Businessmodel of Motorola Solutions

Customer Segments

Motorola Solutions’s customers primarily comprise government, public safety and first-responder agencies, municipalities, and commercial and industrial customers who operate private communications networks and manage a mobile workforce.

Motorola Solutions’s largest customer is the US government through multiple contracts with its various branches and agencies, including the armed services. The US government accounted for around 8% of the Company’s net sales in 2015. These government contracts are awarded via a competitive bidding process.

While Motorola serves customers worldwide – reporting net sales in North America, Latin America, Europe and Africa, Asia Pacific and the Middle East – the US continues to be its largest single market. In 2015 the US accounted for around 65% of the Company’s net sales.

Value Propositions

Motorola provides value to its customers through the quality and reliability of its products, its continual commitment to product development and innovation, and its technical support services.

The Company also has an established brand name, being part of a larger electronics manufacturing conglomerate, that is associated with efficient and reliable services.

Channels

Motorola Solutions operates a website at www.motorolasolutions.com, which provides customers with a great deal of information regarding the Company’s products and services. The Company’s sales and marketing model comprises a combination of direct sales through its own in-house sales team, which focuses primarily on larger accounts, and sales through Motorola Solutions’s channel partners.

Motorola Solutions operates a network of sales offices across the North America, Latin America, Europe, Asia Pacific, Africa and the Middle East. Its channel partners comprise independent dealers, distributors, and independent software vendors, each with their own sales organisations that extend the Company’s marketing reach. Motorola Solutions’s independent software vendors also offer customised applications that serve the individual needs of the Company’s customers.

Customer Relationships

While Motorola Solutions provides details of its products on its website, the Company does not operate a self-service online sales channel. Customer can, however, contact the Company’s sales teams directly, either over the phone or online through contact forms and live chat services, in order to discuss requirements and agree sales. Customers are also able to purchase products from authorised resellers.

Motorola Solutions provides ongoing support services to its customers after sales have been completed. This includes personalised support for customers’s technical issues via phone and email.

Additionally, Motorola Solutions keeps its customers updated with company developments through its Newsroom section, which comprises press releases and media contacts, as well as through its accounts with Facebook, Twitter, YouTube, and LinkedIn.

Key Activities

Motorola Solutions is a leading provider of communication infrastructure, devices, accessories, software, and related services. It operates through two business segments: Products and Services.

• Its Products segment offers a portfolio of infrastructure, devices, accessories and software, while the Products segment has two product lines – Devices and Systems – which include two-way portable radios and vehicle-mounted radios, accessories, software and upgrades, central processing software, base stations, consoles, and repeaters.
• Its Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment also includes integration services, managed and support services, and integrated digital enhanced network solutions. ### Key Partners

Motorola Solutions partners with a number of companies. Its partners can largely be categorised into two groups:

• Channel partners, comprising value added resellers, distributors, independent sales agents, as well as specialist companies that market and distribute Motorola Solutions products to US federal bodies and agencies; and
• Application developers, which collaborate with the Company in developing customised applications with third-party integrations that aim to enhance Motorola Solutions’s offerings and increase the Company’s efficiency. The Company’s channel partners and developer partners are managed via the PartnerEmpower program and the Developer Program respectively, through which they receive access to Motorola Solutions’s resources and tools. Among the Company’s partners are Pennine Telecom, DTS Solutions, IVS Technology Service, and Global Telecommunication House.

Key Resources

Motorola Solutions’s key resources are its technology and intellectual properties, its manufacturing and production network, its distribution and sales channels, and its personnel.

Patent protection is key aspect of the Company’s activities. As such, Motorola Solutions has a range of US and foreign utility and design patents relating to its products, systems, and technologies. Searches of the US Patent and Trademark Office identified a number of patent applications filed in the name of Motorola Solutions, including applications entitled ‘Bootstrapping secure connections for deployable networks’, ‘Hand-held control head’ and ‘Method and apparatus for in-channel interference cancellation’.

Cost Structure

Motorola Solutions incurs costs in relation to the research and development of its products, the production and distribution of its products, and the retention of its personnel. In 2015 the Company spent around $620 million on research and development.

Its most significant costs relate to selling and general administrations, comprising the payment of employee salaries and benefits and payment of rental fees and utilities across its global network of offices. These costs amounted to just over $1 billion in 2015.

There are also costs associated with Motorola Solutions’s participation in government tenders, which come with a number of compliance requirements.

Revenue Streams

Motorola Solutions generates revenue through the its two operating segments. This covers the delivery of stand-alone equipment or services, custom design and installation over a period of time, and bundled sales of equipment, software and services. The Company also licenses some of its patents to third-parties; this, however, does not represent a significant source of revenue.

Motorola Solutions recorded net sales of $5.7 billion in 2015, down slightly from the $5.9 billion recorded the previous year, which the Company attributed principally to foreign currency fluctuations. The Company’s Product segment accounted for the majority of sales, generating $3.7 billion in revenue, more than 70% of which came from the Company’s Devices sub-segment. Motorola Solutions’s Services segment recorded $2 billion in net sales for 2015.