This paper gives a critical situational analysis of Motorola Solutions Incorporation (MSI). It does this by focusing on its internal and external environments, challenges, and their recommended remedial measures. To begin with, MMSI is a telecommunications company founded on 04/01/2011. The Schaumburg-based company is traded at the New York Stock Exchange. Its current Chief Executive Officer, who also serves as the chair of the Board of Directors, Greg Brown, has steered the company. By 2011, it had a total of 23,000 workers with a total asset of $13.92 billion, and a net income of US$ 1.15 billion (Gart, 2006). MSI is guided by a moral principle, which strives to create indispensable indestructible tools to help to improve the lives of people from all corners of the world. It serves the government, health, public safety, and other private entrepreneurs.
Today, the carrying out of business in the world is becoming increasingly challenging. Many entrepreneurs have faced a lot of obstacles, which have really thrarted the rate of their growth. This is not unique to this company because it has had to confront the following:
First, there has been a lot of problems facing the company’s products due to obsolescence. The world has become so dynamic to the extent that it only needs highly creative manufactures to come up with the novel products. Meaning, most of the commodities, which were manufactured by this company including two way radios and business radios, are no longer in fashion as a result of the emrgence of micro kioskks, mobile computers, and wireless broadband networks (Wheen, 2011). This situation results from the ever changing needs of the consumers, who often want to experience the use of the new commodities, which are designed in better ways to suit them. The trend is rapidly changing towards the use of more portable products, which can be used to perform multiple tasks.
Despite being one of the leading suppliers of telecommunications equipments, MSI has been facing a very stiff competition from other companies. These include the Huawei International Private Limited, Phillips Electronics North America Corp., Nokia Siemens Networks Oy NovAtel Carcom Inc., and Philips Electronics North America Corp. These are some of the reputable companies, which offer complementary services to this company. Hence, it has become extremely difficult to compete with them, since they have a wider coverage. Most of them, like Nokia, are multinationals with branches in nearly all the continents. Ever since the communication sector became lucrative, many entrepreneurs have invested their money here. Hence, there is a very stiff war, which only needs well-prepared companies to be engaged into; thus, necessitating the survival for the fittest. All the less competitive producers can be easily eliminated from the market.
The competition faced from them has led to a lot of legal tussles revolving around copyright and patent issues. Besides, it has led to the price wars, where rival manufacturers deliberately charge lower prices in order to appeal most to the potential customers. This has necessitated the diversification of products and improved quality of services. Hence, MSI has taken the initiative to improve the quality of its products. As a result, it has become possible for it to enjoy competative advantage over others, to increase the volume of its sales, and to increase its revenue in the past fiscal years (Silver, Joann, 2008). This explains why it is rapidly expanding its operations to many places today. Meaning, the management has taken advantage of this competition to improve the company’s services, so as to be the best telecommunications provider in the market.
Lastly, there is a problem of overdependence on a section of the market. Given that MSI produces government and enterprise services, a lot of focus is put on the former meaning, most of the revenues are derived from the sales of products made to the government and its agencies (Dee, 2005). According to the company’s financial report, in the 2010/11 fiscal year, a total of 65% of its revenue was derived from the government. At the same time, there was a regional imbalance in the distribution of this income. While the USA accounted for 53.6%, UK, China, Israel and Japan followed with 8.2%, 3.9%, 2.1% and 12% respectively.
Facing challenges does not mean a collapse of an enterprise. A good manager takes advantage of challenges by viewing them as opportunities for further development. Based on the above problems, the paper would like to recommend the following remedial measures:
Diversification of Operations
Concentration on one customer and specific region is a dangerous affair. It may affect the company in many ways. First, it can be detrimental during crisis. When the very client has economic problems, it can become so difficult for it to purchase the same commodity they way it used to do before. In this case, it becomes challenging for the supplier as well, since it will have to experience the same difficulty (Dan, 2010).
Therefore, in order to solve this problem, the paper recommends that the company should embrace the spirit of diversity. Meaning, it should ensure that it establishes a very large pool of clients to supply with its products. If this happens, it will be in a position of encountering such disasters. It will help it in the diversification of risks, because it will have alternative customers to serve should one fail. If MSI can consolidate its market amongst the private entrepreneurs, it will increase the chances of increasing the rate of its stock turnover. Overreliance on the government, as the main client, may be so disappointing, especially if the tender is not awarded (Dan, 2010).
