Business Dynamics - Rfid

RFID

Basic Statistics of the sub-sector :

Motorola Solutions, though a market leader, volatile markets have caused the revenues to remain extremely unsteady. The revenues for the last 3 years is as follows, (all figures in millions of dollars)

Year 2010 2009 2008

Earnings (Loss) 633 (51) (4,244)

Although the company is not quantifying the growth, it is expecting that the growth pattern should be same in 2010-2011 as that of 2009-2010, which was about 19% if not more.

Key Players for the same sector include Cisco, EADS and Honeywell to name a few.

Year / Earnings (Loss) 2010 2009 2008

Cisco 780 610 810

EADS 572 (752) 1,597

Honeywell 183 189 230

Again, like Motorola, although the key players are confident about growth in the coming years, none of them have quantified these projections.

Analysis of the Industry Structure

Porters Framework :

Key Suppliers Key Customer Categories/ Customers Potential substitutes Competitors and their key strengths and weaknesses and the extent of competitiveness

Motorola Solutions US Government, Healthcare, Hospitality, Manufacturing, Retail, Petrochemicals, etc. To a smaller extent, barcode scanning and Wi-Fi Real Time Location Systems Cisco, EADS, Honeywell are some of the competitors for Motorola with Cisco being primarily the biggest competitor. Cisco through its sheer size outmatches Motorola however the size can also cause it to lose track of the RFID market.

Key Issues and Challenges facing this subsector

Since RFID is a highly technological area, the key challenge that these Industries face mainly in emerging markets include creation of demand for their products and the negative impact of changes of laws, or interpretation of laws in these countries. Also there is high dependability on worldwide suppliers and hence global forces at times cause a great shortage of the same.

Key opportunities and strengths for this subsector

This particular sector is highly competitive and requires constant changes in technology. The only way that a particular industry of this sector can have a competitive advantage is by constantly doing research and development ("R&D") programs for the development of new products, and on its production engineering capabilities for the improvement of existing products. Thus in case of Motorola, their commitment to R&D programs allow

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