Motorola Mobility Holdings is a US-based company listed in the New York Stock Exchange Market. The company deals with mobile devices, end-to-end video, and data delivery. The company separated from the parent company, Motorola in early 2011. Before separation, it was operating as a mobile devices division of Motorola.
Financial performance
In as much as the wireless mobile device industry continued to grow, the financial performance of the company declined over the three years. The company faces stiff competition from well-established companies in the industry such as Nokia, Samsung, and HTC. It also faces competition from emerging markets such as China. The loss reported in 2011 increased by 189.5% from the previous year. The company has not paid dividends for several years. Further, it has no plans to pay dividends shortly. The turnover ratios indicate that level of activity of the company declined. The liquidity of the company improved as indicated by an increase in the acid test ratio from 0.41 to 1.28. The ability to repay debt improved over the two years as indicated by long-term debt-paying ratios.
Recommendations
The company needs to expand its product base. There is a high demand for broadband-enabled multi-function devices and advanced device technology, as opposed to the old analog products. Therefore, the company needs to tap this demand by producing innovative products that suit the market demand. Secondly, the company needs to use its strengths such as universal brand, strong patent portfolio, and deep customer relationship to improve the declining market share. Finally, there is a need to manage risks associated with a possible merger with Google Inc. Outcome of the merger may negatively impact the financial performance of the company.
Initially, Motorola Corporation was a multinational company in the telecommunications industry and was based in the Illinois. However, the company was later divided into Motorola Mobility and Motorola Solutions, with each operating as an independent company (Spencer, 2011). The move took place in early 2011 after the company ran into massive losses between 2007 and 2009.
However, of the two branches of independent companies, Motorola Solutions stands out as immediate replacement of the entire Motorola Corporation. The corporation was founded in 1928 and was initially known as Galvin manufacturing Corporation. Later in 1930, the corporation introduced a Motorola radio that was used in cars.
The company was founded under “the stewardship of Paul Galvin together with bill Lear as the investor, who later created the brand name Motorola” (Spence, 2011, p.38). With massive developments in the line of telecommunication, Motorola demonstrated the first portable phone in 1973. The corporation continued in production and sale of mobile phone handsets, until when it was overtaken by the Nokia Corporation in 1998.
Over time, the corporation was involved in a series of innovations in technology; for instance, production of the first GPRS cell phone in 2000, first wireless cable modem gateway in 2002, production of the first handset that used a Linux operating system and java technology in 2003 among many other innovations.
After the split of the entire Corporation in 2011, Google purchased the Motorola Mobility later in the same year and it has its headquarters At Libertyville where it deals with the production of mobile handsets (Spencer, 2011).
Company’s culture
Researchers call for businesses to have their own, but unique styles in running day-to-day affairs of the organizations. The culture practiced within an organization is quite crucial as it determines a company’s direction towards achieving its goals and objectives. Culture incorporates several aspects that include the working environment offered to employees and the company’s vision (Mitchell, 2008).
Vision and mission statements of an organization guide employees and the entire organization towards ensuring success. Within the culture of Motorola Mobility Company, many bureaucracies are applied within the company, hence causing more stress to employees. However, the company applies high technology in their production, hence the high quality phones marketed under the company’s brand name all over the world.
In trying to increase its efficiency, the company has been involved in constant reorganization since 1990s (Crockett & Kharif, 2008). During this time, many job relocations took place within the organization. For instance, many engineers were relocated to overseas branches in Europe, China, and India among other countries.
However, the company values its employees for they form part of the entire company’s investment plan. Consistent and to some extent compulsory training is offered to employees to equip them with different skills and experience. Training is part of a development initiative taken by companies to ensure the wellbeing of employees.
In addition, this move also acts as a form of motivation to employees as they are recognized and rewarded though not on a monetary basis. Value addition in employees also calls for improved quality of output, hence the overall success of the entire organization. However, things changed when the company replaced the good values it had acquired over time with bad ones.
For instance, job security was not a guarantee, especially if one was not innovative. Random changes took place within the management and stringent measures were put upon employees, especially their modes of dressing and working hours (Crockett & Kharif, 2008).
Labor laws do not advocate for detrimental work environments, which cause stress to employees due to insecurity and long working hours. As for Motorola Mobility, this requirement was a complete opposite as employees worked for long hours without proper compensation, apart from the usual salary.
Over the years, Motorola enjoyed success due to exemplary governance and leadership offered by the Galvan family. However, since its acquisition by Google, the management has been on the gradual change. For instance, employees are allowed to have fun after work and stringent regulations on modes of dressing were removed.
After Chris Galvin left the company in 2002, employees did not receive the quality of training they could get in the past. In addition, the management team that took over did not put into consideration motivation of employees as they experienced unaccounted deductions, salaries postponement for months before payment, and bureaucracies were implemented in all sectors of the organization (Crockett & Kharif, 2008).
Although the culture depicted by Motorola is quite the opposite that of Google, Google Corporation is working tirelessly towards a positive change in the organization.
Purpose
After the split of the initial corporation, Motorola Mobility, which is currently owned by Google, deals with the production and marketing of mobile phone devices. The company utilizes various technologies and innovations to come up with mobile phone devices that suit various needs in the market.
Apart from the production of mobile handsets, the company also produces tablets, wireless accessories, and a wide range of other accessories within the telecommunications industry.
The company’s purpose is to bring together people through the utilization of innovative technologies to enrich their lives. In their production plans, the company ensures involvement of customers to ensure that various needs in the market are met, which is also a strategy towards implementing improvement in its products in future (Spencer, 2011).
The company’s executive team
Initially, the entire corporation ran under the leadership of Paul Galvin as the CEO and Bill Lear as an investor. The company’s management remained within the family as Chris Galvin took over from his brother. The company’s CEO assumed the responsibility of ensuring overall wellness of the corporation and that of employees.
In addition, the CEO ensured that overall challenges of the organization were addressed and that all teams within the organization worked together to ensure success within the organization. In 2002, Chris Galvin stepped down as the CEO of the company leaving it under the leadership of Edward Zander.
However, Zander went on to overhauling the management structure and came up with stringent rules that led to a near-downfall and poor performance of the company. After the acquisition by the Google Corporation, Motorola Mobility is currently under Denis Woodside as the chief executive officer. Under the CEO, there are senior vice presidents heading various sections within the company (Crockett & Kharif, 2008).
Successes and failures of Motorola Phone Company
Over the years, the company has been in a position to produce and sell high quality mobile devices that suit various needs of the market. Innovations in technology and provision of quality training to employees were attributed to the success that the company enjoyed in the past.
In addition, the company has not lagged behind in the telecommunication industry. Production and marketing of smart phones and tablets was one of the crucial moves made by the company. During the era of Chris Galvin, the company had successfully implemented a plan that saw proper training of employees, hence a form of motivation, recognition, and empowerment (Crockett & Kharif, 2008).
However, the company along its history made various mistakes not only in connection to its culture, but also other areas, which resulted to poor performance witnessed between 2007 and 2009. Motorola’s culture comprised of bureaucratic procedures and most products were based on ideas from engineers and not consumer’s tastes and preferences.
In addition, the company failed to provide job security to its employees among other complaints. On the other hand, the company failed to come up with and implement a proper marketing strategy (Crockett & Kharif, 2008). However, these missteps hinged on the shoddy culture as depicted by the company. The company’s deteriorating culture led to its inability to produce and release phones as quickly as possible in the market.
For instance, mid 1990s era was characterized by a shift from analogue to digital mobile phone devices in the market. However, engineers and the company’s management team failed to put a serious consideration on effects of such a shift. However, the corporation introduced digital phones in the market, but could not keep up with the competition posed by the Nokia Corporation (Crockett & Kharif, 2008).
Later on, the corporation invested in some sort of entrepreneurial skills that were implemented by various leaders. For instance, under the management of Edward Zander, the company improved its efficiency in production of slim phones.
