Analysis of Blackberry Limited Company - Essay Example

BlackBerry Company due Introduction Blackberry limited Company, which was formerly known as Research in Motion (RIM), is a successful Canadian telecommunication and wireless equipment company. It is widely known worldwide as the developer of the blackberry brand of Smartphone and tablets. It is also greatly recognized for its secure and highly reliable industrial application and mobile device management software. Most of its software are also relevant in the car making, industrial plants most of which are unseen to the general public. Studies (Marukawa, 2010) show that the blackberry was initially a dominant company in the Smartphone market for business and government usage. In 2010, it had a market share of 43% in the United States of the American market. However, in the recent years, the market share of the company has dramatically faced a precipitous decline. The steep decline has been due to the intense competition from the Google’s Android and Apple’s iPhones. For this reason, the blackberry company’s market share in the United States personal consumer market only, was trimmed down to 3.8% in the year 2013. However, on other markets other than the United States private consumer market, the products have had a healthy market trend. In September, the same year, the company authenticated an intent letter to be acquired by the United States ($4.7 billion or US $9 per share). It was through a consortium led by Fairfax Financial that then announced its plan to take the company private. Later on November 4, of the same year, the deal was wiped in favor of US $1 billion. At the moment, the majority of the remaining value of the company lies in innovation. A number of different factors influence the company’s competitive position. However, the company’s greatest challenge in the coming months or years will be to prove to business and consumers that they can match the current Android, Apple and the coming up Microsoft juggernauts that seem to be evading into the distance ahead with their consumers. Reports by Marukawa (2010) detail that in the past months, Blackberry smartphones have gone from being the once dominant smartphones in the market to becoming marginal player in most markets. It has resulted to the company suffering significant losses. The company is losing out to the current iPhone and android mobile handsets. Blackberry launched its tablet, and the Blackberry playbook a year after the iPad, first generation. To blackberry, this was one of the moments that proved to be extremely disastrous. The playbook did not sell as expected. The initial sales were destitute with only 700,000 units being sold in the first two-quarters after its launch. The sales later picked up only after the company began selling the playbooks at a massive discount. Later on, reports (Murat, 2011) detail that the company launched BB10 OS. It was a significant reinvention of Blackberry. The OS was launched along with a new smartphone that would run the Operating System. All the users of the new phone and OS suggested that the design was very nice, very intuitive and came with very innovative features. That was, however, not enough to solve it all for the Blackberry Company. Many customers do not even have an idea of what webOS is. It is very sad. The WebOS was developed by Palm and launched in 2009. The Operating System was smart, user-friendly and had an excellent look. Nobody, however, bought it. It was a different type of handset. However, it did not have a large library of apps to provide enough competition to the iPhone. It is one sensitive area that the Blackberry company needs to look into significantly. Reports (Murat 2011) also suggest that the company is also facing a number of financial difficulties. The company suffered a significant loss for PlayBook. Whereas the BB10 may be far better for the competition, it is not yet enough for the enterprise. Building the consumer numbers and the app ecosystem is likely to be a very ling process. It is not certain if the business is willing to go that far. A lesson from Microsoft might be a solution for Blackberry Company. Microsoft has a larger war chest to draw upon and companies like Nokia, Samsung and HTC to work with. It helps it to provide a wide and variety of options and products to users. The Blackberry Company, on the other hand, is working alone. The hardware costs are likely to slow adoption. For instance, Nokia have made very limited sales of their Lumia phones. On the other hand, the cheap Nokia Asha range has been rapidly growing. Android phones on the contrary trade with a broad variety of prices. Therefore, the market has been divided among all the competitors developing smartphones. Blackberry for a long time has dominated and controlled the world market of smartphones with its outstanding quality in the perfect blend of hardware and efficient and user-friendly operating system. It has changed as blackberry is now watching the competitors run ahead. The situation results from the fact that blackberry has been unable to sustain the competition from the Google Android phones and the Apple iPhones. It is because of the price difference, library for apps, interrelationship and partnership to work with others. Androids are similarly of the same quality as the blackberry phones. The fact that they provide a variation in prices has won Android phones a significant market share. Androids also have an extensive library for apps that encourage customers who want to explore the world of apps. With android OS being just as of great quality as the BlackBerry, android is however cheaper. Everyone would like what is good and cheap, which is what android is providing its users with. All these account for the loss of dominance of the market for blackberry smartphones. Blackberry company profile The Blackberry Limited, which is formerly the Research In Motion Limited, was established on March 7, 1984. It majors in provision of hardware, software, and services worldwide. The blackberry mobile phones handle voice, text messaging, e-mail and services all over the world. The company also develops playbook tablets, provides software development