Blackberry Phones Business - Case Study Example

BlackBerry Phones BlackBerry Phones Executive Summary The BlackBerry brand is the brainchild of Mike Lazaridis who was also the founder of the Research in Motion’s (RIM) company. The main aim of the entire BlackBerry project is to provide wireless internet enabled devices that are capable of working across various different networks (RIM 2012). Since BlackBerry was created, it has steadily grown to command over 20% of the total volume of Smartphone sales in the world. In addition to its being available in over 91 different globally, the product is also offered by over 500 mobile phone services operators. The BlackBerry brand has recorded sales in excess of 100 million devices which is a figure that is comparatively higher in comparison to sales of other Smartphone models in the market (Research in Motion 2011). With the constant development and introduction into the market of new BlackBerry products, it can be seen that BlackBerry is making significant progress in improving technology as well as dedicating considerable funding towards research and development. These initiatives have enabled the company to be able to reach several different demographics in the past few years at a pace that is relatively faster than most other companies have been able to attain. In the 2011, RIM has been able to record exceptional accomplishment and growth that have been largely consistent with the company’s strong financial performance, record shipments of over 52 million handsets of BlackBerry Smartphones as well as the company’s strategic expansion of the international global market share. The company has also been able to introduce new quality products into the market with its latest product offering being the BlackBerry PlayBook tablet. The tablet’s Operating System is set to redefine the current set limits of modern mobile computing (Research in Motion 2011). BlackBerry was able to deliver impressive record earnings in both growth and revenue during the Fiscal year of 2011. The company’s overall revenue grew by an amazing 33.1% over the previous year to a new record of $19.9 billion from the revenues of $15.0 billion that were earned in the 2010 fiscal year with the net income growing by 38.8% to hit the value of $6.34 per fully diluted share. The company invested 12.1% of its revenue in sales and marketing related expenses so as to fund its effort to grow in new market segments as well as international markets. The company’s balance sheet was seen to generate an approximate $4 billion during the 2011 fiscal year ending the years with approximately $1.8 billion in the form of cash and equivalents (Research in Motion 2011). The company is committed to continue in growing its revenue as well as developing various other quality innovative product launches in the near future. These measures will serve to further entrench the BlackBerry platform as one of the world’s major leading Mobile technology platforms for use by both consumers and businesses. BlackBerry Phones Mission and Vision BlackBerry’s vision and mission is quite clear and has been set as aiming to provide various solutions for the international mobile communications market. This also happens to include the software that is instrumental in allowing the BlackBerry Smartphone to be able to essentially access various applications media as well as the internet. BlackBerry’s Objectives Focusing on Financial and Achievement In the development of BlackBerry phones, Rim is keenly focused on maintaining high engineering quality and ensuring that they deliver an advanced portfolio of various products that consistently offer unique mobile experiences and exceptional value for their customers. In the Fiscal year of 2011, with the aim of achieving this objective, various BlackBerry Smartphone products were launched including BlackBerry Torch, BlackBerry Curve and Black Berry Style. The BlackBerry Torch was designed to be the first Smartphone to ever future a BlackBerry keyboard coupled with the new BlackBerry 6 operating system and a full touch screen display (RIM 2012). Among BlackBerry’s many achievements was that it was the #1 selling brand of Smartphone in the year 2010 in various international markets inclusive of the United States, Latin America, Canada and the United Kingdom. Various 4G tablets touch screen and hybrid model Smartphones will soon be in the offing. The phones BlackBerry 6 operating system now delivers expanded and enhanced set of features that have improved BlackBerry user’s internet and social network experiences (Research in Motion 2011). The global presence of the Research in Motion has undergone a generally accelerated growth over the past few years fuelled by the increased attractiveness of the BlackBerry Smartphones to users in the entry level and prepaid market segments of markets segments outside North America. The international markets contributed to approximately 54% of the company’s total revenue in the 2011 fiscal year which was a considerable growth over the 37% that was contributed in the previous year. BlackBerry services and products are now widely through the over 595 distribution channels and carriers spread across over 175 countries globally (Research in Motion 2011). The number of different BlackBerry devices that were sold globally in 2011 was seen to increase by approximately 