The Salient Opportunities in Motorolas External Environment - Assignment Example

Describe the salient opportunities and threats that exist in Motorola’s external environment. It is important to study the external environment for Motorola as it gives useful information on the resources available with the company as well as its ability to successfully survive and grow in the cut throat competitive environment. Opportunities: A major opportunity that Motorola enjoys is because of its strong brand image. Motorola has a strong presence in the global market and with the introduction of more products or the upgraded version of existing products, it can certainly capture more share in the market. Another way of gaining more market share is by introducing existing products in new markets. As the brand image of Motorola is positive, creation of brand awareness can bring fruitful results for the company. Motorola is one of those brands in the communication industry which is making the most of marketing and promotional activities. A little more focus on the advertisement campaigns can further strengthen its position in the market. Innovation is a strong competitive advantage of Motorola. Following the principles of innovation, new products are created which are differentiated from those of competitors. Innovative products usually incur low cost and resultantly, achieve customer satisfaction which in turn helps the company to capture more markets. Motorola is never afraid of taking risks and it is for this reason, innovation has been made possible. Motorola has organized itself into three divisions namely Home and Networks Mobility, Enterprise Mobility Solutions and Mobile Devices. These three segments have their own share in their market and target different customers depending upon their status and other demographics. Motorola is a company where research and development is an active department. Due to continuous research in technology, Motorola has reached the platform of success and enjoys its presence in the area of major technology gadgets. The company offers products that are suitable for various income groups and this explains one of the reasons of its strong brand image. Threats: The biggest threat that Motorola faces is from its competitors. The competitors of Motorola in the telecommunication industry are many and almost all of them are technologically advance and depend highly on innovation for their success. These competitors have already captured a huge share from the market and are doing their best to capture more as well as focus majorly on acquiring new and retaining existing customers. The names of competitors include Nokia, Apple, Siemens, Samsung, Helio Inc, Sony Ericsson, Research in Motion, LG Electronics and Mobile Internet Devices or MID’s. All these competitors have successfully positioned themselves in the industry for a long time and have a fine customer base. Therefore, it is difficult for Motorola to entice the customers and increase sales. In the beginning of Motorola’s operations, some of its products had defects due to which customers took some time to trust on the company’s products. Although there are no faults in the current products but the perception of customers is hard to change. Forty two percent of Motorola’s income comes from five huge customers in the segment of Mobile Devices. These customers are China Mobile, AT & T, Verizon, America Movil and Sprint Nextel. If any of these customers switch to buy competitor products, then there is a possibility that Motorola will lose its revenues. Although Motorola focuses on promotional activities but they are not up to mark. The marketing activities of competitors are strong and Motorola is facing a big threat from its competitors in this regard. Although Motorola is an innovative company but the competitors are more active in incorporating innovation in their operations. Therefore, Motorola needs to speed up its innovation and research to overcome this threat. Motorola also faces trade barriers as it cannot carry its operations in some countries such as Japan. Previously, Motorola was the only provider in the wireless technology but now it is facing competition in this area too. 2)Describe the company’s most prominent strengths and weaknesses. Strengths: In the telecommunication sector, the brand name of Motorola is quite strong. It has a fair market share in both developed and developing parts of the world. Motorola is popular as one of the leading companies in bringing innovation in its products, processes and technology. As the products of Motorola are diverse therefore, it enjoys success in almost all major markets. The rate of satisfaction of customers based on the usage and durability of Motorola’s products is high and also improving day by day. Motorola has been developing technologies such as WiMax for a long time and still maintains a strong focus on this area. The offerings of Motorola are priced in such as a way that all customers from high to middle to lower class can enjoy the company’s electronic gadgets. Motorola RAZR was a huge success few years ago which brought a great increment in sales volume. Weaknesses: Majority of products manufactured by Motorola are not designed in a user friendly manner which explains why customers exhibit reluctance in purchasing them. The supply chain of Motorola is not very reliable which is a worth mentioning weakness of the company. As discussed earlier, the products of Motorola had faults which caused the customers to switch to competitor’s products. The mobile phones of Motorola are no more impressive and this has caused the sales of the company to drop down. Due to poor marketing efforts and defects in the products, the brand of Motorola is quite low in the eyes of the customers. The employees of Motorola are less competitive and do not have updated knowledge about technology. Their level of motivation is also least impressive. Therefore, poor human side of Motorola is its biggest weakness. Motorola deals with few and specific suppliers because some products it utilizes are not available at any other supplier. Because supplier is on the dominant side so frequent delays and sometimes shortage of materials causes Motorola to suffer. 