In a prominent level of integration worldwide economy today, people are more concerned about the phenomenon of intermediary corporations and multinational companies renounce the traditional research and development form in the host country where they have set up research and development centers. In this report I will discuss about Motorola’s reasons to enter China and commit itself as a local company. Moreover, I will talk about the localization strategies in china and its market position. Apart from that I will illustrate the PEST and SWOT analysis of Motorola’s localization strategy in China. Furthermore, I will discuss the characteristics of Motorola as the big emerging market in China.
Table of content
Table of content3
Reasons for Motorola to enter China6
Strategies adopted by Motorola to enter China.8
Operation strategy of Motorola9
Framework analysis of Motorola operations in China10
India and China Global Trends12
PEST – Political, Economical, Socio-cultural, Technological SWOT- Strengths, Weaknesses, Opportunities, Threats
SEZ - Special Economic Zone
CAMP - China Accelerated Management Program
R&D - Research and Development
IDEN – Integrated Digital Enhanced Network
SARS – Severe Acute Respiratory Syndrome
MNC – Multi National Companies
ITO - International Trade Organization
BPO – Business Process Outsourcing
BRIC – Brazil, Russia, India, China
GDP – Gross Domestic Product
USD – United States Dollar
SMIC – Semiconductor Manufacturing Internal Corp
In 1987 Motorola established a delegate office in Beijing. It was dealing with exportation of telecommunications gear and semiconductor to China. Due to the increase of competitions from other companies, Motorola decided to move some of its industrialized activities to China. In 1992, Motorola China Ltd was established and opened an industry in Tianjin. Motorola was the leading worldwide market in manufacturing advanced electronic system, communications components and semiconductors. The company mainly dealt with cellular, personal communication, defense and space electronics’ and computers and other many more electronics products. According to Wen-Cheng et al. (2010) due to its expansion on business in six continents, Motorola employed more than 142,000 people and maintain production amenities globally. Motorola had a elementary objective of priotizing customers’ satisfaction through quality, speed, technology and team work. Motorola succeeded to fulfill its objective in China because it understood the market and the culture of the people. It also maintained uncompromising reliability and focusing on an idea of a world in which everyone can attain full potential. However, in 2000’s Motorola started to experience a huge competition from the Chinese mobile handset companies. Motorola’s market started to fall due to the increasing competition in the market. This led Motorola to raise its sales and market shares by introducing new strategy in 2002 in order to maintain its market. The strategy did not help as the matter of fact Motorola went on losing its market in China (Gaur and Cateora 2006).
Reasons for Motorola to enter China
The growth of Motorola in China went proportional with China’s economic development and China’s involvement in the world economy. Establishment of Special Economic Zone (SEZ) in 1979 which stimulated investors mainly those which engaged in light manufacturing industries. The foreign companies that decided to confine at SEZ were privileged to special taxes treatment and particular services like infrastructure (Mack, L 2012).
Chinese market size, China was the very momentous market for the company. Motorola thought that it was important to establish its manufacturing base and center for its company research in China...