Motorola: Knowing When to Take a New Direction

Yesterday, Motorola announced they would split the company, leaving the struggling and unprofitable phone division to take a new course. According to an article in the International Herald Tribune:

The activist investor Carl Icahn, who has pressured Motorola to make such a move, said in a letter to its board that the announcement was “clearly a step in the right direction.” But he questioned Motorola’s commitment to moving quickly to solve its problems.

Gregory Brown, Motorola’s chief executive, conceded that the main problem facing the company was its inability to come up with new products to replace the highly successful Razr, which was once a must-have phone but has faded from the scene.

Motorola’s actions may cause executives to ask themselves when they should take struggling enterprises into new directions. Analysts cite the competition in the market, especially with Apple’s iPhone, as well as the need for a new chief executive to take control.

As with any business, consecutive months of declining sales or slow growth almost always require a change; knowing exactly what steps to take is another concern altogether.