Business organizations, especially those dealing with particular industry must encounter situation where the success of their operations depend on both internal and external factors. The situation suggests that it is useful to carry out an analysis that takes into account not only the company’s internal factors but also external factors such as activities of the company’s competitors and current industry situation as well.
In many cases, the elaboration of internal and external environment of particular industry must be elaborated by using business analysis tools that specifically discuss internal and external factors the businesses. Some common business analysis tools include Porter’s Five Forces, SWOT analysis, BCG Matrix, PESTLE analysis, Value Chain analysis, and many others. Some of them deal with both internal and external factors while others only address one of them.
Concerning the analysis of internal and external factors in an organization, this paper will develop strategic development of Motorola Corporation by using analysis of Strategic Factors, which is based on IFAS and EFAS factors. The others are strategic alternatives and recommended strategy, implementation, and evaluation and control of the recommendation.
2. Strategic Analysis of Motorola
The strategic analysis on the Motorola Corporation includes all that encloses a business’s marketing purpose. Business environment in this term can be described as the whole thing that enfolds in the Motorola Corporation system. With the intention of being successful, and as the players in the environment cannot be managed by the Motorola Corporation, the Motorola Corporation be obliged to observe the environment for transforms and incessantly become accustomed to them. The Motorola Corporation’s environment can be separated into the micro environment and the macro environment (“Introduction to Hot Topics in Marketing”, 1999).
To e specific, below is the specific elaboration of internal and external factors analysis that Motorola Corporation Company experiences.
2.1. External Environment
The external factors describe issues that a company like Motorola Corporation has a little influence but affect the company severely. It includes universal tendencies and powers that possibly will not directly influence the links that Motorola Corporation has with their consumers, suppliers and mediators. Furthermore, Motorola Corporation separates the macro-environment into many sections, as the following:
2.1.1. Economical Factors
One major external factor is an telecommunication equipment manufacturers like Motorola Corporation is prone to the political and economical situation. According to a research and observation, it is found that telecommunication companies’ growth has a very close connection to economic growth and trade, which in turn prevent customers from buying new cellular phones etc.
2.1.2. Technological Factors
In telecommunication industry, the development of technology plays an important role since it drives gadgets manufacturer to develop the suitable products. Interestingly, there are gadgets that have capability to communicate and deliver voice, data, and video services; the gadgets are mobile phones or cellular phones that com alive in markets since 1980s. Currently, in some markets/countries, mobile business have commercialized the 3G (third generation) services that enable consumers to communicate face to face via small screens in their 3G-enabled mobile handsets or enable consumers to download movies and watch them in their handsets.
Another example of the benefits of mobile phones technology, especially in 3G era, is mobile banking. Basically, the objective of a mobile banking is to enable a user, who has a bank account, to perform regular banking transaction via his mobile phones.
Moreover, the recent development of mobile technologies is the convergence of mobile phones with navigation system as the gadgets are equipped with GPS (Global Positioning System) as manufactured by Nokia, Sony Ericsson, and Motorola etc.
2.1.3. Consolidation among Cellular Phone Manufacturer
In any industries, competitive advantage plays a significant role in winning a competition. This is because it represents not only the greater benefits in terms of products but also in other Ps of marketing mix (place, promotion, and price).
The possession of particular competitive advantages is increasingly important since nowadays, consumers use emotional than rational factors when deciding which products or services they want to use. Combined technology does not have to provide competitive advantage for a product if the combined company cannot employ it to their fully extent.
In handsets industry, we witness new trends of consolidation between handsets manufacturers in order to gain competitive advantages such as the merger between Sony and Ericsson. In the merger, the new company provides fierce challenge for Motorola since the combined force threat Motorola position in handsets industry.
In mobile phones industry, Nokia, a Finland mobile handset manufacturer, is the leader in mobile handset industry although the company also develops mobile network technology. Nokia and Motorola, an American company, occupy 30.8% and 14.6 % of mobile phones market share worldwide, respectively.
In that time, Nokia also leads Asia Pacific market (excluding Japan) by selling approximately 21 million cellular phone units in the region (30.6% of regional sales), while the total handsets sold in that region was 70 million. Ericsson was controlling only 7.4 % of the market and Sony was not even on the top five prior to the merger (Foo, 2001).
2.1.4. Intense Competition in Market
Theoretically, the number of new entrants increase as the barrier to entry reduces in a market. This is because the situation encourages more companies to enter the market, thus increase the degree of competition or rivalry, and drive the profitability to fall. One of common barriers to enter a new market is brand loyalty or in terms of multinational business, the main barrier could be the nationalism.
According to Kotler (2000), brand is a name, sign, symbol, design, gesture or combination of all, which is intended to identify product or services from a seller or a group of sellers to differentiate it form competitor’s product.
The barriers to entry also occur in mobile phones industry since Nokia, the market leader, has already had strong brand equity. The Nokia jargon, ‘connecting people’, is really immersed in the consumers’ mind since their products are easy to use. The situation further coins the ideas that Nokia’s products are the best in the market.
Under such circumstances, Motorola faces great challenges in order to reduce the influence of Nokia that continue ruling the trends in mobile phone industry. Fortunately, Motorola can cope with the challenges and at some degree Motorola performs better. In high end market, Nokia introduce communicator series like Nokia 9300 and Nokia 9500; Sony Ericsson also introduces P series like P990 series that have been equipped with 3G band (Figure 1).
Figure 1 (a) Sony Ericsson P990, (b) Nokia 9500, (c) O2
Although Motorola plays in all segments of mobile phone industry from low to high end markets, some analysts still question the capability to compete against Nokia and Sony Ericsson (MobileInfo, 2001)
3. Alternatives and Recommendations
A main purpose of the strategy is to sharpen the company’s abilities to consider strategically and to analyze issues from the viewpoint of the whole activities. It is important to build a competitive advantage. To develop its competence, Motorola should consider strategically about its business position and how to achieve a competitive advantage.
Motorola needs to develop the abilities in performing strategic analysis in different industries and competitive circumstances, and provide a better comprehension of the competitive challenges of an international market. Motorola must improve theoretical skills to be integrated with the experience and knowledge collected in previous period. They have to upgrade comprehension of different strategic management conceptions and theories and know how to put the concepts into operation (“About Motorola”, 2007).
To advance its company, Motorola should obtain a set of tools and theories to deal with strategic change in a managerial situation. Develop analytical skills and personal skills in planning, evaluating, and proposing management actions are important to recognize why strategic change programs are unsuccessful in some particular situation repeatedly. In addition, Motorola should identify the significance of developing skills at choosing successful methods .
All the significant factors inside and outside of the Motorola Company have some bearing on the decisions of the company as it creates about its management s. Some factors have substantial impact and others have unimportant impact. Motorola should remain to preserve their excellent reputation and comply with their quality maintenances and safety conditions. They need to build continuing relationships with their customers by showing sincerity and integrity. Motorola have to ensure that their marketing and promotion strategy will be precise and honest (“About Motorola”, 2007).
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