Motorola is a Chicago based firm that was started in 1928 as the Galvin Manufacturing Corporation. It is a top producer of handheld cell phones and markets wireless web devices. In 2003, phone gadgets contributed to 40% of the revenue and 60% of Motorola’s operating profits. Motorola is good in communication and technology creativity.
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This has been possible through its strong branding and technological innovation. The firm strives to achieve breakthroughs in technology and to emerge at the top of its competitors (Hitt, Ireland, & Hoskisson, 2010). This paper seeks to explain the SWOT analyses of Motorola incorporation, as well as merits and demerits of Motorola’s strategies. Additionally, the essay identifies the levels of strategy in a firm and issues in business administration.
Salient opportunities and threats that exist in Motorola’s external environment
The external environment analysis helps an organization to know if its resources are enough to thrive among its competitors. Opportunities are favorable external environmental factors while threats are unfavorable external environmental factors. Brand is an important opportunity for Motorola.
Its brands are strategically located in the telecommunications market. This increases the chances of customers seeing and buying its products. Additionally, the firm has strong marketing and promotional tactics. It uses various marketing devices such as print media and TV. As a result, it is able to inform millions of customers about its products.
Another opportunity is strong ability and readiness to take risks. For instance, through creation of new products that enables Motorola to achieve a competitive advantage. The innovation of new products brings differentiation to Motorola therefore reducing the prices of its products. Some products like Telco TV have helped the firm to be better placed in the market.
The corporation has also been winning different contracts that enable it to supply its products in large volumes for a long period of time. This has also helped to boost its sales as well as performance. These opportunities have enabled the firm to grow and establish itself internationally. For instance, it has entered other markets like Taiwan and United Kingdom.
The main threat that Motorola faces is competition from new and foreign firms. For instance, in 2003, Japanese, Korean and Chinese businesses were entering the market to produce and supply cell phones. Their products were cheaper and of higher quality as compared to Motorola’s.
This threatened Motorola’s profit margins such that they were almost reaching one percent (Hitt et al., 2010). Additionally, the firm does not enjoy government protection against entry of foreign businesses in to the market. As a result, foreign market players have entered the market and are almost replacing Motorola.
Another threat is barrier to trade in some foreign markets. For instance, Motorola has been facing difficulties in penetrating Japan. Considering that Japan has already entered Motorola’s market, then blocking Motorola from entering Japan seems unfair. The other threat is from Sagem, which achieved the top most market position in France.
It has been difficult for Motorola to surpass Sagem’s performance as it is a very strong company. Its products are of high quality and affordable. Motorola also faces threat from environmental, health and safety rules. For instance, it is required to ensure that the environment is kept clean during its production process.
The costs associated with this are high and they affect the overall profits and performance of the firm. The credit ratings in the market are unfavorable to the company. High credit ratings mean that the company is charged more interest on loans. As a result, this cost is passed over to the consumer therefore reducing the competitive advantage over the other market players.
Motorola’s most prominent strengths and weaknesses
Strengths are internal favorable environmental factors while weaknesses are internal unfavorable factors of a business. Motorola’s strength is that it is a prominent company in provision of wireless handsets, communication devices and the single provider of iDEN network.
Motorola is a leading and strong market player. For example, it acquired and managed Kreaatel therefore gaining higher chances of entering European and North American markets. The other strength is the ability to manufacture large volumes of mobile handsets at a given time. This enables it to meet the market demand with ease. It is also able to enjoy economies of scale that come with large scale production. Additionally, it is able to surpass its competitors by ensuring that its products are readily available.
Motorola’s weakness is that the general quality of its business operations makes customers unsatisfied. This is because at times, the products happen to have defects which make them to function improperly. Therefore, the customers tend to opt for other technological devices which can function smoothly. Another weakness is that their employees are less skilled and trained. They also lack motivation.
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They offer substandard services to the consumers because they may not know how to manufacture and operate the mobile handsets. This has reduced quality, customers and sales of Motorola’s products around the world. Another threat is weak profitability.
Motorola’s profits and market share have been dropping because of the weaknesses and threats it has been facing. This requires that the company adopts different strategies in order to regain its market position.
Advantages and disadvantages associated with each of Motorola’s strategic options
Motorola’s strategic plans have been made using intangible and tangible facilities. The intangible facilities are employees who aim at achieving the firm’s goals and experts who possess technological creativity. The tangible facilities are the products such as telephone handsets.
These intangible and tangible facilities enable the company to produce, market, sell and obtain income from its produce. However, this strategy is disadvantageous because there are many IT firms using it. Therefore, Motorola needs to identify and advance other tactics that will enable it to achieve competitive advantage.
Another Motorola’s strategy is the implementation of the new WiMaX expertise. This is an essential strategy for Motorola given that WiMaX has several advantages. It can take the place of many telecommunication facilities and cellular telephone networks. It can also provide internet facilities to Motorola products.
