Swot And Porters Five Force Model Of Motorola Management Essay

3049 words (12 pages) Essay in Management

5/12/16 Management Reference this

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As we begin this new century, entrepreneurs, managers and economists are faced with challenges of enormous proportions. The trend towards globalization, which is present in all significant business activities, has brought dramatic results in an increase in the intensity and diversity of the competition. Today, an employer must not only understand the local markets that are familiar, but also the subtleties of trading in foreign markets against competitors that are unfamiliar, especially with the economic openness that exists in some countries since years. The increasing trend towards globalization stems from the forces of technology, are reshaping industries and profoundly affecting the ways to compete. These two forces of globalization and technology requires a new form of leadership.

In this paper we mainly discuss how to carry out effective strategic management methodologies to show for it used by businesses today such as the SWOT and Porter´s Five Force Model. The company for analysis is MOTOROLA.


A strategy is a plan of action to be performed to achieve a given long-term goal. Strategy comes from the Greek Agein = army, Stratos = driver or guide.

Strategy is the set of decisions established in a particular context or background, coming from the organizational process and integrating mission, objectives and administrative action sequence in a completely independent.

Within the approach of the Strategy describes how the overall objectives will be achieved efficiently and correctly, that is what intervention actions will help the organization meet its mission and organizing plans for each strategy and budgets, as detailed as necessary.

Because the consequences of any decision to have a dramatic effect and comprehensive management through its planning function, you must find the best course of action in any way possible and be prepared to change, if experience and new information presented, suggest the need for change and actions set forth above.

Policies are rules or guidelines that express the limits within which action must occur, and those that guide the overall direction are called strategic policies.  

Elements of an effective strategy

Strategies in the military scenario, diplomatic or business must cover at least the following factors and structural elements:

Objectives clear and decisive

Keep the initiative

Concentration and attention


Coordinated and committed leadership




Motorola is a global communications company with an 80 years history of innovation and technology leadership. It is an engineering company by nature.

The most popular products include microprocessors Company (68000, 88000, PowerPC), cable modems, DSL modems, both wired and wireless, mobile phones and networking systems, mobile and wireless and Wimax and Wifi. Motorola is well known for their walkie talkies and also participated in the launch of the Iridium satellite constellation.

North America has a strong presence in the market for cable television, where it provides land from active elements (amplifiers, optical receivers and other) systems, headers and conditional access system to digital decoder’s houses.

The company has a high level of decentralization, which has allowed him to expand rapidly.

The main groups of business operation are:

• Automotive Group, Energy and Control

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• Government and Technology Group for Space

Motorola’s strategy for customer satisfaction is based on two beliefs:

• Respect the dignity of the individual

• Never compromise the integrity of the individual

“In the late 90’s Motorola was developing plans for expansion into the Chinese market, starting negotiations with the Chinese government to enter the electronics industry in the country with the aim of establishing a 100% subsidiary of the company. Since then Motorola has expanded further into the Chinese market through joint ventures and other alliances. This has been instrumental in supporting the Chinese government, which increased grants for business operations. Current projects include the construction of headquarters for Greater China in Beijing, a plant in Tianjin (where they make sub-micron plates) and research and design center in Hong Kong, strengthening its position in the Chinese market.” (Motorola website)

The keys of the growth of the company are:

• Respect for the dignity of the individual,

• The absolute integrity of the individual

• The total customer satisfaction.


Strategic analysis involves gathering information, analyzing and drawing conclusions. One definition says that “Strategy is the art and science of creating the future, management the present, and selectively forget the past.” This is easy to say, hard to do, like any competitive business.

Strategic diagnosis: situation analysis to identify problems and asymmetries competitive with competitors (lower market shares, lower growth rates than the development of the sector)

Exogenous analysis: analysis of the environment for threats and seize opportunities and define potential strategies

Business Analysis: analysis of the strengths and weaknesses to assess the feasibility of strategic alternatives and to better define.

A summary of endogenous / exogenous: SWOT analysis

Cultural assessment and inter-subjective agreement (between the various stakeholders) to choose the policy options

Implementation and business plan

The strategic analysis includes external appearance and internal aspects.

External aspects

Understand the business environment of the area in which the company is moving and the area which is facing competition:


• Demographic

• Economic

• Socio-Cultural


• Political and regulatory

• Technology

• Global

Internal Aspects

These are in the range of things being able to do to leverage and / or protect themselves from possible consequences that detected after external review.

