Motorola Analysis

2 STRATEGIC ANALYSIS

2.1 SWOT ANALYIS

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strength (S) or weaknesses (W), and that external to the firm can be classified as opportunity (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's resources and a capability to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.

2.1.1 Strengths

Right now, the Motorola Company sees everyone as a potential customer. Going wireless has not only become the latest and greatest fad, but very critical for business. Within the cellular market exists two broad segments, the consumer segments and business segments. Both of these groups have different expectations of the kind of service and value they expect from their cellular providers.

Consumer Segment

The first segment, the consumer segment, consists of what I will call the "recreational" users. The consumer segment counts for less than 30 percent of the total cellular market. These customers do not depend on their cell phones for business purposes. They are typically teenagers, college students, car phones, and members of families who are often on the go and need to be able to get in touch with family and friends on occasion. Their air time usage is usually lower than the members of the business segment.

The typical user is focused on certain aspects of their cellular providers: "How much does it cost? Do I really need these great new wonderful things that technology is offering? How often must I replace or recharge the batteries? Can I use this only in my town?" Most technology-related studies indicate that consumers have relatively little interest in anything other than if the product works when they want it to work. As the industry matures effective customer segmentation and development of customized products will be critical success factors.

Motorola has caught the eye of the younger consumer segment with a product called "TalkAbout", which comes in an icy blue to attract younger consumers who might be new to cellular services but yield to a sporty image. This product combines both paging and cellular phone services at one low price.

Business Segment

The second major segment is the business segment. Today, small businesses and corporate segments account for about 70 percent of world cellular market. These users of cellular services are more concerned with the features the phone has to offer.

Motorola's unique phone/two-way radio combo is a key competitive tool in the business. According to Motorola Inc "We feel we're the only player that really offers something new and different.

This product has appeal to many different types of companies. I noticed that "KTM" (Malaysia) also uses Motorola radios. I asked one of the personal there that "why do you use Motorola and not other brand of radios". His reply was that this radio product has a better range, which means clear signals and if signals are clear that means there's very less interference with other communication devices.

Many construction companies have also switched to this device simply because it combines cellular and radio communications into one product. At HeveaBoard Berhad, a 2nd largest particle board manufacturer based in Gemas, Malaysia, there they too use Motorola radios for communication and believe it or not I used them there too and they work wonderfully.

Good advertising has also helped Motorola propel sales of its handsets. They recently won the most unforgettable ad of 1999: Motorola, "Blackbird", which helped gain national attention to its yellow-and-black i700 iDEN phone and its target audience of business people.

So currently according to my analysis Motorola mobiles and their ICs are their strengths but their other home related products still have a long way to go.

2.1.2 Weakness

Motorola is currently recognized for its new inventions. But the thing is new things cost more. For example just remember when a 2 8 6 computer was made it was so expensive that I couldn't afford it when it first came into market. Motorola has high price ranges which makes their mobile phone users think twice. It's a good thing that you have quality but hey not every one can afford it.

The company faces fierce competition from Nokia, which has managed to build ergonomically stylish handsets that consumers crave. New competitors from Japan, with know how in small consumer electronics products and software, could enter the U.S. race for handsets, and new wireless data devices threaten to take away market share as well.

2.1.3 Opportunities

Another new market that is emerging is the wireless Internet market. Motorola is putting Wireless Application Protocol browsers in all its major product lines. over the course of next year, the browsers enabling Internet access will be in virtually every new phone, from the low end to the high end.

This market is in rapid demand from both the consumer and business markets. Wireless Internet will be the next big thing for communication technology and the customers will likely purchase handsets that have this capability.

Motorola's best opportunities lie in the growth of wireless Internet handsets. If they can produce an easy to use phone, with an optimal sized viewing screen, they have a chance at making big profits. I feel this is where Motorola should focus most of its attention. They have already teamed up with Cisco Systems to help with the more advanced development of this product.

A possible alliance with a major email provider, such as Yahoo or Gmail may also be called for. Motorola would then be able to offer a service for consumers to have the ability to check their existing e-mail accounts from their handsets. The alliance would prevent Motorola from having to develop its own email servers and give them a more reputable E-business to be associated with.

2.1.4 Threats

Motorola being a huge company could face a lot of problems