History of the Motorola Brand - Case Study Example

?Internal strengths and weaknesses Throughout its 78-year history, Motorola has been able to maintain its competitive position by turning innovative ideas into products that have high market demand. This innovative culture is one of the most important strengths possessed by the telecommunication company. The core competencies in innovation and reinvention are enabling the company to stay ahead of the competition in spite of the changes that are taking place in the industry. Motorola has been able to make innovation the focus of its strategic direction by being customer-driven. The focus upon the customer has enabled the company to reinvent its organizational structure several times successfully over its history. From televisions and consumer electronics to microcomputers cellular phones and pagers, each time the company has been altered fundamentally, enabling Motorola to compete in different industries. In this manner Motorola’s competitive advantage has been sustainable. The company has created an organic organization design which enables the management to maintain the continuous process of innovation. By capitalizing upon this strength, Motorola has been able to develop a wide range of products and services ranging from wireless handsets and smartphones to wireless and wireline broadband solutions to end-to-end enterprise mobility solutions. This diverse product range has enabled the company to build brand reputation and customer loyalty in a wide range of industries. The diverse product range has also led to a sustainable competitive advantage since the company can maintain profitability by focusing upon other industries if the demand in one industry is affected. Another strength of the company is its organizational culture. It provides a positive environment for the employees so that they are satisfied in working for the company. This motivates them to strive for continuous improvement in productivity. As a result, Motorola has been able to achieve the highest standards of excellence in the industry. One of the weaknesses facing Motorola is that the management has not coped with complexity well as the organizational structure has evolved. This has had a negative impact upon decision making further affecting the management of its international network of subsidiaries, branches and companies. As a result the company has been facing declining sales. At a time when competition in the industry is high, Motorola needs to create an organizational structure that optimizes international management. However the management has yet to take any action in this regard. The result is an inefficient organizational structure. Word count: 400. The current strategy of Motorola Given the high competition in the industry, Motorola has to create a sustainable competitive advantage. The current strategy of the company is to meet this long-term objective by capitalizing upon its core competencies. The important core competencies possessed by the company are brand management, supply chain management, mass production system and product development technology (Case study strategic analysis). The company is trying to combine these core competencies in an organizational structure which makes the company an attractive prospect for the stakeholders. Brand management enables the company to develop a strategic focus that makes the company very market and design driven (Motorola, 2006). In supply chain management, the company is able to develop an efficient system for inventory management and production scheduling. The mass production system saves costs and time and the product development technology has been built upon a standardized information system. These activities have led to a current strategy that takes into account social and environmental costs. Different stakeholders such as consumers, investors, nongovernmental organizations are demanding sustainable performances from the companies that they are investing in. If the products show poor environmental performance, then the company as a whole is not likely to have a sustainable performance in the long term. The current strategy of Motorola is aligned to this long-term objective. The combined core competencies are enabling the company to maintain a continuous process of quality improvements that are aimed at improving both social and environmental performances. As a result different stakeholders have more confidence in the long-term profitability of the company. Current the resource audit is focused upon a global strategy. This is a good strategy inasmuch as the company faces high competition which is addressed through accessing different international markets. However in the process focus upon the domestic market has been compromised. Therefore the company needs to incorporate more focus upon the domestic market. Motorola’s current strategy has been to maintain a continuous process of innovation in market and design orientation. This innovativeness has enabled the company to meet the varying demands in global markets. Brand management, supply chain management and strong production have led to a current strategy that can reap the benefits from a diverse range of products and services. Product diversity has been enhanced by international alliances and joint ventures. The result is a value chain that supports the global strategy effectively. Motorola’s communication solutions have wide market acceptance globally. Word count: 400. Critical discussion of alternative strategy Motorola currently is one of the market leaders globally in providing communication solutions. However