Synopsis of the Situation
The BlackBerry Ltd, formerly known as research in motion, has not been doing well in recent past compared to its competitors. This has been as a result of inappropriate steps taken in the marketing and branding department.
This paper, therefore, analyzes the situation of BlackBerry Ltd in an attempt to identifying the possible problems, which has led to the decline of the company’s share value, as well as recommending possible solutions to the problem.
The recommendations provided do not only help in solving the current problem, but also aim at helping the company do well in future.
Key Issues
The mobile phone industry is highly competitive (Grewal and Levy, 2012). BlackBerry Ltd faces stiff competition from other handset manufacturing companies such as apple, which have created a niche in Smartphones.
The competition in this industry requires companies to be on their toes in order to always please their clients, make enough profits and at the same time remain at the top of the competition (Hartley 2014).
BlackBerry Ltd boasts of a large customer base, which has been increasing over the years. According to Moon (2013), the company had approximately 10.5 million by the time the first apple iPhone was released in the market and 21 million customers by the time the first Google Android hit the market.
The author adds that the company had 78 million users worldwide and an active messaging service with about 60 million users by 2012.
However, there was a report in 2013, by the media that BlackBerry had lost $1.049 billion (Moon, 2013). The company’s share value was $60 in 2011, but dropped sharply that year and has not risen above $20 since then (Martell and Rocha 2014).
In March 2013, the company recorded a 21% decline in the number of phones that were shipped (Moon 2013). This was the least the company had shipped since 2006. These were attributed to several changes in the company’s strategy to address the competitive hardware environment.
Most of BlackBerry’s loss was as a result of the fast growth of other handset companies like Samsung. In the US alone, BlackBerry’s market share dropped to 3%, down from 9% forcing the company to adopt a $1 billion cost saving program in 2013 (Martell and Rocha 2014).
The company also delayed the release of BlackBerry 10 OS, which was a great disappointment to its consumers (Moon 2013). Since then, the company has made losses in their share value and also lost most of its loyal consumers, leaving behind not too many die-hard followers.
BlackBerry has lost most of its market share to other companies manufacturing similar or better handsets for example the Google supported phones. According to Martell and Rocha 2014, 2013 was a dark year for BlackBerry, faced with a number of challenges.
There was a significant reduction in research and development expenses by 24% and also in the marketing and administration where expenses dropped by 35%. The operating expense reductions are encouraging and the situation could get better in the near future. However, the demand for the product is still very low.
By 2013 December, the company’s market share was less than 1% but rose in early 2014 by 7.1%. There was a drop in hardware revenue from 1.9 million to 1.3 million devices sold during the year. 3.4 Million. Recently, the company was forced to lay-off thousands of its employees to slash costs by 64%.
The company has also agreed to sell most of its real estate, especially the ones that do not bring in significant revenue to the company.
The authors also added that the company’s CEO, Mr. Chen, remains optimistic that BlackBerry will have a positive or neutral cash flow by March 2015, but confirms that the company might not record any profits or revenue growth till March 2016.
In March 2014, the company announced that it had decided to target specific customers, the enterprise customers and the prosumers. The company defines prosumers as a group of users that primarily use the device for communication and productivity purposes (Oliveira, 2013).
Applications are not primarily for this consumer. If they use applications, then it is specific ones and for specific purposes. They look for applications that get the job done for them, i.e. they create more content than they consume.
Prosumers are more self-oriented hence they choose more professional or semi-professional device. Enterprise consumers, on the other hand, refers to working business people and as well as the youth.
These are people who access email and need a QWERTY key pad for easy typing and workplace functionality (Dvorak, Vranica and Ante, 2011). These are people who need a phone that works for them.
Marketing Efforts
BlackBerry Ltd has made a number of changes in its marketing strategy in an effort to retain its market share.
First, the company has consolidated and centralized the marketing strategies from its outlets across the world to ensure uniformity in marketing strategies hence the clients get the same ideas and services.
This was also considered a good solution to the client-confusions driven by the different marketing approaches of various BlackBerry outlets.
