Motorola Inc and Its Stand in the China - Article Example

?Motorola Inc and Its Stand in the Chinese Market One of the most interesting developments recently is Motorola Mobility Holdings Inc.’s smart phone sales in China which have been seen to be multiplying very rapidly in Plates even while numerous Google Inc. services for cellular phones are not even permitted in the country. That being said, this paper will try to review the strategies used by Motorola Inc., as well as the existing laws in China about international trade. First and foremost is an overview of Motorola Inc. as a company. It is an American multi-national communications company which is based in Illinois. It was known initially in 1928 as Galvin Manufacturing. By 1947, the company changed its name to Motorola though that name had been used as the company's trademark since the 1930’s. The company's first product was, at the time, radio car. Numerous Motorola’s products were radio-related, starting from battery eliminator for radios, and then to the world's first walkie-talkie. Nowadays, the company is known well for cellular phones of high quality and at the same time as the leading provider for the microprocessor which is used in Commodore Amiga, Apple Macintosh and Power Macintosh personal computers. It is at the same time offering different lines of communication products like satellite systems, digital cable boxes and modems (2007). China Laws Law in the People's Republic of China attracted very little attention a decade ago. But it is now attracting quite a good deal of attention from the business industry. Communicative interest on this subject are everywhere. Commercial services are even now keeping close tracks of Chinese legal developments, while publishing just about all foreign-related laws and regulations as they are being issued from Beijing together with English translations. There even exists a number of Chinese law discussion lists which can be found on the Internet, talking about broad policy issues and technical legal points which are the main topic of more and more spirited dealings by specialists around the world. (Corne, 1997) There are good explanations for this flourishing interest in Chinese law. Nowadays, foreign businesses that are involved in or thinking about doing business with China have an evident need to get a better understanding of the developing legal situation within which they will have to run. Foreign governments, in view of China's increasing value in the world trade and investment, are concerned with protecting their nations' interests by assuring the compatibility of China's legitimate scheme with those of the world's economy. For China itself, its "open door" policy of promoting foreign trade and foreign investment has been the booster of its economic improvement. It is at the same time the main motivational force behind its fast economic growth since 1978. Modification in foreign business laws has led into a broadening improvement of the entire legal system to meet the needs of a industry economy. Both its people and their leaders knows that continuing development in this aspect relies on the continuing efforts to take their legal system into agreement with world standards. (Robinson, 1995) China's legal regime for the approval and standard of foreign direct investment was an important focus of discussions. It is on this topic that the National People's Congress has been most productive in passing legislation. It is at the same time in this area that the laws passed have had such momentous outcomes. China played its introductory law concerning foreign direct investment in 1979 which was known as the Equity Joint Venture Law. This activity authorized the creation, though was dependent to state approval, of joint Sino-foreign business undertakings. Participants in these ventures are liable for the firm's financial obligations, at the same time, entitling them to its profits to the point of capital that was brought in. They are approved to exist for up to 30 years and are accepted under Chinese law as legal persons. Equity joint ventures are ruled by their Boards of Directors. However, under the original law, the Chair of that board must be a Chinese citizen. The law was revised in 1990 in order to allow foreign nationals to serve as Chairs with at least a 25% equity requirement on the part of the foreign partner to the joint venture. At the same time, ownership interests in equity joint ventures can not be transferred. In the years since 1979, China has acted out laws which sanctioned other types of foreign direct investment. By 1986, the establishment of wholly owned foreign enterprises in China had been authorized . After two years, it passed a Cooperative Joint Venture Law, which authorized the creation of contractual joint ventures opposing equity joint ventures. These enterprises bears likelihood to general partnerships in terms of structure and operation. Contractual joint ventures, similar to equity joint ventures, are at the same time subject to government approval. Approval as such are recognized as legal persons wherein they can enjoy limited liability and may last as long as the venturer chooses. There are no minimum shares on the side of foreigners, and the participants have the freedom