Business Model Canvas

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Business Canvas Model

of

Motorola Mobility

Prepared for: Mohammad Hannan Miah (MHM)

Prepared by: Prepared by:

Md.

Md. Shariar Shariar Alam Alam 102 102 0176 0176 030030 Tahsin

Tahsin Hossain Hossain 101 101 0735 0735 030030 Sathwath

Sathwath Ali Ali Bhuiyan Bhuiyan 111 111 0330 0330 030030 Ananda

Ananda Jabbar Jabbar Ratul Ratul 111 111 0225 0225 030030 Prashant

Prashant Tiwari Tiwari 102 102 0559 0559 030030 Nowshin

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  NewnessNewness   CustomizationCustomization   DesignDesign   OS updatesOS updates 

 Brand statusBrand status 

 PricePrice 

 Risk reductionRisk reduction   AccessibilityAccessibility MHM MHM Group Group 44 06 07 201406 07 2014 Strategic Alliance Strategic Alliance   GoogleGoogle Acquisition of Particular Acquisition of Particular resource and activities resource and activities



 Arris GroupArris Group

Alliance for optimization Alliance for optimization and economic of scales and economic of scales



 Datamax-O'NeilDatamax-O'Neil 

 IBM and OracleIBM and Oracle 

 SAPSAP

Reduction of risk and Reduction of risk and uncertainty

uncertainty



 Verizon Wireless,Verizon Wireless,

Corning Inc. Corning Inc. &Qualcomm &Qualcomm Incorporated Incorporated 

 Avnet TechnologyAvnet Technology

Future Alliance Future Alliance



 LenovoLenovo



 Cost Driven:Cost Driven: low end market low end market 

 Value Driven:Value Driven: high end market high end market 

 Licensing FeeLicensing Fee 

 R&D expenditureR&D expenditure 

 Outsourcing costOutsourcing cost



 Personal Assistance inPersonal Assistance in

stores. stores.



 Live Chat OnlineLive Chat Online 

 My repair and returnMy repair and return

center center



 Email SupportEmail Support 

 Telephones support ‘GiveTelephones support ‘Give

a Ring’. a Ring’.



 Communities: FacebookCommunities: Facebook



 High end marketHigh end market

and low end and low end market. market.



 PlatformPlatform 

 Development of sDevelopment of soft -oft

-wares and apps wares and apps

  ProductionProduction   PhysicalPhysical   IntellectualIntellectual 

 Skilled humanSkilled human

resource resource   R&DR&D   Newness Newness   CustomizationCustomization   DesignDesign   OS updatesOS updates 

 Brand statusBrand status 

 PricePrice 

 Risk reductionRisk reduction 

 AccessibilityAccessibility



 LenovoLenovo 

 Flextronics InternationalFlextronics International

Ltd Ltd



 Verizon, AT&T. T-Verizon, AT&T.

T-Mobiles & Sprint Mobiles & Sprint



 Asset salesAsset sales



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B

B usinusin eesss s MM odeodel l CanvasCanvas

Customer segment:

Higher end market and low end Higher end market and low end market:market:

Motorola has come up with products such as Droid and Moto X, which are more 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 technologically advanced with Google android high operating system, high resolution camera and AMOLED screens. These products are directed at premium market to create a

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 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 Apple unlike Moto G and Moto E which is aimed at lower end market priced at around $100 to $200.

to $200.

Although profitable, this segmentation strategy does not set the Droid apart from other 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 Smartphone‟s that are also marketed towards the same consumer. The Droid by Motorola

product line is posi

product line is positioned and advertised as ftioned and advertised as functional for both work unctional for both work and home, as theand home, as the company has realized that a narrow segment can limit its future mass market appeal. 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 withPersonal Assistance in stores: Motorola provides personal one to one interaction with

customers. The employees personally attend each customer and help them resolve customers. The employees personally attend each customer and help them resolve issues or decide on phone selections.

issues or decide on phone selections.



 Live Chat Online: Motorola Mobility provides 24/7 online live chat service to itsLive Chat Online: Motorola Mobility provides 24/7 online live chat service to its

customers all over the globe. customers all over the globe.



 My repair and return center: Motorola hasMy repair and return center: Motorola has“M“My Repair and Return Center y Repair and Return Center ”” where where

phones with technical iss

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

 TeleTele phones support „Give a Ring‟. : M phones support „Give a Ring‟. : Motorola encourages customers to call themotorola encourages customers to call them

whenever they face any problems with the cell phones. whenever they face any problems with the cell phones.