However, this success did not last for long when consumers shifted their focus from hardware and laid strong emphasis on software that ensures additional phone functionalities. The company also failed to enter into the 3G phone market, a step that its competitors had already taken and the company remained completely disconnected from the market (Crockett & Kharif, 2008).
Recommendations
Since the company’s acquisition by Google in 2009, Mr. Jha took over as the company’s chairperson. He implemented various strategies aimed at overhauling the entire business culture that existed in the Motorola Corporation. For instance, he introduced casual wears to replace the strict dressing code that existed as he noted that the dressing code had nothing to do with the declining sales volumes (Crockett & Kharif, 2008).
Mr. Jha also worked hard to ensure consistent contact with the market, which involved a change on the company’s culture that was mainly engineering oriented; for instance, focusing on market need as they evolve from time to time. In this case, Mr. Jha implemented several improvements on the hardware and software to include the emerging developments to suit various needs of customers in the market.
On the other hand, Google should focus on a recruitment drive to enrich the company’s human resources and tap upcoming and fresh talents. Mr. Jha realized the need to overhaul some of the members of staff and replace them with new employees. Some staff members that worked for Motorola Corporation failed to produce a new product for years, and this aspect underscores lost opportunities.
In addition, some top talent and well performing employees had left the company for competitors like Apple Corporation and the like. The cost of hiring new employees can be quite high, but it is avoidable with the implementation of appropriate measures. However, the company should think of a motivation package and new ways to improve the existing workforce instead of conducting a fresh recruitment process.
Reference List
Crockett, R., & Kharif, O. (2008, Aug. 6). Motorola: The New CEO’s Real Challenge. The Economic Times, p.21.
Mitchell, C. (2008). A short course in international business culture: Building your international business through cultural awareness. Petaluma, CA: World Trade Press.
Spencer, A. (2011, Jan. 5). Motorola is split into two. The Wall Street Journal, p.38.
Motorola Mobility Holdings is a company in the telecommunication industry. Its operations mainly involve the sale of mobile devices, data delivery as well as end to end video. The company is based in the United States of America. The company was part of the Motorola Company where it was operating as a mobile devices division, prior to its separation in the year 2011.
After it separated from Motorola, it started executing its own independent operations. Since its separation, the company has been trying to plan its policies, as well as ethics that will be guiding its operations and facilitate achievement of its goals and objectives.
Code program benchmark
It is important to have an effective ethics program as emphasized by the Federal Sentencing Guidelines for Organizations for any company to succeed. Federal Sentencing Guidelines for Organizations is a set of rules and regulations that are used in the United States of America to ensure that individuals and organizations that are found guilty of serious misdemeanors are sentenced uniformly in the Federal Courts (Wulf, 2012).
It is important to note that these guidelines are only applicable in cases of serious misdemeanors. When setting this program, it is always important to put in mind that the current business environment is changing rapidly in terms of technology, culture, while the political and economical changes are facilitating the changes.
Therefore, the codes should be such that they will be effective for the business organization for a long time (Lawrence & Weber, 2011). In addition, it is important to consider the challenges that the organization might encounter in its bid to adopt to the ethics program. This is important since it will help managers to proactively deal with such problems and facilitate smooth running of business.
Business in America has been affected by criminal misconduct over a long period of time. These actions have been in the manner with which organizations conduct their business.
There have been legal sanctions to business organizations, as well as cultural changes and compliance practices as a result of such misconducts (Wulf, 2012). The ethical program issues have grown more complex as globalization continues establishing itself. Questions on what is and what is not ethical have become more difficult and complex.
The telecommunications industry is one that has grown very fast in this technological era, thereby affecting ethics concerned with freedom of expression, privacy, cultural diversity, intellectual property, as well as information access. Some of the ethics in these industries include: Samsung, a company that deals in electronics and mobile devices, is guided by ethics that are summarized into 5 principles.
These principles are compliance to law and ethics, maintenance of clean culture, respect to its stakeholders, environmental, safety and health responsibility, as well as CSR.
It is not easy for the company to fully comply with laws, considering the rapidly changing political and economical environment (Ferrell, Fraedrich & Ferrell, 2011). For instance, the company has found itself in lawsuits with Apple regarding smartphones as a result of competition. Maintaining a clean culture is also a challenge.
Apple Inc. is the other company in the telecommunication industry with ethics that are meant to ensure that all stakeholders comply with the way the company wishes to conduct worldwide business and achieve its goals. Apple’s ethics include corporate governance, reporting guidelines and conflict of interest. These are guided by four principles that include compliance, honesty, integrity, and respect.
Compliance and honesty are sometimes difficult to adhere to due to the increasingly competitive environment. Employees are tempted to act in non-compliance manners in order to gain competitive advantage. For instance, Apple Inc. has been accused of its product quality and privacy issues.
Finally, Nokia is a company that has been successful in this industry. Its ethic program focuses on respect for customers, use of technology, marketing, as well as competition. It is not easy for the company to maintain its competitive and marketing ethics since it is operating in a highly dynamic industry (Wulf, 2012).
Codes of conduct for Motorola Mobility Holdings
Respect
The company should respect all its stakeholders, who include customers, employees, shareholders and directors among others. This will help in building good reputation and gaining competitive advantage.
Conflict of interest
The interest of each party will be clearly stated to avoid conflicts. Conflict of interest is likely to bring division among the company’s stakeholders. Guidelines on conflict of interest should, therefore, be clear.
Technology
The company will adopt a culture that embraces technology and encourages dynamic development. The current business environment is changing rapidly, and organizations should not be static.
Compliance
The company will always comply with the law and national policies. Motorola Mobility Holdings will be flexible to adapt to any changes that may be implemented.
The above ethic guidelines have a direct effect on any company that is in the telecommunication industry. For instance, technology is a factor that cannot be avoided in telecommunication. Motorola Mobility Holdings deals in mobile devices and data delivery. The latter requires high technology to succeed, while the former is changing rapidly.
However, the company should ensure that it maintains the trust of its stakeholder through respect while venturing in technology. The company should respect the privacy of customers and ensure quality production (Lawrence & Weber, 2011).
The company should also comply with national laws to avoid lawsuits and other conflicts with the government. Telecommunication and technology industries are likely to be affected by compliance issues.
Likely challenges
The company is likely to endure difficulties in adhering to the compliance principle due to the changing business environment. Managers and employees might be tempted to break some rules in order to gain competitive advantage.
For instance, employees might be caught up in copyright issues when trying to counter their competitors. Privacy issues will also be a challenge. Generally, the telecommunication industry has had privacy issues due to the nature of its business.
Finally, the costs of production are increasing. Consequently, the profitability of the company is bound to down if swift action is not taken to intervene. The company might be forced to produce low quality goods to maintain its profitability. This is a challenge that might affect the development of Motorola Mobility Holdings in the future if costs continue to increase.
Ways of addressing the challenges
Motorola Mobility Holdings will have to proactively deal with the above challenges to succeed. Managers need to be aware of any technological, economical and political changes early enough to have time to act. It would be highly helpful if managers predict the changes in order to take timely action. Communication among the members of the organization will be effective in ensuring that stakeholders’ conflicts of interest are eliminated.
Finally, the company can find alternative substitute inputs that are cheaper in order to deal with the increasing costs of production. This will ensure quality production at a relatively lower price. Another way to deal with this problem is to differentiate its goods so that it can sell at higher prices and maintain its profitability.
References
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: Ethical decision making and cases. Mason, OH: South-Western Cengage Learning.
Lawrence, T. A., & Weber, J. (2011). Business and society stakeholders, ethics, public policy. New York, NY: Wiley and Sons.
Wulf, K. (2012). Ethics and compliance programs in multinational organizations. Wiesbaden: Springer Gabler.
