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

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.

Small Retailers on the Brink: Slower Sales Even Beyond the Holidays

Current Bad Situation
Although retailers everywhere are expecting bad holiday sales, small, independent businesses are being hit particularly hard. They typically don’t have the cash cushions or price-slashing abilities of the major chains. These independent retailers don’t have the margins to compete on price, as many shoppers gravitate toward large discounters like Wal-Mart to purchase lower-priced goods. This effect is especially devastating given the lack of growth in the market. According to the Wall Street Journal’s December 16th, 2008 issue, holiday sales are expected to rise 1.2% which is the worst year-over-year increase since 2001. Many of these smaller retailers are trying to find an effective competitive model to maintain business for not just the holiday season – but, as importantly, well into the year.

Find New Channels of Potential Business – Blue Ocean Spaces
Small retailers are going to have to look for Blue Ocean Spaces, and find new channels of potential business. While these businesses are too small to own a marketspace, they can certainly carve out profitable niches. There are three areas which small retailers can focus on to develop new business: geographic, demographic, and usage (both occasion and type). They can carry merchandise and services centered around a locale – and have offerings which are highly relevant to a given community. This is a Blue Ocean which large national chains will find very difficult to follow because many are very centralized in structure. As a smaller craft in the Blue Ocean Seas, local businesses can more adeptly cater merchandising, marketing, and operations to uniquely fit communities, towns, cities, and regions.

Look Beyond Current Buyers Demographics
Small businesses can also look outside of the demographic profile of current buyers to target additional customer groups. This can be done effectively by evaluating alternative or complementary industry buyer groups. Small retailers can look for synergic “hooks” to fulfill the needs for either of these groups. A business mentioned in the WSJ article, Charles Mayer & Company, is an up-scale boutique seller of china, crystal, and decorative accessories in Indianapolis. An example of them targeting a complementary buyer group would be to develop an interior design service which shows home- and condo-owning customers the appropriate matches of various pieces to rooms and homes being re-modeled or built. This look across industries would also yield very synergistic opportunities to bundle with partner companies. To further extend our previous example, Charles Mayer & Company could join with an interior design firm outright to provide pieces for a price discount or items which are exclusive to the given designer.

Blue Ocean Spaces Through Alternative Usage For Product Or Services
The third way a small retailer can discover or create a Blue Ocean Space is through alternative usage for their goods or service offerings. This can take the form of different types of usage for their offerings, or different or varied occasion usages for their goods and services. Possible variations on usage fit well with the previously mentioned opportunities to bundle with other goods and services. Alternative uses for a small retailer’s goods or services can be uncovered by looking at a buyer’s experience with related products or services. These retailers should observe and evaluate these buyer’s experiences before, during, and after a given product or service is used. This will yield rich insight into how to extend, alter, or retract their offerings in terms of recommended uses for their given products and the services they offer around them. For example, small auto repair shops have observed the success of “oil change only” shops such as Jiffy Lube, and now include even more discounted oil change services of their own as a front-end bundled offering when repairing other parts of a customer’s car. In this case, the usage occasion was changed from a scheduled maintenance item to an upfront service and opportunistic sale for a small retailer.

Game Changers: Real Solutions For GM and Ford’s Crossover Sales

Budgeting Marketing Resources
In the short-term time horizon, Detroit automakers should gear 65 to 70% of their marketing budgets and resources for crossovers toward the price inelastic geographical/regions based on demographical factors.  They should devote a “trailing” amount of marketing resources of 30 to 35% to price elastic buying segments in given geographies and regions.

Game Plan Adjustments: Mid Range Structural Solutions
Detroit automakers, GM and Ford, can solve this ailment structurally in the mid-term by making adjustments to their “game plans”.  They should look to design and build smaller or mini-crossover vehicles to address the permanent and endemic outlook of substantially higher fuel prices and buffer against less discretionary spending in the mid-term future for Americans.  From a classic Blue Ocean perspective, they need to raise the dimensionality of gas efficiency dramatically for crossovers, and moderate or lower the sales price by making “light” crossover vehicles.  It can achieve this by building them with even lighter chasses.  Also, classically Blue Ocean, they can reduce the engine horsepower to minimum acceptable threshold levels.  It’s likely that consumers are willing to accept a lower amount of horsepower relative to increased fuel efficiency and a lower sales price.

By operating from a holistic perspective, GM and Ford can change the game by developing a wider range of these vehicles focused around various buyer groups according to lifestyle and usage.  They should offer a portfolio of core crossover vehicles with 1 to 2 models for each categorized buyer group. 

Can you think of anything else that you would do the increase crossover sales in the short term and mid term?  How would you categorize the major buyer groups based on lifestyle and usage?  Would you even use different categorization criteria?

I am willing to talk with blog participants live via phone for free consultations.  I am also available to companies, businesses and organizations for consulting engagements and speaking opportunities.  For any of these request, E-mail me .  I will help my readers in any way possible – I want to share my knowledge and expertise.

Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.

Detroit Automakers Price Inelastic Price Elastic Blue Ocean Strategy Crossover Sales GM and Ford Turbo Tagger