麦肯锡三星战略之一：Motorola分析报告
- 1. CONFIDENTIALThis report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.August 20, 2001Mobile Handset Competitor Profile: MotorolaSAMSUNG ELECTRONICS CHINA (SEC China)
- 2. OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product/market Mission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing2
- 3. BACKGROUND INFORMATION1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product/market Mission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 3
- 4. MOTOROLA HAS HIGH ASPIRATIONS FOR ITS CHINA BUSINESSTargeting sales of US$ 10 billion in China by 2002/2003 Focusing production operations in China, as production there is about 15-20% cheaper than in Singapore and 30-40% cheaper than in EuropeSource: Analyst reports4
- 5. MOTOROLA’S CHINA BUSINESS SPANS SIX PRODUCT CATEGORIESMotorola ChinaMobile handsetsNetwork equipmentPagersTwo-way radiosSemi- conductorsAuto electronics and accessoriesMobile network equipmentFixed line network equipmentWireless communicationsSource: Motorola websiteSet up representative office in 1987 Operations include: 1 holding company 1 WOFE 8 joint ventures 26 subsidiaries 12,000 employees US$ 3.4 billion total investment to date5
- 6. STRATEGY1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product /marketMission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 6
- 7. MOTOROLA’S HANDSET STRATEGY COMBINES AN ATTRACTIVE PRODUCT RANGE WITH SUPERB VALUE CHAIN MANAGEMENTDeveloped a wide product range which covers all key price points and offers a wide range of functionality Invested heavily in product localization through China-based R&D team Expanded local manufacturing in order to reduce costs and improve time-to-market Closely managed first-tier group of nine resellers in order to minimize price competition and facilitate order tracking Committed handset promotion Speedy roll-out of new releases Provision of high-quality after-sales services Advanced technologyProduct rangeValue chainCore competencies7
- 8. PRODUCT/MARKET1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership 6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product /marketMission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 8
- 9. Motorola has entered the low-end of the mobile handset market since 1999. Its products are more function-driven compared with Nokia’s products, which are more fashion-driven Motorola takes more than 50% of the share in the high-end and high-mid-end of the mobile handset market, and more than 20% of the share in the low-end and mid-low-end. Its low-end handsets represent more then 50% of its product offerings Motorola’s market share is relatively consistent across tier-cities and geographies, taking approximately 30% everywhere KEY MESSAGES - PRODUCT/MARKET9
- 10. MOTOROLA HAS RECENTLY FOCUSED ON BUILDING OUT ITS LOW-END PRODUCT PORTFOLIO Product positioning Dec 2000Business/professional PersonalProduct positioning Jun 2000V8088 (1.6%)Business/professional PersonalV998 (5.6%)LF2000 (2.9%)LF2000 (4%)368C (3.1%)338C (0.6%)T2688 (4.8%)CD928 (1.1%)V2188 (3.8%)V2088 (2.0%)A6188 (1.4%)V8088 (3.9%)V998++ (7.0%)P7689 (1.8%)L2000 (2.2%)LF2000 (1.7%)368C (2.3%)T2688 (6.2%)V2188 (1.3%)V2088 (1.0%)366C (0.5%)T2288 (0.3%)T360 (0.3%)High High- mediumMedium- low Low High High- mediumMedium- low Low Source: Interviews, McKinsey analysis10
- 11. MOTOROLA MODELS ARE MORE FUNCTION-DRIVEN THAN NOKIAFashion BusinessBasicFunChangeable cover Sub-100gVoice-dialRecordingVibrationTri-bandWAPBuilt-in modemIR-portChinese inputLi-Ion batterySMS messagingGamesComposable/ downloadable ringer tone82106210P7689V998++L2000WWWFashionClassicPrice in China (RMB)26522878236918001452Equivalent features, Nokia more fun/fashion vs. Motorola more functionsMotorola offers lower price models with similar features, tri-band and WAP * Nov. 2000 price Key differences11
- 12. Source: GFK, Sino-MRMOTOROLA HAS HIGHER SHARES IN CHINA IN FASHION AND BUSINESS SEGMENTSNokia MotorolaModels2000ChinaTaiwanHong KongIndonesiaSingaporeFlagship8850 A6188Fashion-High8210, 8250 V8088, V998+Fashion-Low3310 T360, T2988, T2688Basic3210, 5110 V2088/2188, V2288, StarTac, CD928/938Business -low6150 L2000 SeriesBusiness -High6210, 7110 P7689Total:12