15.6 million devices to a new figure of 52.3 million devices. This essentially reflects an increase of about 43%. BlackBerry device revenue was seen to reflect primarily higher numbers of device sales as evidenced by the device revenue of $16.0 billion which is generally an increase of $3.8billion or 31.7%. There was a 48.1% increase in BlackBerry services revenue when the service revenues rose by about $1.0 billion to $3.2 billion. This trend indicated a general increase in net new BlackBerry accounts subscribers in respect to the closing figures that were seen at the end of 2010 (Research in Motion 2011). BlackBerry Phones SWOT Analysis Prior to the year 2002, the BlackBerry was simply put just but a two-way pager having a thumb keyboard attached to it. But with the subsequent introduction of both the 5000 and the 6000 series BlackBerry, the phones abilities were greatly enhanced and expanded with the ability to transmit email as well as the introduction of Java. The 7000 and 8000 were enhanced with more features that served to help in promoting the BlackBerry among the general customers as opposed to focusing only on the business professionals segment. With BlackBerry’s history of innovation, it is essential for one to conduct a SWOT analysis so as to establish its current standing in the market. Strengths RIM designed the BlackBerry phone to have superior hardware as well as an advanced user interface design. The BlackBerry phones have exclusive use of the BlackBerry OS. This has caused the phones to exhibit reliability, stability and consistency across all aspects of the phone (Barker 2011). BlackBerry phones tend to have better talk time, battery life and standby time than most other phones. BlackBerry phones are also relatively more hardy and durable as compared to most other phones. BlackBerry phones are widely renowned for having relatively superior physical keyboards that allow their users with just a little practice to eventually have superior texting skills. The superior security features on the phones are specially enhanced to be able to serve the needs of the business class clients. The BlackBerry e-mail servers are reputed to be so secure that most governments around the world tend to ban the use of the phones in their countries mainly because they make it relatively very hard for most governments to be able to spy on their citizens (Barker 2011). Weaknesses BlackBerry is currently facing a myriad of weaknesses that are affecting it and chief among them is that it faces rather stiff competition form iPhone and Android which happen to be the platform du jour of the phones industry. Most new applications are always developed for use on the two phones, and BlackBerry finds that its apps development always seem to be lagging behind the two Apps market leaders (Barker 2011). The other more significant drawback of BlackBerry is that for one to be able to fully utilize and enjoy the phone’s capabilities, one must ensure that BlackBerry software has been installed into the office systems. This can often be rather expensive for most small-scale entrepreneurs wishing to purchase them for their employees (Barker 2011). Opportunities Some of the opportunities that are available and BlackBerry can be able to strategically capitalize on them include the increasing demand for Smartphones in various markets around the globe provide an excellent opportunity for increased sales volumes of the phones. BlackBerry has a growing customer loyalty base that has caused the phone to remain a favorite among corporate and professional users. Increased globalization is also serving to further expand the world’s mobile phone market industry. Threats Although BlackBerry is doing relatively well in the mobile phone sales market, there are several threats that are currently facing the company and need to be urgently addressed so as to further secure the company’ future in the fast growing mobile phones market. Some of these threats include, economic threats such as the recent global economic recession that affected all the world’s industries and markets. The Mobile phones sales industry is in the process of recuperating from the unfavorable effects of this recession. Stiff competition is being experienced from several other Smartphone makers such as iphone and windows. Competition from these companies is slowly reducing BlackBerry’s market share (Spoonauer 2012). Wit the increased competition between the industry’s mobile phone makers, the average unit price for the sale of a phone has markedly reduced. This has had an impact in affecting BlackBerry’s overall profit margins (Spoonauer 2012). BlackBerry Marketing Strategy BlackBerry needs to implement a vigorous marketing strategy if it is to remain competitive in the current global market. Currently the competitive environment in the mobile phones market lists Apple, Nokia, Samsung, HTC and Research in Motion as being the top 5 operating systems and mobile phone brands in the world. RIM’s market share as detailed in last year’s market reports were seen to stand at 9% having experienced a 3% drop in overall sales. Target Market BlackBerry’s Marketing strategy should be targeted at the Primary Market of persons who happen to be aged between the ages of sixteen and thirty-one years. This is mainly because of the common fact that person in this age group happen to be heavily