to settle the distribution of profits and losses. All laws, in relation to the foreign direct investment, have been followed by the announcement of similar employing regulations. That China's laws have been successful in its promotions of foreign direct investment was proven when in 199, China authorized around 206,000 foreign investment projects, thus providing employment for over 14 million people and accounted for around 29% of China's exports. In 1993, the Chinese National People's Congress acted out a Company Law which affected both domestic and foreign business entities. New forms of business organizations were made available to Chinese firms, wherein under the Company Law, makes potential new investment transports were made available to foreign investors in China as well. These will be as follows: the limited liability company, quite similar, in terms of legality, to the German limited liability company the company limited by shares, similar to an American corporation. These new forms of business structure may give foreign investors more independence and managerial control as compared to the ones they had under the old investment transports, like equity ventures and contractual joint ventures. at the same time they open up the prospect of portfolio investment in as much as the law permits ownership interests in companies restricted by shares to be listed and traded on exchanges. By law, what used to be equity joint ventures can be changed into companies limited by shares. The Company Law at the same time enables foreign companies to set up Chinese subsidiaries. The new law is seen by a number individuals as China's effort to make a single unified law of business organization. a number thinks that foreign nationals may wish to keep the preferential treatment that is acquirable to joint ventures and totally foreign owned enterprises under present legislation. (OECD, 2003) Motorola Since it first joined the competitive electronic firm industry, Motorola continues to stay successful in being a world leader in mobile communication technology. Its rank as the leading maker of cellular telephones, paging devices, automotive semi-conductors, and microchips that are used to operate devices other than computers is constant. Although it has lost a few battles, Motorola has taken on the Japanese head to head, through these times of Japanese competition. In the 1980, Motorola was in control of the emerging U.S, industry in terms of cellular phones and pagers. However, they were not aggressively focused on competing with the Japanese, even though Japanese firms was starting to flood the U.S. industry with low-priced, high-quality telephones and pagers which resulted to Motorola being pushed into the background which is when Motorola stated to battle. Managers were initially not certain as to how they should react, so to begin with, they decided to discard a number business areas and even thought about merging their own semiconductor operations with those of Toshiba. Their fight to regain the industry position they have lost to the Japanese involved two main strategies. The first was to take their lessons from the Japanese before competing with them. In carrying out these strategies, executives of Motorola made the decision to set a number of broad based goals that basically committed the firm to lowering costs, improving quality, and regaining lost industry share. Managers were then sent out on missions, mainly centered on Japan, in order to learn how they can compete better. The firm at the same time dramatically boosted its budget, R&D, and employee training world-wide. (Luo, 2004) One essential lesson that the executives learned from their trip to Japan after viewing a flag flying outside one of its plants was that they had completely forgotten their old ways of doing business and this is exactly where they decided to reinvent their firm from top to bottom: Old plants were closed as new ones were built. Workers received new training with a wide range of quality-enhancement techniques. They decided to place their new commitment to quality at the forefront of everything it did. They decided to announce their goal of achieving a perfection rate of 99.9997% (Six Sigma) When they actually achieved this level of quality, they received the Malcolm Baldrige National Quality Award. Worldwide, Motorola controls 45% of the total industry for the products they manufacture, having regained its number two position in semiconductor sales, and is fiercely introducing as many new products. Today Motorola brings forth greater than 56% of its revenues abroad. Major new initiatives are underway in Asia, Latin America, and Eastern Europe and the firm has currently made headway in Western Europe against rivals Philips and Thomsom. Motorola has set new and astonishing goals for itself. It wishes to take quality to the meaning where imperfections will be measured related to billions instead of just millions. It wants to cut its cycle time tenfold every ten years. And by this year, Motorola sought over 75% of its revenues to come from foreign industrys. Even though Motorola has implanted and proven itself as a successful company, they have their strengths and weaknesses like every other company. Motorola's strengths are: its net