Motorola Strategy Analysis essay
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Motorola is a multinational telecommunications and electronic manufacturing company that was established in 1928. Its initial base was in America; Schaumburg, Illinois, as Galvin Manufacturing Corporation at 847 west street. In January 4 2011, the company split into two; Motorola Mobility and Motorola Solutions Company due to a loss of $4.3 billion it made between 2007 and 2009. Prior to the splitting, the company manufactured wireless telephone handsets, designed and sold wireless web infrastructure devices like signal amplifiers and cellular transmission base stations (DePamphilis, 2010). It also sold network products for broadcasting such as digital video recorders, set-up boxes and other network devices. Its first product was battery eliminator.
Paul Galvin pioneered the company . He got the license for the radio automotive and obtained the name 'Motorola from William Lear. 'Motorola' was established in 1930. The company's top management and structure consists of fifteen senior managers, thirteen Board of Directors, six Business Units and five Strategic Business units. Some of the leaders include Keith C. Jones as the vice president, and director of the supply management; John G. Miller, corporate vice president and director of the worldwide strategic sourcing and supply management.
The company deals in consumer products that include cable modems, broadband communications, digital audio receivers, accessories, digital set-top terminal, voice terminals, IDEN, cellular phones, paging and messaging and two-way radios. It also has business products that include broadband voice over IP, accessories and replacement parts-automotive, canopy wireless broadband, embedded computer products, energy systems-portable, US Federal Government, Global Positioning Systems (GPS), satellite and broadcast cable, soft modems, two-way radios, Manufacturing Execution and Optimization Software, and mobile data terminals (Bhushan, 2007).
Moreover, the company has networks like GSM Network Systems, CDMA Network Systems, Private (Fixed) Data Networks, Transmissions ASTRO 25 Project 25 Compliant Dimetra Tetra Compliant, Advanced Home Services, Network Infrastructure Solutions and Cable Modems. The company's current financial position is acceptable since the split the company experienced resulted in an improvement in the financial growth. For example, the 2010's financial results demonstrate an increase in the net revenues by 4% from 209's results (Ilan, 2011). Therefore, the net revenue was valued at $11.5 billion. Also, net revenues recorded an increase of 9% in Mobile Devices section and a reduction in the Home segment.
More so, the company's operating earnings rose to $76 million in 2010 as opposed to the $1.2 billion operating loss in 2009. This rise in the income was as a result of a high gross difference, which reflected product blend. This was caused by the increased amount of Smartphone devices by the Mobile Device section. Furthermore, the company's net loss reduced tremendously from $1.3 billion to $86 million in 2010. The two business sections' financial results indicated that the company had registered 37.3 million units of Annual Handset Shipments.
Motorola Company sent 37.3 million handsets in 2010. However, this was a reduction compared to 2009's 55.5 million units. In addition, the company transported 13.7 million Smartphones in 2010. Towards the end of 2010, Motorola Company transported more units than those sent in 2009. This margin was a result of the newness of the product in the market since it had just been introduced (Kimmel, 2011). Significantly, the company has registered an improvement in the operating cash flows. This is because it came up with $606 million of net cash, as opposed to the $1.1 billion in the total cash utilized in 2009.
On the other hand, the Mobile Device Business section realized a lot of financial growth in comparison to the 200's financial level. For instance, it recorded a rise in the net revenues from $7.1 billion in 2009 to $7.8 billion in 2010. This was an increase of 9%. Geographically, the company noted an increase in net revenues in Asia, North America, Europe, Middle East and some parts of Africa. However, some parts of the Latin America registered a reduction in the net revenues (Jamie, 2010).In addition, the company transported less units in 2010 compared to those of 2009.
This business segment also recorded a reduction in the operating loss in 2010 in relation to 2009's. That is, in 2009, the company realized an operating loss of $1.2 billion compared to that of $76 million in 2010. The decline in the loss resulted from higher volumes of the Smart phones and excellent product blend. Moreover, it was caused by reduced extra inventory, and the net revenues increment. Other factors that were significant in the reduction of the operating loss include the $283 million income from the legal settlements, reduced rearrangement of the business charges, little study and growth expenses, that showed reserves from cost reduction plans.
