Chapter 197 Motorola's Global Strategy
At the Capital International Airport, a group of foreigners disembarked, trying to maintain their composure against the biting cold. Once outside, they quickly boarded a large Mercedes-Benz business van.
"This damned weather, colder than Alaska," Jared grumbled as he climbed in.
A middle-aged white man chuckled and replied, "Blanco, after a year here, you still haven't adapted?"
"Mr. Blanco," Jared said, sticking his hands toward the van's heating vents, "human beings need hundreds of years to adapt to the cold. Scientifically speaking."
César Blanco, Motorola's Global Strategy President, had flown into Tianjin twenty days before the Lunar New Year.
This visit followed Motorola (Mainland China) CEO's announcement that a brand-new mobile phone production line would be established there.
It was no coincidence; Tianjin was also home to Motorola's first pager factory in China.
...
The Mercedes-Benz van cruised along the recently completed highway toward Tianjin.
There were plenty of cars on the road, and notably, many were private vehicles.
Evaluating a region's development potential based on its traffic conditions and infrastructure investment was basic strategic work.
Motorola had decisively chosen to enter the Chinese market when they learned that China was starting large-scale highway construction.
Two years ago, when the political winds turned favorable, Motorola had been one of the first international giants to move in, establishing an electronics plant in Tianjin focused on pagers and early mobile phones.
At the time, Motorola's thinking was simple:
lose money for three years if necessary—because Yuanxin and Zhongxin's sudden rise had caught them off guard.
What they hadn't expected was that even after losing the first-mover advantage on Chinese-language pagers,
they still managed to turn a small profit within the first year.
Meanwhile, the explosive growth of the analog mobile communication market over the past two years had convinced Motorola's executives that China held incredible long-term potential.
And then...
Yuanxin appeared.
Not only that, they pushed China straight into the GSM mobile network era.
To be honest, in the eyes of Motorola's proud technical department, a Chinese-language system wasn't even considered real "technology." It was just an annoying complication.
But delivering a full GSM solution—
that was a real threat.
Since its founding, Motorola had been the trailblazer that pioneered a new technological field roughly every decade.
The list of their achievements was legendary:
car radios, color TV picture tubes, fully transistorized color TVs, semiconductor microprocessors, two-way radios, pagers, cell phones, and even the Six Sigma quality management system.
They had pioneered automotive electronics, transistorized color televisions, trunked radio systems, semiconductors, and mobile communications, and had long dominated each industry they entered.
They stood so high that it was cold at the top, as the saying went.
(//Note: This description is cited from Zhou Xibing.)
Now, when Motorola's global strategy department turned its gaze eastward and saw a young company—Yuanxin—emerging in much the same way Motorola once had, but perhaps even more fiercely,
Motorola had no choice but to start studying Yuanxin's strategic direction carefully.
And what they found shocked them:
Yuanxin had an extraordinary level of confidence in China's market.
If previously Motorola's China strategy was like casually placing a small blind bet and waiting to see how the cards fell,
now, with Yuanxin in the game—
and Siemens too—
they realized they were facing real competition.
The blind bets were over.
Now, they had to commit and play the hand to the end.
Whether they would win or lose could only be decided once all the cards were on the table.
Motorola very much wanted to see whether Yuanxin's bet on China's potential would pay off—
whether China's domestic market could truly scale up to match its 1.3 billion people.
If it did, all the investment would be worth it.
So César had come.
With genuine intent to expand Motorola's presence in China.
...
The Tianjin investment office and Motorola (Mainland China) executives gave him a warm welcome.
After the formal ceremonies were completed, César convened a private meeting with the local leadership the next day.
"According to our information, Siemens and Yuanxin are both aggressively pursuing partnerships with mobile operators and distributors," said Liang Renbing, the local Motorola General Manager.
"Especially Yuanxin—they're leveraging their communication infrastructure deals and strong ties with the new Mobile Company to sweep through the market."
César absorbed the meaning of "sweeping through" and chuckled.
"So, Liang, are you saying we have no advantages left?"
Liang shook his head.
"Not exactly.
Although the Mobile Company is a state-owned enterprise, they are operating with a very market-oriented mindset.
Local branches have significant autonomy.
And many of their key people come from the former Postal and Telecommunications Bureau, where we already have strong relationships."
"In other words," César said, "we still have a chance to cooperate with the operators?"
"Exactly.
And the opportunity is big."
"The only problem is," Liang continued,
"Yuanxin's commercial arm already secured a first-mover advantage in the cities where GSM will launch first.
They've even established specialized mobile device retail outlets."
Liang smiled bitterly.
"Yuanxin's Deputy Director Zhang even visited me personally, saying that Yuanxin would eventually spin off its retail arm so we could continue cooperating without conflict."
At this, Jared blinked.
"If I understand correctly," he said,
"Yuanxin's Deputy Director is asking us to hand over our mobile phones to Yuanxin for distribution?"
"That's right," Liang said.
César raised his eyebrows but quickly masked his reaction and even chuckled.
"That's quite a unique business model."
"Currently," Liang added,
"there's no comparable telecom retail chain in China—
only a large appliance chain in Beijing, and they haven't shown much interest in selling mobile phones yet."
"Aside from that, we still have strong advantages in small-scale retail outlets that mainly sell pagers.
Motorola's brand recognition remains very high."
He handed César a thick stack of Chinese and English reports.
Liang knew that César's real purpose for this visit was to announce new pricing policies and adjust channel strategies based on local market realities.
Thus, he had to give a full and honest briefing.
César took the reports, skimmed the first page, and placed them on his lap.
After thinking for a few seconds, he asked,
"So, bottom line—our main channel is the Mobile Company?"
"Yes," Liang said.
"And what's the Mobile Company's attitude toward Motorola entering the mobile phone market?" César pressed.
"Or more precisely, how does the Ministry of Posts and Telecommunications feel about it?"
Liang paused, recalling recent meetings, and answered firmly,
"They are very welcoming.
Extremely welcoming."
"Good," César said, his eyes flashing with determination.
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 20 Chapters In Advance: patreon.com/Albino1