How Motorola Can Return To Life – Harvest, Translate, and Innovate

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How Motorola Can Stop The Short-Term Bleeding
To address the health of Motorola going forward, they must stop the short-term bleeding, begin to pull successful products from the pipeline in a mid-range timeframe, and recapture and own key marketspaces for the long-term. In the short-term, Motorola must “harvest” revenue from its current product line, and not invest in developing them further. This may seem counterintuitive – but look, they are not successful and some of these products should be cut off and “milked” for current revenue. They have the economic value of a boat taking on water due to a hole – salvage what can be saved and find a new ship! Concentrate and focus resources toward marketing the best-selling high margin products. Forget about the high potential lower margin product lines – they should head in this direction soon as soon as possible.

In The Mid-Range Motorola Must Pull Marketable Products From Its Pipeline
Motorola’s mid-range goal should be to revive their brand relevance by developing and pulling new products out of the pipeline. Management should use the “utility-usage” technique which was outlined in the last article to translate utility directly into product features. Simply stated, use usage type and occasion to drive new features for new designs. Use these new models to position Motorola within specific marketspaces based on a combination of demographical, geographical, and lifestyle characteristics. At the beginning of this timeframe, Motorola should be well underway in dimensionizing the utility of key buyer groups; consider and/or use the key utility factors of Nokia cell phone buyers (Nokia is the world leader in terms of market share for cell phones) for features of new Motorola models. An extremely effective approach is to juxtapose features of new Motorola models with “missing” Nokia features – in other words, features that Nokia buyers want for their Nokia cell phones but don’t have. This is a “killer” strategy which would likely develop dominance for given buyer groups – the “trick” is to make it applicable to a widely reaching buyer group.

Recapture Share and Own Key Marketspaces For the Long Term
Motorola seems to be lacking a long-term vision for its cell phone business – which in a way is understandable given its current dire straights. But after they develop solid short-term measures to keep their cell phone business from crashing, they need to create an effective long-term strategy. This strategy should be simply this: recapture share and own key marketspaces. For a mid-range strategy, we talked about translating usage types and occasions into features to develop new designs. For Motorola’s long-term visioning, they should take it a step further and look to new benefits which fill desires and latent utility of key substantial buyer groups.

Tap Into Latent Demand
The long-term strategy for Motorola to exploit new benefits and tap into latent demand can be effective when executed by using orthogonal innovation of looking across other industries. In other words, what are the benefits accrued to customers or buyer groups in other industries which can be translated into features for Motorola cell phones? This is another point where breakthrough innovation can occur on a long-term and habitual basis. The essence of this strategy is to continually tap into latent demand for key customer groups – giving them benefits that they didn’t think about and want until they got them. This is how Motorola can own and dominate whole areas of a market space. The invention of the cell phone, iPod, and VCR are all examples of products which tapped into latent demand.

Motorola’s “Magic Show”
Motorola is in bad shape now, but given the right combination for the three-prong lock — short-term, mid-range, and long-term strategy – they can reclaim their market share, profitability, and strong brand equity. They need to minimize the bleeding in the short term by harvesting and milking revenue from their most popular current products – but without reinvesting in them. In the mid-range of two to four years, they need to “pull rabbits out the hat,” and introduce products which have features directly translated from the utility for key customer groups. Long-term, they need a “whole magic show,” impressing customers with “new tricks” that they didn’t even imagine before – features which tap into latent demand benefits. With this blueprint for success, the “motor” will rev back to life in Motorola.

Motorola: Move Out and Get Your Own Place – Own Marketspaces

Motorola’s Current Turbulent Situation
Motorola is in trouble – the cell phone business posted a 33% decline in the first quarter of 2008 at $18.99 billion according to The New York Times. In 2007, this business lost $1.2 billion while Motorola’s two other smaller units were and are profitable. CEO Greg Brown hoped that turning mobile devices into its own unit would lead to a turn-around and revive the Motorola brand. By the end of 2008, this division will have posted three straight years of financial and market share losses. The problem centers around the inability of Motorola to even come close to following up the popularity and sales of its RAZR phone which it introduced in 2003. It was an enormous success, and sold more units than any other handset in history. However, the subsequent designs have been unable to keep pace from a sales perspective, and as a result competitors have taken back market share in the handset market. The company’s market share was at 23% during year-end 2006, and has fallen to 8% worldwide currently.

