Did Google Make An Effective Decision In Taking Over Motorola Mobility

Did Google Make An Effective Decision In Taking Over Motorola Mobility?

Table of contents

Abstract…………………………………………………….…………….……………3

Introduction………………………………………………………………………..….3

Methodology/Approach………………………………………………………………9

Merging effects; Marketing……………………….………….………………..…….6

Merging effects; Diversification………………..………………………..…………..9

Qualitative analysis of the merger……………………………….…………………10

PEST analysis…………………………………………………………….……..…….11

SWOT…………….……………………………………….………………….……….12

Results of the merger…………………………………………………………….….14

Conclusion……………………………………………………………………..…….…15

Appendixes…………………………………………………………………….…….18

Work cited ………………………………………………………………..……….…21

Abstract

In August 2011, the company Motorola was taken over by Google which marked the first significant access of the giant into the hardware side of the of commercial-device market. Since Motorola had its focus on the android, it was right for the company to function as a separate entity in that the android business remains after the merger. The merger of Google and Motorola mobility has several effects on both Google and Motorola as well. In this paper, one will get to understand how effective the takeover of Motorola mobility has been for Google as a growth strategy. The portfolio of Motorola is massive with patents that are very essential to the prosperity of the companies. This was the main thing that attracted Google into the takeover. The use of both primary and secondary research was used to attain a comprehensive result on the merger effects on the company. The essay drives at the provision on the strengths of Google’s merge with Motorola from the patents and diversification of risks in the company. Google’s growth strategy through the merge is a factor of scrutiny in this essay (Jackson n.p).

Introduction

It is important to understand where the two companies come from and how the merger is a good resource for Google in the end. Google is an internet search provider and online advertising services. It is also known to provide software products and additional online services that bring revenue to the company. The revenue collected by Google is generally from the adverts that are online and, to a certain extent, from mobile adverts. It is also evident that Google develops and avails original equipment manufacturers (OEMs) of smart phones and an open source operating system for mobile systems popularly known as android. Google is the leading member in the open handset alliance (OHA). The merger with Google resulted to in the control of Motorola going to Google. Motorola mobility is a supplier of the mobile devices that includes smart phones, with cable broadband access solutions (Jackson n.p).

Motorola’s product portfolios chiefly include mobile devices, wireless accessories, set-top boxes, video distribution systems, and wire line broadband structure products that supplement customer properties equipment. They are focused on developing distinguished, groundbreaking products to meet the growing needs of customers to interconnect, to cooperate and to ascertain, consume, generate and share content at a time and place of their selecting on numerous devices (Jackson n.p). Initially, it operated its industry in two sections, our Mobile Devices section, and our Household segment. Motorola is a holder of numerous patents that attracted Google into the merger. The merge was a growth strategy that Google seized to help the company come out strong in the market, which is competitive. Patents being the new asset class in business today, the merge of Motorola and Google were amended towards the patent wars across the competitions in the markets. The move, which Google took, was essential in the growth of the giant. In the event of the merger, the company entered the market numbers as the largest emerging market (Moscaritolo n.p). The merger provides the company with the ability to have a revenue share of the mobile markets where the households are a big market and give Google an edge in its growth strategy ahead of the merge (Jackson n.p). This essay will analyze the effects of the merger on Google’s revenue.

There are very many advantages of the Motorola take over in the company’s market penetration and development, product development, and diversification. The position of the Google Company is poised in the direction of growth and stability (Jackson n.p).

After the takeover, the SWOT analysis of Google shows that the company has had a growth of strength in the business perspective (Haye n.p). Google has the numbers to propel the mobile company Motorola to an edge of the popularity. When the company excels in its endeavours, the profits are shared in Google as a company. The simple structures in the Google search engine are very essential and have a great reception by the users who find it very simple to use. There is the possibility of any language incorporation in the interface making it easy for people all over the world who do not speak English to access the services of the company. There is a low operation cost as it uses low cost UNIX web servers that propel its profits higher (Jackson n.p). The takeover is very lucrative in the revival of the Motorola Company. Motorola, on the other hand, has the ability to enjoy the protection of the company with Google’s resources being essential to the advancement of the company’s goals. Motorola and Google have the symbiotic relationship where the weakness in the Google Company may be strength in Motorola Company and vice versa (Jackson n.p). Amid all challenges, the merge of the two companies has numerous strengths in product marketing, diversification and product delivery which will be analyzed within the essay.

Methodology /approach

Throughout this extended essay, I have used a data analysis model that explores the use of

Qualitative

PEST

SWOT

The model was chosen for the purpose of accuracy and essence of total inclusion of data about the merger.

