Challenges of Blackberry - Essay Example

? Blackberry Executive Summary The report highlights the challenges faced by Blackberry and various contributing factors which have led to the downfall of the company. The report has helped us in identifying the various kinds of managerial challenges faced by the mobile companies and the impact of it on the productivity of the organizations. The author of the study has provided with various suggestions which can serve the purpose of a guide to the managers and can also help in addressing specific managerial problems. These suggestions will help Blackberry to retain its position as the market leader provided if the plans are executed properly. The reports will conclude with specific approaches for specific managerial problems providing clarity to the reader. Table of Contents Table of Contents 3 Discussion & Analysis 9 Managerial Decision Making 9 Conclusion 19 Recommendations 21 References 28 Introduction Blackberry is a popular handset device manufactured by the Research in Motion (RIM) headquartered in Waterloo. RIM had revolutionized the mobile industry with the introduction of the Blackberry handset in the year 1999 (Blackberry, 2013a).The launch of Blackberry products and services had changed the lifestyle and perception of the customers. The Blackberry handsets are multifunctional, offering services like capturing videos, games, music application, web browsing, emailing and other miscellaneous functions. The USP of the handset is that it offers instant messaging options to customers while maintaining a high level of security through message encryption and also serves the purpose of a multi digital functional assistant. Recently, the company launched a tablet named The Blackberry Playbook (Blackberry, 2013b). The handset devices offer services like Enterprise Mobile Computing and Enterprise Mobility Management which enables the customers to utilize advanced technology and solve their problems. The blackberry technical services support system extends technical services and guidance to customers having problem in using the handset. The company’s stock is listed in NASDAQ and BBRY and the group is currently led by Mr. Thorsten Heins. The report highlights the various challenges faced by the management of Blackberry and the root cause of the problems. The author of the report will also provide remedial solutions which could have prevented the matter from aggravating further. The company has been facing severe technological, managerial and human resource challenges which will be highlighted in the report. The report will also highlight the various causes which led to downfall of the company and reduction in the market share. Finally, the report will conclude with suggestions that can help improve the existing strategic position of Blackberry. Background of the Problem The company’s popularity soared with the introduction of the Blackberry Pager and the Blackberry Pearl 8100. The pager become one of the most popular mobile handsets of and had attracted several customers. The CEO of Verizon communications was one of the first business enterprises had ordered RIM interactive pagers worth $70 million. The Blackberry Pearl phone was a unique phone which offered services like instant messaging, excellent camera features, smooth touch interface and other strong multimedia capabilities. The introduction of Blackberry Pearl 8100 was largely influenced by the emergence of Apple iPhone. Initially, the management of Blackberry did not consider the emergence of Apple iPhone as a threat due to its immense popularity however with the increase in the sales of Apple iPhone the management of Blackberry started considering Apple as serious threat. The sudden emergence of Apple in the mobile phone industry prompted the management of Blackberry to develop advanced phones like Blackberry Storm. Blackberry Storm was the first touch screen phone developed by Blackberry to attract potential customers. Blackberry had become a majority revenue contributor for RIM. However, the sales of the company started declining and the company stared incurring heavy losses. The sudden decline in the sales and the goodwill of the company was mainly attributed to several factors like the popularity of Apple phones, stiff competition from other mobile phone manufacturers and a drastic change in the policies developed by the top level management of Blackberry (Warnica, 2012). One of the major reasons in the sudden downfall of the company was due to the sudden change in the leadership and managerial style by the top level management. The ex CEO of Blackberry of Jim Balsillie was capable of providing remedial solutions to almost each and every managerial and technical problem. However, with the emergence of Mr. Thorsten Heins as the current CEO of the company the started facing innumerable managerial problems and dilemmas which were not provided immediate attention. The current CEO made several attempts for alliance with leading companies like Google, Microsoft and their Android OS for receiving support which were futile. The problem aggravated when the top managers like Balsillie and Lazardis were asked to leave the company amidst the crisis. The management of the company wanted a change in the leadership and management