Motorola Corporation was started in 1928 with the aim of manufacturing a variety of electronic and communication devices. Since then, the company has been growly rapidly with increased net sales and income as well as the number of employees. The company reached its climax in 1993 with reported net sales of $ 17 billion and 120,000 employees globally.
However, of late, the company has faced many challenges which have declined its sales and hence its profitability. These challenges include the size of the company where it became too large to manage in 1990s, involvement in too many businesses, competition from rival companies such as Nokia, and other internal and external factors that reduced the market share of the company in the communication market. The company got involved in too many businesses but it would have specialized in semi conductor devices production.
The market share of the company has reduced in the past few years as the company continue involving itself in many businesses thus affecting coordination.
Involvement in so many businesses, which have proved a challenge to the management: the company ought to drop most of its operation lines or products and concentrate on a few lines or just one that will be easily coordinated by the management.
Through the analysis of the company’s recent financial report, the company is able to break-even implying that, if the company concentrates on one line or product, it is possible to raise its profit to higher margins and this concept highlights the importance of specialization in any undertaking.
The company ought to drop all the products it has been producing and concentrate on the production of semiconductor products. Since 1928 when the company started its operations, it has been manufacturing semiconductor devices with the main clients being electronic manufacturing companies.
The company has continued to dominate in this market for many years; it was ranked the largest manufacturing company of semiconductor globally in 1994. This means that the company already has established itself in this product’s market than in any other product it manufactures.
Concentrating on semiconductor products will enable company to restore its position in the market, which it has lost in the past few years due to concentration on so many products.
It will also make it easier for the management to coordinate its operations in all the regions where the company operates and this will help to improve its efficiency and quality of its products thus improving the sale and profitability of the company.
The corporation involved itself in so many businesses, which have grown rapidly over time thus becoming a challenge for the management to effectively organize and coordinate all the business groups. However, the company may also continue with its operation since its financial report analysis shows that the company is able to break-even, even at this time when its market share has declined.
The best line or product to concentrate on is the manufacturing of semiconductor devices due to their high profit margin and market advantage the company has on the product. Moreover, the company has been doing quite well in this line; therefore, putting more efforts in the same, market share will increase and returns will escalate pushing the company to great heights.