Essay on Motorola china strategy
Key to Motorola's success in China: local management
By: Steve Hendershot August 22, 2011
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Motorola smartphones have nearly twice the marketshare (7.5%) in China as they do worldwide (4%), according to an estimate from research firm Gartner Inc. Indeed, when Motorola Mobility Holdings Inc. reported its second-quarter results, it acknowledged that sales in China and Latin America are driving the company's growth. (Motorola split into two companies earlier this year; Libertyville-based Motorola Mobility is the consumer electronics maker. And, earlier this month, Google Inc. announced that it intends to purchase Motorola Mobility for $12.5 billion.) Motorola isn't new to China; the company has sold products there since 1987. Motorola Mobility Chief Marketing Officer Bill Ogle isn't surprised that many Western companies struggle in China, because the country presents unique challenges. But he tells Crain's about the strategy that Motorola has successfully employed there, and the lessons that other Chicago companies can learn from its experience.
CRAIN'S: How different is China compared to other countries or markets where Western companies attempt to expand? How does Motorola address the cultural and market differences?
Bill Ogle of Motorola Bill Ogle
BILL OGLE: It's actually very different. In the U.S., for example, there are main mobile phone carriers (such as Verizon) and main retailers like Best Buy. In China, there are consumer electronics booths and halls all over the country.
One of the main things we've learned over the years is to have China-based management running our China business. We find that because of their understanding of the local culture, the way things get done and the needs of the customers there, it always works better when you have a management team of people who are Chinese. So many companies tend to believe that (their global strategy will work in China) so they just move their executives there and say, "Run China!" That
By: Steve Hendershot August 22, 2011
3
1
2
0
Motorola smartphones have nearly twice the marketshare (7.5%) in China as they do worldwide (4%), according to an estimate from research firm Gartner Inc. Indeed, when Motorola Mobility Holdings Inc. reported its second-quarter results, it acknowledged that sales in China and Latin America are driving the company's growth. (Motorola split into two companies earlier this year; Libertyville-based Motorola Mobility is the consumer electronics maker. And, earlier this month, Google Inc. announced that it intends to purchase Motorola Mobility for $12.5 billion.) Motorola isn't new to China; the company has sold products there since 1987. Motorola Mobility Chief Marketing Officer Bill Ogle isn't surprised that many Western companies struggle in China, because the country presents unique challenges. But he tells Crain's about the strategy that Motorola has successfully employed there, and the lessons that other Chicago companies can learn from its experience.
CRAIN'S: How different is China compared to other countries or markets where Western companies attempt to expand? How does Motorola address the cultural and market differences?
Bill Ogle of Motorola Bill Ogle
BILL OGLE: It's actually very different. In the U.S., for example, there are main mobile phone carriers (such as Verizon) and main retailers like Best Buy. In China, there are consumer electronics booths and halls all over the country.
One of the main things we've learned over the years is to have China-based management running our China business. We find that because of their understanding of the local culture, the way things get done and the needs of the customers there, it always works better when you have a management team of people who are Chinese. So many companies tend to believe that (their global strategy will work in China) so they just move their executives there and say, "Run China!" That