Business Model Canvas

NORTH SOUTH UNIVERSITY SCHOOL OF BUSINESS

Business Canvas Model of Motorola Mobility

Prepared for: Mohammad Hannan Miah (MHM)

Prepared by: Md. Shariar Alam Tahsin Hossain Sathwath Ali Bhuiyan Ananda Jabbar Ratul Prashant Tiwari Nowshin Ahmed

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MHM

Strategic Alliance 

Google

Acquisition of Particular resource and activities 

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Platform Development of s oft wares and apps Production

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Lenovo

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Accessibility

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Newness  Newness Customization Customization Design Design OS updates Brand status OS updates Price Brand status Risk reduction Price Accessibility Risk reduction

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Future Alliance 

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Datamax-O'Neil IBM and Oracle SAP

Verizon Wireless, Corning Inc. &Qualcomm Incorporated Avnet Technology

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Reduction of risk and uncertainty 

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Arris Group

Alliance for optimization and economic of scales 

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Physical Intellectual Skilled human resource R&D

Personal Assistance in stores. Live Chat Online My repair and return center Email Support Telephones support ‘Give a Ring’.

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Communities: Facebook

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Lenovo

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Flextronics International Ltd

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Verizon, AT&T. TMobiles & Sprint

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Cost Driven: low end market Value Driven: high end market

Licensing Fee R&D expenditure Outsourcing cost

06 07 2014

Group 4

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Asset sales

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Motorola Software and UI

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High end market and low end market.

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B usin ess M odel odel Canvas

Customer segment: Higher end market and low end market: Motorola has come up with products such as Droid and Moto X, which are more technologically advanced with Google android high operating system, high resolution camera and AMOLED screens. These products are directed at premium market to create a differentiated image of the product and to be able to compete with phones like Samsung and Apple unlike Moto G and Moto E which is aimed at lower end market priced at around $100 to $200. Although profitable, this segmentation strategy does not set the Droid apart from other Smartphone‟s that are also marketed towards the same consumer. The Droid by Motorola

 product line is positioned posi tioned and advertised as functional f unctional for both work and home, as the company has realized that a narrow segment can limit its future mass market appeal.

Customer relationships: 

Personal Assistance in stores: Motorola provides personal one to one interaction with customers. The employees personally attend each customer and help them resolve issues or decide on phone selections.

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Live Chat Online: Motorola Mobility provides 24/7 online live chat service to its customers all over the globe.

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My repair and return center: Motorola has “My Repair and Return Center ” where  phones with technical issues iss ues are repaired or can be b e return & replaced with a new

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Tele phones support „Give a Ring‟. : Motorola Motorola encourages customers to call them whenever they face any problems with the cell phones.

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Communities: Facebook and Twitter page: Communities such as Facebook and Twitter allows customers to give their feedback and post their problems with the devices. This allows interaction which makes the customers feel more involved.

Value Proposition: Motorola Mobility makes sure that it integrates its patents and copyrights (intellectual), with great physical attributes (hardware specs, battery life, fluent OS incorporation, etc), backed up by its incredible human resource (designing phones to compete against other manufacturers on an equal footing and providing the best logistics and support) and R&D (new technological innovations –  first  first 1080p display phone, Project Ara, etc.) to provide the consumers with the best possible value and the best experience.

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 Newness: In addition to coming up with newer iterations of devices, devic es, Motorola Mobility is coming to market with its very own smart-watch, Moto 360 featuring the one and only device to sport a circular touch screen and one of the first few devices to use the newest Android Wear OS.

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Customization: The Moto Maker gives the users the ability to customize their devices to their hearts content. No longer are the users bound by what manufacturers provide, they can customize their Motorola devices from choosing the color to selecting trim levels and  boot animations.

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Design: Motorola fixed its issues to design and build robust devices sporting cool, slick minimalistic designs and also giving the users the ability to modify if needed.

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Brand/Status: In a highly saturated market with many no-name companies, Motorola  provides the users with a household ho usehold name

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Price: Off-contract prices for the devices are very low and offer great „bang for the buck‟ [Moto G LTE $179, Moto E $129]

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Risk reduction: Moto X, Motorola‟s flagship phone, is being offered to customers for a

trial of two weeks for a penny thus reducing the customers risk in selecting a phone. 

Accessibility: Motorola‟s new devices [Moto G, Moto E] are free on contract and ar e

available on all carriers thanks to their good relationship with US carriers making the devices highly accessible to everyone.

Key Partnership Strategic Alliance:

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Google: Acquired Motorola and key provider of Motorola‟s operating system.

Acquisition of Particular resource and activities:

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Arris Group: purchase Motorola Mobility's cable modem and set-top box business

Alliance for optimization and economic of scales:

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Datamax-O'Neil: develops and delivers cost-effective, industry-leading solutions for mobile field service/workforce and direct store delivery (DSD).

