MANAGEMENT – CAPSTONE
Management - Capstone
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Introduction
Under the various religious systems that exist, various belief structures have evolved over a period of time. Such belief structures have crept into the latest – the communication technology has to offer – mobile telephony also. Customers tend to satisfy their needs on the basis of the intensity or requirement of the needs. Needs are general in nature but wants arise out of the desire to fulfill needs in a specific way. Wants that are conditioned by certain motives are known as a buying motive (Kotler, 1972). Hence, marketers must work to create these wants in the customers and target or position their product in such a way as to invoke desire in the customer to fulfill these wants (Andrew C. Gross et al, 1998). People acquire beliefs and attitudes through experience as well as learning. The beliefs and attitudes held by people, in turn, influence their buying behavior (ICMR - ICFAI Center for Management Research, 2004).
People insist on picking up connections based on the numbers. Some feel that if the sum of the digits of their telephone number adds to one number, it is bound to bring luck to them. Another such belief is a specific number sequence appearing in the telephone number or a single digit appearing numerous times in the sequence of a telephone number to an unemotional management approach. This might seek like a superstition but it can also be viewed as a specific belief system that is opening new avenues for revenue generation for the mobile operators. It is discovered that the customers are paying huge sums of money and are waiting up to six months to acquire a specific “lucky” numbers. The same is the case with China too. The beliefs in certain superstitions that consumers hold are becoming to have an effect on their consumption. For instance, in the Asian cultures, specifically China, people are very superstitious about numbers that are divided into lucky and unlucky numbers. This has affected the consumers to a point where the numbers play a vital role when it comes to making a decision on setting a date for a wedding, number plates for cars, and even mobile phone numbers. According to recent studies, the superstitious outlook on numbers has set a trend in the Chinese culture. This is offering a huge new market opportunity for the sales and marketing teams. It has been observed that sales personnel on the field are charging premium on the numbers almost on the spur of the moment. This is happening because there is no clear policy guideline or regulation that is overseeing this particular belief system. Hence, this opportunity is offering almost unlimited market opportunity.
This paper analyzes the mobile industry with reference to Motorola Mobility in terms of a variety of strategic aspects like Industry analysis, SWOT Analysis, Porter’s Five Forces Analysis, among others.
Motorola is an 85 year old company and was incorporated in the year 1928. Motorola actually was established as a battery eliminator company and was initially name as Galvin Manufacturing Corporation. Paul V. Galvin and Joseph Galvin are the founders of this company. The name Motorola typically means Motor (Car) + Ola (Sound) = Motorola (Car Radio!). The company today offers a variety of products that predominantly belong to the communication technology industry vertical. The products of the company include Mobile Phones, Tablets, Baby monitors, Software and applications, Modems, Accessories, and phones – both corded and cordless. Majority of the products that the company offers are based on wireless technology. The primary market that Motorola has been serving since its inception was the public safety market.
Mission, Vision, and Primary stakeholders. The mission of Motorola is – “a global communications leader powered by a passion to invent and an unceasing commitment to advance the way the world connects. Our communication solutions allow people, businesses and governments to be more connected and more mobile." The vision of the company is "Our history is rich. Our future is dynamic. We are Motorola and the spirit of invention is what drives us." The primary stakeholders of the company are its employees, customers, shareholders, and suppliers.
The company, which is proud of its rich legacy and history, even today carries this legacy forward in a number of ways and predominantly through innovation. It is claimed by the company that the driving force behind the company is its spirit of invention. The richness and legacy of the company’s history is because of invention.
Motorola offers a variety of solutions through its products both to the Corporate as well as the Government. Motorola specializes in technologies like converged voice and day and also wireless IP networks. Motorola also offers cross industry solutions. , the company is technologically strong though. Though the competitors of Motorola, Cricket Wireless and T-Mobile are financial in a better position in terms of finances, they do not enjoy the same in terms of technology.
Globalization has certainly many impacts on the company due to the fact that there are newer competitors like Apple etc., as these new companies were taking advantage of the newer technologies. However, this resulted in providing access to emerging markets like Asia. Numerous acquisition plans were aligned to globalization. Benchmarking analysis is an endeavor that helps an organization perform better financially as well as operationally.
Benchmarking analysis of Motorola revealed the company goes beyond direct competition in the manner that it minimizes complexity and disruption and also have become pioneers in emerging technologies. Motorola is one company that adapts very quickly to newer technologies. As far as the operations and processes of Motorola are concerned, it is evident that they are the pioneers in their respective field and they also retain the first mover advantage. The company also enjoys high levels of customer intimacy and also the customer satisfaction levels are extremely high. Learning, at Motorola, is an internalized and also an incessant process. Motorola, basically is a well-established brand and also renowned globally for its R&D. Motorola as a brand is an accepted name in all sectors of operations and solutions.
Porter’s Five Forces Analysis
Threat of new entrants – The cost of technology have sufficiently come down and availability of finance has sufficiently gone up and finally governments across the globe are opening up this particular sector thereby reducing and lowering entry barriers.
Bargaining power of buyers – As the number of players offering service in one particular geography goes up, the service differentiators are reducing thus actually commoditizing telecom services. Thus, the bargaining power of the consumer is increasing.
Bargaining power of suppliers – Despite the fact that the number of service providers is increasing, the backward supply chain players is not widening as rapidly, thereby narrowing down the choice of suppliers for the telecom service providers. Hence, the bargaining power of suppliers is also increasing.
The rivalry among existing players – There is an intense rivalry among the existing players and a constant one-upmanship amongst the existing players. So, there is actually very limited collective bargaining power they have towards governments.
The threat of substitute products – As on today, amongst the various communication technologies available, there is no technological solution close enough to form a threat for the mobile industry.