Ansoff matrix with the growth strategy that Google have applied

An Ansoff matrix aids in definition of two factors of Google marketing. What is sold and whom it will be sold to. The Ansoff matrix pertains on the markets and products and enables four alternatives of actions when Market Penetration – determining the options in the marking objectives.

Product Development – Selling of existing products to already established markets

Market Development – Extension of existing products to the new markets

Market Diversification – Development of new products for emerging markets

For Motorola and Google, diversification is applied in the strategic development. It will assist in growth of the business through new markets and new products. It is a good option when the market is saturated or when the products in the market are almost reaching the end of their lifecycle. This strategy helps in production of synergies and spreading the risk through product broadening as well as market portfolio.

The companies can apply unrelated diversification. Google is associated with development of software, nevertheless, the company cab venture into new market and new products including the android and mobile industry.

Developing new products for the existing market is risky than market penetration. This is often necessary when the business strength lies in the relation with the customers. At Google, the client retention is considered high and they are unlikely to be detracted away. Therefore, the most valuable means of growing the business is through development of new products for the already existing customer population. Google can now offer mobile products, android applications, software products, consultancy services succession planning in addition to software development (Remenyi 109). Many product-founded businesses can add the complementary services, for instance the suppliers of equipments can add on repair and maintenance and the service-based businesses can add on products to augment sales.

Google can embark on diversification. This involves two unknowns. They can establish new products with indefinite development problems as well as new markets with unknown characteristics. However, this offers the best growth potential. Google will have to develop new products, which take advantage of the main competencies of organization. The examples include taking advantage of the Motorola android to develop a virgin brand and a wider range of goods and services.

Existing product New product

Existing market Market penetration

Aggressive competition

Advertising sale incentives Product development

Product variants

Existing market Loyalty cards, increase usage quantity or frequency

New applications New products

Complementary services and products, backward integration

New market Market development

New channels

Internet

Franchise

New territories

Export Diversification

Acquisition

Reuse competencies

Merging effects;

Benefits of the Merger

With the incredible number of online businesses, tools to help you more effectively manage business give the companies an edge in building strong marketing structures that make them stronger in the internet services and mobile services. The companies have more impact in both the cell phone and Internet. Together, they have the ability to produce many products into the market that impact the rate at which the companies grow (Jackson n.p). With patents that Google acquired, they are very essential in revenue bringing together the assets that many other mobile companies have coveted. Bearing in mind that Apple and Samsung have the highest mobile profits in the world, Motorola has the ability to make the market spread through the vast Internet that Google can offer. Although the company merger does not pose a threat to the market of phone, the merger makes the companies a force to watch in the tech world where everything is changing every day (O’Reilly n.p).

The quarterly financial readings show the company’s profit did grow in the last year. The profits recorded by Motorola were 82% of the total profit minus the operational loss. This profit margin is very crucial in the growth of both companies. The increase in the cash flow of both companies is very instrumental in the operational activities of both companies on the quarterly basis. The move by Google to take over Motorola gives the company a diverse edge in the provision of new products in the market and the company base realizes reaching new markets. When companies get new markets, they are entitled to increasing their profits. Google saw a niche and took the opportunity to experience new major profits from mobile platforms and while still having a big stake in the software markets (Hayes n.p).

The financial situation of Google is very extensive and overly stable compared to other companies in the industry. Google has a deep financial structure, which gives it a better ability to have investments where others cannot. The finances enable the company to employ many qualified workers who are very competent in the provision of services to the company. This results in a very quality customer experience, which is the first target of the company’s growth. The company has loyalty from the users who find their services very simple and efficient (Moscaritolo n.p). The patent acquisition that the company has is very good, making the company have a strong edge in the industry. The company has a culture of innovation that will spread to the Motorola mobility and advance in the mobile services market (Jackson n.p).

Consequently, the company has numerous open source products and services making it a reliable partner to other mobile companies. The takeover gives Google have a stake in the growing mobile market (O’Reilly n.p). Google is a multinational corporation making it very diverse in the advertisement platform and the spread of their products that gives Motorola the ability to reach the highest number of customers possible. The company beliefs are a great strength towards the realization of their goals, making it effective via the merger it made by Motorola. The company gives the world a platform to advertise and make its money. With the merger, the company extends into the mobile world since the world is going mobile hence the merge with Motorola was a lucrative business step of the company. Mobile markets are growing daily while information need is constant. The merger between the two companies is then strengthening (Jackson n.p).

