Motorola in China
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Case Code: BSTR081 Case Length: 15 Pages Period: 1987 - 2003 Pub Date: 2003 Teaching Note: Available |
Price: Rs.400 Organization: Motorola Industry: Electronics, Countries : China Themes: Business Environment |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background
The history of the US-based Motorola's presence in China dates back to the late 1980s when, Motorola established a representative office in Beijing in 1987. It exported telecommunications gear and semiconductors to China and employed around 600 people to market its products. With increasing competition and production costs, Motorola decided to shift some of its manufacturing activities to China. In 1992, Motorola established Motorola (China) Electronics Ltd. and opened a manufacturing facility at Tianjin city in North China. Initially, Motorola manufactured pagers, semiconductors, two-way radios and automobile electronics in China. As the demand for pagers was expected to be low in China, Motorola planned to export the surplus production to other markets. However, since telephone penetration was low in China in the early 1990s, pagers became an instant hit and the company was soon selling its weekly output of 10,000 units in the Chinese market itself. It was reported that the annual demand for pagers increased from 1 million in 1991 to 14 million by 1996.
Later, when mobile phones began gaining popularity in the mid-1990s, Motorola started concentrating on the production of handsets.
Over the years, Motorola expanded its business in China to various segments, such as Personal Communication Sector (PCS), Global Telecom Solutions Sector (GTSS), Semiconductor Products Sector (SPS), Commercial, Government and Industrial Solutions Sector (CGISS), Broadcast Communications Sector (BCS) and Integrated Electronics Systems Sector (IESS) (Refer Table I for segment information). Along with expanding into a wide range of products, Motorola also focused on improving quality in its Chinese manufacturing units. In 1995, Motorola manufacturing plants got ISO9002, ISO14001 and QS9000 quality certification. Over the years, Motorola concentrated on three product categories - mobile phones, telecom network equipment and semiconductors...
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