Industry Analysis

Set the top 10 competitors in the industry, and characterized.

See the studies that are public or those qu provides the Company over its competitors in the industry.

Analysis of the Environment


Related Searches


New Competitors


Study the Value Chain Company

View Business Processes and Support Processes that make up the Value Chain of the Company, in its various stages:



Pre sale



Establish Sources of Competitive Advantage Company

Ability to Meet Customer




Source: emeraldinsight.com

With this information you can perform different techniques and models such as PEST Analysis, SWOT analysis and Porter’s five forces model, achieving an effective management strategy.


This is the acronym used to refer to an analytical tool that allows you to work with all the information you have about your business, useful to examine its Weaknesses, Opportunities, and Threats Strengths.

The SWOT analysis has many applications and can be used by all levels of the corporation and in different units of analysis such as product, market, product-market, product line, corporation, company, division, strategic business unit, etc. Many of the findings obtained as a result of SWOT analysis may prove very useful in market analysis and marketing strategies to design and qualify for inclusion in the business plan.

The SWOT analysis should focus only on the factors key to the success of your business. Should highlight the strengths and weaknesses internal differential when compared in an objective and realistic competition and the opportunities and threats to environmental cues.

SWOT Analysis Motorola

Below is a SWOT analysis that presents the environment that surrounds the company Motorola.


• The events of Tiananmen Square Motorola offered the opportunity to win the negotiations necessary to keep 100% of the subsidiary.

• Motorola has expanded, and continues through joint ventures and other alliances

• Motorola has enjoyed increases in their grants from the Chinese government for its operations.

• The traditional business of Motorola in the areas of wireless communications and semiconductors have provided much useful for the company.

• Motorola has had a major expansion of technology and wants to further expand through direct investment.

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• It is important to consider that the political system has big risks for instability and corruption.

• Human rights and copyrights are not respected, mainly on the government, although progress has been made about what reforms are politically.

• There is political instability, labor regulations turbulence

• Poor and inadequate energy supply for natural resources.

• High demand for infrastructure and well-developed.

• The demand for financing is high and local level, funding is limited and scarce.

• Labour productivity is low which makes antibodies to investors unfamiliar with this type of culture.


• Business opportunities has been Motorola, you have given to be in a position of leadership for all product lines, managing business partnerships and corporate level, allowing them diversification.

• First seen, we see that Motorola is in a range of markets, deverdificandose through a variety of product lines. Although Motorola historically created partnerships and joint ventures to invest abroad, came in different markets in China with 100% ownership of its subsidiaries, alliances and partnerships. To coordinate their investment projects in China, the company set up Motorola (China) Investment Ltd. As a holding company.

• Following the discovery and development strengths complementary, contributing technology to the growing knowledge of Motorola, making it a leader in the industry.

• Today, Motorola’s focus is in many markets through direct investment or joint capital partnerships

• The opportunities and future projections, are related to the technological advances of the market, Motorola has achieved a diversification through the development of core attitudes, reflecting a very clear and its objectives.

• Motorola is the worldwide leader in profitability and growth among the major companies that make telecommunications system, in addition to the world.


• A large number of corporations interested in investing in high-tech industry in the Chinese market.

• High investment in an unstable market, low labor productivity, low quality of life for its citizens, underdeveloped infrastructure and political instability which puts into question the growth potential of this market.

• Competitors of great strength and little experience of Motorola in the business of computers.

• Industry is very sensitive to technological change which forces actors to constantly innovate to stay competitive.


In the formulation of a strategy is a key step the definition and study of the main characteristics of sector in which it operates. The framework most commonly used for this type of analysis is the 5 forces model Porter’s competitive, which, based on several factors

Structural, describes the competitive system in which the company. The competitive structure of an industry depends then by the simultaneous interaction of five forces competitive they are:

• Rivalry among competitors

• Threat of new entrants

• Threat of substitute products income

• Bargaining power of suppliers

• Bargaining power of consumers

Source: gamingbusinessreview.com

1. Competitive Rivalry within an industry

In the analysis of the market a special attention must be paid on direct competitors, other firms in the same market in the same productive sector. According to this scheme there are typically five factors that determine the competitive position of each competitor:

The concentration

The structural diversity

The differentiation of

The production capacity

The objective of the analytical approach is to have a complete picture of how actors move in the real market, with reference to their current strategies available to comparison with the current strategy of our company.