Motorola Mobility Holdings is a company that is based in the United States of America. The company deals in mobile phones and mobile devices, as well as data delivery and end-to-end video. The company is listed in the NYSE market. The parent company for Motorola Mobility Holdings is Motorola, but the two separated in the year 2011.
It is important to note that the Motorola Mobility Holdings is currently owned by Google Inc. A new logo for the company was unveiled in June 2013 following its acquisition by Google Inc. Since then, the company can simply be referred to as Motorola-a Google Company.
Motorola Mobility Holdings has shareholders who contribute to its investment capital and making major decisions for the company. Its stakeholders have either direct or indirect effect on the performance of the company. This term paper will focus on the primary and secondary stakeholders of the company and evaluate how they can help the company’s CEO in implementing changes and improving the performance of the company.
Primary stakeholders
These are stakeholders who are internal to the company and they have a direct effect on its operations. They are stakeholders who are directly involved in the economic transactions of the company. They include employees, customers, stockholders, creditors, as well as suppliers.
The stockholders of an organization can also be referred to as the shareholders. They contribute the investment capital for the organization. In other words, they are the legal owners of the company. Therefore, they are specially privileged depending on their shareholding capacity (Lawrence & Weber, 2011).
The main aim of any company’s shareholders is to maximize their wealth. Therefore, they play any role that can help the organization improve its performance and profitability simultaneously. Shareholders are involved in the decision making process of the organization. The decision making capacity depends on the number of shares held by each individual.
For instance, the person with the highest number of shares has the highest say when it comes to voting and decision making. Shareholders are also involved in the communication process of the organization. This is done through an elected communication agent. In addition, shareholders of Motorola Mobility Holdings are also involved in corporate social responsibility of the company.
This is important in that it improves the company’s image in the community, in addition to improving customer loyalty (Bustin, 2004). The other class of stakeholders is the employees. These are involved in the day-to-day operations of the organization (Lawrence & Weber, 2011). Employees of Motorola Mobility Holdings facilitate innovation and use of technology in the organization.
Customers are also an important part of the company’s stakeholders. Customers determine the profitability of any organization. When an organization has a high number of customers, its possibility of making high profits is also high. Creditors are the stakeholders who give credit to the organization. They finance the organization’s operations. Creditors are important since they boost the money available for investment.
Finally, the suppliers of Motorola Mobility Holdings are the people or parties that supply the company’s goods and services in its supply chain. Suppliers avail goods for sale to the organization. They are important since the quality of goods and services they supply determine the loyalty and trust that customers have on the organization.
Secondary stakeholders
These are usually external to the organization and they are not involved directly in the company’s transactions. However, they may have an effect on the firm’s performance. These stakeholders are also affected by the organizational actions (Lawrence & Weber, 2011). Secondary stakeholders of Motorola Mobility Holdings include the general public, media, as well as business support groups.
The actions of secondary stakeholders may affect the organization in that they can improve its profitability or reduce it. For instance, more people will be willing to buy the products if the general public has trust on the company’s products and services.
In addition, chances are that many people are likely to trust the organization if the media are positive about the company. The actions of the organization can also affect the secondary stakeholders. For instance, production of quality products, corporate social responsibility and satisfactory services will improve stakeholders’ loyalty to the organization.
Motivation plan
Topic
Timeline
Purpose
Rationale
Message
CSR adaptation decision
The company should first inform the market of its intention to adopt CSR approach through an official speech or in its website
To create awareness among the company’s stakeholders about the intended change and find an appropriate way of executing the modification.
This is important since it will ensure that all the concerned parties are involved in the process and that they fully participate, thus the process will be smooth.
The company should communicate its intention to implement change, and the benefits associated with the change.
There should be a discussion with the stakeholders on how the modification is to be implemented.
Experts in the company who have knowledge regarding the intended change should give the best period to make viable proposal.
To expand the innovation platform and bring more members on board.
To establish genuine costs, as well as make decisions in a timely manner
This will communicate to the stakeholders of the approach and the intention for the actual change process.
Communicating to the public the intended change
This should be done after the stakeholders accept the change.
To create awareness to the public about the change.
An accurate report and plan about the change should be presented.
Explain why the company decided to make the changes and the rationale behind the decision.
Challenges to the motivation plan
Implementation of a change in the organization does not come without challenges. For instance, there are some stakeholders who may oppose the implementation. Such a process is likely to reduce profitability in the short run, and shareholders are likely to oppose the move.
In addition, the process may be costly, further reducing profitability and stimulating resistance from shareholders. Some employees may feel insecure in that they see as if they might lose their positions following the changes since a change might completely alter the way business is done at Motorola Mobility Holdings.
Overcoming these challenges
One of the major ways in which challenges can be overcome is through effective communication about the intention to make changes and the impact of the change (Devito, 2006). This will ensure that all stakeholders are aware of the changes and that they are in agreement. The other way that the challenges can be addressed is by involving all stakeholders in the process. This makes them feel part of the change and support it.
Conclusion
Stakeholders are an important organ of an organization. Therefore, it is important for the CEO to involve the stakeholders for an organization to make any effective changes in the bid to improve its performance. Any change to be implemented at Motorola Mobility Holdings should involve all stakeholders.
References
Bustin, G. (2004). Take charge: how leaders profit from change. Reading, PA: Tapestry Press.
Devito, L. (2006). Human communication: New Zealand edition. Auckland, New Zealand: Addison Wesley.
Lawrence, T. A., & Weber, J. (2011). Business and society stakeholders, ethics, public policy. New York, NY: Wiley and Sons.
A strategy signifies the continuing programs of an organization with the aim of having an anticipated outlook of potential plans. The success of a strategy lies in its application to the fullest aptitude. The fundamental components of the global strategy of Motorola include the extent of functions, deployment of resources, unique proficiency, and synergy.
The extent of functions for Motorola or its area of carrying out business can be described geographically as an international operation. With respect to the way it distributes resources, Motorola changed strategy, which meant leaving given areas of operation and focus on other unexplored areas like making microchips among other products. The company has as well dedicated substantial resources to research and development (R&D) and innovative product advancement.
The unique proficiency of Motorola revolves about its dedication to quality. Motorola has a practice of standing as a first mover in the expertise arena. The company does not just manufacture WiMax chip, but also manufactures phones and other merchandise that apply the WiMax technology. The novelty of Motorola permitted the company to achieve a competitive advantage on the cellular phones and pagers by advancing in R&D to assist the technology. Lastly, Motorola is capable of realizing synergy in its functions as the diverse components of its actions benefit others.
The drawback that Motorola encounters is being satisfied with its achievement, and this permits other aggressive expertise Japanese companies to achieve a competitive advantage. The expected strategy for Motorola is to generate a chance to take back the company to its previous profitability rank. Its intention is to make tactical attempts to comprehend the requirements of clients in a better way as it embarks on improving the quality of products and slicing cycle times.
Motorola’s arrival at its present strategy because of a SWOT analysis
Before getting to the idea of strategies, a firm ought to carry out a SWOT analysis, just as Motorola did. An excellent SWOT analysis provides the foundation for policy development, which permits a company to take advantage of its strengths and opportunities, reduce the effect of weaknesses, and curtail threats. Obviously, Motorola recognized the Japanese companies as a threat in the early 1980s.
However, Motorola managed to curtail this threat and made good use of its opportunities in the international market. Motorola at that moment was weak in the regions of product quality and costs, but outstanding elements of management, research, and development were capable of reducing the effect of the weaknesses coupled with turning the company around.
Motorola as well carried out its SWOT analysis anchored in the market knowledge. As its strength, Motorola is among the leading companies in the world along its line of operations. Motorola is a creator of expertise and has the first-mover benefit. Motorola is powerfully dedicated to conveying client contentment, constant advancement, and establishing new standards of excellence via its achievement of the Six Sigma Quality advancement course; a systematic and arithmetic advance issued to better the quality of its products and eradicate defects.