Second, the company dropped the infamous name Research in Motion in favor of BlackBerry. This name was not known by many people and those who did found the name unappealing. The company believed that its lack of popularity in terms of its name was to blame for the decline in sales.
Third, the company decided not to recycle the names that had been used to brand and market other BlackBerry phones such as bold, curve, touch and tour and instead go for simpler naming such as Z10, Q10 and so on. The company considered the new names easy to remember and associate with.
The company decided it would produce just one BlackBerry brand that would be its stronghold in marketing the entire company. It decided not to take up the marketing and advertising strategies that other companies like apple are engaged in, and concentrate on its name only.
It is only in a few parts of the world that this handset does well, with other handsets dominating the rest of the planet. It would need to clean up the bad name of the company for it to sell its latest products that is the Z10 and Q10 smartphones. (Hartley, 2014)
Fifth, the company decided to focus more on offers to lure more customers. The company has really been putting their efforts into advertising to create awareness of the product to the publics, which is besides those who already know the product.
Lastly, the company has taken advertising to a whole new level of using carriers.
The Problem
From the issues presented above, it is clear that BlackBerry Ltd had quite a number of marketing issues. Its handsets have lost most of their worth. They fail to brand their smartphones which is vital in this sector. Hence, marketing its products to strengthen its brand remains key.
Due to lack of proper communication to its clients, the brand has been doing poorly over the years (Cheriton 2013). The company has not put in place proper marketing strategies that will clear the bad name it has presently.
According to Cheriton, the company should not have adopted business-as-usual marketing strategy, but rather damage-control and rebuilding-the-brand kind of marketing. If the handset has to remain in the market, it has to manufacture their product with their clients in mind so that they can deliver exactly what they want.
Though the company has a number of issues, the most crucial one, according to my understanding of the case, is the damaged image of the company and the brands it produces. Many people believe that BlackBerry is for the old, rich businessmen. They think that it has some of the most old fashioned applications and software.
Other people even perceive BlackBerry products to be difficult to use due to its complex nature. All these are misconceptions because many people lack the necessary information regarding the device. They don’t have a reliable source of information to enlighten them on the pros of BlackBerry device.
The company has not put much effort into the campaign to change this negativity and ignorance from people. Many of them rely on word of mouth to know about BlackBerry products and end up getting wrong or insufficient information regarding the device.
I believe this is the most important issue because a product must be positively known by its consumers, whether new or old, for it to do well in the market. The people must have the right information about it including knowledge of the good and possible weaknesses of the product.
The company should always endeavor to counter attack negative news about the device circulating in the market with positive news. A product may not be as great, but it needs to have a positive image for it to sell. This is what the BlackBerry device needs to do.
Alternative Solutions
Despite the negative publicity about BlackBerry devices, all is not lost. The company can use the following options to redeem itself.
The first option would be to develop a totally new brand that is not currently available in the market and bring it out to challenge its competitors. The consumers would not have anything against it and would have a better chance of doing well in the market against its competitors (Grewal and Levy, 2012).
This would be an expensive and risky turn to take, but it has a high probability of success. The company only has to make sure that the device is mind-blowing and has all the features and applications that would make it sell.
The second solution would be to rebrand the devices already present in the market. The company would need to give these devices a new look, name and probably add more features and applications that appeal to the consumers.
The company would also need to remove those applications that are not favored by consumers. This would make the old brands better and hence they would do better in the market.
The third option would be to relook its marketing strategies and put more efforts in redeeming its name from the wide spread negative publicity.
Selected Solution to the Problem
The third solution seems to be the most appropriate in solving BlackBerry’s problem. The company needs to engage in marketing strategies that are more inclined towards cleaning up its name. This is possible by engaging in activities that only explain to the consumers the positive side of its devices.
This information needs to be true, so that the consumers are not disappointed when they learn otherwise from other sources. If this is done well, the company will gradually redeem its name as consumers forget the negative things they knew about its brands and start appreciating BlackBerry.
This would be the most viable solution to the problem as it is easy and does not require as much capital and expertise as the other two. It does not also require so much strategizing as the company can simply emulate how their best competitors do their marketing.
Adopting some of the competitors marketing strategies, especially those that have proven successful in the past, would help a great deal.
