The alliance between U.S.-based Motorola and Proview was reportedly earmarked to gain market share within the LCD displays and televisions sector. Yau (2012) has disclosed that due to the forged alliance, Proview was able to win “the licence to produce and sell liquid crystal display (LCD) and cathode ray tube (CRT) monitors and LCD and plasma television sets under the Motorola brand” (par. 4). The current volume of production for Proview was revealed to have reached as much as 4.5 million LCD monitors, as well as about 10 million CRT monitor per annum.
How has each partner benefited from the alliance?
The alliance benefits each partner through the increase in the level of production and sales of the products which could significantly mean higher profits and greater market share in the identified sector. As disclosed, the objective of the alliance between Motorola and Proview was to break alleged dominance of competitors from Japan and South Korea. These competitors were noted to produce products with the following brands: Philips, LG Electronics, Samsung, and TPV Technology . Therefore, for Motorola, the alliance would provide opportunities to expand their market share, not only in mainland China; but as reported, the alliance aimed to capture the U.S. market and even Europe through expanding the product line to include optical digital drivers, DVD recorders and players, as well as car audio-video products .
For Proview, the alliance would enable them to increase the production, sales, and profits with the assistance of carrying the products through the Motorola brand. Thus, their expertise would be known and recognized worldwide.
What total quality challenges did they face?
The quality challenges that the alliance face include having to directly respond to the strategies posed by the four top competitors in the industry: Philips, LG Electronics, Samsung, and TPV Technology. According to Yau (2012), “Samsung had a 23 per cent market share, followed by Philips's with 16 per cent, while TPV had 15 per cent and LG 12 per cent” (par. 7). Thus, their entry in the industry would be considered a threat to these manufacturers which would be expected to intensify their efforts and entrenchment in their respective shares of the market.
Likewise, there is much challenge in determining the appropriate pricing strategy that could effectively lure consumers into purchasing the Motorola brand. Also revealed by Yau (2012), “the price of a 30-inch LCD television has fallen by 50 per cent to about $25,000 this year. The cheaper cost is expected to boost global demand for LCD televisions tenfold this year alone” (par. 12). Accordingly, the potentials for reported growth in demand in the global market would be a challenging factor to produce high quality products, in conjunction with an enticing price to capture the targeted market share and enable them to break dominance of the Japanese and South Korean manufacturers for the identified products.
References
East West Alliances. (n.d.). Some Examples of Relevant Strategic Alliances. Retrieved from ew-alliances.com: http://www.ew-alliances.com/RecentAlliances.pdf
Simoons, P. (2012, May 17). Expanding on the definition of a strategic alliance. Retrieved from simoons.com: http://www.simoons.com/2012/05/expanding-on-the-definition-of-a-strategic-alliance/
Yau, W. (2012, August 4). Proview, Motorola form alliance. Retrieved from South China Morning Post: http://www.scmp.com/article/431102/proview-motorola-form-alliance
