This case study analyzes the history and strategic position of Motorola Inc. It discusses how Motorola began as Galvin Manufacturing Company in 1928 and changed its name to Motorola in 1947. Motorola became a leader in radio communications technology during World War II and later expanded into televisions and semiconductors. By the 1980s, Motorola dominated the US cellular phone and pager markets but lost ground to Japanese competitors. In response, Motorola tried to learn from the Japanese and compete with them, which helped revenues triple from 1990-1999. However, weaknesses emerged such as a lag in digital phone technology that hurt Motorola's position. The company attempted turnarounds through innovations like Mobile Extreme Convergence architecture.

1. Case Study, History, and Strategic Analysis of Motorola Inc
The company that I chose to complete my Strategic Analysis on is Motorola Inc. Many of us are
familiar with Motorola products due to the advent of the cellular phones. Regardless of the carrier of
the service, be it Verizon, AT&T, Sprint, many of these companies use a cellular device created by
Motorola. However, the company does much more than just producing cell phones. One area that
Motorola is trying to focus its current strategic actions in the area of Semiconductors.
History/Financial Portfolio
Motorola Inc. started with the founding of the company by Paul V. Galvin. Paul and his brother Joseph
E. Galvin purchased a battery eliminator business from Stewart Storage Battery Company which made
battery eliminators used in operating radios using household current in 1928 and created 'Galvin
Manufacturing Company'. The company started with five employees and grew gradually. It expanded
its business into automobile industry, by introducing auto radios sold to independent auto distributors
and automotive dealers. With Galvin Manufacturing Company entering into the auto industry, Paul V.
Galvin coined the word 'MOTOROLA' linking motion and radio.
Daniel E. Noble joined Galvin Manufacturing Company in 1940 as Director of Research. As a pioneer in
FM radio communications and semiconductor technology he originated the first hand-held two-way
radio for the Connecticut State Police. He brought his designs to Galvin Manufacturing Company and
developed a two-way radio system for the U. S. Army Signal Corps. Because of this, Galvin
Manufacturing Company played a significant role in World War II w ith radio and communications
equipment like the "walkie-talkie" and "handie-talkie".
The first public stock offering occurred in 1947. The company's name was officially changed to
Motorola Inc. In 1948 Motorola entered into the television business and with more than 100,000 of
these TV sets sold in one year, Motorola catapulted into fourth place in the television industry. During
the late 1940's Motorola began to supply auto radios to Ford and Chrysler plants for installation in
their automobiles.
Motorola introduced dispatcher radios by taking advantage of expanded allocation of radio frequencies
and with aggressive marketing and a reputation for reliable equipment earned a leading role in the
industry. Daniel E. Noble launched a Motorola Research and Development facility in Phoenix, Arizona.
He anticipated the enormous potential of the newly invented transistor and helped Motorola became
one of the world's largest manufacturers of semiconductors.

