The BlackBerry Company is a brand name that has thrived in the market for a long time. However, this situation is slowly changing due to stiff competition from other companies. Companies such as Nokia and Apple are developing more attractive and versatile devices that are highly preferred by users.
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Besides, the BlackBerry has not done much to market its existing devices and this has worked against the market performance of its brands as most potential customers has developed uninformed negative opinions about BlackBerry products.
As a result, the company has recorded a significant decline in sales, market share and shares value.
This report presents the BlackBerry case from an economics point of view and identifies various steps that can be taken to address the situation. The paper is divided into key areas namely: description of company; the problem; solution to the problem and; ethical issues involved.
Description of the Organization
Founded in 1984, the BlackBerry is a multinational mobile communications company that has transformed the mobile industry over the years (BlackBerry 2014a). The company was the first to introduce smartphones in the market in 1999.
It is a NASDAQ listed company with institutions holding a significant stake of its shares as outlined in Table 1 (NASDAQ 2014):
Table 1: The BlackBerry holder share positions as at October 2014. Generated from NASDAQ (2014).
|Institutional ownership 52.31% |
Total shares outstanding $527 Million
Total value of holdings 2.829 Million
|Nature of position||Totals|
|Decreased positions||39, 534, 263|
|Held positions||197, 215,569|
|Total institutional shares||275,907,631|
|Total shares held in company||275,907,631|
The Organizational Structure
The BlackBerry Company has several sections, which are grouped into three key departments namely; finance and accounts, facility management and human resource and administration. The departments are coordinated by the CEO office as illustrated the company’s organizational structure presented in Fig. 1.
Fig. 1: BlackBerry organizational structure. Adopted from BlackBerry (2014b).
According to BlackBerry (2014b), the responsibilities of each position are as follows. The Chief Executive Officer is also the executive chair of the company’s Board of Directors and doubles as the cofounder, in charge of QNX software systems.
The enterprising engineer takes charge of managing the product and software sections while the global sales office oversees the sales in various BlackBerry outlets across the world. The devices and emerging solutions office is in charge of the BlackBerry’s long-term development plan both in terms of product innovations and business prowess.
Finally, the chief legal office is in charge of all sorts of legal issues both in terms of product development and running the business.
According to Moon (2013), the BlackBerry performed well in the market until 2013 when its market share started crumbling. The author states that the Blackberry had 10.5 million clients by the time the first Apple iPhone was introduced in the market and 21 million customers by the year Google and Android first entered the market.
However, the situation changed in 2013 with significant losses incurred as outlined by Moon (2013). Information leaked to the media that the BlackBerry had incurred a loss of $1.049 billion and was undertaking a $1 billion budget cutting plan.
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While the management decided to undertake several modifications to address the competitive hardware situation, this did not help much according to Moon as the company recorded a 21% decline in the number of mobile phones exported in March 2013.
The company also made losses in its share value and most of its faithful clients had opted out leaving behind not too many die hard supporters. Moon (2013) attributed the huge loss in the BlackBerry’s market segment to the fast expanding deals of Samsung and HTC android phones, which are slowly replacing the BlackBerry in the market.
In the US alone, the BlackBerry’s market segment plunged to 3% down from 9%.
Nevertheless, Cheng (2013) outlines four factors, which the BlackBerry can exploit to have a competitive advantage over its competitors. First, the BlackBerry has numerous outlets in different parts across the world. This gives it an advantage as it can re-strategize and put more efforts in the regions where its products are doing well.
Besides, the company had merged and brought together the advertising division hence it will be easy for the division to monitor market situation and see which region to direct advertising efforts. Second, BlackBerry is a brand name, which the company can use to leverage the market.
Most people associate the name BlackBerry with class and style hence the company can use this to influence people who are concerned about class and style.
Third, the BlackBerry changed its branding strategy to focus on less complex names such as Z10 and Q10 for its smartphones contrary to its previous strategy that recycled prior complex names. Such simple names are easy to remember and can compete well in the market.
The BlackBerry’s brand has lost its esteem making it extraordinarily imperative in the cell phone industry. While the company is a brand name, it has not been able to showcase its products to fortify its brand. Its inability to appropriately communicate to the potential customers has worked to damage its brand name.
As such, the company should engage in what Cheriton (2013) refers to as rebuilding-the-brand kind of marketing.
