1. How should Motorola appropriately react to the emerging local brands, head-to-head competing or cooperating in some fields?
Due to the large size of the Chinese cell phone market and its potential for long-term continual growth, competition for access to China’s consumer markets is intense. Competitive threats from Nokia, Siemens, Samsung, and local producers like TCL are a cause for concern within Motorola. However, eighty-four percent of Chinese consumers prefer foreign mobile phones to local models, with Motorola, Nokia and Ericsson being their favorite makers, according to a nation-wide survey conducted by the China Telecommunications Association and Eaglewings Public Relations. For this reason, Motorola’s biggest competition for cell phone supremacy would likely appear to come from foreign companies outside of China.
China’s aforementioned government structure plays an interesting role in the assumption that foreign companies will maintain dominance. As is traditional, the socialist government hierarchy prefers for a majority of any industry to have local majority control. The government, which controls the operations of the service provider sector and is a dominant player in distribution channels as well, has the means to make this goal a reality – quickly. For this reason, Motorola must not only utilize shorter-term strategies to find a way to grow market share, but long-term change strategies to find a way to compete with government powered locally owned firms.
The Ministry of Information Industry showed that Motorola had a leading market share of 28.7% in the mobile phone industry as of April 2002.
Competition Local Chinese Brands
➢ 3% Nokia
➢ 5% Siemens
➢ 47% Motorola
➢ 13 % Samsung
➢ 22% Others
➢ 10% Market Share of Chinese Cell Phone Market (as of 1st Quarter 2005)
The cellular phone industry in China is going through the growth stage of the industry life cycle. As... [continues]
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