize products and services to meet customers’ expectation. It is also used when the company resources and capabilities that can be used to meet the needs of the customers. Differentiation strategy has been used by various telecommunication firms to help increase their market share and maintain their competitive advantage. For example, Nokia has used differentiation strategy to differentiate its products and meet customer needs (Ireland, Hoskisson &Hitt, 2008).
Most studies have proved that using differentiation strategy in a competitive telecommunication industry is effective in improving brand development. Most of the telecommunication firms in foreign countries have used differentiation strategy to occupy market share by enhancing the volume of sales and product quality. The differentiation strategy will have a lot of benefits to the organization unlike the global strategy being currently used in the organization. First, the differentiation strategy will enable Motorola compete with other forms in the industry. This is because of unique products and brand. It will also help the company enter new market segments and increase its market share.
For instance, the company will be able to target markets that are underserved and develop products that suit the needs of customers in those segments. Thus, this will help the company retain its market share. Additionally, the differentiation strategy will help increase sakes in the organization by attracting customers. The global strategy used in the organization has affected profit negatively. The company recorded low sales between 2007 and 2009.The differentiation strategy will help lower expenses in the organization and improve sales (Ireland, Hoskisson &Hitt, 2008).
Moreover, the differentiation strategy will prevent the company from relying on the capability of the management and its position in the market. Currently, the company depends on the management and position for competitiveness. The company is likely to be affected negatively in future as it depends on the factors above. The company might record low sales and productivity in future if the factors named above are affected in future. The company will not be affected in future if the management changes. This is because it will depend on its products and brand awareness instead of the management.
This implies that the sales and productivity in the company might not be affected in future. This is because the company will be able to overcome changes in the market and meet the needs of the customers. Thus, the company should implement the new strategy instead of the global strategy. This is because of the benefits that are linked with differentiation strategy. The differentiation strategy will enable the form overcome the challenges it is facing including threats. It will also be able to exploit various opportunities that are available in the firm. The company has different opportunities as shown in the case study. First, the company has an opportunity to improve its market share and develop unique products (Ireland, Hoskisson &Hitt, 2008).
Reference
Ireland,R.D.,Hoskisson,R.E.,&Hitt,M.A.(2008).Understanding Business Strategy: Concepts and Cases. Cengage Learning
Is this your assignment or some part of it?
We can do it for you! Click to Order!