- 13. MOTOROLA HAS DRIVEN SALES INCREASES PARTICULARLY IN THE LOW-END PRODUCTSMid-low
(RMB1500-2500)High-mid
(RMB2500-3500)High
(>RMB 3500)December 2000April 2001Product mix
Percent of unitsMarket share by price point
PercentLow (
- 14. MOTOROLA’S MARKET SHARE IS RELATIVELY CONSISTENT ACROSS TIER CITIES AND GEOGRAPHIESMarket share by tier cities PercentMarket share by geographic areas PercentNorthWestNortheastCentralTier 1 Tier 2 Tier 3 2000April 2001SouthEastSource: Sino-MR, GfKDec 2000-April 200114
- 15. VALUE CHAIN STRATEGY1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership 6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product/market Mission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 15
- 16. Motorola’s value delivery system strategy has evolved since 1997. Product development has been more customer oriented and new releases are catering for needs by different customer segments. Localization of mobile handset manufacturing has been furthered to a production capacity of 18 million units in Tianjin and 8 million units in Hangzhou. With increasing investment in sales and marketing, Motorola is now the strongest brand in China Motorola employs PTAC, CellStart, Heguang, Eastcom, SunYin, Sinya, North Telecom, Hengxin, and Forte as its 9 first-tier resellers. It intends to reduce the many tiers of resellers that has become a disadvantage to Motorola’s channel efficiency Motorola’s key strength lies in advanced technology, committed promotion, wide distribution network and quality after-sales serviceKEY MESSAGES - VALUE CHAIN STRATEGY16
- 17. MOTOROLA’S VALUE CHAIN HAS EVOLVED OVER THE PAST THREE YEARSFrom. . . (1997)To. . . (2000/2001)Manufacturing Sales and marketing DistributionProduction capacity in Tianjin (1.5 million) and Hangzhou (200,000) Strong brand awareness Market share 34% 50% reimport via Hong Kong Strong nationwide tiered dealer network (10-15 tier A dealers) Close relations with PTT’s Expanding production capacity at Tianjin to 18 million units, and at Hangzhou to 8 million units Strongest brand awareness in China Developed needs-based customer segmentation Market share 30% 50% reimport via Hong Kong Number of dealers limited to 9; shared exclusivity by product Kept strong retail support (doubled marketing and sales staff since ‘97)Source: Interviews, McKinsey analysis17
- 18. MOTOROLA’S KEY STRENGTHS LIES IN ADVANCED TECHNOLOGY, COMMITTED PROMOTION, WIDE DISTRIBUTION NETWORKS AND QUALITY AFTER-SALES SERVICES Source: IDC 2000Key strengthsRecent development Committed handset promotion Speedy roll-out of new releases Strong brand recognitionPays more attention to market needs Continues to promote models with free giftsSales and marketingHas nine first-tier resellers, the largest number among vendors Price competition among resellers is eliminated Can effectively manage the production volume with close tracking of orders from the channels Best vendor on channel support in promotion, advertisement, service centers and fundingAltered its strategy in 2000 to employ two authorized reseller from every modelDistributionProvision of quality after-sales servicesSets up Internet-based consumer club and plans to double service stations in 2001After-sales servicesAdvanced technology Highly localized products - strong local R&D (800 engineers, 18 research centers, investment 13 b. RMB)High rate of new product introduction (9 new products in 2000) Ready for 3GProduct development18
- 19. MOTOROLA DISTRIBUTES EXCLUSIVELY THROUGH NINE FIRST-TIER RESELLERSSource: IDCRationales Motorola employs PTAC, CellStart, Heguang, Eastcom, SunYin, Sinya, North Telecom, Hengxin, and Forte as its 9 first-tier resellers. Historically assigned one Motorola model to each reseller Eliminates price competition Enables Motorola to effectively manage production volume with order tracking Recently shift strategy to have 2 authorized resellers for every model in order to improve promotions and access to customers Motorola is the best vendor on channel support as promotion and advertisement is provided. It also helps resellers to set up service centers to handle repair and maintenance services. As the leading vendor in China, Motorola’s channel strategy is of continued importanceMotorola Channel StructureMotorola’s well-built distribution network plays an important role in its success in China Too many tiers of resellers become a disadvantage to Motorola’s channel efficiencyVendor1st-tier resellers2nd -tier resellersRetailers/retail chain storesConsumers100%21%64%3%85%12%76%19