With respect to its weaknesses, Motorola upheld old ways of doing business by being conformist and hence failed to compete with rising international companies assertively, which seized the opportunity to achieve a competitive advantage. When Motorola was conscious of its strengths, weaknesses, opportunities, and threats, it was easy to establish its status in the market and regain its reputation.
Primary business strategy
Differentiation underscores the company’s chief business approach. In this regard, Motorola is dedicated to unique products, which are different from the ones of its competitors on the foundation of quality. Actually, the company presently has an excellent rate of 99.9997 percent. The differentiation strategy assisted Motorola to improve its product and make it comprehensible for clients to distinguish its brand and worked to increase sales and make sure that the company regains its market share through the attraction of new clients and regaining old clients.
The differentiation strategy applies where clients targeted by a company are not subject to prices and where the markets are competitive in an attempt to assist the company to gain competitive advantage. Additionally, Motorola has employed a differentiation strategy where the clients have particular needs since the strategy makes it easy for companies to achieve the needs of the clients found in diverse market sections.
The differentiation strategy offered Motorola numerous benefits, unlike the international strategy. The differentiation strategy enabled Motorola to battle with Japanese companies because of exceptional merchandise and brand. The international strategy employed by Motorola at first influenced profits negatively by reducing its sales between the year 2007 and the year 2009.
On the other hand, the differentiation strategy assisted Motorola to lower expenses and recover sales. Motorola will not be influenced negatively by the change of its executive leadership in future as through the differentiation strategy, it relies on its merchandise and brand attentiveness rather than the executive leadership. The differentiation strategy assisted Motorola to rise above its challenges, as well as threats, and will as well help the company exploit different opportunities that are available in the contemporary market.
Motorola is engaged in marketing and production of services, products, and applications that relates to communications, information, as well as entertainment. Its network is supported through broadband embedded systems and wireless networks. The company operates three segments, including home and network mobility solutions, network and enterprise mobility solutions, and mobile devices. Motorola is well known for its pioneering role in WiMAX 802.16e, a technology that was glorified for its great efficiency and flexibility. Motorola operates in an industry that is highly competitive, a situation that calls for commanding strategies if it is to defend its market share and profitability. The latest financial information shows that the company was undergoing one of the most trying moments since its inception, because of the economic crisis that crumbled its profitability (Drucker, 1994).The objective of this paper is to analyze the case of Motorola Company, explore its SWOT, examine different aspects of its strategy, and finally recommend a way forward.
Motorola’s’ Threats and Opportunities
Motorola operates in an industry that is full of opportunities. All it takes is for the management to come up with good strategies, given that there are enough resources to implement them. A case in point is whereby the company can decide to broaden its range of products so as to capture wider market share. Notably, Motorola has a global presence which makes it even easier to enter new markets that have not yet been exploited. For example, the company can establish its presence in Asia where mobile technology industry has not reached maturity, and where market is growing fast. The company has a potential for improving its reputation and brand name through innovation and product improvement. Increased marketing and promotion efforts can help popularize the company’s brand and products (Jay, 2006).
Despite scores of opportunities that are up for grabs, Motorola may not be able to exploit its full potential because of the limitations that comes from the external forces. The most threatening are Motorola’s competitors, who have established strong grounds in the market, and are strong financially. Some of them include wireless handsets, Nokia, Sony Ericson, and LG Electronics. Indeed, some of these companies conduct promotions which are superior to that of Motorola. It is also worrisome to notice that Motorola can only obtain some of its inputs from a single supplier as mentioned by the chairman when he says “in 2003 and 2004, Motorola suffered from product delays due to supply shortages caused by a lack of a sufficient number of suppliers” (Hitt, Ireland, & Hoskisson, 2011, p. 228). The economic crisis that the industry is undergoing currently is likely to constraint its suppliers financially and hence exacerbate shortage and delay of supplies. Also very threatening to Motorola’s market is the fact that the cellular market has almost reached maturity, and hence the sales are likely to slump.
Motorola’s’ Strengths and Weaknesses
Motorola has a strong brand name, which is known across the world. This improves marketability of its products as most customers associate strong brand names with superior quality of goods and services. The company has positioned itself in the market as an innovator and hence able to guard its market leadership. In all its three divisions, the company keeps unveiling new products from time to time, with virtually all of them succeeding in the market. Its global market coverage improves its revenues and market share. Besides covering a range of target markets, the company is able to pursue its low cost strategy as its cost of inputs is relatively low (Drucker, 1994).
Motorola’s internal environment does not lack some constraining factors. In some instances, Motorola tends to release to the market, products which do not go down very well with the customers. This includes products which are detected with faults, hence causing customer dissatisfaction and abhorrence of Motorola as a brand. The fact that Motorola’s employee training and education policy is not given the attention it disserves is a notable weakness, especially considering that it’s innovative and product improvement strategy, which is very critical, requires highly qualified and skillful manpower.
Advantages of Motorola’s strategic options
During the time of this analysis (2008), the company is experiencing serious financial ordeal as a result of global economic crisis. Some of the company’s strategic options that are viable will restore its profitability. Disassociating the mobile devises segment from its mainstream will generate a number of benefits, which are evidenced by the chairman’s comments that “creating two industry leading companies will provide improved flexibility, more tailored capital structures, and increased management focus – as well as more targeted investment opportunities for our shareholders” (Hitt, Ireland, & Hoskisson, 2011, p. 228). Increasing efforts in understanding the customers’ demand will help the company improve its products so that the company can remain relevant in the market. Making the company leaner will relief the company from straining its budget due to excessive salaries expenses, especially considering that it is undergoing trying financial moments. Reducing emphasis on the already saturated European market will give the company an opportunity to concentrate on the less exploited markets from the developing countries. Low cost strategy will attract more customers, especially during this time of financial crisis when many consumers try to increase the value of their money. Finally, venturing in to a new and innovative technology such as WinMax is certainly one of the strongest selling points for a company in this industry as it will enhance its competitiveness.
Disadvantages of Motorola’s strategic options
The strategic options that have been proposed for Motorola do not lack some challenges. Cutting off some top management staff from their job is really counterproductive, especially considering the number of years the company has spent training them. Indeed, the company is likely to lose employees with crucial skills. If absorbed by some of its competitors, then it will be very threatening for Motorola. Lessening emphasis on the European market is likely to work against the company because the competitors might get a chance to consolidate their market out there. Finally, the company proposes to reduce cost, a very risky move indeed. This is because the company’s profit margin is likely to reduce substantially, especially if the cost of inputs does not go down as well – the worst will happen if the inputs become more costly in future (Drucker, 1994).
Corporation’s strategy, organization structure and strategic issues
Motorola is structured in three divisions, that is, home and network mobility, enterprise mobility solutions, and mobile devices. Making mobile device division independent will go a long way in helping the management to focus on more specific products, hence easing and enhancing strategy formulation. The staff and the management will also be able to specialize in those divisions they are more productive. In a bid to relief the company from excessive burden on salaries expenditure, the company can reduce the number of staff at the managerial level. Also, excess workers who work in loss making or less profitable divisions can be cut off (Drucker, 1994).
The way forward for Motorola
Agreeably, Motorola is undergoing a challenging moment, especially due financial crisis and perhaps stiff competition from its rifles. However, these reasons are not enough to make the management relent on its strategy. The management should continue with its efforts of keeping abreast with what the customers really want. The central idea is to focus on the customers, as they are the ones who will deliver the company from its current challenging position. Most importantly, the management should continue keeping pace with the technology that the consumers seems to desire. The Chief Executive Officer together with the top management should harness the company’s reputation and the company will reap abundantly in future (Hamel, 1994).
References
Drucker, F. P. (1994).Managing in Turbulent times, 3rd ed. London: Heinemann Ltd.
Hamel, G. (1994). Competing for Future. Harvard Business Review, 31(4), 23-30.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2011). Strategic management: Competitiveness and globalization, concepts and cases. Mason, OH: South- Western Cengage Learning.