This solution was chosen after careful analysis of the company’s portfolio, which revealed that very little effort is put into marketing. The company is also not doing its marketing the right way.
For example, the company, for a long time, had different marketing and advertising strategies for the different branches in different regions across the world. This would confuse consumers and make the company seem divided and unsure of what exactly they want to achieve.
The company also has very few adverts and commercials regarding its products. The few adverts available seem somewhat irrelevant and are not interesting to the consumers. The adverts give vague and incomplete information that would not entice the client to buy the devices.
Expected Results and Rationale for the Solution
Conclusions
A lot needs to be done to restore BlackBerry’s former glory. The company needs to check what it is doing wrong that is making it lag so much behind its competitors. The company needs to do an audit of both its products and management to be able to identify where exactly the problem lies: product or the management.
Cutting on costs is a wise decision to make until such a time when the company has started making enough profits.
Advertising and marketing is the only way through which consumers would get to know about the product and it is obvious that the company needs to do much about this alongside other strategies like rebranding its products.
Recommendations
The company has serious problems that need to be dealt with immediately if it is to realize any profits in the future. The company needs to re-strategize on its marketing to ensure the consumers prefer its devices over its competitors.
It needs to borrow a leaf from its competitors regarding their way of doing things so that it can be in a better position to go back to its former glory. The company needs to advertise its products more on the media in a manner that consumers will be happy with. The adverts need to be relevant for them to be effective.
The management also needs to be reorganized. The company should consider replacing some of its managers, especially in the marketing division, to allow for the introduction of fresh ideas.
The company should hire fresh and young people who know what consumers want and would not do things in the same old ways. Experience in marketing should be given first priority during recruitment to ensure that those absorbed in the company can add value to it.
The company also needs to start making client-friendly devices. They should be easy to use and have the latest applications that are found in other handsets. This way, they will compete fairly in the market just like other phones.
The names used for the products should be easy to remember and should arouse curiosity and desire for the handsets. The company should not recycle a name that has been used before as the clients will feel that they are buying an old product that has nothing new to offer.
Handling the situation
If I were to handle BlackBerry’s situation, I would first of all re-organize the management to get rid of those who are not performing.
I would then cut on the unnecessary expenses that the company cannot handle at the moment, and then put as much capital, time and personnel into marketing, advertising and branding, which would most definitely turn around the business.
Since I may not have the knowledge of the appropriate methods to use, I would seek advice from the experts and try to emulate what my competitors, who are performing better than me, are doing. This would, most probably, take time, but patience is key.
The market would not turn in my favor overnight, but it will be seen to steadily rise. It is important to note that this would be a continuous process that has to be followed from now henceforth. No stopping, but it can be improved.
Positive and Negative Results
Adopting the solution presented above would generate several positive outcomes as listed below. It would enlighten the consumers on the positive side of the company and its devices; hence they would go for the product.
The consumers would get good service from the devices that are of high quality and have the best applications. The company would also benefit as it would increase its income and return to its former glory.
There are many employees that had been laid off when the company shares value went down. However, with the increased shares value, they would get back their jobs which would be good to better their lives.
On the other hand, this solution would have some negative consequences in that it is difficult to change consumer’s minds to think something they knew was bad is now good.
The company would have to use quite a good amount of resources for this solution to work. This would not be good for the company as it does not have such a large amount to spend since it is incurring losses at the moment.
References
Cheriton, R. (2013). BlackBerry’s biggest problem is not its phones. Web.
Dvorak. P., Vranica, S. & Ante, E.A. (2011). BlackBerry makes issue: Gadget for work or play. Wall Street Journal. Web.
Grewal, D., Levy, M. (2013). Marketing (3rd Ed.). Irwin: McGraw Hill.
Hartley, M. (2014, March 28). BlackBerry ltd.’s ‘new coke’ moment: John Chen to resurrect company’s developed phones. Financial Post.
Martell, A. & Rocha, E. (2014). BlackBerry economic trends. Web.
Moon, B. (2013). A brief history of research in motion. Investroplace. Web.
Oliveira, M. (2013). BlackBerry defines prosumers target market. Web.