Diversification of the companies is a strong tool that helps them reach a market share as a growth strategy. Google has a reputation of going into ventures that make it more diverse in other services. The company’s growth strategy was strengthened by the acquisition of new patents from Motorola. This is a diversified venture. They have taken technology into another level by making of driverless cars where they will be used in the future. This may be the next biggest thing for Google in its niche (Jackson n.p). Internet provision is a business that grows every day and Google has the resources that are supplied by the profits made in both the merger and the individual companies. With the vast supply of capital, the company can produce the best and fastest Internet. The infrastructure it intends to provide is likely to propel the company to the highest levels in the market. It has grown into the electronics industry where the company has the backing of Motorola to have the best mobile services in the market. It has moved into production of notebooks, tablets, and Smartphones (O’Reilly n.p).

SWOT Analysis

Google took control of Motorola in 2011. This has had negative and positive impacts on Google and Motorola. A SWOT analysis avails the outline of the factors, which influence a project; this points out a few disadvantages as well as advantages of the project. The merger is influential in ensuring that the Google portfolio of patents is made stronger. By taking over Motorola Google reduces the chances of facing litigation, which emanates from infringement. In addition, Google is now authorized to take part in the viable Android environment. By acquiring the patents held by Motorola, Google can widen the client base.

One of the weaknesses is that Google had to adopt cost-cutting measures to sustain the merger. For instance, Google had to lay off 4000 employees in order to lessen the cost of operation of the company (Mirvis 203). As a result, many Motorola branches worldwide were closed to work towards accommodation of expansion.

Many opportunities emerged from the merger. There is the prospect of expansion of the Google market. Motorola is set to introduce Google to the business of TV. Secondly, Motorola poses many patent portfolios. This guarantees a client base expansion. In addition, it is predictable that the merger will hamper completion from the other companies. Google is expected to attract a big audience for the products. Technologically, acquisition of Motorola patents means that Google may engage in many ventures for instance manufacturing of driverless cars.

The threat to the merger includes the variance of sorts between Google and a few of partners in software. For instance, Samsung is a big manufacturer of android. It is now a main competitor of Google in the hardware industry. This is conflicting given that they are required to work in unanimity while being careful in keeping secrets.

Taking into account the fact that Samsung and Apple have the highest mobile profits in the globe, Motorola can utilize the opportunity to spread its market through the vast internet offered by Google. Even though the company merger is not expected to pose a threat to the phone market, the merger is a force to be watched in the technology world whereby business is ever changing.

The periodical financial reading indicates the company profit grew in the last year. Profits recorded by Motorola were 82 percent of the entire profit minus the cost of operations. This margin is important in the growth of the companies. An increase in cash flow for Google and Motorola is crucial in the operational functions of both companies quarterly (Bilimoria 107). The decision to take over Motorola gave Google a diverse edge in the provision of brand new products to the market as well as the company base in realization of reaching newer markets. Once the companies acquire new markets they can increase their profits. Google identified an opportunity and took it to experience brand new big profits from the mobile platforms while maintaining a big wager in the software market.

Google and Motorola enjoy a symbiotic relation whereby the weaknesses in Google strengthen in Motorola and vice versa. Amidst all the challenges, merging of Google and Motorola has much strength in marketing of products, diversification, as well as product delivery. With many online businesses, the tools necessary to effectively manage the businesses avail the companies an edge in construction of stronger marketing structures, which make the companies stronger in the mobile and online service provision. The companies have a greater impact in both internet and cell phone (Moorthy 67). Together, the companies produce many products for the market, which has an impact on the rate of growth of the companies. With the patents that Google amassed, they are beneficial in revenue accumulating the assets, which the other mobile companies have coveted.

The financial situation in Google in extremely extensive; it is excessively stable when compared to the other companies in the similar industry. Google enjoys a deep financial structure. This makes it possible for the company to make investments where the others are not able. The large finances enable Google to employ many qualified persons who are highly specialized to provide the company services (Melka 45). This as a result gives a quality customer experience. This is the initial target of growth of the company. The company enjoys loyalty from the users who the services efficient and simple. The company has a very good patent acquisition; this makes it have a sturdy edge in the industry. Google has a culture of innovation. It will spread this culture to Motorola mobility as well as advance the market of mobile service.

The product portfolio of Motorola include various mobile devices, set-top boxes, wireless accessories, video distribution systems as well as wire broadband structure products which supplement the properties of customer equipment. They develop groundbreaking, distinguished products which meet the ever-increasing needs of customers of interconnecting, cooperating and ascertain, generate, consume and share content at a place and time of choice concerning a number of devices. Formerly it used to take place in two section of the industry; the Household segment and the Mobile Devices Section. Motorola is the holder of a number of patents, which attracted Google to merge (Hotchkiss 123). This was a growth strategy, which Google took upon to aid the company to grow in a competitive market. Patents are the new assets in the business world today. The merge of Google and Motorola was modified towards the patent wars all across the market competitions. During the merge, Google entered the market numbers as the greatest emerging market. The move was crucial in the growth of the giant.