 Communities: Facebook and Twitter page: Communities such as Facebook andCommunities: Facebook and Twitter page: Communities such as Facebook and

Twitter allows customers to give their feedback and post their problems with the Twitter allows customers to give their feedback and post their problems with the devices. This allows interaction which makes the customers feel more involved. 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 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 great physical attributes (hardware specs, battery life, fluent OS incorporation, etc), backed up by its incredible human resource (designing phones to compete against other

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 manufacturers on an equal footing and providing the best logistics and support) and R&D (new technological innovations

(new technological innovations – – first 1080p display phone, Project Ara, etc.) to provide the first 1080p display phone, Project Ara, etc.) to provide the consumers with the best possible value and the best experience.

consumers with the best possible value and the best experience.



 Newness: In addition to coming up with Newness: In addition to coming up with newer iterations of devicnewer iterations of devices, Motorola Mobility ises, Motorola Mobility is

coming to market with its very own smart-watch, Moto 360 featuring the one and only 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 device to sport a circular touch screen and one of the first few devices to use the newest Android Wear OS.

Android Wear OS.



 Customization: The Moto Maker gives the users the ability to customize their devices toCustomization: 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 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 can customize their Motorola devices from choosing the color to selecting trim levels and boot animations.

boot animations.



 Design: Motorola fixed its issues to design and build robust devices sporting cool, slickDesign: 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. 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, MotorolaBrand/Status: In a highly saturated market with many no-name companies, Motorola

provides the users with a ho

provides the users with a household nameusehold name



 Price: Off-Price: Off-contract prices for the devices are very low and offer great „bang for the buck‟contract prices for the devices are very low and offer great „bang for the buck‟

[Moto G LTE $179, Moto E $129] [Moto G LTE $179, Moto E $129]



 Risk reduction: Moto X, Motorola‟s flagship phone, is being offered to customers for aRisk 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. 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 Accessibility: Motorola‟s new devices [Moto G, Moto E] are free on contract and ar ee

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

devices highly accessible to everyone.

Key Partnership

Strategic Alliance: Strategic Alliance:



 Google: Acquired Motorola and key providerGoogle: Acquired Motorola and key providerof Motorola‟s operating system.of Motorola‟s operating system.

Acquisition of Particular resource and

Acquisition of Particular resource and activities:activities:



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

Alliance for optimization and

Alliance for optimization and economic of scales:economic of scales:



 Datamax-O'Neil: develops and delivers cost-effective, industry-leading solutions forDatamax-O'Neil: develops and delivers cost-effective, industry-leading solutions for

mobile field service/workforce and direct store delivery (DSD). mobile field service/workforce and direct store delivery (DSD).



 IBM and Orcle: streamlining the supply chain with real-time inventory management,IBM and Orcle: streamlining the supply chain with real-time inventory management,

implementing EPC-compliant RFID technologies to reduce information gap in implementing EPC-compliant RFID technologies to reduce information gap in retailing, workforce automation and migrating wireless technologies to the new 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 throughSAP: technology to reduce cost, improve performance and gain the agility through

customer relationship management (CRM), enterprise resource planning (ERP) and customer relationship management (CRM), enterprise resource planning (ERP) and supply chain software.

supply chain software.

Reduction of risk and

Reduction of risk and uncertaintuncertainty:y:



 Verizon Wireless-Verizon Wireless-(Motorola‟s biggest customer), Corning Inc.(Motorola‟s biggest customer), Corning Inc.- (for Gorilla Glass),- (for Gorilla Glass),

Qualcomm Incorporated- (for mobile systems chip). Qualcomm Incorporated- (for mobile systems chip).



 Avnet Technology Solutions:Avnet Technology Solutions:to Distribute Motorola Mobilitto Distribute Motorola Mobility‟s Video and Broadbandy‟s Video and Broadband

Solutions. Solutions.

Future Alliance: Future Alliance:



 Lenovo:Lenovo:already acquired Motorola‟s large alliance already acquired Motorola‟s large alliance IBM and on the verge ofIBM and on the verge of

acquiring Motorola Mobility. This will provide Lenovo easy entry in USA mobile acquiring Motorola Mobility. This will provide Lenovo easy entry in USA mobile market and its supply channel through IBM.

market and its supply channel through IBM.

