Motorola in China From ‘Intended’ to ‘Emergent’ Strategies

1. Motorola in China
From ‘Intended’ to ‘Emergent’
Strategies
Submitted: Asams VK
Ashish Mehta
Reeshma Naligala

2. Background
• Founded in 1928
• Initially produced car radios and TV receivers.
• Invented cellular technologies and became a market leader by
1980.
• Dominated the Telecom industry.

3. Motorola in China
• Entered the Chinese market with Western Strategies
• Was successful initially, until competition grew in 1995
• “Nihao Moto” – January 2003
• Invested $3.4 billion
• New product-line
• Mobile phone maintenance service express
• Agreement with China Mobile to research on 3G

4. Emerging with China Unicom
• Phase – 2: $10 million
• Phase – 3: $80 million
• Topmost supplier to China Unicom’s CDMA
• 6 more contracts worth $240 million
• Java technology based platforms
• MOU with Chinese government

5. Downfall
• SARS
• Growing inventories
• Rise of domestic and international competition
• 2+3+3 Strategy
• Lost the top position to Nokia in 2004

7. Primary operation in china:
Manufacturing
 R&D
Target set for yearend 2006: 10$
Billion worth:
 Production in China
Component purchase
Direct or indirect investment
Expansion in China
Semi conductor
production
Broadband Equipment
Digital trunking networks

8. Re-rise
• Divided the market into 4 regional segments
• Replaced distributors by retail outlets
• ACOE
• Moved design unit to India and China
• Broadband services to 3 cable networks
• 4 million customers in 3 cities
• Launch of V3

9. • Revamped the organisational setup
• Focus on profits rather than market share
• More low-end handsets
• Adding technologies of Camera, Mp3, Videos, E-mail etc.
• Expanded into smaller cities
• 3G RnD centre in Beijing

10. MING
 Launched in 2006
Attracted more than 3 Million debut
Step up to retailing, stores in 3 location with more
than 9 stores
Stores offered
1. Free download of ringtone
2. Wallpapers
3. In-store training to customers
4. Personalization facility through ‘Phone tattoos’
V.P Marketing retail stated “If they touch the device, they are five times more likely to buy it’

11. Targeted at affluent early adopters

12. 0%
5%
10%
15%
20%
25%
2005 2006
Market Share They attacked the young consumers with high
power functionality
 Donated more than $ 5Million towards children's
education
 In 2007 company received contracts from china
Mobile worth of $394 Million for expand and
update GSM standards
They generated 60% revenue in the first half of
the year
In second quarter they recorded a loss of $21 Million

13. To regain the market they came with Motorola RAZR
Again it become a big failure
 All models of Moto RAZR failed in China

14. Reason for the failure
 Fashion related product
Life span of mobile was 6 to 10 month
Improper forecasting
Lack of first mover advantage
Lack of strategic capabilities

15. Primary operation in china:
Manufacturing
 R&D
Target set for yearend 2006:
10$ Billion worth:
 Production in China
Component purchase
Direct or indirect investment
Expansion in China
Semi conductor
production
Broadband Equipment
Digital trunking networks

16. Thank You.