Contributed by Uplifting Service
Google has a pretty good reputation for customer service. The world’s largest search engine gives people the results that they need. Their Google Docs suite is free and is a decent replacement for more expensive office suite offerings. Gmail allows millions to operate free e-mail accounts with relatively little spam making its way past Google’s complex filters. Google is a technology company that knows what people want.
A few short years back what Google wanted was Motorola Mobility. Why? Well, the main reason was that Motorola held a bunch of patents and other items of intellectual property which Google’s mobile operating system, Android, infringed on. A few billion dollars to purchase Motorola meant a lot less time in court (and possibly a lot less money spent) defending each potential infringement.
Why Motorola Mobility?
If you’re thinking that there are a whole bunch of companies out there with IP issues with Android; you’d be right. What made Motorola Mobility attractive to Google in addition to the IP was this:
• The Motorola brand was considered to be strong enough to allow Google to manufacture its own smartphones and take on Apple head-to-head in that market place. Google’s own Nexus range wasn’t gaining the traction in that arena that they had hoped for.
• Motorola Mobility wasn’t in Motorola’s long-term roadmap. The company had decided to refocus on core mobile network technologies because they’d been losing market share in the handset market for several years. Companies like Apple, Samsung, Nokia, etc. had all been taking Motorola’s market share by offering better handsets or lower cost handsets. This might have been a warning to Google’s executive team but it meant that they could pick up Motorola Mobility much more readily than they could any other well-respected mobile brand.
What went wrong?
When most of us think of Google we think of them as a consumer technology company but the truth is that Google mainly serves a corporate marketplace. In the case of smartphones Google makes the world’s number one operating system for a range of manufacturers (including Samsung, HTC, ZTE, etc.) and the only major brands it doesn’t supply are Apple, Nokia, and RIM.
Google’s desire to go head-to-head with Apple was not well received by these partners. In fact they were furious. They’d committed billions of dollars to using Android to reach their customer base. Now Google was planning to come after its’ customers’ customers. This is a risky strategy; it can be done successfully but most of the time it’s a poor move. Making your biggest customers angry is a customer service disaster.
The partners immediately began to put pressure on Google to drop these plans. Google didn’t but it did agree to ring-fence the Motorola division from the rest of the company. In effect Motorola Mobility would be kept on the outside looking in. This was probably the death knell for Google’s efforts to go head to head with Apple.
When they acquired Motorola Mobility, Google knew that one of the problems at Motorola was a lack of innovation. The corporate culture had come to expect a gradual reduction in market share in the handset market. Without direct access to the creativity and customer service culture of Google; more of the same is all that could be expected from the Motorola brand.
That’s exactly what consumers got. Motorola launched a series of new Smartphones on the Android platform. Phones like the Moto X were decent phones but they weren’t groundbreaking. In fact as with many of Motorola’s recent offerings they were poor value. The phones were too highly-priced in comparison to their feature sets. A Motorola-Google smartphone cost nearly as much as an Apple or Samsung product but only delivered an experience equivalent to more mid-range brands like HTC.
Apple’s customer offering in the smartphone arena has been subject to constant innovation. The company may have lost market share (though the smartphone market’s overall size has expanded considerably since the iPhone was the only option for consumers) but consumer delight has always been their hallmark. Google had launched phones that didn’t distinguish themselves in any substantial manner.
Google simply didn’t have the experience or understanding of the consumer smartphone market place that they’d hoped to gain by acquiring Motorola Mobility. They’d bought a brand that was stagnating, enraged their corporate customers, they’d then blockaded their new brand from Google’s creative talents and then their phones failed to impress the consumer too.
Google should have been decisive following their acquisition. If they wanted to compete in the consumer market place it was essential to upset their corporate partners and live with their upset. They could then have applied their own genius to creating products consumers want to their handset division. It would have been a risky strategy but you have to take risks to enter and win in a new market as business. The consumer expects no less from a customer-service driven organization like Google.
Dithering, over which type of customer was more important to them, meant that Google did both sets of customers a disservice. In the end, Google realized that they could no longer jeopardize their corporate business over an ill-conceived consumer venture. Google and Motorola’s divorce was nigh on inevitable at that point.
A Happy Ending?
Google sold Motorola Mobility to Lenovo. Lenovo is a Chinese company with a history of taking set-in-their-ways brands and reinvigorating them. Lenovo acquired the ThinkPad brand from IBM in the laptop market and put the brand back on track. Lenovo will take Motorola Mobility and rebuild it in to a strong competitor in the mid-tier of handset providers. Lenovo won’t be taking on Apple head-to-head it’s not the way that Lenovo operates; they dominate the 2nd tier of electronic provision and by applying Chinese manufacturing and focus on value to the consumer; Motorola may remain a solid brand for many years to come.
Lessons Learned
• Know who your customers and understand how they want to grow. Learn these vital insights before you serve, and keep learning as needs change and new possibilities arise.
• Listen to what your customers want and value. In Google’s case that meant providing corporate partners with a safe environment for their growth. And for consumers, providing high-end smartphones that compared favorably with Apple, Samsung, and others.
• If you are going to acquire another brand; ensure their service culture mirrors and matches the best aspects of your own. Ring-fencing an acquired brand and leaving it to sink or swim is not a good recipe for success.