The company has a current strategy marketing vision which involves making things smarter and life better. Also, the strategy is concerned with enhancing intelligence everywhere in the world. Another constituent of the strategy involves a superior technology and brand equity. The company also strives to become influential in the change from analog to digital data delivery.
In addition, Motorola Company is working towards attracting and retaining excellent engineers, technicians, managers and nontechnical staff. It is also focusing on becoming the best broadband communications into the next generation, through its venture in technology and academic capital. The company aims at providing entertainment, information and communication.
This strategy is practical given that the company's products are excellent. They are vital in the communication, entertainment and learning. These products like the laptops and modems are widely used in research. They are globally distributed hence enhancing intelligence everywhere. Therefore, the company's strategy is significant because of its focus on making life gets better and making things smarter.
This strategy also matches the company's business model. This is because its operations are in line with the strategic plan. The company is known to produce quality products. It ensures that its clients get the best items by use of the 'Six Sigma Quality.' This is statistical means of measurement. It aims at ensuring that there are at most 3.4 per errors per million products and customer services. It also strives to produce standardized products as the employees note the errors identified in the entire business. These statistical measures are incorporated in every employee's job.
Moreover, the company uses a strategy of 'reducing the total cycle time' in order to enhance the quality in its business. There is a close examination of the whole system; the design, manufacturing, marketing and management. This calls for an inspection of the total system, including plan, manufacturing, marketing, and administration. The management also plays a crucial role in quality checking by regularly meeting to discuss ways of improving their products' quality. This is also done through communicating the results to the whole company. They also ensure that all the workers are equipped with the appropriate skills in the business through training programs. Therefore, the company is working according to its strategy.
The company SWOT analysis involves the Strengths Weaknesses, Opportunities and Threats. Motorola's has a strong-brand name which is one of it strength in the market. Also, the company is widely known globally and recognized as the leading quality and innovative company in the world. It also has a wide variety of products that are doing well in the market (Kreitner, 2007). In addition, the company has many customers all over the world who are content with their products. Its products are also affordable hence catering for all classes in the society.
However, the company has weaknesses that include reduction in the cellular products. Some of its products also have defects hence discouraging customers. Moreover, the company has a little employee training and education on the company business. In addition, the company has a poor-brand name publicity which results in low sales. Another weakness of the company is that some of its products are not user-friendly. Consequently, the customers are kept away from them. The company's management sequence is not extremely remarkable.
In addition, the company has its share of opportunities. These involve its ability to widen its variety so as to attract a bigger market share. It can improve its image by correcting the defects in its products. The Introduction of the brand in the new markets is essential in acquiring more market share. Motorola Company can also broaden its brand publicity through improved communication and greater advertisement (Hartline, 2008). The company also has a chance to develop in Asian market since the region has a few mobile brands and the use of phones are rising fast. It is notable that the company should risk innovation of more products so as to get more market.
Lastly, the company has certain threats that involve many competitors who are dominating the market. There is a danger of losing customers if it does not handle the competitors tactically. These competitors also have stronger promotional strategies than Motorola's. In addition, the company is at a risk of losing its excellent reputation for the competitors due to faulty products (Kreitner, 2007).
The company's main competitors include Agilent Technologies, Inc; ADC Telecommunications, Inc; Analog Devices, Inc; Alcatel; General Electric Company; Casio Systems, Inc; Fujitsu Limited; Cisco Systems, Inc; and Advanced Micro Devices, Inc among others. In conclusion, the company should improve on its weaknesses in order to gain more market. It should also correct the defects in the products so as to improve on the quality. Moreover, the company should train the workers on the business and do adequate publicity of its brands. Furthermore, the opportunities it has should be utilized well so as to realize its vision. It is essential that it uses its strengths well so as to get a wider market.