tools and modems that other manufacturers fix into portable devices. Murat (2011) says that apart from the hardware sales, the company also generates revenue from network access charges and software licensing payments. Reports (Murat, 2011) detail that the company bought 100 percent of the shares of a business that is responsible for the technology that is being fixed by the company’s developer devices on March 7, 2011. The Blackberry company then bought assets of a corporation whose acquired technology were to be incorporated into the company’s products. It then received the scoring loop in June 2011. Later in March 2008, it got the Paratek microwave Inc. Blackberry has no publicly stated organizational purpose. However, according to my understanding of the company’s purpose, Blackberry’s main existence in the business was to be a global company that will provide its customers with wireless communication solutions. Blackberry has stuck to the purpose. It has provided the best smartphones and the best operating systems. However, a lot has not been done to win clients who are currently familiar with other options. Therefore, this has led to the loss of dominance in the market. External and Internal Analysis Blackberry Company’s external and internal analysis can be articulately put into the order of SWOT and PESTLE analysis. To start with, the following is the SWOT analysis f the blackberry company. Strengths  Ville (2011) argues that Blackberry’s greatest strength is that it enjoys the top of the mind summon up with its good reputation among its competitors and corporate users of mobile.  Another strength is that its devices can be shared by any other mobile carriers anywhere across the globe. This a significant advantage for the company as its this makes portability and mobility easier.  Blackberry devices are more secure than those of its competitors. The unmatched security feature embedded in the devices gives it added advantage. It explains why blackberry is familiar with corporate users who link it with their virtual private networks.  All these strengths make blackberry the preferred choice for most governmental urgencies including the FBI, CIA, the white house, and some state departments. It is because the phones come with an encrypted military grade security making it the perfect choice for the bodies dealing with volatile information. Weaknesses  The primary weakness of the Blackberry company is that it decided to go on a single track focusing on corporate users hence strengthening its security features ass Unique Selling Proposition. It is an excellent feature that puts it a step ahead of others. However, with the coming of Samsung and apple who have more than just security feature, the blackberry company has been unable to sustain the competition. It has left Samsung and apple smartphones cornering all the market share by enhancing their safety features.  Since small business owners with blackberry smartphones needed to install the expensive enterprise software, a number of them started shifting to blackberry’s competitors. Additionally, the company had lost grounds from the proprietary operating system designed for Samsung and apple had more advantages for these customers hence locking blackberry out of the competition.  As discussed above, blackberry was a single track focusing on corporate users only. It did not touch a broad consumer base. Samsung and apple took advantage of this segment by providing a user-friendly interface and simple and efficient apps. Later on, these new companies took over even the corporate users. Opportunities  The company has made an aggressive move by rejecting a sale offer as well as the buyout offer and accepted a fresh capital infusion from an Angel investor. It has also appointed a new CEO and rebranding its organizational team and structure.  Blackberry has a lucrative opportunity as leveraging its current customer base of more than100 million customers. Provided that the company can quickly tap into this customer base for its future products future devices, a great is waiting for the business in the future.  Integrating third party apps and features into the blackberry phones can help the company imitate the strategies used by its competitors, Samsung and apple hence increasing business partnerships with third party providers. Thre is a likelyhood that there is an excellent opportunity for the company to tackle and overtake Samsung and apple. Threats  Even though the company was the original developer of smartphones, its competitors beat it in the race by building smartphones of the future by providing flexibility and an easy user interface that blackberry did not have. Therefore, the competitors found it easier to corner the market share.  Despite the threats from its competitors, the company has to try and deal with the gloomy internal atmosphere which has been the cause of the difficulties the company is going through. It has reduced employees’ morale and brought loss of direction in the enterprise. It is a fact that the smartphone industry and market thrive on innovation; therefore, blackberry has to rejuvenate itself and not just rescuing itself from the small moments and motivation of its demoralized employees. The above analysis has highlighted the central need for the blackberry company and its management to take time to pull the company from the marsh where it has found itself. The company leadership has made strategies will be seen in the light of the business’s coast away from its profit-making or market control model to a position where it has no authority in the market. The task is upon the company leadership to take up the challenge. It can also be put into PESTEL analysis as follows. Political factor: Kefei (2007) claims that the friendly political environment in the North America especially the USA has done much good to the blackberry company. The main challenge is in countries like China and India that have raised concerns over the blackberry security feature that makes it unable to track and monitor government authorities. The company has also been criticized in countries like Indonesia, Kuwait, Saudi Arabia and Egypt for the same security reasons. Countries