the company cannot sit still given the increasing competitive rivalry in the mobile phone industry. Therefore the management needs to formulate an alternative strategy. The company’s current strategy is geared towards the international markets. Unlike its competitors, Motorola has not focused upon the domestic market. The alternative strategy needs to make this the long-term objective. By focusing upon the domestic market, the company will be able to lower the cost of the value chain since the resources could be sourced from its home market. By focusing upon the domestic market the company would be able to streamline costs of supply chain management. Superior cost management would strengthen Motorola’s competitive advantage. By controlling logistics costs to a greater extent, the company would be able to deliver superior user experience as the product development technology goes through a continuous improvement process. One of the weaknesses facing Motorola is the inefficient organizational structure. This has impacted negatively upon the decision making process so that the management of its international network of subsidiaries, branches and companies has not attained the desired standards of excellence. As the organizational structure has become more complex, the strategic focus has been compromised. The importance of an effectively functioning organizational structure will increase as the company implements more focus upon expanding share in the home market. Because of the increasing competition, Motorola will have to balance both needs of global and domestic expansion. This requires a high level of coordination which cannot be achieved unless the management can build an efficient organizational structure. In this respect, the company needs to look into the future direction of the industry. This will enable the management to develop a vision of the future strategic direction of the company so that the new product development process takes place accordingly. The value chain of the company needs to focus on those products and services that have potential in the future of the industry. The fastest growing market segment of the industry is web-browsing smartphones. Therefore Motorola needs to focus more R&D activities on this product segment. The company needs to develop more multimedia phones in order to maintain its competitive advantage. However Motorola also needs to strengthen its presence in software and services market. This objective can be met by collaborating with Google which manufactures the Android operating system which makes it easy for software developers to develop a wide range of applications for phones. Therefore the strategic alliance with Google should be emphasized upon. This strategic alliance would lead to a synergistic combination of resources between the two companies thus creating a platform for developing the most user-friendly handsets. By focusing the resource base upon the handset business, Motorola would be able to strengthen its competitive advantage. The company’s toughest competition comes from the likes of Verizon Wireless, Sony Ericsson and Nokia, all companies with strong presences in the handset business. In order to ensure continued supremacy in the mobile phone industry, Motorola needs to change strategic direction from being focused upon manufacturing phones to providing software and services (Hempel, 2009). For this reason continued collaboration with Google has been emphasized upon. Motorola currently lacks the organizational capacity on its own to develop software systems. Therefore coordination with software developers is one of the key success factors in sustaining the competitive advantage. The consumers are focusing more and more upon software functionalities provided by the phones. Web-browsing capabilities have become essential. Therefore the strategic focus of the company should be to build up presence in the developer network so that both phones and software functionalities could be combined synergistically. The company already possesses core competencies in information management. The sharing of information would enable Motorola to maximize the coordination with software developers. As a result the company would not only be able to manufacture the most affordable phones but also to package them with software functionalities most sought after by the consumers. Given the increasing competition in the mobile phone industry, Motorola has to develop a strategy that takes into account both global and domestic demand. In this manner the company can handle the competitive pressures that are characterizing the industry. The company’s handset business can be rejuvenated by bundling its phones with the latest software functionalities. By continuing to build phones around Google’s operating system, Motorola can create a production system that provides a computing platform via mobile solutions. This is the critical success factor in the mobile phone industry. The consumers want phones that allow them to browse the web and use a wide range of applications. By maintaining this strategic direction in both global and domestic contexts, Motorola can retain its market position and maintain its competitive advantage. Word count: 800. References Case study. Strategic analysis – Motorola share. Hempel, J., 2009. Motorola gets in the game. Fortune, 160(7). Available through ebscohost.com [Accessed 27 April 2011]. Motorola – Hello motto, 2006. [online] Available at:< http://www.connect2ideas.com/ MagazineArticle/tabid/115/key/dacc3bfd-dbe3-480d-973b-ce03cd4c36f4/Default .aspx> [Accessed 27 April 2011]. Read More