into the usage of their phones. It is also persons of this demographic that have adopted the usage of Smartphones and targeting this market would help BlackBerry increase its current market share (Costa 2011). The Company’s secondary market should be targeted to consist mainly of persons aged between thirty-two and fifty years of age. Persons of this age demographic tend to comprise mostly of business people who mainly rely on their phones for e-mails and phone calls. They prefer having phones that have good internet connectivity inclusive of Wi-Fi and require phones that have above average capabilities. Marketing Mix Implementation Product Strategy: The BlackBerry is a line of Smartphones as well as mobile email that were developed by the Canadian based company Research in Motion (RIM). They were first developed in 1999. The BlackBerry was designed to function as a Smartphone that was to have the enhanced capabilities of a personal digital assistant, internet browsing, portable media player as well as gaming devices amongst several other features. The BlackBerry’s popularity was seen to grow mainly as a result of the phone’s aptitude to send and receive various emails and instant messages while maintaining relatively very high security levels via the help of its on-device message encryption technologies (RIM 2012). The BlackBerry phone can be seen to be getting sleeker in design as is the current trend with all Smartphones in the market today. Possible modern modifications that can be made to further enhance the mobile phone include creating more color options as well as strengthening the phones Wi-Fi Connection so as to stem the chances of a repeat of the global blackout that was experienced on BlackBerry phones in 2011 (Research in Motion 2011). It is widely expected that BlackBerry’s new operating system, the BlackBerry10 (BB10) will soon run all the new devices that happen to be developed by RIM starting in the late 2012. Distribution Strategy: BlackBerry phones are currently being offered in a wide variety of different shops and stores. These generally range from cell phone distributor shops to the likes of Wal-Mart. It is vital that BlackBerry tries to push the BlackBerry product as a new, faster and better software so as to promote the sale of the BlackBerry product. The existing good relations between RIM and the several companies selling BlackBerry products should be maintained in all global markets (Mehra 2012). Price Strategy: The average price of a BlackBerry is considered to be an average amount for the sale of most Smartphone models. With the new operating system, design and additional features, BlackBerry could consider increasing the sales price for the phones so as for the company to be able to realize good profit and sales margins (Mehra 2012). Promotion: The Company should concentrate on focusing its promotion on BB10. The BB10 can be promoted via the use of television, internet and magazines which will help in creating a hype over the BB10 in the market today. Evaluation and Control For the guaranteed success of the marketing strategy, it is vital that BlackBerry tries to ensure that it keeps a close eye on not only its consumer base but also its sales so as to ensure that the company is able to raise its market share and appease the company’s stock holders. A possible tool that the company can use to try and effectively control the Smartphones market is the BB10. Focus should be aimed at highlighting just how much better BB10 happens to be as compared to other previous software in the BlackBerry line (Mehra 2012`). Random Surveys can be conducted to help in totaling up the sales as well as establishing if there happens to be any negative comments about the software. These problems can then be rectified and software updates to rectify the problems can be made available online. This measure will serve to ensure that the company shields itself from any eventual long-term problems that may hurt or even haunt them once the product has been released into the market. The average wholesale price for a single unit of a Black Berry is about 250 per unit with an estimated variable cost per unit price of about $150 for unit sales of sales volumes of about 240,000. Estimated First years fixed costs stand at about 26,750,000. References: Research in Motion. (2011). Research in Motion Annual Report. 2011 Accessed on December 15, 2012 from http://www.rim.com/investors/documents/pdf/annual/2011rim_ar.pdf. Barker A. (2011). BlackBerry OS: Strengths and Weaknesses. Accessed on 2011 Accessed on December 15, 2012 from http://BlackBerry-strengths-weaknesses.articles.r-tt.com/ RIM.com 2012. Company Information. Accessed on Accessed on December 15, 2012 from http://www.rim.com/company/ Spoonauer M. 2012. BlackBerry 10 launches on Jan. 30. Accessed on December 15, 2012 from http://www.mnn.com/green-tech/gadgets-electronics/stories/BlackBerry-10-launches-on -jan-30 Costa M. 2011. BlackBerry’s accidental youth phenomenon could become a strategic web changer Accessed on December 15, 2012 from http://www.marketingweek.co.uk/BlackBerrys-accidental-youth-phenomenon-could -become-a-strategic-web-changer/3022716.article Mehra P. 2012. BlackBerry’s strategy is to strengthen distribution channels to increase foothold. Accessed on December 15, 2012 from http://pitchonnet.com/blog/2012/08/23/BlackBerry/ Read More