Executive Summary
The Blackberry is one of the leading Smartphone companies in the world. This firm was started in 1985 by Research in Motion Limited. The management was keen on transforming the electronic market, especially the phone segment. The management realized that the market for phones was on the rise.
After commissioning a research, the management realized that consumers were expecting a lot more services for their phones. This is what the management commissioned to undertake in order to provide consumers with the product they desire.
The management made use of technology to come up with their first Smartphone in 1999. It came at a time when the when the market was demanding for something special from the phones. This was the reason who the firm experienced a massive growth during this period.
Given the threats that existed in the market, other firms came up with similar products as that of Blackberry. This created a massive competition in the market.
Besides this, there were other environmental factors that did not favor this firm, a fact that saw Apple and Blackberry surpass Blackberry in market share for the Smartphone.
Introduction
Founded in 1984, Research in Motion Limited “RIM” (renamed Blackberry in 2013) is the manufacturer and distributer of the popular Blackberry series Smartphone with its latest model, the Blackberry 10.
This has created a considerable degree of speculation as to whether or not it will be successful in the currently oversaturated Smartphone market (McCracken, 2013). In the past decade, Blackberry used to have a far larger share of the Smartphone market (roughly 40%) starting from the latter half of the 1990s till 2005.
It was only when other manufacturers (such as Nokia, Blackberry, Siemens, and Motorola) gained sufficient traction that Smartphone sales for the company began to dip (Castald, 2012).
The proverbial nail in the coffin came when Apple released the iPhone. From 2009 till the present the iPhone dominated the Smartphone market pushing other competitors, especially RIM, onto the sidelines.
While Blackberry has attempted to compensate for this by venturing into other markets and attempting to diversify its service offerings, the fact remains that the company should have delved deeper into more appropriate product development early on instead of relying on its old business model (Castald, 2012).
As a result, Blackberry’s shares have been falling in price as of late with many speculating that this once great company may actually go under (McCracken, 2013).
This paper will thus examine the latest changes and developments that have occurred within the company in the past year, reveal what it has been doing wrong and determine what could possibly be done to resolve the issues the company is currently experiencing.
Current Organizational Analysis
The current business environment has remained very competitive. Blackberry finds itself in a position that its management had not anticipated before. The firm has lately been struggling to reclaim the lost glory in the Smartphone industry, but this is proving to be an uphill task.
It is challenging to find the best way through which it can top this industry as was the case before. On order to critically analyze this organization, the following SWOT analysis will be important.
SWOT Analysis of Blackberry
SWOT analysis is always a very important tool that helps in determining the internal ability and weaknesses of the firm, and the opportunities and threats that are available in the external environment.
This analysis will help in understanding this firm, and in knowing some of the factors that have propelled it to its current position in the market.
Strengths and Weaknesses of the Company
Blackberry has some special abilities that can be considered its main strength in the market. The ability of this firm to diversify in its products is a special ability that makes it stand out in the world as one of the few firms developed special niche for its products.
To help it succeed in this industry, this firm has come up with a quality control unit in all its subsidiaries in order to ensure that it delivers quality products to the customer (Chaston, 2009). Ability to deliver quality service to the customer has made it develop a special niche in the market making its products popular across the world. The firm is also one of the first firms that embraced value chain management.
Through this, the firm has been able to continue satisfying its customers at a reasonable cost. The ability of this firm to adopt the emerging technologies has been considered as strength by other firms.
Blackberry Z10 is one of its recent products that demonstrates its capacity to deliver special satisfaction to its customers by bringing products that are a little beyond the expectations of the market.
Despite the above strengths for this firm, it has some weaknesses that have impeded its growth to a given degree. One of the main concerns that this firm has not addressed properly is the issue of the emerging technologies.
Apple, Samsung and Nokia among other firms have successfully displaced this firm as the top manufacturers and distributors of Smartphone (Evans, 2012). The main reason for this was the inability of the firm to adapt to the emerging technologies within the right time.
Another thorny issue for this firm has been on environmental management. The components of the products of this firm are known to be very dangerous to the environment. Old phones among other products of this firm pose a serious challenge to the environment.
This firm has been criticized, alongside other firms, to be leading in the pollution of the environment. This firm is yet to come up with a clear structure on how it can manage environmental pollution caused by its wastes around the globe (Chao, 2007).
The firm has claimed that it has been engaging in corporate social responsibility. However, this has not been enough to make the public believe its commitment to a cleaner environment.
Opportunities and Threats
In every industry, there are always opportunities and threats that a firm may come across in the external environment. There are various opportunities that exist for Blackberry in its operations in the global market.
One of the opportunities that this firm has had is an expansive and unexploited market in the third world countries. Most of the electronics firms have focused their effort on building a large base of loyal customers in the leading economies like the United States and the European markets (Liew, 2009).
