CONFIDENTIALThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.August20,2001MobileHandsetCompetitorProfile:MotorolaSAMSUNGELECTRONICSCHINA(SECChina)OVERVIEWOFCOMPETITORANALYSISFRAMEWORK1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing2010417SHELM038JL_RAJv5iBACKGROUNDINFORMATION1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing3010417SHELM038JL_RAJv5iMOTOROLAHASHIGHASPIRATIONSFORITSCHINABUSINESSTargetingsalesofUS$10billioninChinaby2002/2003FocusingproductionoperationsinChina,asproductionthereisabout15-20%cheaperthaninSingaporeand30-40%cheaperthaninEuropeSource:Analystreports4010417SHELM038JL_RAJv5iMOTOROLA’SCHINABUSINESSSPANSSIXPRODUCTCATEGORIESMotorolaChinaMobilehandsetsNetworkequipmentPagersTwo-wayradiosSemi-conductorsAutoelectronicsandaccessoriesMobilenetworkequipmentFixedlinenetworkequipmentWirelesscommunicationsSource:MotorolawebsiteSetuprepresentativeofficein1987Operationsinclude:1holdingcompany1WOFE8jointventures26subsidiaries12,000employeesUS$3.4billiontotalinvestmenttodate5010417SHELM038JL_RAJv5iSTRATEGY1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing6010417SHELM038JL_RAJv5iMOTOROLA’SHANDSETSTRATEGYCOMBINESANATTRACTIVEPRODUCTRANGEWITHSUPERBVALUECHAINMANAGEMENTDevelopedawideproductrangewhichcoversallkeypricepointsandoffersawiderangeoffunctionalityInvestedheavilyinproductlocalizationthroughChina-basedR&DteamExpandedlocalmanufacturinginordertoreducecostsandimprovetime-to-marketCloselymanagedfirst-tiergroupofnineresellersinordertominimizepricecompetitionandfacilitateordertrackingCommittedhandsetpromotionSpeedyroll-outofnewreleasesProvisionofhigh-qualityafter-salesservicesAdvancedtechnologyProductrangeValuechainCorecompetencies7010417SHELM038JL_RAJv5iPRODUCT/MARKET1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing8010417SHELM038JL_RAJv5iMotorolahasenteredthelow-endofthemobilehandsetmarketsince1999.Itsproductsaremorefunction-drivencomparedwithNokia’sproducts,whicharemorefashion-drivenMotorolatakesmorethan50%oftheshareinthehigh-endandhigh-mid-endofthemobilehandsetmarket,andmorethan20%oftheshareinthelow-endandmid-low-end.Itslow-endhandsetsrepresentmorethen50%ofitsproductofferingsMotorola’smarketshareisrelativelyconsistentacrosstier-citiesandgeographies,takingapproximately30%everywhereKEYMESSAGES-PRODUCT/MARKET9010417SHELM038JL_RAJv5iMOTOROLAHASRECENTLYFOCUSEDONBUILDINGOUTITSLOW-ENDPRODUCTPORTFOLIOProductpositioningDec2000Business/professionalPersonalProductpositioningJun2000V8088(1.6%)Business/professionalPersonalV998(5.6%)LF2000(2.9%)LF2000(4%)368C(3.1%)338C(0.6%)T2688(4.8%)CD928(1.1%)V2188(3.8%)V2088(2.0%)A6188(1.4%)V8088(3.9%)V998++(7.0%)P7689(1.8%)L2000(2.2%)LF2000(1.7%)368C(2.3%)T2688(6.2%)V2188(1.3%)V2088(1.0%)366C(0.5%)T2288(0.3%)T360(0.3%)HighHigh-

