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.