Introduction
Research in Motion (RIM) and Blackberry are common names associated with smartphones that revolutionized mobile communication and other related services. It is necessary to state that companies experience changes that break or make them depending on how they are managed. Blackberry had a success story to tell its competitors and clients but now it must struggle to regain its ground due to the financial challenges it is experiencing. This essay is a summary of an article about the Blackberry shares decline.
The inside Story of Why Blackberry is Failing
Blackberry started experiencing its downfall shortly after it released its first Smartphone. There was a need to introduce a device that would replace all other similar products and compete effectively with other similar companies. However, this was a terrible flop that forced Verizon to turn to Google and Motorola. He intended to ensure Blackberry produced a touch screen phone that would ensure its market is retained and expanded. This was not over and the efforts by co-CEO Jim Balsillie to develop instant messaging software were opposed by the current CEO Thorsten Heins. He was forced to quit the board and stop his relations with Blackberry because he thought his presence in the company was not adding value. The board of directors led by Mr. Heins ignored the advice and went ahead with their plans that had serious implications for the company. These are the main reasons that triggered Blackberry’s long journey to financial crisis and this has forced some of its top officers to resign for fear of being condemned for failing the company.
Its wars started in 2012 when Thorsten Heins (CEO) and members of the board thought that the company’s weapon would be the full touch screen Blackberry Z10. However, Michael Lazaridis opposed this plan and said that it was not a wise move to refuse to listen to the voice of reason. The company had learned various lessons from its previous products and there was no need of investing in a device that had already saturated the market. Mr. Kristian Tear and Frank Boulben opposed this idea claiming that there was no market for keyboard-equipped mobile phones. This marked a turnaround for Blackberry’s performance because it failed to meet its financial targets after launching the Blackberry Z10 that had been opposed by some of its board members.
It reported a $ 965 million fiscal second-quarter loss because of a huge write-down of this product. The plan had flopped because the company had not met its target eight months after launching this product. It is unable to meet the cost of paying its workers and has already cut 4,500 jobs; therefore, its workforce has been reduced by 40%. Even though this company invented the smartphone products it is unable to compete with similar companies and this has lowered its market value by $ 75 billion within the last five years. Significant rifts between board members are to blame for causing serious conflicts and barriers when implementing the projects of this company.
Mr. Balsillie resigned from the company’s board because his proposal to introduce a universal product that would promote instant messaging on all phones was opposed. This and other similar happenings have cast the future of this company in doubt and Fairfax Financial Holdings announced its intention to take over Blackberry at an estimated cost of $ 4.7 billion. The Apple iPhone was a serious threat to Blackberry because of the complexity of its services. It was a mini computer and this baffled Mr. Balsillie who downplayed this innovation by casting doubts on it’s thereat to collapse networks. The launch of its two-way email pager managed to compete with Apples’ iPhone and minimized its influence on the global market.
The post iPhone period dealt a serious blow to Blackberry because it required the use of different data packages from the traditional wireless carriers. This forced Mr. Lazaridis to buy the Torch Mobile software that enabled mobile phones to access the internet. However, it was very challenging to fix this application in Java supported devices because it was only compatible with Android and Apple systems. This showed that the company was neither prepared nor positioned for the future of smartphones. The DNA of Blackberry was very old and it was necessary to change it to enable the company to extend its life.
Blackberry’s structure was very complicated and even though the two CEOs worked in unison their subordinates were a headache to decision making. It took too long to account for shortcomings and products were never launched as planned due to long consultations. The plan to launch its first notebook (PlayBook) did not help the company recover from perennial failures and led to serious losses. Mr. Lazaridis is optimistic that the Blackberry story will never end and there is a possibility he may be in the team planning to buy his former company and rejuvenate its performance.