For instance, Motorola has installed WiMax in to its cell phones therefore making it an international performer in technological innovation. Introduction of WiMaX has made other big providers of communication devices to be on toes in order to offer similar facilities.
For instance, Nokia and Cisco Systems are aiming at providing WiMaX services to the mobile industry. However, the strategy of using WiMaX is disadvantageous. For example, there is increased competition since other mobile technology companies are starting to provide the same services.
Additionally, the costs required to use WiMaX are getting lower as more manufacturers turn up. This has increased supply and lowered selling price therefore affecting Motorola’s profits.
How the corporation’s strategy and organizational structure can be designed to solve the company’s strategic issues
There is stiff competition in the technology market. Therefore, Motorola is expected to fight for its place in order to endure and achieve competitive advantage above its competitors. It can do this by differentiation of its products and provision of competitive prices to its customers.
Since there are upcoming and innovative telecommunications providers, it is important that Motorola improves its strategies (Hitt et al., 2010). In order to remain competitive, Motorola can identify and implement different products that have not yet been launched by its competitors. Additionally, it can adopt bargaining power by purchasing its production materials at affordable price. For example, it can buy in large volumes in order to obtain discounts.
This way, it can be able to sell its mobile handsets at a price lower than its competitors. Motorola should also strive to create more products. Since the costs of producing digital products are reducing, customers and demand are also increasing. These customers aim at obtaining variety of products for comparison purposes. They also expect to buy quality products. This should motivate Motorola to increase its production capacity, create new products and advance its technology in order to take advantage of increasing demand.
How Motorola should proceed
In order to improve its strategic planning, Motorola should be highly innovative. This is in order to ensure that plans with the right procedures, mechanisms and technology are introduced. As a result, the future product needs of consumers can be met. The technological plans initiated by Motorola Corporation will need a mechanism of checks and balances which will remove market surprises and errors.
Road mapping is a strategic plan that Motorola can adopt because it can make the company to be different from its competitors. This road map offers a general procedure and database for every Motorola company to follow. This enables the companies to be in a position to advance, build and share their products, missions, visions and strategies with the whole corporation.
Additionally, it is possible to centrally solve issues that are facing various sections therefore reducing problem solving procedures and time. Road mapping can also provide strategic planning which creates a competitive advantage.
Various levels and types of strategy in a firm
Business level strategies are methods that firms use to carry out several operational roles. These strategies are used in order to assign duties and guidelines for proprietors, managers and employees. Some of these strategies are: coordination of unit functions, utilization of labor, development of competitive advantages, identification of market gaps and monitoring of product plans.
Issues in business administration
Human resource issues: These are matters or problems that face the employees. Some of them are: guaranteeing of open communications, balancing of stress and the labor force, setting up of responsibilities and conflict resolution (Bishop, 1991, p. 6).
Structural issues: These are basically the factors affecting the organizational structure. Some of them include competition, characteristics of customers and suppliers and the technological and regulatory environment. Although these issues can affect business, it is important to converse with the administration before changing the organizational structure (Bishop, 1991, p. 7).
Policy and Procedural Issues: This is mainly the authority that is either granted or earned by the employees or owners of a business. Authority entails application of control within a firm. For instance, there are procedures for approving and delegating of responsibilities and authority.
An organization can use Management by Objective (MBO) to coordinate and allocate authority and duties. Current Operating Reports should be made in order to give management and employees an updated schedule of expected goals and objectives (Bishop, 1991, p. 8-10).
Risk management issues: This involves identifying and solving uncertain factors that can affect the profitability or goals of an organization. It is the role of management to weigh the consequences of these concerns on the whole business. Some of these issues are: asset theft, computer offenses, scams and breach of laws (Bishop, 1991, p. 10).
Motorola Incorporation has various opportunities and strengths that allow it to establish a stable market position. Its opportunities are strong marketing and promotional tactics, strong brands which are strategically located, creative technological advances, different contract awards and strong ability and readiness to take risks. Its strengths are the ability to manufacture in large volumes and becoming a leading and strong market player.
On the other hand, Motorola faces threats from its competitors such as Japanese and Korean cell phone manufacturers. They sell related telecommunications devices and sell them at a lower-cost price. The other threat is barrier to trade in foreign markets as well as environmental, health and safety rules. High credit ratings deny Motorola the chance to borrow capital at an affordable rate.
As a result of these threats, Motorola has initiated competitive techniques such as WiMaX technology which has enabled it to attain a competitive advantage. There are various business level strategies that have been initiated in order to assign duties and guidelines for proprietors, managers and employees. There are also issues affecting business administration. These are human resource issues, structural issues, policy and procedural issues as well as risk management issues.
Bishop, J. (1991). Management Issues for the Growing Business: Emerging Business series. Web.
Hitt, M., Ireland, R., & Hoskisson, R. (2010). Competitiveness and Globalization, Concepts: Strategic Management Series.Concepts. Connecticut, U.S.: Cengage Learning.