Innovation Through Acquisitions Motorola\'s Strategies

Innovation Through Acquisitions

Motorola's Strategies for Innovation

Culturally Motorola is a technologically-driven company, segmenting their research & development (R&D) investments by product line, versus centralizing this function as competitors Nokia, Samsung, and others do. To enable greater levels of coordinated effort however, the company relies on creating value through a shared roadmapping exercise (Probert, Radnor, 2003). Roadmapping is Motorola's process for ensuring innovation through cooperative strategies. The use of roadmapping also ensures a higher level of collaboration across its mobile phone and network equipment businesses. A second approach Motorola relies on is in creating value through strategic entrepreneurship, which is what many industry experts credit with the development of the Razr cellular phone (Lee, 2008). Motorola also relies on mergers and acquisitions to differentiate their products through the addition of services, which can also increase gross contribution margins (GCM) and profitability. An example of this innovation through acquisition is the decision to acquire Netopia, a services provider specializing in enterprise-wide cabling and telecommunications equipment, with expertise in IPTV (Internet Protocol Television) and advanced IP networking technologies (Weekly Corporate Growth (2006). This acquisition gave Motorola the necessary services to expand their commercial divisions and also sell more effectively into enterprise-wide accounts. The use of mergers and acquisitions at Motorola for gaining differentiation and therefore delivering innovative solutions, freeing themselves from being a purely product-driven company illustrates how this strategy can be effectively used.