The Author adds that the BlackBerry needs to move from a business-confronting-engineering-organization to a buyer-hardware-organization with more concentration in offering services to ordinary individuals if it wants to stay abundant in the market.
Source of the Challenge
From the discussion so far, the BlackBerry’s problem is caused by its inability to communicate its brands to the market mainly due to poor marketing. According to Cheng (2013), the BlackBerry has failed to offer potential customers with fundamental information regarding its products.
The company has no dependable source of information on its devices hence potential customers only rely on the internet, but information obtained is often scarce and exaggerated to the negative side.
As a result, many people consider BlackBerry phones to have outdated and non-user-friendly applications, which are most suited for the old and rich businessmen.
Furthermore, the BlackBerry has very complicated advertisements that cannot lure potential customers. According to Moon (2013), advertisements must be extremely appealing and the organization ought to make the customers feel that they cannot do without the product being advertised.
On the contrary, the BlackBerry uses the official-looking old people in its promotions rather than the youthful normal people that would draw the attention of youthful customers.
Effects of the Challenge on the Organization and its Likely Impact on Key Stakeholders
As had been illustrated earlier, the BlackBerry deals have gone down enormously since 2013. This is on the grounds that there are no new customers being pulled into the company while the diehard clients are gradually losing interest in the company.
The decline in sales would mean that the company resizes its workforce as a way of cutting down on expenses. This implies that several employees risk losing their jobs if the situation is not addressed. This will undoubtedly have a negative impact on employees’ standards of living and the economy at large.
Further, the company has also recorded a decline in its share value. With the decline in the BlackBerry’s share value, it is expected that most shareholders might decide to pull out and look for other lucrative companies to invest in.
As a result, the company will not have adequate funds for its operations and might end up dissolving if the problem is not dealt with immediately.
But in event that the company closes down, what was once its piece of the pie in the market will go to different companies. This will be a good thing for the competitors as they will have less competition in the market.
According to Cheng (2013), the BlackBerry Company has several strengths. First, the company has many outlets all over the world giving it wide market coverage. Second, the company already has a brand name that is known to many people all over the world.
Third, the company has many diehard customers that it can always depend on to consume their products. Last, the company has adopted simple names, which are much easier to remember, for its phones.
However, the BlackBerry also has some weaknesses outlined by Moon (2013). The company has a bad image among many people in the world. Many people consider BlackBerry smartphones as devices for the rich and old people.
Besides, the BlackBerry has not been able to effectively communicate its brands to potential customers. Consequently, its brand name has been soiled.
Despite the weaknesses, the company has some opportunities, which it can use to its advantage. According to Cheng (2013), the BlackBerry has the ability to introduce a new brand in the market. The company can easily exploit its technological capacity to develop a new brand that can work to salvage its soiled brand name.
Besides, the available BlackBerry brands in the market are still powerful. All the company needs to do is to simply re-brand them by adding more features and giving them new looks and names that will attract more customers.
The company, however, has to be wary of the stiff competition from other mobile phone companies that are constantly producing new devices with features that are preferred by customers. This is a threat that the BlackBerry has to carefully tackle for it to survive in the market.
Responding to the Challenge
Strategic Considerations and Planning
Borrowing from Grewal and Levy (2012), the solution to the challenge lies in re-branding its existing brands. This will involve refurbishing the existing brands to give them a new look.
As such, the enterprising engineer section will work closely with the devices and solutions section to identify the applications that can be removed or added to the existing devices to make them sell in the market. The focus should be to develop a powerful and attractive device that can compete well in the market.
The brands will also be given new names to save them from the already existing negative publicity. The re-branding will also require the input of the global sales and marketing sections. It will be necessary to effectively communicate the new brands to the potential customers.
Hence, the marketing section will have to re-strategize marketing and come up with advertisements that can lure many people into liking the BlackBerry products. I will then be the duty of global sales section to remove the old brands from the market and replace them with the refurbished ones.
How Planning and Implementation will be approached
The solution to the challenge will involve product improvement following a planned change process. Borrowing from Roberts (2010), there will be need for adequate planning on the next course of action in a bid to make BlackBerry products perform better in the market.
As a manager, I will ensure that adequate plans are made for the resources and activities required to deliver the option sought. This will start by communicating the need for change to the top management.
