Motorola in Trouble
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Case Details:
Case Code : BSTR267
Case Length : 16 Pages
Period : 2004-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Motorola
Themes: Business Strategy
Industry : Consumer Electronics
Countries : US
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
The Journey Downhill
Motorola followed up the Razr with the launch of several versions of the phone. A CDMA version of the Razr called the Razr
V3c was launched in November 2005...
Revival Efforts
In mid-2007, after Motorola's poor performance in the second quarter, Zander and Motorola's acting CFO, Tom Meredith, announced that the company would no longer go after market share but would concentrate on improving margins.
Zander had already announced in May 2007 that Motorola would lay off 4,000 people that year in an effort to cut costs. These job cuts came on top of the 3,500 cuts announced in January 2007, and together represented about 11 percent of Motorola's workforce. Motorola expected to save $600 million in 2007 through the job cuts...
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Zander's Troubles
By mid-2007, Zander seemed to have lost much of his credibility both within and outside Motorola. Several analysts felt that in the initial stages, Zander had taken the credit for projects that had already been in the pipeline when he came to the company...
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Outlook
Motorola's fortunes took a further hit in late June 2007, with the launch of the Apple iPhone. The iPhone was hailed by analysts as the phone of the year, and 750,000 phones were reportedly sold within a few weeks of its launch.
In September 2007, Apple announced a $200 price cut on the iPhone, which had debuted at $599, to give a further impetus to sales. This put even more pressure on Motorola to come out with a commercially successful phone and to do it soon. Nokia also launched two new phones under the Prism name in mid-2007... |
Exhibits
Exhibit I: Top Five Mobile Phone Vendors in Q2 2007
Exhibit II: Ten Year Share Price Chart (NYSE) - Motorola
Exhibit III: Motorola's Five Year Financial Summary
Exhibit IV: Motorola's Quarterly Financials
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