This firm has managed to tap into the emerging markets in African and parts of Asia. The stable economic growth in the major economies means that there is increased opportunity for this firm to increase its sales in such countries as the American markets and the markets in Europe.
This growth of the economy means that the consumers will always have enough to spend on luxurious goods such as Blackberry Z10. There is an interesting trend in the market where this firm is competing with Apple for the market share of the tablets.
The BlackBerry Cobalt and Apple iPad 3 have been competing in the market for supremacy (McLaughlin & Aaker, 2010).
Although this may be considered as a threat, this competition has offered the two firms an opportunity to acquire a special niche in the industry, outsmarting some of the former industry giant like Nokia and Motorola.
The emergent of an economically empowered youth around the world is also another opportunity that this firm has been able to exploit. In the IT industry, their main target market is the youth. With an economically empowered youth, this firm can generate a lot of benefits through increased sales.
There are threats that exist in this industry that is worth noting. Technology is probably the main threat that this firm faces in this industry. Blackberry has used technology to reach its current position. It is one of the few firms that have managed to adapt to the emerging technologies, though not at a very fast rate (Ferrell, 2011).
However, it is a nightmare trying to figure out what some of the competitors can do with this same technology. Another biggest threat that this firm faces is the stiff competition posed by rival firms.
This industry is one of the most competitive industries in the world. Any slight mistake by the firm may result in a situation where its market share is taken over by other rival firms.
Identification of Problem Area(s) or System(s)
In the current market, there are a number challenges that this firm faces in its normal operations. In order to elaborate some of the problems that Blackberry faces in its daily operations, Porters Five Forces theory and PESTEL analyses will be necessary.
Analysis of the Firm by Porters Five Forces
According to Bissoondoyal (2006), the electronic market has been on a constant rise in the last two decades. Emerging technologies are changing the social structure of societies around the world. People, especially the youths, have come to appreciate the importance of Smartphone.
Blackberry has been keen with its marketing strategy. According to Ferrell (2011), one of the most powerful tools that a firm has in the market is the ability to reach out for the customers with the desired message in the best way possible.
The management of Blackberry has come to realize that this is one of the strongest tools that competitors like Apple, Samsung and Nokia are using today as a way of developing competitive advantage in the market.
Blackberry comes out as one of the leading manufacturers and distributer of Smartphone not only in the American markets but also in the world. With a considerable market share in the Smartphone industry, this firm one is the leading manufacturer and distributer of Smartphone in the current world market.
However, the recent incidents are poised to change these figures. The emerging trends are favouring some firms while hurting others. Blackberry is one of the biggest casualties of the emerging technologies in this industry (Charantimath, 2007). It has lost its market share in this market considerably.
Porters Five Forces
New Competitors is one of the threats it has to take care of. New firms will be entering this industry very frequently, especially due to the attractiveness of the industry. To tackle the threat of new competition, this firm has been keen on producing new products to rival those of new competitors.
It has been keen to introduce new products in the market to counter any possible threat. Threat of Substitutes also threatens operations of this firm.
To manage the threat of substitute products; this firm has developed different lines of products to satisfy different markets so that they may not be adversely affected if substitute products invade one line.
To increase their bargaining power with the buyers, this firm has continued to produce high-end products with qualities that make it easy for the customers to appreciate their high prices. In so doing, this firm has been keen to ensure that the lower end of the market is not assumed (Gerber, 2008).
To increase its bargaining power with the suppliers, it has created a scenario where is single buyer with various sellers. This makes it able to dictate the terms of buying the products.
To counter the intensity of competition, it has been able to acquire a special niche in this market, rendering their competitors irrelevant as their products are turned into mere substitutes of such company’s products.
Analysis of the External Business Environment (PESTEL)
Environmental scanning can be done using PESTEL Analysis. This involves the analysis of political, economic, social, technological, environmental, and legal environments. Politically, various firms in the United States have experienced a relatively stable government (Gountas & Mavudo, 2008).
The country has experienced a long period of political stability that has made it conducive for business. It has a very stable government that is supportive of business operations. The government of this country has ensured that the political environment of the country is peaceful enough to encourage business operations.
Lack of political stability would mean that various businesses are not in a position to conduct business normally. Some may even be forced out of the market with huge losses in case the instability is accompanied by looting and arson.
Economically, various firms in this country, including Blackberry, have had difficulties. The firms have been faced with economic recession that hit various countries in the world, especially the US economy that had direct effect on various economies in various other nations (Hill & Jones, 2010).
This had serious negative effects on the firms’ revenues as many of the customers considered the products as non-basic. When the economy of a country is on a decline, the purchasing power is reduced, and this reduces the viability of various businesses.
They will be forced to cut down their operation levels, as the market will have a reduced capacity to sustain them. During such times, weak firms are always faced out of the market.
The socio-cultural environment of this country is diversified. This is because this country has people from all over the world. There are those countries that cherish equality, and women have equal economic strength just as men. In such countries, the firm does not segment the market based on sex, but age (Hooley, 2008).
