Market Exit Positioning: Google’s Acquisition of Motorola Mobility
Yesterday, Google announced that it was acquiring Motorola Mobility for $12.5 billion, an estimated 63% premium over its market price at the time of announcement. This announcement completed an 8 month strategic positioning move by Motorola to exit the mobile device market and refocus its business model on the Motorola Solutions side of the business. However, its market exit success started back in 2008, when Motorola decided to strategically align itself with the Android Mobile Operating System. What can startups and expansion-stage companies learn about market exit positioning from Motorola’s recent market exit success story?
Here are three market exit positioning takeaways that startup and expansion stage companies can learn from Motorola’s market exit success story:
- Strategic acquisitions do not happen overnight and often result from several years of planning and strategic positioning. Motorola began the transformation of its company back in 2008 when it opted to move all of its mobile devices over to the Android Operating System. This was the first of many moves that Motorola planned to align its mobility product and technology development strategies with Google’s technology and products.
- Target acquirers will often limit acquisition targets to companies and intellectual property (IP) assets that can be easily integrated into their company and IP portfolio. Thus, it is important to start aligning your company’s product position, technology, and research and development strategy early-on with the targeted strategic acquirer. Motorola spun its mobility division off from the rest of the company in January to facilitate an easier acquisition and also refocused its product planning to meet the needs of its target acquirer.
- A target acquirer may not realize that an acquisition could be the easiest way to fulfill its target strategy, so it is up to the company who is looking to be acquired to publicize its value proposition as it relates to the target acquirer. Doing so will ensure that your target acquirer sees your company in its radar and realizes how acquiring your company can help it better achieve its target strategy. Motorola started marketing its mobile device patent portfolio since it realized that Google would likely need to bolster its Android patent portfolio in order to protect its position in the mobile operating system market.
If you are interested in learning more about market exit strategies, you should read my blog post on accounting for antitrust risk in your market exit strategy and my blog post series on understanding your exit options. Similarly, if you are interested in learning more about early-stage market exit strategy, I highly recommend reading Early Exits: Exit Strategies for Entrepreneurs and Angel Investors by Basil Peters.