Jay, B.B. (2006).Gaining and Sustaining Competitive Advantage, 2nd ed. New Delhi: Prentice Hall.
The case study describes the contingent staffing model that the Office for Contingent Workforce Management (OCWM) group has developed to help Motorola to improve the flexibility of its recruiting format and comply with the standards set by the modern market. The major problem resides in the fact that the group needs to assure the key stakeholders of the model cost-effectiveness. On the one hand, the model has a well-designed format and offers various scenarios for contingent recruiting. On the other hand, the group has no statistics that would prove the feasibility of this implementation. This paper provides a detailed analysis of the model structure and offers some recommendations on how its value can be communicated to the key stakeholders.
Introduction
The analyzed study elucidates the problem of contingent workforce staffing in Motorola. Thus, the OCWM group has designed a new model that is mainly aimed at raising the efficacy of the recruiting procedure and adapting the existing format to the changes in the modern market. The proposed model has a consistent design and innovative implications. The former is evidenced by the fact that it offers two detailed scenarios for hiring professional and non-professional contingent employees. The latter is evidenced by the fact that the group has created a unique business-webbing format of the model functioning. To date, the key challenge resides in communicating the need for adopting this model to the key stakeholders. The model has a series of weaknesses and, most importantly, the group has no empirical evidence of it cost-effectiveness. Otherwise stated, its implementation implies significant risks for the company, which means that it will be problematic to convince the stakeholders to adopt the model. As such, the paper at hand aims to provide a detailed overview of the key facts associated with this case study and discuss some recommendations that might help the group to resolve their problem.
Key Facts
The key problem resides in communicating the need for change in the recruitment pattern to Motorola managements. As such, the OCWM group needs to define concisely how the new staffing model might help the company to benefit. The case study reveals some facts that might be helpful to convince the management in the model’s efficiency.
First and foremost, the proposed model is closely aligned with the company’s newly-implemented planning strategy. As such, OCWM group has designed a new contingent staffing model that ensures flexible and quick recruiting that is highly valuable in the modern market environment. This model complies with the recently adopted strategy or “asset light» approach. The approach is designed to ensure that the company responds to the market changes in a prompt and flexible manner. It was initially developed as a new planning strategy that put a particular emphasis on maneuverability. Therefore, this fact can be used as an argument supporting the model implementation.
Second, the case study has revealed that the company is impacted by external factors and, thus, it needs to respond to them adequately. As such, the target sector for the model implementation is the semiconductor products sector (SPS) which is one of the six business units that compose Motorola. To date, the performance outcomes of this sector are challenged by the sea changes in the relevant market. The reshaping of the recruitment model might be a part of the company’s response to the market fluctuations.
Third, the case study shows that the group has skillfully identified the problems existing in the current recruitment model. First, the staffing management is decentralized. Second, the company needed stronger guarantees of the employees’ competency. In addition to that, they have determined a series of challenges associated with contingent staffing. First, the inequality in the pay rate between contingent and full-time workers serves to be a powerful demotivation trigger for the former. Second, managers do not have enough motivation to hire contingent workers since this decision does not imply any financial incentives. Third, there is no consistent contracting system that would allow managers to perform effective and legally sound recruitment of contingent workers. Forth, skilled employees often tend to prefer the contingent format of employment. As a result, they demoralize full-time employees by expressing their disdain towards the prospects of professional development. Thus, the group can use these arguments while communicating the change to the key stakeholders.
Another important fact that needs to be elucidated is the model’s structure. As such OCWM suggests a recruitment model based on the principles Motorola supply chains’ functioning. The latter has already proved its efficacy so the simulation of the supply chain structure can feature a powerful argument in favor of implementing the new recruitment model.
Finally, the group offers a well-designed plan that covers both objectives and the ways of their accomplishment. As such, the main objectives that the new staffing strategy targets are involving best professionals, ensuring consistency in the recruitment flows, and cost-effectiveness. It is proposed to achieve the set goals with the help of a specially developed business-webbing design. The group likewise initiated a creation Managed Service Provider (MSP) that is expected to ensure an effective management of the business-webbing networks. It is essential to note that the group decided it would be more efficient to have two MSPs so that one is responsible for non-professional staff and the other is in charge of professional personnel. As such, two staffing models are currently proposed.
In the frame of the non-professional staffing model, OCWM group sends a request for a particular number of employees to the relevant network recruiters. The latter are supposed to provide appropriate candidates in a timely manner. The criteria for defining the appropriateness is the test Motorola has designed in order to ensure that the applying employee has a minimal set of the qualities required to perform particular tasks. The essential paperwork is performed by the responsible MSP. The advantage of this model resides in the fact that competing network recruiters are interested in prompt responses. Additionally, the consistent pattern of the recruiting process allows OCWM group to indicate the critical flaws and eliminate them timely. Finally, the relevant MSP bears a large extent of responsibility for managing the process. Therefore, it might be suggested that the group will have few challenges communicating the need to implement this model to the key stakeholders.
The second model has elements; as such, it might be assumed that it will be more problematic to convince the stakeholders in its feasibility. On the face of it, the professional staffing model operates by a similar part as the one previously described. In the meantime, it has a more complicated structure since there is a larger set of requirements that professional employees need to meet. As such, applicants are supposed to provide their resumes and take an interview with MSP manager. The latter is the key liaison between an employee and Motorola at the early stages. This manager is likewise responsible for carrying out the so-called comparative compensation analysis that the company can use to assess the value of contingent workers and compare it to that of its full-time employees.
The proposed model has some disadvantages that are apt to create barriers to its implementation. As such, the main weakness of the proposed staffing model is the need to regulate co-employment relationships between Motorola and its MSPs. Additionally, the challenge resides in selling the program to Motorola managers. The latter, in their turn, have already developed their own hiring strategies that they believe to be effective. As such, in order to convince them in adopting the proposed model, it is essential to prove its cost-effectiveness.
Recommendations
First and foremost, the OSWM group needs to communicate the need for changing the recruitment strategy in Motorola. In order to do it, the group can rely on both external and internal factors. The internal factors include the inefficacy of the existing system, i.e. its inconsistency, and the low managerial motivation to hire contingent employees (Beaulieu, 2002). External factors include the changing market environment. As such, the group can refer to the examples of other companies that have already performed a shift to new contingent workforce staffing models.
A brief research on the trends in the relevant market shows that many of the company’s competitors have already adopted their contingent workforce staffing models. For example, Samsung has created the so-called “just-in-time-hiring” that allows the organization to employ talents in a prompt and effective manner (Yusuf, Altaf, & Nabeshima, 2004). The scope of companies that have managed to adjust their recruitment policies to the new market conditions is fairly large. Thus, the list of recruitment innovators includes Wal-Mart, Apple, Amazon, and other leading market players (Bush, 2015). Therefore, Motorola needs to act promptly in case it wants to maintain its competitive advantage.
As soon as the key stakeholders are persuaded in the relevance of making a shift to a new recruitment model, it is recommended that the OSWM group puts an emphasis on the benefits that the model they have designed implies for the company. First and foremost, the model offers two different formats of managing professional and non-professional employee staffing. This aspect is highly important since, according to the recent research, these candidate groups require different recruitment approaches (Karim, 2014). Second, in case the company decides to implement the proposed model, it is likely to receive an additional source of high-quality employees for full-time positions. As such, it has been empirically evidenced that contingent workers make effective full-time employees since they acquire a clear understanding of the operation process while working on contingent terms (Dahling, Winik, Schoepfer, & Schau, 2013).
The major weakness of the groups’ proposal is the lack of the empirical data that would evidence the cost-effectiveness of the designed staffing model. Therefore, the group might offer a trial implementation for a short-term period in order to collect the relevant statistics and examine the general efficacy of the proposed model. With the help of this implementation, the group will be likewise able to identify the existing flaws and eliminate them. In order to reduce the cost of the trial implementation, group members can take the role of MSPs.