like the United Kingdom and German has raised concern about the toxic contents the company uses, energy usage and recycling. The counties have set tight regulations hence giving the company a lot of pressure. Economic factor: this a factor that plays a primary role in the blackberry company as the market demand for the smartphones is relatively elastic and mostly depend on consumer income. The current ( Kefei 2007) economic downturn has impacted the smartphone company as people are unwilling to spend on the devices unless the prices are right. Given that the sales of the blackberry are made worldwide, the exchange rate will also an impact on the company as the fluctuation in exchange rates can swiftly make the company competitive or prohibitively costly. Social factor: these are factors such as education, lifestyle and income levels. These are factors that have a significant effect on the demand patterns in the market and also impact the seasonal sales as well. In a country like United States for instance, the sales of the company’s devices appear to be high in the month of November to December. It is usually a holiday season. Technological factors: Kefei (2007) suggests that this is another factor that poses an enormous effect on blackberry. Technological advancements over the past decades such as the 3G has had a big impact on the company. The changing market control is also due to the technological advancements. Blackberry smartphones are highly adaptable to technical drifts, and this has helped the company retain a number of loyal customers. Environmental factors: this is another factor that directly affects the company as it has to meet the set environmental standards. The company needs to struggle to ensure that the manufacturing standards remain eco-friendly. Failure to adhere to this could potentially stain the company’s image. Legal factors: one of the major legal issues facing the blackberry company is mentioned under political factors. The devices are highly secure and therefore it becomes difficult to monitor them. Therefore, countries like UAE, India among others are planning to ban the services of the blackberry company. It is likely to have a significant effect on the enterprise’s operations. The company also have some legal issues with other enterprises like Visto that acts as a negative impact on the company’s operations as it’s a force working for the enterprise. Strategy development Existing strategies Blackberry has existing strategies that are geared towards rejuvenating the company’s glory back into the market. The procedure has been referred to as the “four pillars policy.” The four pillar strategy comprise of low cost or low priced products, enterprises services and solutions, QNX in auto entertainment platform and bringing out an enterprise Blackberry messenger version. E-commerce platforms Lalvani, the managing director, is bringing the idea of selling through electronic commerce in order to bring down costs even further. However, analysts say that the company still has to do more if it has to catch up with the rivals in the market. The analyst tracking smartphone segment said that the company’s shares dropped by over 50 percent in the fourth quarter. The company’s channel associates are not pleased with the current trend. He said that the enterprise should work towards launching low-cost handsets as a lot of its competitors such as android are launching low-end products. Faisal Kawoosa, telecom analyst at cyber media also added that the company should shake up the market by getting into partnerships with Indian vendors such as the Micromax. Such companies have shown a great marketing skill that complement well with Blackberry’s great work. The analyst says that this can be a strategic controlled licensing model. Enterprise segment Lalvani is not just focusing on the device business. He is investing more time and effort in leveraging the company’s existing muscle in the company software segment. The company’s new products such as the Blackberry enterprise sector back this up together with the business version of Blackberry messenger. He is on the hunt for big corporate to offer a full gadget management outfit. With the Blackberry Enterprise segment, the blackberry now is equipped with a platform that gives IT managers in the company the power to securely manage employee’s devices regardless of the model of the instrument. To allow its customers experience what the new platform is capable of, the company has set up a knowledge center in Mumbai. QNX for auto segment In order to successfully tap into this market, Blackberry company is looking at a diverse and prolonged game plan. Among the greatest pieces of this strategy is the availability of the QNX platform for in auto entertainment system. Lalvani also says that a lot of consultations are ongoing with a number of car companies in Indian market for the QNX. The healthcare vertical is also being looked at; he added. The QNX software was acquired early in 2010. Apart from just providing the underlying technology for the Blackberry 10 software, an OS that operates the current Blackberry’s smartphones range, QNX is also a technology that is used to the core of the system that power nuclear reactors and military drones. The new Blackberry messenger (eBBM), which provides secure and reliable real-time mobile messaging is another essential product from the company. Unlike other instant messengers such as the common BBM and WhatsApp which run on the internet, the new Blackberry messenger eBBM is connected through blackberry’s private networking hence providing corporate users with more security. All these strategies are set to improve a single strategic business unit. It is the smartphones, manufacturing. It is significant to understand that blackberry is a company with multiple business units. It not only provides communication solution through the developing of smartphones but also manufacturing of modems and other wireless based services. Therefore, the above strategies strictly relate to the current concern with the loss of market control by the company’s smartphones. Proposed strategies Haque et al. (2011) argues that BlackBerry has a widespread