sales innovation industry and software development. their passion openness of executives acquisitions mergers and business alliances are at the same time part of Motorola's strengths. Customer-oriented Great number of employees and offices The use of Six Sigma Approach Good name reputation Wide range quality enhancement training industry Software Development Weaknesses of Motorola are: the overall quality of its operations, products, and business practices. They seem to generate unhappy consumers and have poor consumer relations. Their products seem to have high numbers of defects Motorola itself is viewed as being inefficient and has a reputation of lacking a strategy. There at the same time have low employee education, training, motivation, and morale, which is an extremely important aspect. Opportunities that Motorola has are that they can learn from the Japanese, have untapped industry opportunities around the world. They at the same time have the opportunity to take part in joint ventures, new alliances, and further dealings with present business partners. Low Quality of Operations Lack of Business Practice Poor consumer relations Lack of Promotion Methods The industry demand all over the world for wireless phones has inflated very dramatically resulting in supply problems and stock outs, as well as its sales decline in their production segments such as the Satellite Communications Development Segment and their Commercial Government and Industrial Systems Segment. Motorola is at the same time threatened by its competition, Ericsson, mobile giants from all over the world such as AT&T Wireless, Mobil, France Telecom and many more. To best evaluate Motorola, one would have to admit that it is one of the most successful companies in the world. It has the highest quality as it was recognized when they received the Malcolm Baldrige National Quality Award for reaching Six Sigma Quality. However, there are still a number recommendations which can help Motorola in improving their business, a number of which are: to become more customer service oriented. A good and highly successful idea we feel would be if Motorola made it available for its cell phone customers to track the number of free minutes that are left in there account, how many minutes they have used in all, and all other account information, which can apply to its pager customers at the same time. Another recommendation is to allow their customers to pay their bills on line either by credit card and even setting up a monthly debit of their checking account, of the bills amount. Another thing that is extremely important is that the collaboration with America Online to make available, access to customers emails. All of the recommendations that were made could, would, and will be more convenient to customers. The more Motorola pleases it customers, the more happy they are, the more they become loyal to the Motorola brand. These all create a preference to the Motorola name, which leads to a better reputation, increased sales, increased profits, increased revenue, and increased industry share, which are all an important for companies like Motorola when it comes to present and future business. Motorola in China Motorola is the largest foreign investor in China's electronics industry with greater than 9,000 employees in China. Since coming to China in 1987, Motorola has made its commitment to China a long-term strategy. By the end of 2005, Motorola's total investment in this country reached US$3.6 billion. Motorola's commitment to China continues to increase, showcased in part, by its venture investment program. These investments are expected to bring much- needed funding, technology and management know-how to local Chinese entrepreneurs. On August 30th, Motorola held a conference they referred to as the “really intelligent, Ming cell phones come back” in Beijing. The company introduced three kinds of “Ming” series smart phones using the Android system as a basis all at one time which meant that in less than one year, Motorola has introduced a total of 11 Android smart phones in China which would averagely mean that the company is introducing a new phone into the industry almost every month. The rate of new handsets introduced heavy, the powerful force in the smart phone industry is very uncommon. From the ending of the previous year, Motorola set up intensive new Android phone, stormed the smart phone industry, successful performance. (Luo, 2004) However, Motorola’s improvement is not smooth and the road is ill-fated, due to other operating systems as well as Android cell phone manufacturers which have vied with this much pressure to Motorola. Successful completion of both divided, but at the same time with major cell phone manufacturers begun competing head first, how to solve the plight of the Red Sea android phone, Motorola will be key to recovery. Introduction of a new range of smart phones, storms the Chinese industry Brilliant achievements have set the cell phone industry, Motorola formed in recent years repeatedly frustrated, after a long period of low and its preparation, this year, Motorola settle down, frequently force, and continue to stir China’s smart phone industry, underlines the will power to catch up. (Ireland, 2008) On August 30th of 