References
Beaulieu, N. D. (rev. 2002). Contingent Workforce Planning at Motorola, Inc. HUS No. 9-902-211. Boston MA: Harvard Business School Publishing.
Bush, J. (2015). The fundamental problem with contingent workforce management today. Spend Matters. Web.
Dahling, J. J, Winik, L., Schoefer, R., & Chau, S. (2013). Evaluating contingent workers as a recruitment source for full-time positions. International Journal of Selection and Assessment, 21(2), 222-225.
Karim, A. (2014). The increasing usage of professional contingent workers: A review. Journal of Global Business Management, 10(1), 33-37.
Yusuf, S., Altaf, M. A, & Nabeshima, K. (2004). Global production networking and technological change in East Asia. Northwest, Wash.: World Bank Publications.
Advertising is a medium of communication, usually one way in nature in which a message is passed from a sponsor to an intended target. Advertising varies from sales promotions, public relations, underwriting, publicity, sponsorships etc. There are also different mediums used to advertise messages and they include; television, billboards, internet, magazines, radio, newspapers etc. The overall advertisement costs for companies have been huge in the past especially before the internet generation and other modern marketing techniques. Even today, apart from internet advertisements, which are usually cheaper, television and other forms of advertisements are still being utilized.
In order to achieve the right customer attention, the companies would like to do preliminary research on how the designed advert will actual impact on the preference of the audience and it will have any negative implication on the public. Bad publicity will be very dangerous for a company and is usually irreversible. This paper will therefore discuss on the Motorola’s “Hellomoto” campaign aimed at promoting mobile phone handsets from the company. It will examine the roles of media research, testing the effectiveness of a particular advert and target audience considerations. It will also discuss research objectives for Motorola and the methodology used with regard to the Hellomoto campaign by Motorola.
Current advertisement- Hellomoto
Motorola inc. is an American multinational company dealing with the following products and services; embedded systems, microprocessors, mobile phones, two-way radios and networking Systems. Recently, it has produced a wide range of mobile phone handset that come with a complete entertainment provisional service that has improved its market share. In order to market these types of products, the company has embarked on an advertisement campaign “Hellomoto”. This advertisement has been placed across all medium of advertisements including the internet, billboards, radio and T.V in most countries in Europe, Asia, Africa and America.
According to one of its managers in Japan, the advertisement has been researched and tested well in order to achieve its intended objective. “This advertisement will promote the use of mobile phones and showcase how mobile technologies can bring major social and economic benefits to people who have never before had access to information and communication technologies” Chong Eric, Asian regional manager said on the Motorola website.
Motorola has also realized that there are serious accidents that occur while motorists are driving their cars. The Hellmoto phones come with speakers which enable the person driving to easily communicate. Whenever, the phone rings it automatically alerts the driver who is legally suppose to place the car aside and talk. This campaign therefore advocates for safe driving
Research objectives
The main objectives of the research on that particular advert are; to define the theme of the advertisement, come up with media schedule and proper version, pre-test the advert, to ascertain the budgeting considerations of the advert if it will be cost-effective to the company or not. The research to be undertaken was to reveal the hidden appeals that make people buy certain products especially phone handsets from either this company or any other company such as Nokia. It seeks to define the most efficient access which would be in terms of quality, uniqueness or cost of the product.
The following picture taken by the hellomoto campaign in Asia expresses the motive of the advertisement
Figure 1. Hellomoto campaign tour
Research methodology
Research methods have been designed to consider what the advertiser is trying to do, his intentions and to examine the relationship between the specific structure, content and the appealing nature of the message and the group or individual to whom the advertisement targets. There are a range of research methods that are used to illustrate and investigate how media advertising has influenced young people. These methods are; cross-sectional surveys, key in-format studies (analysis of television viewing data which provides exposure measures), data on expenditure, cohort studies, in-depth qualitative interviews and focus groups.
On the “Hellomoto” campaign, this research would be purely be cross sectional survey and other in-depth qualitative interviews that are intended to provide a general overview of the audience on the advert. The Hellomoto campaign would be looked from two different perspectives. First, it would be looked at through representational point of view where the picture of a person holding the phone is more focused than the mobile phone itself. This means that the company needed to bring out the pleasures one achieves after buying a Motorola phone. The pleasure one gets from the entertainment aspect and services from the phone is enough to give someone the real ‘time off’ they need.
Target audience considerations
The target audience for this advertisement cuts across all the ages but leans mostly towards the youth. This group of customers is more interested in entertainment; music, videos etc and this is provided definitely by the Motorola phones.
A review of the cross sectional studies on mobile phone ads indicated that advertisements contribute a lot in customer preference and it influences the following trends as noticed among the youth.
A young persons knowledge of the specific type of phone
Preference rates for the Motorola products in general
Loyalty for the products
Current buying behaviours and trends
Intentions to buy the product and feel what the person in the advertisement feel
Creativity of the concept
To have the necessary attention from its audience who in this case are mostly the youth, the company needed to have something or brand that would meet the eye of the audience. This would be easily achieved through a unique word that would catch attention. The two words in the advert, ‘hello’ and ‘moto’ are unique in that they represent the nature of the communication efficiency to be provided by the products. ‘Moto’ is a Swahili word that describes how ‘hot’ something is. If a product is said to be hot, then it is of good quality. Moto is also a short name of Motorola. Likewise, ‘hello’ is the common way of response used while one receives a call. A combination of the three issues makes a complete advert. This is one of the creativity features the designers of this advert thought it could impact on the audience. Creativity in the sense that the advert will be capable of making the company save on costs and at the same time help it t achieve its objectives.
Proposition
The intention or scheme of the campaign is to market the entertainment features in “Hellomoto phones”. That is why most of the ads are pined with picture of young men and women. Most of the images placed on this advert are for women. The reason is obvious, the outfit, pose or facial expression of the women embraces all the elements of the phone thereby symbolizing the figurative dominance of the Motorola phones. It also clearly reinforces the message that crosses the mind of the reader or listener whenever such as message is placed on the television or radio or on a magazine. Previous research has also shown that the company’s ads including the ‘Notnowmoto’ campaign earlier back provided some form of idolization with regard to the phone itself which culminated to the superiority/ supremacy of the product.
The hellomoto campaign incorporates many other specific ads within it that specifies the specific phone. The ads include ‘Obeymenow’, ‘Notnowmoto’ among others. All these phones represent the wide variety of products the company can offer to suit the likes of its customers. Most of these ads give the feeling of coolness mostly associated with the youth and the modernized society. The research shows that if more focus is directed towards the spectator’s attention especially on a billboard, the message will optimistically be accepted by the target audience.
In order to complete the discourse of the advertisement, the “Hellomoto” clearly reflects the power, freedom and flexibility of communication. The person can shut up his interlocutor using appropriate keys in his or her mobile phone thus able to perform various tasks just for pleasure using the phone. This and other features make the marketing of the brands simple and the role of the advertisement is to reinforce that fact.
Testing effectiveness of the advert
Testing the effectiveness of the advert comes inline with the research objectives. It is largely in response to the way people perceive or interpret the meaning of the advert. When coming up with the theme of the advert and properly drafting it to be presented to the media, a prelude mock- up television commercial was then tested. Though the internet, the company can also place a comment box next to the advert to allow the audience gives their feedback. The company can target a sample of audience representing the market such as those of a community or an institution.
Folder technique
This technique involves the use of the use of more than one advert and withdrawn in order to gauge the response nature of the audience. In order to achieve the best result, different versions of the advert were tested. First, a press version was revealed to some respondents, and after wards withdrawn, and then respondents can be asked questions to test what they remember about the advert or how they felt about the advertisement5.