All the entrepreneurs understand the bureaucratic procedures involved into the government deals. Before awarding any tender, adverts are made in the print, broadcast, and online media. At times, even international bidders are involved. In this situation, it becomes too competitive to win the tender. Moreover, it may be challenging if one of the rival companies unites with the concerned authority top in order to win the tender. If this happens, the company will automatically lose its main market. Meaning, it will store dead stock or be compelled to look for the new market. All this risk can be avoided by diversifying the market.
Concentration of market on one line must be avoided at all costs. A team of dedicated sales and marketing professionals should be deployed in the potential areas to promote the company’s products. They should begin their work with placing informative adverts in all the available media sources. However, this should be done after carrying out a market research aimed at understanding the actual context of the market. If the market is expanded, the company will be safe, because it will easily spread risks and survive, even if a section of its market faces economic crises (Gart, 2006).
The management of this company must appreciate the fact that their products are used without any boundaries. People in the contemporary society are very much happy with the various brands of telecommunication products, because they have made life better for them. Therefore, it is not a wise decision to concentrate the market in only one region. Even if the USA may be the area with the highest number of clients, deliberate efforts must be made to ensure that a larger market base is established in all other continents. It is only a matter of decision and investment. Any kind of a customer only needs to be informed about the new commodity, so as to make a decision on whether to purchase it or not. This implies the application of all the deliberate efforts to coax them to embrace the new products from this company.
There should be a diversification of services in this company. Meaning, different kinds of products should be manufactured, so as to address the demands of various clients in this highly dynamic society. Instead of concentrating on the production of a few commodities, the management should come up with strategies to increase the number of their products (Steinbock, 2007).
The manufacturing of such products will only result from the adoption of high technological skills. Hence, there will be a variety of products, which can substitute one another, in line with the tastes and preferences of different clients. Before coming up with such an idea, it is paramount to conduct a market research in order to understand the demands of customers. Probably, this is why MSI has now come up with a variety of products including OEM Scan Engines, tablets, two way radios, SCADA Systems, enterprise voice, Iden Networks, WLAN Accessories, RFID Accessories, support and help desk applications, and network design software.
In order to do this in an effective manner, it will be essential for the company to employ the highly qualified personnel, who have a deeper understanding of the customer needs. They should be knowledgeable about the target customers, so as to design the most appropriate commodities, which will address their constantly changing demands (Gart, 2006). At the same time, they must be knowledgeable regarding the modern technological advancements, which many of the clients aspire to conform to. If a variety of products is manufactured to appeal to the clients, they will do all that they can in order to acquire them because it will become popular.
Since the world has become so advanced, it is advisable for the management of this company to respond with immediate effect. Apart from hiring a highly qualified team of personnel to spearhead the smooth running of the company, a lot of funds should be allocated for carrying out various researches. It is only through this that the company will be able get all the relevant information, which it needs in order to produce commodities, which are good enough to satisfy the diverse needs of its clients. This should be done as a response to the external environment, which may be too competitive. It is only better initiatives, which can save the company from succumbing to this competition however stiff it may be. If this is properly done, the company will come up with the most appropriate commodities tailored to the satisfaction of the current modern market. At the same time, they should be given a number of alternative commodities to choose from in line with their preference and tastes.
In order to encounter the intensifying problem of competition, it is advisable for the company to form mergers with its leading rivals. This will mean pooling together resources and having an assured control of the market. As already explained, operating as individual entities may be so challenging given the high level of competition in this sector (Blumberg, 2000). Therefore, in order to avoid the cases of price wars among other forms of unhealthy competition, it is better to come up with the ideas of uniting these firms, so as to form one major one, which can be easier to manage (Armstrong, Kesten, 2007).
The paper recommends that MSI should form mergers with Huawei International Private Limited, Phillips Electronics North America Corp., Nokia Siemens Networks Oy NovAtel Carcom Inc., and Philips Electronics North America Corp. Through this initiative it will be easier for it to have a large portion of the market by ensuring that its services are spread to all corners of the world, where they may be needed. As a result, it will enjoy a competitive advantage over other smaller industries, which may end end up collapsing in the long run (Armstrong, Kesten, 2007). This can also be achieved through franchizing existing companies.
Generally, unhealthy competition may be so destructive for any business. Therefore, if different firms deal in a similar line of commodities, it is not wrong if they pool their resources together in order to establish one stronger company. Doing this can enable them to increase their chances of controling the market. It may either result into a monoploy or oligopoly. In such a situation, it becomes easier for those firms to expand their market base and access other areas they could not reach before coming together. As a result, there will be an increased rate of stock turnover, a development which will obviously lead to the growth of each of them.