of good reputation, and this can go a great distance in formulating working plans for the company. For the next five years, I would propose a variety of strategies that the enterprise can put into play to rejuvenate the lost glory at a corporate level, smartphones business unit level and functional levels. At a corporate level, the company needs to find a way to get friendly relationship with other firms, which is not the case at the moment. The company has stood along and worked independently for a very long period. Working with other undertakings can lighten some of the loads burdening the blackberry company. For instance, the company produces all the requirements that are needed to develop the smartphones. It provides the hardware and fits it into their operating system. It has led to the company having minimal contact with other organizations that can be a source of market as well. At a business unit level, the company has a lot to do as it has been overtaken by its rival who are now far ahead. The first strategy at this stage is the diversification of products. The company should focus on satisfying all the customers who envy their products. Blackberry can realize this by diversifying their products into a manner that it does not only belong to a particular social class. The main reason the company’s rivals are ahead is due o having a variety of product that come in a variety of prices. Each social class in the society can get what is equivalent to their pockets’ ability. On the other hand, blackberry has put more emphasis on developing smartphones for corporate. If the blackberry has to stand tall again, it has to manufacture a variety of phones that range in prices so that everyone can feel considered in the Blackberry world. With its prevailing reputation, cheap alternative blackberry phones can be a starting step to reviving blackberry back into the market. Another strategy at a business unit level is the repackaging of the app library. Blackberry’s competitors such as the Google Android smartphones have an extensive library of apps that range from games apps, multimedia apps and a variety of messengers. Apart from the corporate, Ahmed (2008) suggests that smartphones are also significantly purchased by the youth who want to experience a lot of fun through their smartphones. Therefore, the app library should be repackaged to accommodate the interest of the smartphone users if blackberry is to compete effectively with its rivals. It is clear that these strategies differ significantly in the existing plans. For instance, the company is focusing on how to satisfy its customers with better quality phones and operating systems. These clients are only corporate clients. The company is not focusing on how it can sell more to the low-class population in the society. The small and middle-class population dominates the society. Therefore, if blackberry can target this market by developing cheap alternatives for the corporate smartphones, this can be a significant step towards winning the market back. The company is also developing very friendly operating systems that are user-friendly and that are secure to use. However, according to the strategy I mentioned above, must a company to widen its apps library. It is not in existence. Apps are what excites some people who use these smartphones. Implementation These strategies need an immediate application for the Blackberry company to catch up with its competitors before they vanish out of vision. A direct implementation of the policy is also to realize quick revenue as soon as possible, which is also the interest of any shareholder. To implement the diversification of products strategy, critical order should be followed carefully in order to avoid any coming with some contingency plans to support failure of the policy. First, the products in the market should be given time to sell. Secondly, the company should embark on making less expensive phones, not necessarily smartphones. The phones should then be shipped to the market together with the current existing expensive smartphones. With the knowledge that cheap blackberry phones are in the market, customers will be out to check for the cheaper phones with the company’s reputation in mind. During this search for the more competitive new models, clients can as well explore the existing models they have no idea about. Both the more reasonable and the existing expensive smartphones will have won attention and market. When implementing the app strategy, the best thing is to break the monotony in order to attract customers’ attention and arouse their anxiety. By doing this, the Company should approach a well-known company like the Google and have a link to the android app store. The customers will perceive blackberry as superior phone with a combination of both Blackberry app and android apps. Contingency plan There is no need for an emergency plan, as this plan does not touch on the current development of the devices. The strategies are aimed at boosting the company’s market share and not to change its operations. Conclusion Blackberry is a telecommunication limited company that has a high repute for quality in its products. For the past decades, it has widely dominated the market share. However, this has changed in recent months as its competitors are now looking at the Blackberry Company that is now lagging behind. The decline in its market share is not due to a decrease in its products’ quality. It is because it has been unable to sustain the competition from its rivals. The rivals have already and are still coming up with quality smartphones that have a larger apps library, user-friendly operating system all at affordable prices. According to Ahmed (2008), the affordability factor forms the key basis of the company’s loss of market share. The failure of the enterprise to meet the customers’ financial ability is what is putting its rivals ahead of the game. Therefore, for a company to get on its feet again, it needs to incorporate the proposed strategies. Lowe the prices, upgrade apps library, coordinate with other firms and provide luring offers. Bibliography Ahmed, Ishfaq. 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