Because of the barriers previously mentioned and the positioning of Motorola in China a risky product entering the market with strong investment and support from the company to the Chinese government reforms complemented by a long-term plan in technology and labor training Motorola work put China as the first investor in the growing China electronics market by providing a very good image in front of local consumers. These have seen a direct and aggressive competition in the short term.

Although high-tech industry is seeing the birth of China as a major player emerging as a consumer electronics world’s largest potential market, growing labor force and expanding economy, so many corporations in the world are already beginning to invest billions of dollars into the Chinese market. Of course, the advantage will always be those who came first and who supported the country in the most difficult opening moments such as Motorola’s belief in its development (the Pioneers).

2. Threat of New Entrants

The threat of potential entrants depends on the so-called “Barriers to entry.” The more the more they will be high will be difficult to enter the market, what will be the highest, the more secure will be the companies that have managed to enter. The traditional barriers to entry are:

The scale of the investment

The identity of the brand

Access to distribution channels

Economies of scale and learning

Government policies


This company has strong capital investment in the development, production, marketing and design in the development of electronic products.

Willingness of Chinese authorities to form joint ventures or Joint Venture which necessarily requires curtailing freedom to establish business alliances established with 100% foreign subsidiaries

Business considered risky because of the high investment and uncertain long-term returns, mainly due to China’s political system, which is not very stable and has elements of corruption

High costs of modernization and management due to inadequate supplies of energy, underdeveloped infrastructure, limited local funding, and low labor productivity

3. Threat of Substitute Products

This threat often imposes a ceiling on prices to the consumer / client, beyond which the customer find convenient to switch from one product to another. However the threat exists only if there is a high degree of similarity between products, and then only if the costs of conversion, in other words costs that the consumer will incur in moving from a product to another, are modest. The costs of switching from one product to another can be grouped into those due to unfamiliarity with the new product, need for adaptation cannot fully meet the needs reviews

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In the electronics market will always be present substitute products because these products meet common needs (talking on the phone, watching TV, listening to music, etc.) But is the investment in technology development and unbuckled what you will add more and better features to these devices, with a continually changing market expectations in more and better functionality and ergonomics. Motorola In this much with a vast experience and position

4. Bargaining power of suppliers

As with customers, supplier analysis aims to make out who they are and how they can affect the ability company’s competitive major suppliers. Suppliers can affect the entire supply cycle through the level of purchase prices, how payment (deferred or not), the quality and continuity of supplies, the level of technical assistance if necessary, the timely deliveries. The bargaining power of suppliers depends on the following elements:

% Of purchases from one supplier

Existence of substitutes

Switching costs supplier


Bargaining power of suppliers is quite low because Motorola is self sufficient for much of its supplies and conditions to suppliers according to their needs and demands, especially high quality and punctual delivery.

5. Bargaining power of consumers

In this type of analysis is referred to key customers company, those whose weight is able to contract encourage behaviors that reduce the profit margins (Including price reductions, quality improvements or service). The bargaining power of customers is influenced by following factors:

Size of purchases

Client concentration

Possibility of vertical integration


The bargaining power of buyers is given mainly those that are state corporations that give the Chinese government a large bargaining power as a result of concentrated power handling and the restrictions and conditions that may impose on his suppliers.


The strategic analysis is useful to compete in local and international, the issue of globalization is here to stay.

Prior to starting a business or new project, or to conduct marketing activities, it is important to make a strategic analysis prior to define the key issues that will shape the way forward for our business.

If managers do not face the strategic process as a dynamic, end up clinging to the methods of the past and that strategy no longer work. The competition is now very complex and sophisticated managers cannot afford to oversimplify or ignore the threats and potential opportunities with their companies.

When the companies are making strategic decisions requires a broader definition of the market and includes:

Opportunities to penetrate markets currently underserved

Changes in technology, price levels, under the conditions of the suppliers that can further extend the range of substitute products.

Potential competitors may come from adjacent markets

The creation and implementation of the strategy should support early points, significant flexibility and total respect for certain values and ideas that support the company. Strategic thinking invites us to analyze and reflect on the variables that influence organizations.

Given the many variables that any company is whether the market in which to develop their actions, it is necessary studies and analysis in order to reduce the uncertainty caused by many uncontrolled factors. Gathering information and then reflecting on it will get security in the future strategic decisions

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