2. By 1950 the net sales of Motorola was $177,104,669 and the number of employees had grown to
9,325. Unfortunately, in 1952, Motorola's first color television was short of success due to te chnical
problems, a high price tag, and the failure of broadcasters to offer an adequate amount of color
programming. The product was pulled from the market in 1956. Among some of the innovations for
which Motorola is famous are a new radio communications product, a small radio receiver called a
"pager" that delivered a radio message selectively to a particular individual carrying the device and
the "Motrac" with such low power consumption that radios in automobiles were able to operate
without running the car engine Motorola was the first company to use epitaxial method to mass -
produce semiconductors. It used low cost techniques in making silicon rectifiers, used in automobile
alternators. In place of auto generators, the Automotive Products Division began producing
alternators, inaugurating the company's role as a supplier of "under the hood" electronics. Motorola, in
a joint venture with National Video, developed the first rectangular picture tube for color TVs and with
Ford and RCAs designed and made 8-track tape players for the auto industry. Domestic and foreign
auto manufacturers soon became customers for tape players and 8-track players became the
Automotive Product Division's second major product line.
As the cost of semiconductors continued to decline, their application in consumer electronic products
increased and created a new major market. Motorola responded with a full line of low cost plastic
encapsulated transistors. The design of these devices was eventually adopted by the entire
semiconductor industry. In 1967 the company expanded its international presence by adding six
plants around the world. Lunar roving vehicles used Motorola's FM radio receiver to provide a voice
link spanning the 240,000 miles between the Earth and the moon. It was 100 times more sensitive
than any car radio. Motorola entered into the manufacture of components for battery powered quartz
and between 1971 and 1979, the company gained critical experience in producing and supplying
integrated circuits, quartz crystals, and miniature motors to manufacturers like Timex, Benrus and
Bulova.
The company introduced its first 6800 microprocessor (see figure 3), which used only 5 volts of power
for the communication and business machines sector in 1975. In 1979 Motorola introduced its first 16-
bit microprocessor, Figure 3 the 68000. Capable of completing two million calculations per second, it
used to run and write programs for scientific, data processing, and business applications.
In the 1980's Motorola controlled the emerging U. S. market for cellular phones and pagers but they
were not aggressively focused on competing with the Japanese, even after Japanese firms began to
flood the U. S. market with low-priced, high-quality telephones and pagers. Motorola, finding itself,
pushed into the background heard the call to battle. Managers at first were not sure how they should
respond, so they originally decided to abandon some business areas and even considered merging
their own semiconductor operations with those of Toshiba's. After much searching they decided to

3. fight back and regain the firm's lost market position. This fight involved two main strategies: Learn
from the Japanese, and then compete with them.
This strategy seemed to work as Motorola's revenues tripled from approximately $10 billion in 1990 to
almost $31 billion in 1999. However, more problems started to arise. The 1996-99 bottom-line
performance did not match its rapid growth and profitability during the 1990-96 periods. One of the
key issues facing Motorola was their weak financial position. Motorola had inopportunely chased the
dot-com and telecom boom in 2000 and built up a manufacturing capacity and a global cost structure
for a $45 billion revenue Martin Cooper demonstrates the first company going into 2001, but had
achieved only $37.6 portable cellular telephone. billion in revenue in 2000. Then the reality of 2002
hit: *A telecom equipment downturn affecting both wire-line and wireless.
*The worst semiconductor decline in history.
*Dot-com busts.
*A U. S. recession.
*Appalling terrorist acts.
*Delays in the deployment of next-generation (3G) wireless technology.
*Large customer default *Sales of only $30 billion.
*Major and painful corporation-wide resizing.
*Financial charges.
These are some of the reasons for the weak financial position mentioned in the 2002 annual report.
However, if you analyze these reasons it would seem that the company was trying to take the blame
away from Motorola's management and place it on external factors. Some reasons alternate reasons
might include: *Rapid technology gains and product innovations by Motorola's rivals in wireless
communications.
*Outdated management style.
*Lagging digital cellular phone technology.
*Motorola's focus on a wireless-equipment technology that only covered half of the U. S. market
potential.

4. *Poor quality and performance in some of its product areas (loss of customers).
In an attempt to regain its market position, Motorola began innovations with the development of
multi-media mobile devices using Mobile Extreme Convergence (MXC) architecture. With this
innovative architectural change many of the current design limitations of affordable, advanced, full-
featured mobile devices were eliminated.
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 Lucent Technologies
In 1996, AT&T decided to split into three different companies. These New companies were the
new AT&T, NCR, and Lucent Technologies. Lucent Technologies is one of the leading
designers, developers, and manufacturers of Telecommunications systems, software, and
products.1 They are
 Lucent technologies business profile
These new Companies were the new AT&T, NCR, and Lucent Technologies. Lucent
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telecommunications Systems, software, and products.1 They are beginning to emerge as a
Fortune 40 Company.
 Apple SWOT Analysis
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