Motorola Synopses
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Motorola, Inc. is a Fortune 100 global communications leader that provides seamless mobility products and solutions across broadband, embedded systems and wireless networks. In the industry environment, Worldwide Interoperability for Microwave Access (WiMax) is very important to Motorola. WiMax is an Institute of Electrical and Electronics Engineers (IEEE) standard designated 802.16e-2005 (mobile wire-less). With WiMax cell phones will no longer be tied to cellular networks.
WiMax has the potential to replace a number of existing telecommunications infrastructures (WiMax, 2007). WiMax has the potential of replacing cellular networks, copper wire networks used by telephone companies, and the coaxial cable infrastructure use by cable TV while offering Internet Service Provider (ISP) services.
Broadband wireless access (BWA) and in particular WiMax is being implemented worldwide. The relevance of WiMax to Motorola is that the company’s leading competitors, mainly Cisco Systems and Nokia in the communications equipment business is working to provide WiMax technology to a mobile society. Mobile phones with WiMax technology is slated to start showing up for consumers to purchase in 2008. The introduction of WiMax for cellular phones could also potentially impact Motorola’s performance in the cell phone business. It is also a sound strategy for Motorola to be aware of what their competitors are doing. This trend is also relevant to Motorola because WiMax will reduce the need for wireline equipment, especially in homes. Wireline equipment is primarily used for Internet access and e-mail.
Motorola has made some progress with WiMax technology. Motorola has had many first in the industry and will adapt seamlessly to the trends seen with WiMax. Motorola is a provider of the WiMax chips and can make alliances with other providers to integrate WiMax into more cell phones offered by companies like Sprint/Nextel.
According to the Datamonitor, “successful players will continue to invest in research, and maintain a diverse technology portfolio, in order to maintain revenues in the face of changing end-user requirements (Datamonitor, 2007).
In the industry environment, one of the recognized forces is the threat of new entry. Although there are many rivals in the industry environment, they are not the only ones that pose a threat to firms in the industry. The possibility that new firms may enter into the industry has a huge effect on competition. The entry and exit of new firms are shaped by characteristics that help define whether or not this threat is strong. “In theory, any firm should be able to enter and exit a market, and if free entry and exit exists, then profits always should be nominal. However, industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market” (Porter, 2006).
Threat of new entry is a competitive force that poses a challenge to Motorola. Although the company has a good reputation and good stock market value; there are other major competitors out there and new entrants. There is however barriers to entry put in place in this industry, that prevents new entrants from coming in. The economies of scale barrier “deter entry by forcing the aspirant either to come in on a large scale or to accept a cost disadvantage” (Pearce & Robinson, 2004). Companies in this industry are expected to come in a large scale or accept a cost disadvantage.
Costs to entry for WiMax are low relative to cellular technology. The costs to entry are expected to drop rapidly once there are more certified equipment manufacturers. If ISPs, communities and municipalities were to implement networks the costs to entry associated with infrastructure could be overcome by new entrants. Over time, as the WiMax technology matures, the barriers posed by operations and support will be removed due to improvements in network monitoring and customer service. The real barrier to entry will be caused by large well capitalized companies form a large presence of form alliances.
Motorola will have continued understanding of the external environment in an effort to strategically focus the company’s internal processes to take advantage of the industry structure and to create competitive advantage. Motorola will continue its use of roadmaps to drive innovation and growth. “The internal view of strategy can be represented by use of the balanced scorecard strategy map (Norton and Kaplan, 2000).
For most industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.
number of competitors
rate of industry growth
intermittent