There are several external factors that are affecting Motorola. I will use the PESTEL framework to analyze them. The focus, therefore, will be Political, Economic, Socio-cultural, Technological, Environment and Legal.. Let us now take a look at them in details.
Political: In spite of technological advancements we have not yet reached a stage where we exist in the virtual dimension. Businesses are done through remote collaboration tools and solutions but those who collaborate operate from and within certain jurisdictions. Those jurisdictions have laws and they affect how any company operating within them can operate. Multinationals like Motorola must adapt to the political climates of their host nations.
Socio-cultural: Motorola shows social responsibility and maintains good relationships with their host communities. An example of their social responsibility is the supplier diversity programme which endeavours to give certain disadvantaged groups an opportunity.
Technological advancements: New solutions, new platforms and the pace of these innovations. From MRP we now have ERP and are quickly heading towards the Virtual Enterprise. Software breakthroughs have brought an expanded horizon. There are many business solutions and platforms that are constantly affecting the way we do business. Motorola is also taking advantage of these solutions and platforms.
Environmental: Motorola has long term environmental policies that include designing all their products to be environment friendly, recycling or reusing all waste materials and conserving natural resources.
Legal: Motorola has a well established legal department. This is demonstrated by the fact that they have an audit committee line which main aim is to allow access to the Audit and Legal Committee of the Motorola's Board of Directors.
THE INTERNAL FACTORS THAT ARE AFFECTING MOTOROLA
Now I want to discuss the internal factors that are affecting Motorola. I will concentrate on the threat of entry, threat of substitutes, the power of buyers, the power of suppliers and competitive rivalry.
The threat of entry: Nokia, previously a minor in telecommunications overthrew Motorola the former undisputed king of telecommunications. Another smaller company could repeat what Nokia did. The challenge is predicting correctly the next technological trend. A new or smaller company can literarily become the world leader if it makes the right forecast and positions itself well to capitalize on it.
There are other threats posed by certain platforms:
As described by Hardwick and Bolton (1997), "Virtual enterprise companies share costs, skills, and core competencies that collectively enable them to access global markets with world-class solutions their members could not deliver individually." (Eom & Lee, 1999)
This has afforded Motorola a better way of increasing efficiency while reducing costs. However, it has also opened up the door for less funded competition to increase their productivity.
Threat of substitutes: The internet is growing and with this growth also comes a lot of opportunities and threats. The cost of doing business online is relatively low. This means that a less financed