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IBM and Orcle: streamlining the supply chain with real-time inventory management, implementing EPC-compliant RFID technologies to reduce information gap in retailing, workforce automation and migrating wireless technologies to the new

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SAP: technology to reduce cost, improve performance and gain the agility through customer relationship management (CRM), enterprise resource planning (ERP) and supply chain software.

Reduction of risk and uncertainty: uncertainty: 

Verizon Wireless- (Motorola‟s biggest customer), Corning Inc.- (for Gorilla Glass), Qualcomm Incorporated- (for mobile systems chip).

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Avnet Technology Solutions: to Distribute Motorola Mobility‟s Mobilit y‟s Video and Broadband Solutions.

Future Alliance:

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Lenovo: already acquired Motorola‟s large alliance IBM and on the verge of acquiring Motorola Mobility. This will provide Lenovo easy entry in USA mobile market and its supply channel through IBM.

Cost structure Cost Driven:

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Moto G, a product of Motorola Mobility, is a low-end market phone produced to serve price sensitive customers. It falls under low-end market since this phone costs less than $200 with contract.

Value Driven:

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Moto X being a flagship phone is a premium phone which cost more and is specifically produce to serve the high-end markets

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Licensing Fee:

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Motorola Mobility is licensing the Reference Design Kit from Comcast for its set up development cycle. The Comcast RDK is a pre-integrated software bundle that creates a common framework for powering two-way, IP or hybrid set-top boxes and video gateway devices

R&D expenditure:

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Motorola‟s R&D spending has been decreased in the past few years but still they have

 been investing a decent amount a mount to reach out its goals. goals . It was said that Motorola‟s main mistake was that it uses other companies operating system for its phone so they are trying to significantly raise their spend in making their own operating system like it worked with Apple. Outsourcing cost:

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Motorola's longstanding outsourcing partner is Singapore-based Flextronics, the world's second-largest electronics contract manufacturer. Under a reported US$75 million deal, Flextronics took over management and operation of Motorola's factories in Tianjin and in Jaguariuna, Brazil, last year.

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Intellectual: its patent and copyrights, however most of them have been sold out to Google

Co. Human: Motorola Mobility‟s most prime resource is its employees who are dedicated and

motivated towards achieving company goals, through experts who are innovative in technology, knowledge management. In addition, administrators who have abilities that suits company future govern Motorola Mobility. These administrators are very talented and acquire the required skills in technology and general electric, as it requires human resource to come up with a device which could compete with other smart phones not only in terms of tangible product but also in terms of intangible items like software, apps etc. R&D: Motorola Mobility‟s R&D sector, which specializes and presents with high -tech

innovations, and now as it is under Google‟s authority there can  be much more to expected

than before and already some sparks can be seen in its new product Moto X.

Key Activities 

Platform: Motorola needs to continuously upgrade its smart phones, and come up

with new android software, and application. It needs to keep up with the different eco system. 

Apps developer/ app development:   The smart phone industry in not dominated by

 just the product, but the functionality that it provides, that is the apps and software‟s. 

Production:  Motorola Mobility hardware production dominates the market, although

it has a very limited product line.

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Google is selling Motorola Mobility's smartphone business to Lenovo Group for $2.9 billion. Motorola has produced the Moto smartphone in Fort Worth. Lenovo says it will continue the Fort Worth operation. Fort Worth might not seem like an obvious choice, but Mark Randall who is Motorola‟s senior vice president of supply chain and operations thinks  the city is logistics heaven. There‟s an industrial ai rport with a low tax rate, access to a large freight rail network and the factory Motorola is moving into used to be a Nokia facility. The area is also home to the so-called “telecom corridor” –  where  where companies such as Verizon, Ericsson and AT&T have offices. Besides it is also close to the company's service and repair operations in Mexico. The factory will be owned and run by Flextronics International Ltd., a Singapore-based contract electronics manufacturer that has had a long relationship with Motorola. Assembly accounts for relatively little of the cost of a smart phone. The cost largely lies in the chips, battery and display, most of which come from Asian factories.

Revenue Streams: Basically Motorola Mobility's smartphones generates its revenue from main two

ways:1. Asset sale: User buys cell phones from a wide offered range of products like MotoX, Moto E, Moto G and Droid. There are also other accessories contributing to their revenue streams  just like their newly offered offered Smart watch watch which is Moto Moto 360. 2. Motorola Software and UI : Inthis portion the revenue is mainly generated from the software and user interfaces that are produced by Motorola. There could be another way of revenue stream for Motorola which is licensing as Motorola Mobility Holdings Inc. (MMI) demanded $4 billion a year in patent royalties for use of technology critical to functioning of the Xbox video-gaming system from Microsoft Corp. But that didn’t work out as Microsoft and Apple Inc., which has its own patent battles with Motorola Mobility, have both filed