2010, Motorola took the latest action. In the “wise real return” conference, Motorola introduced a total of three “out” series of cell phones, to support domestic three different formats. All three phones are in support of China Mobile TD-SCDMA network, MT810, support China Telecom CDMAEV-DO and GSM dual-network dual to be the XT806 and support China Unicom’s WCDMA network A1680. It is worth noting that they are based on the Android smart phone system. This style arrangement, show MOTO focus more on balance and cooperation between the three operators, the layout concept. Meng Pu, president of Motorola Greater China, said China’s current 3G standard by the three operators to support, therefore, in order to meet the different 3G standards of customer, and Motorola will increase cooperation between the three operators. It is reported that two versions of cell phone configuration HD camera and other features, hoping to China in an increasingly competitive smart phone industry to attract more and more users. Motorola’s intensive campaign, the achievements are obvious to all. According to IDC data, the second quarter, Motorola’s handset industry share in China is only 2% over the same period four years ago the figure was 23%. The second quarter of 2010, this year, Motorola smart phones in the domestic industry share was 13.6%, second only to Nokia’s 26.7% and Samsung’s 17.9%. Inside the Android operating system, Motorola is greater than 50% industry share, ahead of other manufacturers. Betting on Android, an occasion to regain their leading position According to Nielsen’s report shows that by 2012 there will be 1 / 3 is the smart phones, Android has become the world’s most rapidly increase in smart phone operating system; the previous quarter, the U.S. industry with 27% of smart phones Android system Apple’s operating system has greater than 23%. In the country, Android system performance is at the same time very eye-catching. It is reported that domestic cell phones used in the system, Google Android smart phone industry share, in the past month for the first time over Apple’s iPhone. Android system in the world of rapid expansion, Motorola is actually trying to take back the lead as the Chinese industry, providing a flash exhibition room for maneuver. Meng Pu frankly, Motorola’s 2G cell phones would be greatly reduced, mainly based on the Android operating platform, the development of 3G cell phones, Motorola from 2008 put stakes on the Android operating platform. Previously, Motorola co-CEO Sanjay? Jia at the same time said, Android phones will be Motorola’s revival by the choice. He said that Motorola plans to launch in 2010 of 20 smart phones, most of which use Android system. Li Yan, vice president of Motorola, said Motorola has introduced 11 models of products based on Android, the data from a third party perspective, Android’s products are the smart phone industry, the most rapidly growing. Motorola’s Android operating system, which holds 50% industry share, ahead of other manufacturers. Meanwhile, in China, Motorola has introduced a number of smart phone models over the Chinese industry, other smart phone brand. According to Sino-statistics, as of the first half of this year, Motorola’s industry share in China, greater than other brands combined Android smart phone, Android smart phone vendors to become the industry share of top brands. This means that in the Chinese industry Shan Fan ? new Android smart phone manufacturers have become the first leading brand in doing my part. Aggressive approach to breaking the plight of the operating system Red Sea According to reports, the “return wise real” conference, Motorola, Chinese companies talked about rebirth, that is, to the system with Android smart phone, smart phone vendors to become the first Chinese leading brands. But competition is intensifying, Motorola’s outlook is not optimistic. The competition among the cell phone manufacturers of Android system are fiercely either. September 2, Huawei introduced the smart phone operating system equipped with android2.2 U8150. Huawei’s terminal business for the UK and Ireland director of Nicola Philbin said, this is the only currently on the industry a brand and Android2.2 with Google cell phone operating system, and has great competitive prices. Coincidentally, Cool disclosed in a recent earnings report, after a year of research and development, the first flagship products will be based on android second half of this year. Cool the first Android phone to industry will further increase its competitive advantage in the 3G industry. There is no doubt, then, Motorola’s industry space will be further squeezed. It is remarkable that, Android system due to of its open source and for free, will attract many cheap cell phone vendors into the system, the price decline as irreversible trend. Currently, more reliance on Motorola Android phone in the stand-alone profits, if the downward pressure on prices continued to strengthen such as cheap cell phone prices, inevitably forcing Motorola’s growth is slowing down. From the view of the current situation, android Smartphone momentum very fierce, as Motorola’s development provides a good environment When it comes to the sales of Smartphones in China, Motorola and HTC have earned