Sample technique
The company can ruin all its proposed advertisements to a specified number of participants in a specific venue which can be recorded for purposes of analysis. The company can also interview the same participants after the commercial has been run and then seek their views and reactions on the advert. In this case, the company can be sure of providing an advert that will be able to catch attention, legally acceptable, attractable, easy to understand and very effective.
Role of media research
Media research is very important while trying to obtain facts on the effects and perceive nature of the audience. It also provides a clear outline with which the company would follow while implementing the advert especially the time frame. Just before the company launched the “Hellomoto” campaign, it made sure that it would be successful and thrilling to the target audience. The media played a big role in, which was based on; creating the theme, defining the copy platform, testing the advert, the effects of the advert and also the target audience. Research in advertisement is meant to prevent wasting company resources on adverts which will not be effective.
Conclusion
The research has to be done before, during and after the advert is run. The research provides an indicator of the effectiveness of the advert. Currently there are many ways of carrying out advertisement research, and the agency that produces the adverts will have to perform this research before commissioning the advert. In general the ‘Hellomoto’ campaign by the Motorola Company has been very successful and it has signalled the way the company has been improving in sales since the start of that campaign.
References
Alden, D. L., and W. D. Hoyer, et al. (1993): Identifying Global and Culture-Specific Dimensions in Humour in Advertising: A Multinational Analysis. Journal of Marketing 57(2): 64-75.
Assmus, G U. and Farley, D.L (1984): How Advertising Affects Sales: Meta-analysis of Econometric results. Journal of Marketing Research 65-74
Belk, R. W. and Pollay, R.W (1985): Images of Ourselves: The Good Life in Twentieth Century Advertising. Journal of Consumer Research 11(March): 887-897.
Cook, G. (1992): The Discourse of Advertising. London: Routledge
Hall, S. (1997): Representation: Cultural Representation and Signifying Practices. London: Sage
Jonathan, C. (2006): “HelloMoto” Tour Malaysia introduced by the MotoBus.
Manca, L. and Alessandra M. (1994): Gender and Utopia in Advertising: A Critical Reader. Lisle: Syracuse University Press
This assignment assumes that the author has been hired to implement the just-in-time (JIT) methodology in the Motorola Corporation. The company produces and sells smartphones and accessories, and its directors would like to reduce waste. They are also interested in the other benefits provided by JIT, which have manifested during its implementation in various companies worldwide. As such, they have hired the authors, an external consultant, to help with the introduction of the new processes. The task is to determine the changes necessary to successfully implement JIT in the company, list the benefits, and describe the likely challenges. This assessment aims to answer these questions satisfactorily for Motorola’s board of directors.
Necessary Changes for JIT
JIT can be risky to implement, as the reduction in active inventory means that it is easier for any underlying issues to manifest. As such, companies have to address these issues beforehand to avoid any issues that may appear after the introduction. Hirano (2019) highlights the need for top management commitment and outlines five core principles: proper arrangement, orderliness, cleanliness, cleanup, and discipline. Every aspect of production should undergo refinement to achieve excellent efficiency, and the time it takes a product to move between two adjacent production stages should be minimal. The production as a whole should also be clean and well-arranged to minimize the risk that any defective products may appear.
Benefits of JIT
The purpose of JIT is to reduce waste, which leads to lower costs and improved production speed and efficiency. However, the achievement of the goals outlined above can also have results that are less immediately apparent. Reid and Sanders (2016) highlight significant reductions in inventory investment, lead time, rework and setup, space requirements, and material handling equipment. JIT aims to optimize space usage alongside other aspects, and this tendency leads it to improve the operation of physical facilities. As such, Motorola will likely improve the overall operation of its facilities and increase their productivity in the long term at little to no cost.
Implementation Challenges
The significant benefits of the approach result from the proportional effort that all of a company’s employees have to commit to achieving them. Singh (2014) discusses the need for a methodology and a production process redesign, employee training, suitable incentives, an advanced IT infrastructure, and continued success measurement. Most of the effort that goes into the implementation of JIT occurs at the beginning, and the sudden large workload can be overwhelming. Other aspects, such as supplier reliability, are also concerning, and Motorola should inquire into their ability to provide components on short notice. Overall, the introduction of JIT requires a large amount of work, and the company should guarantee its ability to manage the task.
Conclusion
The JIT philosophy can produce vast benefits, but it is associated with many different risks and challenges. It requires a complete reorientation of the company’s values, starting with the upper management and moving down to employees at all levels. As a result, they will apply their efforts to reduce waste and improve the productivity of the manufacturing facilities. However, the amount of work necessary for the initial transition may be overwhelming, and there is a variety of external risks. The Motorola company should not begin the transition if it is not confident in its ability to handle the strain. However, if it does, it can improve its competitiveness significantly, and so, JIT deserves consideration and implementation if possible.
The mobile handset market is rapidly on the change according to the 2007 Global Handset Market Forecast, and surprisingly, both the high and low ends of handset pricing have become more important. With the advent of globalization, there is a greater need for rapid communication and mobile handsets have been very vital to people. Worldwide handset shipments are expected to increase to 1.46 billion by 2012, driven in part by increasing availability of low-cost and ultra-low-cost handsets in emerging nations.
Total handset revenues will increase at a compound annual growth rate of 1.7% to a total ofUS$165.4 billion by 2012 and third-generation (3G) handsets will represent half of the worldwide revenue for cellular handsets. These are the findings according to the 2007 Global Handset Market Forecast (In-Stat/MDR, 2007). Shaun Collins points to a vast middle class in India and rising incomes in other emerging markets (Reuters, 2007). India and China are undergoing a rapid industrialization phase and as a result, the countries have boosted disposable incomes and phone networks. India and China are thus two huge emerging markets for handset makers to tap into.
Over the past two years, China has enjoyed growth of 5 million users a month, while Indian monthly growth now averages 6 million. Tarmo Virki reports, based on Strategy Analytics, that there has been an increased demand in Asia and Africa for mobile handsets in the June-September period of 2006 (Virki, 2007).
In the handset industry with a rapid growth potential, Motorola has been the world’s second biggest mobile manufacturer after Nokia. It has been recognized as one among America’s Most Admired Companies by Fortune Magazine, USA, 2007 and one among the Strongest Brands by BusinessWeek, USA, 2006. It also ranks 12 among the Top 500 Innovators List compiled by InformationWeek, USA (Motorola, 2007).
On September 21, 1983, Motorola made history when the FCC approved the DynaTAC 8000X phone, the world’s first commercial portable cell phone. Motorola handsets are quality products that meet excellent standards. The official website claims that Motorola provides customers with the most compelling mobile experiences available – from the iconic MOTORAZR to the forward-thinking MOTO Q (Motorola, 2007).
The problem that Motorola faces today is a steady decline in its sales. Katie Allen in her article published in The Guardian, January 6, 2007, suggests that Motorola faces a gloomy future that is affecting the entire mobile phone market. In early trading in New York in January 2007, shares in Motorola, maker of the Razr handset, were down 8% at $18.90. Motorola has rattled the mobile phone industry with downbeat sales forecasts (Allen, 2007).
According to market research group Gartner, Motorola, the world’s No. 2 handset maker, shipped 65.7 million phones to distributors in the fourth quarter of 2006, but only 61 million were sold to consumers. However, it only reflected a general trend in the handset market. Overall, mobile phone makers shipped close to 300 million phones to resellers in the fourth quarter, but more than 15 million had not yet been sold to consumers, Gartner said in its quarterly overview of handset sell-through sales to consumers. The hand set division was facing huge problem with 36% sales down. Motorola had slipped from the first to the third place among handset manufacturing (market share at 13%) in 2006 (Allen, 2007). According to a study by Strategy Analytics, Nokia is the market leader in the handset market with Motorola coming in at a second.
