Motorola - Building and Participating in Partnership Ecosystems

In May 2004, Motorola found itself in the unusual position of being a partner in another corporation's "ecosystem". British Telecom announced its highly ambitious intention to offer merged fixed and mobile telephony to its customers and become a leader in the larger convergence trend. Rudolf and Valeria Maag Fellow in Entrepreneurship Ha Hoang analyses how Motorola found itself partnering with some of its biggest global rivals in BT's Bluephone alliance.

by Ha Hoang
Last Updated: 23 Jul 2013

In May 2004, British Telecom announced its highly ambitious intention to offer merged fixed and mobile telephony to its customers and become a leader in the larger convergence trend. Motorola, which had been one of the first operators to provide WiFi systems solutions to BT and other leaders in the sector, was to be a vital player in BT's plan. In providing end-to-end WiFi solutions, Motorola acted as the leader of its own ecosystem by bringing together small entrepreneurial partners around its solution architecture. But the BT agreement would involve linkages with some of the American-based firm's main global rivals, like Alcatel and Ericsson. Motorola would find itself - or more specifically, its Global Telecommunications Solutions Sector (GTSS) unit - forced to operate as a player in one of its partner's ecosystem.

The Bluephone project announced by BT involved Motorola and six other partners. For the first time, Motorola's business development team found itself part of another company's partner ecosystem. How could Motorola guarantee not only that it could add value to the partnership network, but that it would also capture some of the value that was created? As firms jockeyed for position, Motorola was sure to encounter resistance from other players involved Rudolf and Valeria Maag Fellow in Entrepreneurship Ha Hoang analyses how Motorola's Business Development team was created.

Rudolf and Valeria Maag Fellow in Entrepreneurship Ha Hoang analyses how Motorola's Business Development team was created in response to a serious and sustained global telecom slump. The team would allow Motorola to deliver comprehensive system solutions without building all the components of the solution in-house. To this end, its GTSS business development team was mandated to form developmental partnerships, often with smaller and younger companies.

Hoang explains why finding a workable partnering model was easier said than done. Partner portfolios would have to be arranged ahead of the market by the Business Development team to offer the most innovative packages and to avoid pre-emption. Forecasting the evolution of such a radically changing sector was no mean feat, particularly since profitability is often elusive in nascent markets and partnerships would involve at least several years of collaboration. The case details the steps that Motorola took to minimize the risks of partnering with smaller players.

The author also provides a brief history of Motorola's early commercial experiences in WiFi development, a strong success and the first time its GTSS department had used the new partnering model. Opportunities in WiFi, however, were only one indication of much more profound changes still occurring in the telephony market, due to fixed-mobile convergence. Hoang explains the most important current trends affecting the recent market, including major changes in the competitive arena, technological changes, and customer expectations and demands.

The case concludes with some insights into how a smaller player in the Bluephone alliance is leveraging these trends and jostling for position in order to extract some value - even thrive -through partnerships with bigger players such as Motorola.

INSEAD 2004

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