- 20. ORGANIZATION AND OWNERSHIP1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product /marketMission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 20
- 21. Motorola has 8 JVs, 1 WOFE and 1 holding company in China, among which Hangzhou Eastcom Cellular Phone (8 million units production capacity) and Motorola Tianjin (MCEL, 18 million units capacity) are devoted to mobile handsets Motorola is mainly organized along product lines, however, its WOFE in Tianjin has been reorganized to be more customer focused. Motorola Tianjin is divided into 4 sectors, i.e. Personal Communication for consumers, Commercial, Government and Industrial Solutions for corporate and government, Global Telecommunication Solutions for telecom operators, and Integrated Electronic Systems for assemblers KEY MESSAGES - ORGANIZATION AND OWNERSHIP21
- 22. MOTOROLA HAS 8 JVs AND 1 WOFE IN CHINA, AMONG WHICH 1 JV AND THE WOFE ARE DEVOTED TO MOBILE HANDSETSMotorola (China) investmentLeshan - Phoenix semi-conductorShanghai Motorola paging productsHangzhou Motorola Mobile communi- cationHangzhou Eastcom cellular phoneShanghai zhongmei automotive electronicsHuamin Smart card, Beijing Huamin smart card system manufacturingMotorola Tianjin (MCEL)Established yearProduct offering1995199520002000199919981992SemiconductorPagerGSM and CDMA networkMobile handsetsAutomotive electronicsSmart card system and productMobile handsets Mobile infrastructure Semi-conductors Two-way radios Base stations Handset accessoriesWith Ansenmei and Leshan RadioWith Shanghai Radio (SRCEM)With Eastcom and Putian42% With Eastcom and PutianWith Shanghai GEWith Sino-overseas construction information100%Source: Motorola press release22
- 23. MOTOROLA IS ORGANIZED ALONG PRODUCT LINES, HOWEVER ITS WOFE IN TIANJIN HAS BEEN REGORGANIZED TO BE MORE CUSTOMER FOCUSED R&D Hang Zhou/ ShanghaiManu- facturingSalesServicesManu- facturingSalesServicesMotorola China Personal communication Commercial, government and industrial solutions Global Tele-communication solutions Integrated Electronics Systems Asia tele-communication product manufacturing site (planned)R&DManu- facturingR&DManu- facturingSalesR&DManu- facturingSalesR&DManu- facturingMobile handset* pager *In 2001, 18 million units capacityGSM, CDMA Mobile network and handsets GSM, CDMA Mobile networkMobile handsets* *In 2001, 5 million units production 8 million units capacity Two way radio GSM, CDMA systems, e.g., base station BatteriesHangzhou Motorola mobile communicationHangzhou Eastcom cellular phone Motorola Tianjin (MCEL)MarketingSource: Motorola press release23
- 24. FINANCIAL PERFORMANCE1. Background informationLocation Registered capital Management team Equity structureStarting year Number of employees Era analysis4. Value chain strategy5. Organization and ownership 6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structure Ownership structureSales Profit 2. Strategy 3. Product/marketMission Vision Corporate strategy Market positionKey product offerings Key customers Value proposition Geographic focus Pricing 24
- 25. Motorola has been maintaining its market share of 30% in mobile handset. Due to increasingly intensive competitions, its market share is expected to drop to 20% in 2005. Motorola’s EBIT margin for mobile handset is 5%, which is very low compared with Samsung’s EBIT at 15% and Nokia’s EBIT at 20%. The low EBIT margin is mainly due to its high cost of goods sold.KEY MESSAGES - FINANCIAL PERFORMANCE25
- 26. MOTOROLA HAS GROWN WITH THE MARKET AND MAINTAINED ITS 30% MARKET SHARE IN MOBILE HANDSETTotal revenues USD billions Number of units Millions Average price USD Source: IDC, Dresdner Kleinwort, Samsung, McKinsey analysis26
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