Motorolas Retake at the WinWin Strategy

Interestingly, Motorola’s journey has also been one of the frequent investments and divestitures, which largely remains unparalleled. It progressed the most under the leadership of Robert Galvin and by the 1980s, it became a world leader in the chip, modem, cable and wireless technology. It merged with General Instrument Corporation in 1990 and proposed the development of first HDTV technical standard. By 2001, the company had a worldwide sales of US 30bn and by 2007 it crossed the $100bn mark.
China has always been the cynosure of the eyes of global investors and Motorola Inc is no exception to this. It forayed into the Chinese territory in 1987 and set up its first office there in Beijing. Buoyed by the response and initial success, it set up Motorola China Electronics at Tianjin in 1992. Then, it mainly limited its production activities to products such as two-way radios, mobile phones, automobile electronics, semiconductor, cell phones and pagers. When Tango, was launched in 1995, it revolutionized the way the Chinese population communicated and for the next decade, Motorola Inc remained the highest seller of wireless communication handsets and other peripherals in China. Tango was a two-way personal pager, perhaps the first the world has ever known. In 2003, it boasted of a whopping 23.8 % of the Chinese handset market valued at $3.4bn.
The year 2002 is regarded as a milestone year in Motorola Inc’s China experience. It was then that the company adopted the famous win-win or two + three + three strategy to increase its stake in the Chinese market. The salient features of the 2 + 3 + 3 strategy are:
two reflects the two centres which the company wanted to establish in China, Global Production Base and a Research and Development base. the first three reflects the three key growth areas which Motorola wanted to champion in China. They are ‘digital trunking communication systems’, ‘semiconductors’ and ‘broadband’. the next ‘three’ signifies the three $10bn growth targets. These mainly consisted of achieving annual production of $10bn, overall investment in China of $10bn and total local sourcing to Chinese markets worth $10bn…all by the close of the year 2006.
Motorola Inc pursued its ‘win-win’ strategy aggressively, making required adjustments in its business and manufacturing units globally. Under no circumstances, could it allow to slacken its hold on the Chinese markets. It functioned in the sectors such as ‘Personal Communication Sector (PCS)’, ‘Semiconductor Products (SCP)’, ‘Broadband Communications Sector (BCS)’, ‘Global Telecom Solutions Sector (GTS) ’, ‘Commercial, Government and Industrial Solutions Sector (CGISS)’ and ‘Integrated Electronics System Sector (IESS)’. [*]