the most consistent success from their Android platform, although it has required a number necessary and careful tweaking, adaptation and replacement of applications in making the possibility of Android selling in China to be actually possible. Motorola announced recently that one million smartphones had been sold in mainland China for the first quarter of 2011, though not all of which were Android phones. At the same time, HTC claimed that they would triple the number of shops there, up to as much as 2000 outlets by the end of current year. However, both HTC and Motorola, proves to be having an ongoing battle in making Google’s Android mobile operating system work, as well as sell in China. The result of which is Google’s troubles in China. A number of the services and features that are available on most Android phones are not available in China, the main reason why Motorola has built relationships with Baidu and Microsoft, enabling all of those applications to be available on their mobile devices. Meaning that tablet-spec Tudou app will be added to the Motorola Xoom. On the otherhand, HTC Sensation, which will soon be heading to China onto two networks leaves Google, not exactly innocent in these issues that make Android an inconvenience in China due to Android phones coming with no Android IME already installed. This means that a third-party application is required before typing Chinese could be possible. HTC and Motorola opted to avoid that out-of-the-box omission, with a good Chinese IME in their adapted Chinese smartphones. In addition to these, the Android industry in China is one of the marginal few in the world without paid applications support. Which is where the Moto SHOP4APPS and HTC app stores bring their own customized selection of free and paid applications. Motorola's New Strategy For China claims that it will spread out the demand to assist in reviving it's economy. It will have to find a want to get the Chinese consumers into buying again and that's will prove to be a challenge for a telecommunications company like Motorola. The company's industry share there has tanked over the last few years which then means that Motorola is working to turn things around. The company is now trying to shift its focus on consumers, which they now see as the key to a much-needed turnaround. For greater than a decade, Motorola dominated handset sales in China. Duncan Clark, chairman of BDA, a telecom advisory firm in Beijing, says Motorola was once an icon for U.S. investment in China. But in recent years Motorola's sales have fallen rapidly. The speed of Motorola's decline in China has dumbfounded a lot of people, which at the same time includes many of its Chinese employees. According to BDA and the Chinese industry research firm CCID, Motorola's industry share for mobile devices in China has gone down from 22 percent at the beginning of 2007 to only over six percent for the year of 2022. One part of the company's troubles has been under investment in research and development. Nokia and Samsung are introducing new models into the industry quickly and Motorola has had a number difficulties in trying to follow up its success with the Razr phone which they have introduced way back in 2004. One of the biggest challenges here for Motorola is keeping pace with demand. In China, cellular phones are a status symbol and people change their phones very frequently. However, Motorola has been late coming into the industry with technology that the Chinese consumers were looking for. Chinese consumers are very eager to be seen carrying the most advanced technology in the industry. They see it as a projection of who they are. It is a brand. It is very important to them so if they are seen to have a numberthing, no matter how slightly lower features the features are, or how slightly older, they will still be losing face. Motorola is continuing its investment in research to fight the company's declining sales. Three thousand engineers work at the company's research and development center in Beijing, where phones are tested for sound quality and network reliability. Motorola's research will eventually pay off with more products like Motorola's Ming series. The introducing of China's third generation cellular phone service may present more opportunities for the company. Motorola recently secured a $310 million contract with China Mobile which at the same time includes infrastructure for the transition from second to third generation networks. It is not only China's mobile carriers that Motorola needs to win over. The company is currently focused on connecting with cellular phone consumers as well. References: Organisation for Economic Co-operation and Development. 2003. “OECD Investment Policy Reviews China: Progress and Reform Challenges.” OECD Publishing. Corne, Peter Howard. 1997. “Foreign investment in China: The Administrative Legal System”. Hong Kong University Press. Robinson, T.W. and Shambaugh, David L. 1995. “Chinese foreign policy: theory and practice”. Oxford University Press. R. Duane Ireland, Robert E. Hoskisson, Michael A. Hitt. 2008. “Understanding Business Strategy: Concepts and Cases”. Cengage Learning. Yadong Luo. 2004. “Coopetition in international business.” Copenhagen Business School Press Read More