Motorola: China Experience*
This news was unsettling but expected for Brian Lu, the General Manager of Motorola China's Personal Communication Sector. He had just received a report on the most updated market analysis. The report was on the intensifying of market competition in the Chinese cellular phone industry and stressed the emerging Chinese brands, among which TCL is the current leader. TCL is eating shares from all of the international brands including Motorola. He knew the Chinese government's policy of promoting local companies over their international counterparts, and this report confirmed a fear that he had had since he was promoted to his current position.
Brian understood that Motorola, as the number one foreign import/export company in China, was in a unique situation. Through the creation of complete locally sourced production and development, Motorola had established a strong infrastructure and developed powerful relationships in China. He now wondered, what was Motorola's best strategy to take advantage of their company's previous development? The company needed a plan of action and he decided to arrange a meeting to discuss how Motorola should react to these local brands and overall market competitive pressures.
Motorola was founded by Paul V. Galvin in Chicago, Illinois, in 1928. Under the leadership of Robert W. Galvin, Paul’s son, Motorola expanded into international markets in the 1960’s and began to switch its focus from the previously dominant consumer electronics market it had targeted. The company sold its color television receiver business, which then allowed it to concentrate energies on high-technology endeavors in commercial, industrial, and government fields. By the end to the 1980s, Motorola had become the leading worldwide supplier of cellular phones. Following a merger with General Instrument Corporation, Motorola became a leader in cable modems and set-top terminals. This allowed the company to become a leader in chip system level technology, harnessing the power of wireless, broadband, and the Internet. Motorola is the first company to offer wireless always-on access to the Internet through its use of General Packet Radio Service (GPRS) protocol technology. As an industry leader Motorola has continued to grow and in 2001 the company had worldwide sales of $US 30 billion.
Motorola entered China in 1987 when it opened its first office in Beijing under the name of Motorola China Electronics Ltd. In 1992, it set up the Motorola (China) Electronics Ltd. in Tianjin and began to produce beep-pager, mobile phone, two-way radio, wireless communications facilities, semiconductor, automobile electronics etc. The products not only are sold in China but also are distributed to world markets. Through its early production of beep-pager, mobile phones, and two-way radios, wireless communications, semiconductors, and automobile electronics, the company has become the biggest foreign-import export company in China (according the Chinese edition of Fortune), now Motorola is the biggest foreign electronic company, the biggest American company and the most successful foreign company in China. Motorola China utilizes local sourcing in a “win-win or two + three + three” development strategy to make China its local home and development base in Asia. Motorola's China operations consist of one wholly owned factory, one holding company, eight joint ventures, 18 R&D facilities and 26 sales offices. Motorola China employs a total of 13,000 people. The company’s integration and sales goals are being driven by R&D centers, management training, and joint venture partner assistance that have established the company’s ability to develop, enhance, and distribute products to local consumers. The overall goodwill created by Motorola’s efforts to produce completely in China have insured the companies continued development in China’s complex...
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