mediumMedium-

lowLowHighHigh-

mediumMedium-

lowLowSource:Interviews,McKinseyanalysis10010417SHELM038JL_RAJv5iMOTOROLAMODELSAREMOREFUNCTION-DRIVENTHANNOKIAFashionBusinessBasicFunChangeablecoverSub-100gVoice-dialRecordingVibrationTri-bandWAPBuilt-inmodemIR-portChineseinputLi-IonbatterySMSmessagingGamesComposable/downloadableringertone82106210P7689V998++FashionClassicPriceinChina(RMB)26522878236918001452Equivalentfeatures,Nokiamorefun/fashionvs.MotorolamorefunctionsMotorolaofferslowerpricemodelswithsimilarfeatures,tri-bandandWAP* Nov.2000priceKeydifferences11010417SHELM038JL_RAJv5iSource: GFK,Sino-MRMOTOROLAHASHIGHERSHARESINCHINAINFASHIONANDBUSINESSSEGMENTSNokiaMotorolaModels2000ChinaTaiwanHongKongIndonesiaSingaporeFlagship8850A6188Fashion-High8210,8250V8088,V998+Fashion-Low3310T360,T2988,T2688Basic3210,5110V2088/2188,V2288,StarTac,CD928/938Business-low6150L2000SeriesBusiness-High6210,7110P7689Total:12010417SHELM038JL_RAJv5iMOTOROLAHASDRIVENSALESINCREASESPARTICULARLYINTHELOW-ENDPRODUCTSMid-low(RMB1500-2500)High-mid(RMB2500-3500)High(>RMB3500)December2000April2001ProductmixPercentofunitsMarketsharebypricepointPercentLow(<RMB1500)Dec2000-April2001Mid-low(RMB1500-2000)High-mid(RMB2500-3500)High(>RMB3500)Low(<RMB1500)Source:Interviews,Sino-MR(Dec2000-April2001),McKinseyanalysisMid(RMB2000-2500)13010417SHELM038JL_RAJv5iMOTOROLA’’SMARKETSHAREISRELATIVELYCONSISTENTACROSSTIERCITIESANDGEOGRAPHIESMarketsharebytiercitiesPercentMarketsharebygeographicareasPercentNorthWestNortheastCentralTier1Tier2Tier32000April2001SouthEastSource:Sino-MR,GfKDec2000-April200114010417SHELM038JL_RAJv5iVALUECHAINSTRATEGY1.BackgroundinformationLocationRegisteredcapitalManagement

teamEquitystructureStartingyearNumberofemployeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,advertisingandpromotionDistribution(channelandsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing15010417SHELM038JL_RAJv5iMotorola’svaluedeliverysystemstrategyhasevolvedsince1997.Productdevelopmenthasbeenmorecustomerorientedandnewreleasesarecateringforneedsbydifferentcustomersegments.Localizationofmobilehandsetmanufacturinghasbeenfurtheredtoaproductioncapacityof18millionunitsinTianjinand8millionunitsinHangzhou.Withincreasinginvestmentinsalesandmarketing,MotorolaisnowthestrongestbrandinChinaMotorolaemploysPTAC,CellStart,Heguang,Eastcom,SunYin,Sinya,NorthTelecom,Hengxin,andForteasits9first-tierresellers.ItintendstoreducethemanytiersofresellersthathasbecomeadisadvantagetoMotorola’’schannelefficiencyMotorola’skeystrengthliesinadvancedtechnology,committedpromotion,widedistributionnetworkandqualityafter-salesserviceKEYMESSAGES-VALUECHAINSTRATEGY16010417SHELM038JL_RAJv5iMOTOROLA’SVALUECHAINHASEVOLVEDOVERTHEPASTTHREEYEARSFrom...(1997)To...(2000/2001)ManufacturingSalesandmarketingDistributionProductioncapacityinTianjin(1.5million)andHangzhou(200,000)StrongbrandawarenessMarketshare34%50%reimportviaHongKongStrongnationwidetiereddealernetwork(10-15tierAdealers)CloserelationswithPTT’’sExpandingproductioncapacityatTianjinto18millionunits,andatHangzhouto8millionunitsStrongestbrandawarenessinChinaDevelopedneeds-basedcustomersegmentationMarketshare30%50%reimportviaHongKongNumberofdealerslimitedto9;sharedexclusivitybyproductKeptstrongretailsupport(doubledmarketingandsalesstaffsince‘97)Source:Interviews,McKinseyanalysis17010417SHELM038JL_RAJv5iMOTOROLA’SKEYSTRENGTHSLIESINADVANCEDTECHNOLOGY,COMMITTEDPROMOTION,WIDEDISTRIBUTIONNETWORKSANDQUALITYAFTER-SALESSERVICESSource: IDC2000KeystrengthsRecentdevelopmentCommittedhandsetpromotionSpeedyroll-outofnewreleasesStrongbrandrecognitionPaysmoreattentiontomarketneedsContinuestopromotemodelswithfreegiftsSalesandmarketingHasninefirst-tierresellers,thelargestnumberamongvendorsPricecompetitionamongresellersiseliminatedCaneffectivelymanagetheproductionvolumewithclosetrackingofordersfromthechannelsBestvendoronchannelsupportinpromotion,advertisement,servicecentersandfundingAltereditsstrategyin2000toemploytwoauthorizedresellerfromeverymodelDistributionProvisionofqualityafter-salesservicesSetsupInternet-basedconsumerclubandplanstodoubleservicestationsin2001After-salesservicesAdvancedtechnologyHighlylocalizedproducts-stronglocalR&D(800engineers,18researchcenters,investment13b.RMB)Highrateofnewproductintroduction(9newproductsin2000)Readyfor3GProductdevelopment18010417SHELM038JL_RAJv5iMOTOROLADISTRIBUTESEXCLUSIVELYTHROUGHNINEFIRST-TIERRESELLERSSource:IDCRationalesMotorolaemploysPTAC,CellStart,Heguang,Eastcom,SunYin,Sinya,NorthTelecom,Hengxin,andForteasits9first-tierresellers.HistoricallyassignedoneMotorolamodeltoeachresellerEliminatespricecompetitionEnablesMotorolatoeffectivelymanageproductionvolumewithordertrackingRecentlyshiftstrategytohave2authorizedresellersforeverymodelinordertoimprovepromotionsandaccesstocustomersMotorolaisthebestvendoronchannelsupportaspromotionandadvertisementisprovided.Italsohelpsresellerstosetupservicecenterstohandlerepairandmaintenanceservices.AstheleadingvendorinChina,Motorola’schannelstrategyisofcontinuedimportanceMotorolaChannelStructureMotorola’swell-builtdistributionnetworkplaysanimportantroleinitssuccessinChinaToomanytiersofresellersbecomeadisadvantagetoMotorola’schannelefficiencyVendor1st-tierresellers2nd-tierresellersRetailers/retailchainstoresConsumers100%21%64%3%85%12%76%19010417SHELM038JL_RAJv5iORGANIZATIONANDOWNERSHIP1.BackgroundinformationLocationRegisteredcapitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,advertisingandpromotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing20010417SHELM038JL_RAJv5iMotorolahas8JVs,1WOFEand1holdingcompanyinChina,amongwhichHangzhouEastcomCellularPhone(8millionunitsproductioncapacity)andMotorolaTianjin(MCEL,18millionunitscapacity)aredevotedtomobilehandsetsMotorolaismainlyorganizedalongproductlines,however,itsWOFEinTianjinhasbeenreorganizedtobemorecustomerfocused.MotorolaTianjinisdividedinto4sectors,i.e.PersonalCommunicationforconsumers,Commercial,GovernmentandIndustrialSolutionsforcorporateandgovernment,GlobalTelecommunicationSolutionsfortelecomoperators,andIntegratedElectronicSystemsforassemblersKEYMESSAGES-ORGANIZATIONANDOWNERSHIP21010417SHELM038JL_RAJv5iMOTOROLAHAS8JVsAND1WOFEINCHINA,AMONGWHICH1JVANDTHEWOFEAREDEVOTEDTOMOBILEHANDSETSMotorola(China)investmentLeshan-Phoenixsemi-conductorShanghaiMotorolapagingproductsHangzhouMotorolaMobilecommuni-

