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Sales of BlackBerry have declined significantly owing to a number of factors. These factors are poor execution of planned operations, technical delays, such as certification, distribution, and logistics, increased user fees, and failure to keep abreast with technological development.
To overcome these factors, BlackBerry should formulate effective and practical strategies, foresee technical challenges and plan on how to overcome them, reduce user fees, and keep abreast with technological advancements. To enhance understanding of factors that BlackBerry faces, future research should examine how brand identity, quality of products, and operations influence sales and marketing.
Poor execution is a factor that led to the decline in sales of BlackBerry in the smartphone industry. In January 2013, BlackBerry unveiled its innovative products, Z10 and Q10, which are smartphones that operate on the platform of the BB10 operating system. Owing to their uniqueness and attractiveness, BlackBerry was optimistic that these products would penetrate the competitive markets of smartphone industry.
From the outset of design and innovation, these products had a competitive advantage in the smartphone industry. During the launch event, Thorsten Heins, then BlackBerry chief executive officer cited execution as a challenge in the sale of BlackBerry 10 smartphones. Lewis (2013) argues that BlackBerry has a history of product delay due to poor execution of marketing strategies and distribution of smartphones across the globe.
Hamilton (2013) supports the argument that BlackBerry has a history of product delay because it delayed the launch of BlackBerry 10 smartphones. Analysis of the global markets and even in Manhattan, where the product launch event occurred, indicates that Samsung Galaxies and Apple iPhones dominate.
Therefore, poor execution led to product delays, which hindered BlackBerry from marketing and selling its products in the smartphone industry. Delay in technical certification is a factor that contributed to the decline in sales of BlackBerry in the smartphone industry. Despite the fact that BlackBerry launched its new products, it failed to obtain technical clearance from the United States carriers.
In essence, the products did not penetrate the smartphone markets in the United States in time for customers to buy and use them. During the launch event, Thorsten Heins stated that loyal and potential customers in the United States had to wait for some months for Z10 and Q10 smartphones to reach their markets (Lewis, 2013).
In the competitive smartphone industry, delay in product distribution is a huge setback because it gives competitors an upper hand to penetrate the market and expand their market share. The outcome was that BlackBerry did not only lost loyal customers, but also potential customers, hence, decreasing its sales significantly. Financial reports show that BlackBerry registered a loss of $965 million during the second quarter of the year 2013, which compelled it to sack 4,500 employees (Lewis, 2013).
Such a loss indicates that delay in technical certification contributed significantly to decline in sales of BlackBerry. The change of name from Research in Motion to BlackBerry is a factor that contributed to the decline of sales because it increased user fees. To enhance its global reputation, Research in Motion decided to adopt the name BlackBerry because it was an iconic name, which gave it a new brand and made it have a single global identity for marketing purposes (Black Berry, 2013).
However, in spite of having a new brand and marketing identity, BlackBerry lost millions of loyal customers. Austen (2012) argues that millions of customers defected to Samsung and Apple smartphones because Research in Motion charged high user fees. The increased user fees made customers to shift their loyalty to alternative products in the markets, which are cheaper than BlackBerry 10 products.
In a bid to reverse the trends of customers, Thorsten Heins planned to reduce user fees because they accounted for 36% of total revenues that Research in Motion generated (Austen, 2012). Although BlackBerry managed to reduce user fees significantly, it was too late to prevent its loyal customers from shifting to alternative products in the smartphone industry.
Failure to keep abreast with technological advancement is a major factor that contributed to a massive decline in sales. BlackBerry did not envision that smartphone industry would revolutionize information technology. According to Gustin (2013), BlackBerry became a conservative mobile phone company because it insisted on producing smartphones with physical keyboards, while most users preferred virtual keyboards due to versatile navigation.
As BlackBerry focused on physical keyboards, Apple and Google generated smartphones with virtual keyboards, and thus, keeping abreast with the interests of customers and versatility of the technology. Whereas Apple and Google focused on generating smartphones with virtual keyboards and powerful operating systems, which act as powerful mobile computers, Blackberry conserved its operating system and physical keyboard.
Eventually, customers realized the innovative technological features of Apple and Google smartphones and shifted their loyalty from BlackBerry to them. Gustin (2013) argues that though BlackBerry eventually produced smartphones with touchscreen, it did not match that of Apple and Google because it looked like a poor imitation. In this view, failure to keep abreast with technological advancements in features of smartphones made BlackBerry to lose considerable market share and experience a massive decline in sales.
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Analysis of BlackBerry shows that its sales declined considerably owing to a number of factors. These factors have made BlackBerry to incur huge losses and sack thousands of employees.
From the case study, it is evident that poor execution, technical delays, high user fees, and failure to keep abreast with technology are major factors that contributed to decline in sales. In this view, BlackBerry needs to mitigate these factors and ensure that they do not have a negative impact on sales.
Given that poor execution contributed to the decline in sales, BlackBerry should formulate effective and practical strategies, which enable it to execute its plans in time. From the case study, it is evident that BlackBerry lost millions of customers owing to lack of effective strategies to market and supply chain to distribute its products.
In this view, to ease the execution of marketing and sale of products, BlackBerry should own a robust supply chain. Therefore, to augment sales in the competitive markets of smartphones, BlackBerry should have robust strategies and supply chain, which are not only effective, but also practical, for the management to executive operations.
BlackBerry should foresee technical issues that would prevent it from marketing and selling its novel products globally and plan to overcome them. Analysis of the case study indicates that technical issues contributed to the decline in sales of BlackBerry. To overcome the technical issue of delayed certification, BlackBerry should submit its products in time to avoid detrimental delay.
Moreover, BlackBerry should ensure that it submit the appropriate version of products to expedite clearance and certification processes. Timely submission of quality products is essential because a slight delay gives competitors an upper hand in the smartphone industry.
To attract and retain customers, BlackBerry should reduce user fees that it charges. BlackBerry charges higher user fees than Apple and Google, and thus, making customers to prefer affordable products and services. In this view, BlackBerry should ensure that its user fees are the lowest in the smartphone industry for it to attract and retain a considerable number of customers.
Moreover, since a significant number of people are in the middle class economically, BlackBerry should design affordable products for it to target extensive market and increase sales. BlackBerry should undertake extensive market research so that it can understand tastes and preferences of customers in the smartphone industry.
The case study clearly indicates that BlackBerry overlooked tastes and preferences of customers when it remained conservative in innovation, while Apple and Google adopted innovative technologies, such as touchscreen and versatile Internet technologies. Hence, BlackBerry should keep abreast with technological advancements for it to remain competitive in the smartphone industry.
Future Research Direction
To enhance understanding of the smartphone industry, future research should focus on establishing the influence of brand identity and quality of products on sales. Brand identity and quality of products are two major factors, which influence sales in the smartphone industry.
In the case of BlackBerry, future research should examine how BlackBerry 10 smartphones and their features contributed to the decline in sales of BlackBerry. Moreover, future research should study the role of operations in sales and marketing. In essence, the study should establish how operations contributed to decline in sales of BlackBerry in the smartphone industry.
Austen, I. (2012). Black Berry loses million customers in a quarter: One million users left during most recent quarter; revenue fell 48%. Web.
Black Berry. (2013). Research in Motion Changes Its Name to Black Berry: Company adopts globally recognized brand, consolidates to single brand identity. Web.
Gustin, S. (2013). The fatal mistake that doomed Black Berry. Web.
Hamilton, O. (2013). BlackBerry Timeline. Web.
Lewis, M. (2013). BlackBerry One Year Later. Web.