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In September 2013, the Blackberry Company reported a second quarter net loss of $965 million (Miller, 2013). This was attributed to a slump in sales of its new Z10 smart-phone. In an attempt to manage the crisis, the company declared that it would scrap more than 4,500 jobs globally. This loss coincided with a period when Apple it competitor sold over nine million of its new iPhone smart-phone models. Five years back, the Blackberry Company was among the best technological performing companies with a significant market share (Miller, 2013). Things did not seem rosy from two years ago when its sales started dwindling. The huge second quarter loss of 2013 confirmed that all was not well with the company. The only question being asked is what went wrong. This paper makes use of the systems thinking methods and techniques to explain the origin of the decline in Blackberry’s performance. In addition, these methods are utilized to chart a course of recovery from the decline and re-establish the company as a leading technological company.
Decline and recovery of BlackBerry
The economic environment is increasingly becoming complex and it is easy for a company to be overloaded with environmental pressure and collapse. For a company operating in such an industry, it has to realize that progressing with internal and external changes is critical for the organization’s success. This can be achieved through transformational perceptions such as systems thinking. System thinking provides methods and techniques in combatting inherent company problems and industry challenges.
System thinking explains that problems cannot be solved by disintegrating it into individual component parts. This is because such activities can only be examined when they are together due to the interaction of its component parts. According to Senge (2006), system thinking is a process that involves a methodological comprehension of problems and identification of their solutions. The system has to be analysed within its environment by taking account of its external environment. Through analysis, solutions to a problem are obtained and organizations are able to have a learning system.
In a nutshell, system thinking first involves the understanding of the system. Secondly, the systems external context should also be clearly comprehended through the same elements. Thirdly, solutions are developed through systemic investigations. These three processes are utilized in systems thinking elements, which include inquiry, analysis, synthesis of problems and solutions. Systems thinking can be used to analyse and shed light on what went wrong with Blackberry, and provide solutions to the problems to facilitate its recovery.
First, Blackberry needs to understand its system as the first bold step of getting to the root of the problem. The challenges of the declining market share of company dates back to 2011. The Blackberry Company being the first inventors of smart-phones failed to adapt to phone applications. This is pointed to the management misjudgement of the significance attached to applications by its consumers. This explains its relegation to the third position by Apple. The top management was slow to respond to the development of Blackberry applications. Consumers are increasingly making use of various applications hence forming a competitive platform for technological companies to compete. The management’s slow response to developing its own applications gave room to Apple and Google Play applications hence relegating the Blackberry Company to the shadows.
The slow response of the company to the market needs is premised on the organization’s culture (Miller, 2013). The executive rifts played a major role in Blackberry’s woes. Coupled with the increasing challenge from its closest rivals, the executive rifts limited the company’s ability to develop new products for the evolving market. The management was blinded by the company success in the turn of the 21st century by thwarting attempts by some executives to develop applications so as to keep their rivals at bay. This stand-off compromised Blackberry’s chances of tapping into the new enormous sources of profits.
This left the company which was a smart-phone pioneer and market leader to surrender to its market rivals. It failed to catch up with the smart-phone wave in the market. This inquiry shows that the top decision making organ of the Blackberry Company was the cause of the problem that led to the decline of the organization. This is because it slowed down the innovation and tapping into the market opportunity as a result of shifting consumer preferences.
System’s thinking requires the understanding of the external context of the organization in order to find solutions to a particular problem (Gharajedaghi, 2011). The smart-phone industry is bubbling. The landscape of competition in the industry is changing. This is attributed to the increase in the usage of phones due to technological advancement. The competition in the smart-phone industry is increasingly becoming fierce with players like Android, Apple, and Google Play leading the park (Miller, 2013). These companies are engulfed in a competitive battle of technology and better pricing as they seek to increase their market share. Most interestingly is that the consumers are shaping up the competition. Costumers are now interested in smart-phones that offer competitive features and at considerable prices. Software applications are becoming a major focus for consumers who are now less concerned about hardware.
The problems of the corporation also emanated from its approaches on fending-off market competition. The company corporate culture nurtured strategic confusion in the organization in response to the market needs. The company never embraced change in its technology base to fix technological issues as Apple and Android adopted new software platforms. In addition, the company never utilized information about the external environment, and failed to balance between satisfying individual consumers and corporate customers’ needs.
In providing a solution to the problem, system thinking applies systemic investigation. Systemic thinking tries to find solutions into complex problems through analytical and synthetic thinking (Gharajedaghi, 2011). Analytical thinking involves thinking about elements of a problem whereas synthetic thinking looks at how elements of the system work together. For the recovery of the Blackberry Corporation, analytical and synthetic thinking is necessary.
In providing a solution for the recovery of Blackberry, the infusion of money is not the only solution for the company. Analytical thinking shows that the company needs to change its corporate culture to facilitate a learning system where the executives are ready to adopt new ideas. In the fast moving smart-phone industry, the company needs to re-invent its technological base and develop operating systems that are flexible to the shifting customer trends. The competitive applications of eco-systems and a competitive marketing strategy should be put in place to re-gain its market share. The company needs to utilize consumer feed-back in the development of competitive products that match the changes in the industry.
From the systems thinking techniques, organizational problems, intensive technology, and industry competition are reasons behind the decline of the Blackberry Company in the market. The corporate culture of the organization prevented organizational learning and change; this resulted in the loss of its market share. Analytical thinking suggests that a cultural change is necessary for a company to recover in the long run. In addition, technological innovation is critical for the organization to remain competitive in the market.
List of References
Dou, E & Lee, M 2013, “Smart-phone Makers Hit by Rising Competition,” Wall Street Journal, Web.
Gharajedaghi, J 2011, Systems thinking: Managing chaos and complexity: A platform for designing business architecture, Access Online via Elsevier, Burlington.
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Miller, H 2013, “BlackBerry Is Seen Mimicking Palm’s Decline,” Bloomberg, Web.
Senge, PM 2006, The fifth discipline: The art & practice of the learning organization, Doubleday/Currency, New York.