The merger provides Google with the possibility to control a revenue share of mobile markets whereby the households are a huge market and avail Google an edge in the growth strategy after the merge.

There are many advantages of Motorola take over in the market penetration, product development, as well as diversification of the company. The position of Google is Poised in the direction of stability and Growth.

After taking over Motorola, the SWOT analysis of Google indicates that the company had a growth in the strength of business perspective. Google has the necessary numbers to impel Motorola to popularity. When the company is successful in its endeavors, the outcomes are distributed in Google. The straightforward structures of the Google search engine are beneficial and have a greater reception by all the users. The users find the search engine easy to utilize. The possibility of incorporation of any language in the interface enables even the buyers who do not understand English to benefit from the services of the company. This operates on a low cost. It utilizes UNIX web servers, which propel the profits higher(Hotchkiss 103). The takeover is lucrative especially in the revival of Motorola. Motorola enjoys the protection Google avails due to its vast resources, which are essential for enhancement of the goals of the company.

Results of the merge

The merger gives the companies an edge to the improvement on the products services and competition in the market. The android ecosystem will change drastically following the merger where the company is to an android partner (Hayes n.p). The customers are sure to expect new magnificent products from the merge since the pool of money is added in the big corporation.

Internet provision is a business that grows every day and Google has the resources that are supplied by the profits made in both the merger and the individual companies (Hayes n.p).

New opportunities are sure to be felt in the companies both bad and good. On the good side, the employees are sure to gain more in the merge while layoffs are sure to be part of the growing process. The user experience of the android world will change the system and make it friendlier in order for the user to manage to have a very fluent and less aided use of the Smartphone applications.

Conclusion

In conclusion, the takeover of Motorola Mobility by Google has been very effective for Google in many ways. Android, a product of Google, has a very strong network of users that will in turn promote the strength of Google via the Motorola smart phones. Furthermore, Android brings in diversity of products, boasting 39 different models. Google’s software is now being used on all those devices, which makes it easier for Google to expose their products to a diverse and large audience (Albanesius n.p). Google will not have a loss of the union for the patents are more significant while working on the patents that are not yet amalgamated. The difference of the industry productivity is essential while the fusion tries to figure out the healthy reasonable forces for the prosperity of the merge ahead of the crucial strategy. Google’s takeover has forces that will shape the struggle in the face of both the market niches each company occupies. The patent portfolio Motorola occupies will help the ecosystem that the android occupies. With the innovation background of Motorola, the merge brings together the two-company makes up the best innovation driven set of companies (Moscaritolo n.p). Motorola mobility is strongly positioned in living room devices giving Google the chance to venture into new markets that will boost the revenue of the companies. A partnership between Motorola Mobility and Google will speed up the choice and innovation of mobile computing. It will enable customers to purchase mobile phones at lower prices, and better quality phones at that. The patent portfolios of Motorola Mobility will help to protect the Android ecosystem. Furthermore, sine the Android ecosystem is an open source; all competitors in the mobile sphere can incorporate the Android platform into their own mobile devices (Savitz n.p.). This access by competitors ensures the future and reach of the Android ecosystem in the mobile market. It also gives hardware manufacturers, application developers, customers, and mobile phone carriers the ability to choose platforms.

The synergy between Motorola Mobility and Google creates space for more innovation in the mobile phone and the application development market (Albanesius n.p). This market is becoming more and more important in the daily lives of consumers all around the world. Since the Android ecosystem is an open source platform, instead of building a monopoly with one company of mobile phone developers, it enables a competitive environment that drives change and innovation. Furthermore, this is a partnership between two well-established companies that both have equal strengths in software development and mobile development. By bringing two companies together with long histories of patent protection and consumer loyalty, this merger represents a balanced agreement with the ability to foster growth in technology that has a global reach. Countries with access to innovative solutions then have the ability to grow at a faster pace and develop solutions of their own to fit their unique cultural needs.

Appendix 1

Motorola Solutions Inc

(NYSE: MSI

Quarterly earnings of Motorola after the merge

Quarterly earnings for Motorola after the merge.

-7346951805940

Appendix 2

Growth in turnover 2012-2013

Appendix 3

Stock performance, Revenue, Employees.

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