Once the management admits that re-branding is necessary, I will sit down with them to develop the goals of the intended change, which will guide in measuring progress. The overriding goal will be to salvage the company from negative publicity and improve on sales.
Successful implementation of the solution sought will require some form of control by the management. This will mean identifying and controlling the key sections, which are important in reclaiming the BlackBerry’s name such as the facility engineering and marketing sections.
I will work in consultation with the management to identify key individuals that can be trusted with leading the change process. A plan on how to communicate and manage resistance throughout the change process will then be developed.
Equally important will be a monitoring plan to help in evaluating whether the company is meeting its change goals (Eyre 2012). There will also be need to plan for the required product improvements to ensure that the resultant product meet customer needs.
Once the necessary planning is done, the identified change leaders will take charge of coordinating the relevant sections to deliver the rebranded products in the market in a way that will help the company reclaim its market share.
Required Changes to the Organisational Structure
The solution to the BlackBerry challenge will also involve drastic changes in the organisational structure. A restructuring of the staffing issues in the company will be necessary to ensure a balanced distribution of staff in all departs.
Key interest will be in the facility engineering and marketing sections since they determine, to a greater extent, the success of the BlackBerry brand in the market. I will consider restructuring the departments such that the enterprising Engineer and devices and emerging solutions become a new department.
From the discussion so far, the BlackBerry’s problem is the decline in its sale volumes due to negative. The solution to the problem is re-branding combined with intense marketing.
Hence, the best indicators to use when measuring progress in solving this problem are the market performance of the BlackBerry products as well as change in people’s perception of the BlackBerry and its products. I will collect data on sales of the BlackBerry products and do quarterly analysis to monitor the trend closely.
If the change is making good progress, then the brands delivered to the market should attract more buyers hence sales should depict a rising trend. But if the sales depict a declining trend, then it will mean that the change is not being properly implementation hence the need to relook the implementation and address the problems.
In addition, close monitoring of the company’s share value will also provide some insight on progress in the solution to the problem. If the share value goes up, then it will mean that the company is doing better in the market and attracting more investors hence an indication of positive progress in solving the problem.
As for change in potential customer’s views about the company, frequent market surveys to gauge customers’ perception of the BlackBerry can be a good progress measure.
Alternatively, a comments section can be created in the company website for visitors to leave their comments about the company and its products. Content analysis of the comments will help in determining whether or the negative publicity is declining.
Ethical Issues in Solving the Problem
Organizations develop value statements that have to be followed to the latter, despite the problem at hand. Creativity and excellence are some of the values that have to be strictly adhered to. There will be need for the BlackBerry to ensure that the company remains innovative and encourages excellence.
For this reason, it would be unethical for the BlackBerry to copy what its competitors are presenting to the market. Solving the problem will also require that the management is reminded of their ethical responsibilities and made to understand that neglecting the company is not ethically right.
Besides, the company should have fair dealings with its clients. This is usually achieved through delivery of high quality products in the market. It would only be ethical for the BlackBerry to continuously produce high quality devices. Yet the company is seen to relax on ensuring this.
Taking everything into account, the BlackBerry has a problem that needs to be sorted out for it to regain its lost glory. The company has a problem with its marketing strategy, which has not done enough to provide potential customers with adequate and relevant information about its products.
As a result, the company suffers negative publicity that has affected the company’s market performance. Consequently, the solution to this problem lies in re-branding and development of a new marketing strategy, but this will require some radical changes and close monitoring.
Having analysed the BlackBerry’s problem in detail, I make the following recommendations as a way of solving the problem. First, the company has to re-strategize its advertising. It can borrow a leaf from its competitors and come up with advertisements that can work to lure more customers into buying its products.
Besides, advertisement should focus on providing customers with as much information as possible about BlackBerry products. This will ensure that customers receive viable information on which they can judge BlackBerry products. Second, the company needs to do an overhaul of its administration.
Management is vital in the success of any business. Therefore, individuals who are in the administration and are simply watching as the company goes down the drain need to be laid off and replaced with new and youthful individuals who can comprehend and deliver on customer preferences.
Last, the company needs to consider developing devices that are more user-friendly. Focus should be on the most recent applications that are found in other companies’ devices. The devices developed should be branded with easy to recall names that stimulate interest.
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