Cost structure

Cost Driven: Cost Driven:



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

less than $200 with contract.

Value Driven: Value Driven:



 Moto X being a flagship phone is a premium phone which cost more and isMoto X being a flagship phone is a premium phone which cost more and is

specifically produce to serve the high-end markets specifically produce to serve the high-end markets

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Licensing Fee: Licensing Fee:



 Motorola Mobility is licensing the Reference Design Kit from Comcast for its set upMotorola 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 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 a common framework for powering two-way, IP or hybrid set-top boxes and video gateway devices

gateway devices

R&D expenditure: R&D expenditure:



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

been investing a decent a

been investing a decent amount to reach out its goalsmount to reach out its goals. It was. It wassaid that Motorola‟s mainsaid that Motorola‟s main

mistake was that it uses other companies operating system for its phone so they are mistake was that it uses other companies operating system for its phone so they are trying

trying to significantly raise their spend to significantly raise their spend in making their own in making their own operating system like itoperating system like it worked with Apple.

worked with Apple.

Outsourcing cost: Outsourcing cost:



 Motorola's longstanding outsourcing partner is Singapore-based Flextronics, theMotorola's longstanding outsourcing partner is Singapore-based Flextronics, the

world's second-largest electronics contract manufacturer. Under a reported US$75 world's second-largest electronics contract manufacturer. Under a reported US$75 million deal, Flextronics took over management and operation of Motorola's factories 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:

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

Co.

Human:

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

motivated towards achieving company goals, through experts who are innovative in motivated towards achieving company goals, through experts who are innovative in technology, knowledge management. In addition, administrators who have abilities that suits technology, knowledge management. In addition, administrators who have abilities that suits company future govern Motorola Mobility. These administrators are very talented and 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 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 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.

tangible product but also in terms of intangible items like software, apps etc.

R&D:

R&D: Motorola Mobility‟s R&D sector, which specializes and presents with highMotorola Mobility‟s R&D sector, which specializes and presents with high-tech-tech

innovations, and now as it is under Google‟s authority there can

innovations, and now as it is under Google‟s authority there can be much more to expected be much more to expected than before and already some sparks can be seen in its new product Moto X.

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

Key Activities



 Platform:Platform: Motorola needs to continuously upgrade its smart phones, and come upMotorola 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 with new android software, and application. It needs to keep up with the different eco system.

system.



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

just the product, but the functionality

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



 Production:Production: Motorola Mobility hardware production dominates the market, although Motorola Mobility hardware production dominates the market, although

it has a very limited product line. 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. 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 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 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

who is Motorola‟s senior vice president of supply chain and operations thinks the city is the city is

logistics heaven. There‟s an industrial ai

logistics heaven. There‟s an industrial airport with a low tax rate, access to a large freight railrport 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 network and the factory Motorola is moving into used to be a Nokia facility. The area is also home to the

so-home to the so-called “telecom corridor” – called “telecom corridor” – where companies such as Verizon, Ericsson and where companies such as Verizon, Ericsson and AT&T have offices.

AT&T have offices.

Besides it is also close to the company's service and repair operations in Mexico. The factory 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

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 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 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.

display, most of which come from Asian factories.

Revenue Streams:

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

ways:-1.

1. Asset sale:Asset sale:User buys cell phones from a User buys cell phones from a wide offered range of products like MotoX, Moto E,wide offered range of products like MotoX, Moto E, Moto G and Droid. There are also other accessories contributing to their revenue streams Moto G and Droid. There are also other accessories contributing to their revenue streams just like their newly off

just like their newly offered Smart waered Smart watch which is Motch which is Moto 360.to 360. 2.

2. Motorola Software and UI :Motorola Software and UI : Inthis portion the revenue is mainly generated from theInthis portion the revenue is mainly generated from the software and user interfaces that are produced by Motorola.

software and user interfaces that are produced by Motorola. There could be another way of revenue stream for Motorola which is

There could be another way of revenue stream for Motorola which is licensing as Motorola Mobilitylicensing as Motorola Mobility Holdings Inc. (MMI) demanded $4 billion a year in patent royalties for use of technology critical to 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.

functioning of the Xbox video-gaming system from Microsoft Corp. But that didn’t work out asBut that didn’t work out as

Microsoft and Apple Inc., which has its own patent battles with Motorola Mobility, have both filed Microsoft and Apple Inc., which has its own patent battles with Motorola Mobility, have both filed