Lacking Pipeline – No Good Successor To The RAZR
This slide seems to indicate a problem with Motorola’s innovation processes and pipeline. There were no new “good” products to replace the RAZR. To follow up the RAZR’s success, Motorola would have been wise to dimensionize the utility for RAZR customers, and figure out the key features and benefits which were highly valued by them. This knowledge, and more importantly, its application to the following new designs, would have clearly led them to breakthroughs to match or at least approach the RAZR’s success.

The Four Factors Needed To Dimensionize Utility
In dimensionizing utility, Motorola should not do so for a generic singular customer profile – but they should divide the market into key buyer groups. This should be based on any combination of demographics, geography, lifestyle, and usage. Put these four factors into separate two-by-two grids and have each factor occupy a quadrangle of the grid. Next, list the key characteristics of important buyer groups according to each of these factors. Pay particular attention to usage in terms of two aspects: type and occasion. To develop a set of composites, link the key demographic, geographical, and lifestyle factors to a particular usage type or occasion. This is a key step in developing a feel for what is valued by composites of different types of major buyer groups. The next step is absolutely vital: connect the usage types and occasions to product features to develop.

Translating What Buyers Value Using “Utility-Usage” Chain
By making this “utility-usage” value chain, an executive can directly translate what key buy or potential buyer groups highly value, into features which mirror their expectations and desires. This will allow Motorola compete strongly in various profiled marketspaces. If done right, it will allow them to own marketspace – just like they did with the success of the RAZR. They can replicate this success using this strategy. It should be at the heart of their innovation strategy going forward – and it’s certainly not too late to save their business.

How To Leverage Walgreens’ Strategic Position To Work For Them

At The Intersection Of Several Types Of Retailers
From a strategic perspective, Walgreens has a unique position in the marketplace, sitting at the intersection of Wal-Mart, small discounters, Target, and grocery store chains. The medium size and neighborhood-centric locations of typical Walgreens make them akin to small discounters. Walgreens’ scale allows it to offer low prices à la Wal-Mart. The uniqueness of some of Walgreens’ merchandise is similar in ways to Target’s offerings. And Walgreens’ offering of some staple groceries put it in line with grocery stores. The “trick” for Walgreens is to leverage some of these aspects of its offerings into targeting buyer groups which value a significant combination of many or all of them. If they can locate large pockets of these profiled consumers within given geographic locations, they will be hugely successful in this recession and in any economic climate, no matter how terrible.

How To Use Its Position To Gain Buyers
In sitting at this strategic intersection, Walgreens can gain buyers by:
1. Keeping Low Prices For Many Merchandised Items
2. Maintain and Develop Relevant Signature Brands (Non-Staples)
3. Stock Need-To-Have Grocery Items (Staples & Certain Non-Staples)

Prescription Savings Card Is A Winner
A bright spot for Walgreens is its prescription savings card which is increasing in usage and members. This offers people savings on the purchase of prescription drugs, which can be a substantial expense especially for people on a fixed income. Walgreens has a recession-proof winner here and should put more resources behind increased marketing to targeted groups. Here, they can utilize the advantage of their scale to move returns beyond other investment of resources.

Match Position With Informed Strategy And Right Tactics
Walgreens’ positioning and strategy must be “in-synch” especially during this economic downturn. They need to build solid links to key buyer groups through understanding their demographics and lifestyle preferences. This needs to be turned into pinpointing geographical locations where groups with desired demographics and lifestyles are located. Bets need to be placed in these areas – whether with a new store or upgrading an existing store. Simple line extensions of “stripped-out” non- or less value-added features will yield ultra-value private label product lines – which can counter-intuitively be branded boldly by wrapping these items into a special designated section or store-within-a-store. This is a marketer’s dream: being able to brand generic low cost items! At the intersection where Walgreens sits, what would you do?