cationHangzhouEastcomcellularphoneShanghaizhongmeiautomotiveelectronicsHuaminSmartcard,BeijingHuaminsmartcardsystemmanufacturingMotorolaTianjin(MCEL)EstablishedyearProductoffering1995199520002000199919981992SemiconductorPagerGSMandCDMAnetworkMobilehandsetsAutomotiveelectronicsSmartcardsystemandproductMobilehandsetsMobileinfrastructureSemi-conductorsTwo-wayradiosBasestationsHandsetaccessoriesWithAnsenmeiandLeshanRadioWithShanghaiRadio(SRCEM)WithEastcomandPutian42%WithEastcomandPutianWithShanghaiGEWithSino-overseasconstructioninformation100%Source:Motorolapressrelease22010417SHELM038JL_RAJv5iMOTOROLAISORGANIZEDALONGPRODUCTLINES,HOWEVERITSWOFEINTIANJINHASBEENREGORGANIZEDTOBEMORECUSTOMERFOCUSEDR&DHang

Zhou/ShanghaiManu-

facturingSalesServicesManu-

facturingSalesServicesMotorola

ChinaPersonalcommunicationCommercial,governmentandindustrialsolutionsGlobalTele-communicationsolutionsIntegratedElectronicsSystemsAsiatele-communicationproductmanufacturingsite(planned)R&DManu-facturingR&DManu-facturingSalesR&DManu-facturingSalesR&DManu-facturingMobilehandset*pager*In2001,18millionunitscapacityGSM,CDMAMobilenetworkandhandsetsGSM,CDMAMobilenetworkMobilehandsets**In2001,

5millionunitsproduction8millionunitscapacityTwowayradioGSM,CDMAsystems,e.g.,basestationBatteriesHangzhouMotorolamobile

communicationHangzhouEastcomcellularphoneMotorolaTianjin(MCEL)MarketingSource:Motorolapressrelease23010417SHELM038JL_RAJv5iFINANCIALPERFORMANCE1.BackgroundinformationLocationRegisteredcapitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,advertisingandpromotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferingsKeycustomersValuepropositionGeographicfocusPricing24010417SHELM038JL_RAJv5iMotorolahasbeenmaintainingitsmarketshareof30%inmobilehandset.Duetoincreasinglyintensivecompetitions,itsmarketshareisexpectedtodropto20%in2005.Motorola’’sEBITmarginformobilehandsetis5%,whichisverylowcomparedwithSamsung’’sEBITat15%andNokia’’sEBITat20%.ThelowEBITmarginismainlyduetoitshighcostofgoodssold.KEYMESSAGES-FINANCIALPERFORMANCE25010417SHELM038JL_RAJv5iMOTOROLAHASGROWNWITHTHEMARKETANDMAINTAINEDITS30%MARKETSHAREINMOBILEHANDSETTotalrevenuesUSDbillionsNumberofunitsMillionsAveragepriceUSDSource:IDC,DresdnerKleinwort,Samsung,McKinseyanalysis26010417SHELM038JL_RAJv5i9、靜夜四四無鄰，，荒居舊舊業貧。。。12月-2212月-22Wednesday,December14,202210、雨中黃黃葉樹，，燈下白白頭人。。。00:42:4300:42:4300:4212/14/202212:42:43AM11、以我我獨沈沈久，，愧君君相見見頻。。。12月月-2200:42:4300:42Dec-2214-Dec-2212、故人人江海海別，，幾度度隔山山川。。。00:42:4300:42:4300:42Wednesday,December14,202213、乍見翻疑夢夢，相悲各問問年。。12月-2212月-2200:42:4300:42:43December14,202214、他鄉生白發發，舊國見青青山。。14十二月月202212:42:43上午午00:42:4312月-2215、比不了得得就不比，，得不到的的就不要。。。。十二月2212:42上午12月-2200:42December14,202216、行動動出成成果，，工作作出財財富。。。2022/12/140:42:4300:42:4314December202217、做前前，能能夠環環視四四周；；做時時，你你只能能或者者最好好沿著著以腳腳為起起點的的射線線向前前。。。12:42:43上上午午12:42上上午00:42:4312月月-