MOTOROLA INDIA CASE STUDY

Beginning …..

1. 1980: Software component of Motorola growing more than

software expertise within the company.

2. State of the art of software development was poor.

3. Steering Committee decision: Build process-oriented entity

with high degree of management commitment and

adequate resources – Bangalore in India.

4. Blueprint of software process of SEI model had to be

developed owing to 6S.

5. Target to achieve CMM Level 3 and 5 in 2 and 4 years

respectively.

POSITIONING

1. Positioning itself as one of the advanced technology in

mobile technology.

2. Positioning itself as a leader in terms of software using 6S.

3. Positioned itself as number one in terms of overall quality by

implementing CMM Level5.

4. Positioning as a employee friendly company in times of

boom and recession.

5. Positioned itself as customer friendly by bridging the gap

between the CMM of customers and self.

6. Positioning in terms of variety.

7. Positioning in terms of value for money.

NEW MARKET ENTRANTS

SUBSTITUTES

SUPPLIERS CUSTOMERS

FIRM COMPETITOR

COMPETITIVE FORCES AND STRATEGY

FIRM:

Advantage of being the First Mover:

1. Build Motorola’s reputation with buyers.

2. Early commitment to new technologies & channels had a

cost advantage.

3. First time customers will remain loyal to the firm, with

repeated buying.

4. Moving first makes preemptive strike, making imitation hard

/ unlikely.

Disadvantage of being the First Mover:

1. If pioneering leadership is more costly than imitating

leadership.

2. When imitator’s products are primitive and follower wins

over disenchanted buyers from leader with better products.

3. When demand side of market is skeptical about the benefits

of the new technology introduced.

4. When due to market evolution late movers and fast

followers respond suddenly to the market changes with

better version products.

FIRM:

Some Question(s) for Motorola:

1. Does market take off depend on the development of the

products and services that is currently not available ?

2. Is new infrastructure required before buyer demand can

surge ?

3. Will buyers will have to bear switching costs ? Will they have

to learn new skills ?

4. Are there influential competitors in a position to delay /

derail the efforts ?

NEW MARKET ENTRANTS:

1. In the wireless infrastructure sector are Nokia and Cisco

Systems.

2. Competitive environment for communications equipment

requires:

3. Vendors offer attractive financing terms to their customers

as an important part of their sales packages. Motorola leads

the cable modem market with a 41% share, followed by

Toshiba Corp. at 18%, and Thomson Multimedia at 13%.

4. With intense pricing competition pricing pressure was as

strong as ever in 2002 in such markets as wireless handsets.

5. New competitors in the field such as Samsung and Siemens

have helped to speed up the pace of innovation by

pressuring established companies to protect their market

share.

SUBSTITUTES & COMPETITORS:

1. Long, exclusive partnership with Nextel Communications Inc. - the largest customer of Motorola.

2. The nation’s sixth-largest wireless carrier, with 13 million subscribers, Virginia-based Nextel purchases all of its phones and network infrastructure from Motorola, spending $14.86 billion since 1995. Nextel’s signature service, a walkie-talkie feature available with the push of a button, is based on technology available only from Motorola.

3. Nextel’s five-year contract with Motorola expired at the end of 2003, and the companies are operating under a one-year extension while they discuss the future of their relationship.

4. Meantime, Nextel is testing equipment from other manufacturers and lobbying federal regulators for rule changes that would reduce its reliance on Motorola’s proprietary technology, known as iDEN.

CUSTOMERS:

1. Difference between the CMM levels between customers and Motorola.

2. Customers followed informal way to resolve issues with Motorola due to their

internal deadlines.

3. Motorola re-organized to 3 SDCs (CF) => for projects, people, tech GM.

4. Changing demands of MIEL customers => in depth knowledge of markets.

5. Hiring of domain experts locally / from Motorola business.

6. Reusing of components : Transfer technology from one domain to another

helped to improve response times in other domains, for customer queries.

SUPPLIERS:

As Motorola was a technology based company that runs on innovation, the basic

input(s) were its Human Resources.

1.Mandatory training for its new recruits.

2.Coping with attrition:

i.Positions in terms of compensation / opportunities enriching domain knowledge.

ii.Expenses for video conferencing with MU / IIT.

iii.Awarding them for team / individual performance, ESOPs for key employees.

iv.Individual Dignity Entitlement: Ensure regular dialogue between manager /

emp.

Helped managers to develop people management skills (with tech skills).

PERFORMANCE OF MOTOROLA (US):

PERFORMANCE OF MOTOROLA (US):

ISSUES FOR MOTOROLA:

Internal Environment:

1.System Engineering group was not fully staffed.

2.No movement for senior technologists from MIEL Operations Groups due to

growing demand of software.

3.Business Development Group not able to contribute to the tech developments.

4.Traditional head Count model was used to get the “Value” of the product /

technology on no. of people employed for development it was not correct.

External Environment:

1.2000: Aligned business groups in 3 parts to take care of the Customer needs.

2.2001: Global slowdown affected sales / profit , and situation worsened further.

3.2001: Reclassified projects and cut back on outsourcing.

4.Issues in the management process and its solution.

5.New areas of growth and revenue in 1:2

LOOKING AHEAD …

1. Need to review the sustainability of MIEL’s business model for services.

2. Efforts to sell more products and technology than services – new road for

MIEL

3. MIEL’s road from support paradigm to enabler paradigm.

4. Should MIEL have direct access with the product sectors that would allow

access to their technology / market intelligence.

5. Is MIEL is partner / supplier to product sectors ? – dual approach from

product.

6. Issue in serving customers outside Motorola and compete with Indian

vendors.

To Summarize ….

1. Not to be dependent with the headcount business for growth and survival.

2. SI and IT consultancy initiatives must grow.