The United States is one such country. However, in other countries where this firm operates, like the Kingdom of Saudi Arabia, women are subordinates to men. It forces this firm to target the male members of the society because they have bigger purchasing power.
The technological environment that firms in this country have to operate in is very dynamic. Technology inventions and innovations, especially in the field of communication have been the main challenge and strength of this firm at the same time (Bissoondoyal, 2006).
Technological changes are so unpredictable and firms are struggling to come terms with these changes. The dynamism of technology in this sector has forced some firms out of the market.
Legally, this firm has not faced major challenges. The laws that govern trade in the United States and many other countries in the world have been very favorable to this firm. It has not faced serious litigation cases for failure to follow some of the industry rules and regulations.
It is important to note that although the largest market for this firm is made up of Christians, portions of the market are Muslims. Failure to follow the industry and national laws and regulation may not only lead to serious fines imposed by the government on the firm, but even a total closure of the firm.
There are some environmental concerns that would be considered a challenge for the firm. The United States is one of the developed nations in the world. However, other markets have poor infrastructure and this causes serious problems to Blackberry, especially in distributing its products (Lamb, 2012).
Although these governments have made efforts to improve their infrastructure, others still need serious improvement in order to be considered as of the right standards. The facilities at various institutions of higher learning also need improvement for them to be in a position to churn out fully capable employees.
Data to Support Organizational Deficiencies
The Leading Manufacturers and Vendors of Smartphone World Wide
Source: IDC Worldwide Mobile Phone Tracker, May 1, 2012
According to the data given in the table above, it is clear Research in Motion (Blackberry) is at a distant forth in sale and distribution of the Smartphone, having been surpassed by Samsung, Apple and Nokia. It is one of the firms that had a negative growth in market share over the trading period that ended in December 31, 2012.
Recommended Organizational Changes
The trends shown above are a clear indication that Blackberry must change its strategy in the market in order to be able to survive in this market. If the current trend continues, chances are high that it may be forced out of the market. The management should consider implementing the following recommendations.
- The management should consider moving most of its operational activities online. It should consider making the process of booking the products, and payments of the services online. This will reduce operational activities within the firm.
- The management should consider improving the value they offer customers. This may include offering additional benefits to the customers such as free transportation within its major markets. This will increase levels of satisfaction of customers.
- The management should embrace the emerging trends in the market. It should use the emerging technologies such as social media marketing to reach out for the customers.
- The management should increase the number of young innovative employees who can help the firm manage the emerging technologies.
- The management should increase its corporate social responsibility, especially on environment, to improve its public image.
- The firm should consider increasing its partnership with suppliers to ensure that they constantly have the stock.
- The management should ensure that employees are constantly motivated in their various duties in the firm.
- The management should address all the needs of the employees to the best of its capacity. It should address all the complaints that are put forth by the employees of this firm.
Implementing the above recommendations will have a number of advantages to the firm. However, it also comes with a number of challenges that this firm must be ready to face. The firm must be ready to face these challenges when it decides to implement these strategies.
Methods to Be Utilized to Implement, Monitor, and Correct the New Plan
The management should develop project management teams within the firm to ensure that the above recommendations are implemented appropriately. The top management of this firm should develop these projects, and assign specific employees as the project members.
The project members, headed by the project manager, will be responsible for implementation of the projects. The senior management team will monitor and make corrections in the project as may be necessary.
References
Bissoondoyal, U. (2006). Total quality management: a practical approach. London: New Age International.
Castald, J. (2012). The end of RIM: Cover Story. Canadian Business, 85(13), 22.
Chao, S. (2007). Advancing quality improvement research: challenges, opportunities-workshop summary. Washington: National Academies Press.
Charantimath, C. (2007). Total quality management. New York: Pearson Education.
Chaston, I. (2009). New Marketing Strategies: Evolving Flexible Processes to Fit Market Circumstance. London: Sage Publications.
Evans, D. (2012). Social media marketing an hour a day. Indianapolis: Wiley.
Ferrell, C. (2011). Marketing Strategy. New York: Cengage Learning.
Gerber, K. (2008). Marketing communication. Cape Town: Pearson Education.
Gountas, J. & Mavudo, F. (2008). Marketing Strategy: A Decision-Focused Approach. North Ryde: McGraw-Hill.
Hill, C. & Jones, G. (2010). Strategic management theory: an integrated approach. Boston: Houghton Mifflin.
Hooley, G. (2008). Marketing Strategy and Competitive Positioning. Harlow: FT Prentice Hall.
Lamb, C. (2012). Marketing. Toronto: Nelson Education.
Liew, J. (2009). Employee training: a study of education and training department in various corporations. Sydney: General Books.
McCracken, H. (2013). BlackBerry’s Last Stand. Time, 181(5), 16.
McLaughlin, D. & Aaker, D. (2010). Strategic market management: global perspective. Chichester: Wiley.