The study found that Nokia is the market leader with 36 per cent global share, up from 33% for the same period the previous year. Nokia’s gain came largely at the expense of Motorola. With a total of 45 million handsets sold, Motorola saw its share of the market drop to 18 per cent, down from 22 per cent a year ago (ElectricNews.net, 2007). Lately, Motorola’s share of the global handset market is estimated to be 13 per cent, down 50 basis points from the second quarter of 2007, ranking Motorola number three behind Nokia and Samsung Electronics. In the latest quarter Motorola continued to lose market share in the Asia Pacific region, including India, but it regained its lead in Latin America and kept its lead in North America (Taylor, 2007).
Two of the factors for the downfall in sales of Motorola handsets have been found to be Motorola’s inventory build-up and fading popularity of certain models. It is widely felt that Motorola introduced its low-cost FONE handset too late in the emerging markets. Gartner analyst Carolina Milanesi says that distribution takes longer in emerging markets, and the November launch of Motorola’s FONE meant it had missed part of the year-end holiday gift season (Reuters, 2007).
The FONE has also received a lukewarm response from consumers because it appeared too fancy for rural consumers, and because marketing to rural consumers turned off the appeal to fashion-conscious city slickers (Reuters, 2007). It has also been found that Motorola’s slim flip-phone RAZR is no longer popular in Europe (Reuters, 2007). Motorola also faces intense price competition with the world leader Nokia. The need for lower-cost models for large parts of emerging markets like India and China and competitive pricing due to competition with Nokia has brought down profit margins. Shaun Collins, an analyst at the telecoms consultants CCS Insight, said competitive intensity was at an all-time high.
“This is a marketplace that is making a lot more phones but it’s gaining less profit from making a lot more phones,” he said. Some of the targeted marketplaces were “ultra-low price”, he pointed out, citing Motorola’s recent launch of the Motofone handset in India for less than £20. There is also increasing competition with companies vying with each other to provide new model handsets that have many appealing features.
For example, Apple’s iPhone, though a recent release has captured the interest of the global mobile market (Waters, 2007). Eight phones can be considered rivals for the customers Apple is targeting and it’s interesting to note that Motorola is not among the eight (Waters, 2007). Another new entry is Google. Google has entered the mobile phone industry with its new Android system model that incorporates most of its internet applications (Johnson, 2007).
Some people feel that the slump in sales of Motorola is due to the RAZR model. The RAZR was launched in 2004 and was sleeker and good-looking than anything else in the market at that time. It acquired a reputation as a desirable and distinctive phone in 2004 and 2005. Already by the time the RAZR was launched, Motorola was struggling with other phones in its portfolio. The Windows-based Motorola MPx was a high-profile failure, the MPx220 was panned at launch due to poor performance, the MPx100 had been cancelled and various other phones were either incredibly late to market or were not making much of an impact.
The MPx series failed due to technical issues and also because they were far ahead of their time. Other advanced models such as the 3G E1120, the E1060 music phone and the A1010 smartphone were stylish and had great features, and yet they had to be quietly cancelled. According to the Mobile Gazette these phones failed because they were too much ahead of their time and the E1120 in particular would be a great phone today. Non-RAZR phones failed for Motorola. Motorola ROKR E1 was criticized for being outdated, and for crippled implementation of iTunes. The bad press it invited proved to be immensely damaging for Motorola (Mobile Gazette, 2007).
Again, Motorola phones by being the first sleek phones have come to be seen more as fashion phones. While newcomers such as LG have come up with innovative models such as the Chocolate and Shine devices, Motorola is stuck with clones of RAZRs in an effort to rekindle success.
Motorola must understand is this – the RAZR has had its day. Fashion-savvy customers in mature markets get easily bored. When people wander into a shop they don’t see the technology underneath – the first thing they not is yet another RAZR design which is not so very different from the one they have purchased already. Motorola’s problems have been blamed on its inventory build up. Market leader Nokia also built some inventory, but these were within safety margins (Reuters, 2007). This should be followed by Motorola. Martin Garner, of the industry experts Ovum, has noted that people who buy their first phone are not always looking for a cheap buy.
First time buyers are looking for a nice phone, he says and would be willing to spend a large amount of their disposable income for it than others. This gives a message for Motorola, not to just focus on producing cheap phones but to build phones with appealing features. Google is entering the handset market with a model that will enable people to access Google maps and Google Earth on their mobile phones. Currently, mobile phones use a variety of operating systems to access the internet including systems from Microsoft and London-based Symbian, the biggest maker of mobile-phone software, whose owners include Nokia, Ericsson and Siemens (Martin and Beaumont, 2007).
Marketing can be viewed as a set of functions that include product development, packaging, pricing, advertising, selling, distribution and customer service. This process can be studied under two phases: a strategic and a tactical phase. The strategic phase has three components: segmentation, targeting, and positioning. The tactical phase is the one that includes designing and implementing various tactics to achieve the formulated strategy. These tactics are also referred to as the “4Ps”: product, place, promotion, and price. (Kotler, 2003). A marketing strategy is implemented through decisions regarding the elements of the marketing mix that are also known as ‘controlled variables’ of marketing.
Product: To provide the right product to the right people at the right time at the right price is the secret of marketing. Motorola achieved huge success with its RAZR model. However, due to failure to innovate, it got stuck to the basic RAZR model. When it comes to features, Motorola always launched its new products well ahead of time and hence there was no market for it. Apart from that Motorola phones are truly quality products with great packaging, branding and features. Motorola not only designs, manufactures, sells and services wireless handsets, but also licenses its vast portfolio of intellectual property.
Place: Currently it is headquartered at Schaumburg, Illinois, USA. With operations worldwide, Motorola maintains manufacturing, sales and administrative facilities in dozens of locations. By catering to customers across nations from the internet and through regional centers, Motorola has acquired the location strategy advantage. Motorola cell phones can be bough at various stores online. The only problem had been with its inventory build up. Having excess products in store without corresponding demand has proved detrimental to the company. By having regionalized production centers, Motorola has diversified the risk of concentration of labor, production costs, and transportation costs. When production and transportation costs are cut down, the pricing can be competitive
Pricing: Motorola is best known for its competitive pricing and offers the cheapest mobile handsets in the market. It adopts low pricing strategy to encounter competition from its chief competitors Nokia and Samsung Electric.
Promotion: Motorola promotes itself well through special deals, latest gear, coupon codes; cool downloads such as ringtones, wallpapers, screensavers, videos, etc and also through advertisements. Motorola has also sought celebrity endorsement through soccer star, David Beckham. Motorola advertises in the national newspapers, computer magazines, on the Internet and TV and by placing inserts in newspapers and magazines.
Recommendations
Motorola must ensure there is inventory buildup with safety margins. This is possible only through market research.
Motorola must study the market and build products that suit the market. Most of its models failed because they were not suited to the market that existed at that time.
Motorola should create models that are totally different from the RAZR model.
It should face competition not just by lowering the price but by also cutting down on production and distribution costs.
Motorola cell phones must break free of the fashion phone label. As long as they are seen as fashion phones they are likely to get easily outdated.
Motorola must consider time as a factor while launching new model cell phones to rural and urban clients. Urban clients prefer to receive new models first.
Motorola must develop software that is compatible with a variety of handsets.
The software of Motorola should be developed in the future to include internet services and social networking sites.
When it comes to design, Motorola must change its image of being a fashion phone. Sony Ericsson phones are more understated when it comes to design and don’t fall into the fashion phone category, and Nokia like to design every phone to look a little different from the rest which keeps their range looking fresh. It would be nice if Motorola could take a lesson or two from them and not try to ape the RAZR model all the time.
Motorola is one of the most successful companies in the world. Though the marketing mix has been studied in order to understand the success and failures of Motorola, it must be mentioned that the failures maybe averted with a greater marketing research, fine tuning of external design of mobile handsets, and by trying to bring the benefits of low cost and high quality to each and every customer. It is this focus on customer value that can truly make Motorola the number one company in mobile handsets.