3. Describe the advantages and disadvantages associated with each of Motorola’s strategic options. Motorola has decided to bring a change in its operation which may cause the company to switch to low cost structure. The suggestion is valid because during the current competition in the telecommunication sector, it is better to have low cost structure so as to minimize the effect of losses as well as boost the income level. However, associated with this strategic option is a disadvantage too which is the cut down of jobs from three thousand to two thousand especially in the handset department. Loss of one thousand jobs will not only spoil the image of the company in the eyes of laid off workers but also spread a wave of job insecurity and uncertainty among the remaining employees. Employees’ level of loyalty with Motorola would be shaken. Motorola has finally come to realize that in order to increase its sales and capture more customers, it has to consider other markets too. Therefore, it has decided to lower its focus on the European markets and concentrate more on the Asian countries. This is a positive yet wise move taken by Motorola because the competitors have strongly captured the European markets and instead of spending capital and efforts on strengthening its brand in the same market; it is better to capture new markets and gain profitability this way. Motorola was focusing on those products which were manufactured by other companies too and are readily available in the market. It is better to introduce products that are rare and more useful to the customers. A significant strategic option by Motorola is the use of WiMax. WiMax is the acronym for ‘Worldwide Interoperability for Microwaves Access’. WiMax is a technology that causes data to transmit at a very high speed and has replaced infrastructures commonly used in telecommunication such as cable infrastructures, copper wiring network. WiMax has largely benefitted the cable television operation system and internet service providers. The data transmission speed of WiMax is one to five megabytes every second and it is highly suitable for distance of more than twenty miles. Now the implementation of WiMax is being carried out on global level. In 2008, WiMax was successfully launched in Veitnam. Motorola is offering alliances with other companies to incorporate this technology in their cellular phones for instance, Sprint/Nextel. The competitors such as Nokia and Cisco are also trying to offer WiMax based operating systems to the society. The disadvantage of this strategic option is that competitors will start offering WiMax which might give rise to critical situation for Motorola. When many competitors will start offering WiMax, the uniqueness of this technology will go down and as a result, the popularity and profit of Motorola will drop. The social networking buzz has compelled Motorola to take the strategic decision of cutting down on its operating systems and offers only those systems which are compatible with My Space and Facebook. For this purpose, it has also partnered with Google to work on Android. This is a favorable step taken by Motorola. 4. Describe how the corporation’s strategy and organizational structure can be designed to solve the company’s strategic issues. There is cut throat competition going on in the industries of telecommunication and technology. It is really important that Motorola prepares itself for competition and compete fiercely against its competitors. Also Motorola needs to work hard to sustain its competitive advantage. Motorola must follow low cost structure while practicing the concept of differentiation religiously. It must offers products and services to its customers at low prices as compared to those of competitors. Alongside, what it offers must be differentiated from the rest of the market. New telecommunication companies are gradually entering into the market and the technology they offer is usually diverse based on novel ideology. It is high time that Motorola must realize its potential and strive to design a competitive strategy which is practical and at the same time, sustainable. Motorola earns huge share of its profits from five buyers and cannot afford to lose any of these. Therefore, Motorola must understand the demands of each customer on individual level and ensure that they are fulfilled accordingly. The customers must be kept gratified otherwise serious consequences will welcome Motorola. Customers heavily rely on technology in their daily lives which means that demand for electronics is at peak. Thus, Motorola should continuously introduce electronic and telecommunication products and services into the market which are up to date and highly innovative. 5. Explain how Motorola should proceed. Motorola must consider following the technique of road mapping. Road mapping allows companies to define their goals and set actions for reaching them. Just like a traveler decides a destination and follows the path to reach it. With the help of road mapping, the company will be able to identify and follow the right technologies, processes and methodology in order to compete in the external environment. This will prevent any market surprises for the company and prepare Motorola to streamline with market trends. Road mapping will also communicate a clear vision of the company to its divisions and in this way a collective effort will help attain goals more efficiently. References: Abbass F. Alkhafaji (2003). Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. Binghamton: Haworth Press, Inc. Gem Stapleton, John House, John Lee (2008). Diagrammatic Representation and Inference. Germany: Springer-Verlag Berling Hitt, M.A., Ireland R. D., &Hoskisson, R.E (2011).Stratregic Management: Concepts & Cases: Competitiveness & Globalization. 9th ed. Mason: Cengage Learning. Stanley E. Fawcett, Lisa M.Ellram, Jeffrey A. Odgen (2007). Supply Chain Management. Delhi: Pearson Education, Inc.. 214-216. Read More