In addition to the various aspects discussed above, there is an immense opportunity available surely with respect to beliefs or superstitions.
While there are official systems for choosing preferred numbers, there seems to be no formal mechanisms in place to monitor unscrupulous sales personnel on field. Organizations must be very clear on what are these fancy numbers available or likely to be available soon and fix a transparent pricing mechanism and make it public. This will avoid exploitation of unsuspecting consumers. Some of the numbers in very high demand must be auctioned. Probably, taking this innovation further would be to establish active working relationships between mobile telephony “operators” and “numerologists” to advise consumers their “lucky” numbers thereby creating an additional stream of revenue for the operators.
SWOT Analysis
Strengths
- There is almost an infinite demand for the services provided in the mobile phone industry and Motorola, being part of this industry, certainly owns this strength
- Technology has reached a level of saturation and thereby rapid enhancements are not visible in the near future. The technology is stable and Motorola is constantly expanding in terms of technology.
- The major technological advantages of Motorola are that it offers the latest cell phone accessories, and have the first mover advantage with respect to CDM. It is just that the company needs to retain and build on this particular area of strength.
Weakness
- There is no more of an element of surprise in this industry to offer to the consumers.
- Countless players in the market, for instance, competition for Motorola comes from companies like AT& T, Cricket Wireless, among others.
- It is a government controlled and intensely monitored industry.
Opportunities
- Since the technology is stable new entrants just need sufficient capital to enter in to this business.
- Because the demand is almost infinite globally, there is still sufficient space for quite a few players to enter into this business.
Threats
- Established players could actually form a cartel, either formal or informal, and dictate the market scenario and market developments.
- New players that could enter the market may not have sufficient capital to boost appropriate market expansion to sustain all the players in the market.
Outlining a Strategy
Relationships are the main asset of the enterprise - not the machines that make the products, the products themselves, or even the intellectual capital inherent in people, patents or know-how, important though all these might be (Wolf, 1990; Wolf, 1990). Relationships in business become weak if they are not continuously refreshed. Organizations should always ensure to keep in touch with their customers even after the completion of the business deal. Relationships depend on mutuality. Value must be shared for both supplier and customer to benefit (R. Jonston, 1998; Jhonson, 2004; R. Jonston, 1998). One-sided attempts to profit at the customer's expense are of no use.
An excellent strategy adopted by Motorola universally is the strong accent that they place an emphasis on in maintaining excellent vendor relationships treating them like part of the organization and ensuring that they play key roles in even R&D efforts.
Various Levels and Types of Strategies
Organizationally, Motorola has always retained its first mover advantage, especially in the CDM technology. They have a strong emphasis and matching investments into R&D and have consistently maintained that. While this is true at global organization level, the local sales managers of Motorola in all the countries that they operate in directly globally adopt various field level strategies to ensure substantial market share is retained by the company. A case in example is the Indian market – the largest, the fastest expanding, the cheapest and possibly the most advanced in terms of technology where Motorola’s sales managers rub shoulders with established brands like Nokia, Samsung, among others while also facing competition from smaller unknown brands as well as the mobiles from Chinese markets.
Communication Plan
Mass production, distribution and marketing of goods and services will give way to mass customization of products and services, communication and various other aspects that appeal to the customer, predominantly in the case of intangibles. There must sufficient and novel value to be created for both supplier and customer to deserve interest by both the parties involved.
Two Corporate Mechanisms
Organizations, as they grow stronger and larger, become more complex in administration and management and hence require effective corporate mechanisms to be designed and implemented to ensure full compliance with the legal systems in all the countries of their presence. Motorola, a large telecom giant having its interest in many aspects of telephony have developed effective corporate mechanisms, starting at the top. The guidelines at the board level are indicative and dictate voluntary compliance and adherence keeping in line with the highest code of ethics that the company is expected to follow. For instance, any director or his immediate family member is not expected to receive gifts that are likely to influence the decision of the director in the business. Secondly, another important guideline is that the code of conduct itself is not comprehensive nor does it cover every aspect and situation and hence draws its attention to voluntary disclosure to the Chairman of the ethics committee as and when a situation as such arises. These are two exemplary corporate mechanisms that are in place in this behemoth organization.
Effectiveness of Leadership
Motorola has identified that its strong market position is primarily because of two factors namely, first mover advantage, and strong R&D. They make all efforts consistently in line with these two predominant characteristics of their business and ensure that they always lead and be ahead of the competition on these two dimensions.
Responsible Corporate Citizen
Motorola, true to its size and stature, have many a time voluntarily risen to the needs of the local communities that they operate in. It is very important and relevant to mention that they were the first company to have mobile recycling policy to reduce environmental contamination by the heavy metals that are used in the manufacture of hand phones by facilitating collection of used hand phone batteries and even hand phones and ensure scientific recycling mechanisms. This shows the inclination of the organization to not only take leadership position in terms of creating better and newer technologies but also being responsible corporate citizens.
Conclusion
In today’s global business environment, most of the companies are attempting to manage their business strategy in line with their operational delivery. The need of the hour in today’s business world is to develop strategies in such a way that they payback in terms of competitive advantage along with cost reduction.
A firm that offers the consumer the same value as the competitors, but at a lower cost is said to possess cost advantage, whereas a company that offers superior value to its customers when compared to its competitors, possesses differentiation advantage. These two advantages are called positional advantages as they represent the firm’s leading capability in the industry in either of these advantages.
Additionally, analyzing the customer segments’, the competitive environment, and internal performance should be a continuous process for an organization. A company that can develop an effective and efficient competitive intelligence system will always succeed in handling the competition to its advantage (Mullins, 1999). With this kind of scenario in the market, it is recommended that mobile phone operators consider the above mentioned recommendations and streamline the pricing mechanisms in order achieve competitive advantage.
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