style which could be a contributing factor for the success of the organization. This had sparked controversies among the common people of USA. The change in the CEO and the top level managers did not have much of an impact on the sales of the organization. Discussion & Analysis Managerial Decision Making The mobile phone market is one of the most competitive markets and has surpassed the revenues of IT industry. It is observed that presently leading companies like Apple and Samsung had captured the mobile phone industry completely. As per a survey conducted by ComScore, Android OS accounted for 46 percent of the market share and Apple accounted for 28 percent while RIM with 17 percent (Warnica, 2012). The market share held by RIM is decreasing gradually. The sudden decrease in the sales and shares of the company were also dependent on factors like the changing market, changing consumer needs, lack of technical expertise and the lack of response to consumer needs and preferences. Initially the mobile handsets of Blackberry were acclaimed for their design and functionality but in due course customers started complaining about the repetitive designs in every version of Blackberry handsets (Reed, 2013). Even the security system of Blackberry Enterprise and Blackberry messenger could not be successful in retaining its existing corporate and non corporate users. This is because the innovative development by Apple phones had not only catered to the unmet needs and wants of the customers but had also helped the customers in relating with the phone. The management of Blackberry made relevant technologies which catered specially to the corporate customers and not individual customers. This technology is also known as (BYOD) Bring Your Own Device which means that every mobile company is more focused on manufacturing mobile handsets which will have a unique operation that will segregate itself from its competitors (Jakarta Globe, 2012). By developing a handset device catering to the needs of the corporate customers had limited customer base unlike Apple companies who developed phones for a larger customer base. It was only after the emergence of Apple iPhones that RIM started manufacturing phones for individual customers (Bent, 2011). The advertising techniques used by RIM were also not appealing to the customer and failed to relate with the customers. The company started growing worldwide by developing new technologies for their mobile handset like upgrading the java system and procuring several leading business units to add value to the company. However, feeble attempts like this failed to attract the potential customers and eventually the company started incurring heavy cost expenditure and yielded minimal profits. The slow paced growth and the inability to yield a substantial amount of profit compelled the company to fire around 20000 employees in the year 2011. The company launched a tablet named Blackberry PlayBook Tablet which was running on QNX Platforms to generate a substantial amount of profits from additional segments. The launch of tablet could not even attract customers because they regarded the device as additional devices which were costly and inconvenient. The tablet provided additional services after being connected with the Blackberry phone which seemed troublesome for the customers. Thus, we can observe that the managerial decision taken by the CEO is based on impulsiveness and irrationality. Consequence of the Managerial Decision Making It seems from the irrational decision making of the top level managers that the main focus of the management is to attain profitability and not attend to customer needs and wants. The failure of the tablet Playbook declared the company as good as dead by several analysts. The playbook received mixed reviews and failed to yield profits. The major reasons for failure were due to its lack of technical expertise and simplicity. Apple phones offered simple facilities with advanced technologies which even influenced the introduction of Android software (Perez, 2012).Evan after the failure of tablet launch the management of the company launched a new phone named Blackberry 10 with relatively new application system. During the launch event of the mobile phone the management announced of changing the name of RIM to Blackberry. This decision was made to attract attention from the potential individual and business customers. The company also showcased the features of the mobile handset device in an event called Blackberry Live 2013 to highlight the mobile features in an automotive industry (Crackberry, 2013). The main objective of the event was to facilitate the mobile computing in an auto industry. The development of OTA service is a part of BlackBerry's wide mobile computing strategy. BlackBerry is now providing the base for mobile phone computing through connecting two end points securely and offering a range of opportunities for information sharing and community building. This was irrational decision making from the management perspective by targeting a particular corporate sector. The management should have laid emphasis on improving its existing relationships with its current business alliance like Standard Chartered bank and Toyota (Skipworth, 2010). Standard Chartered has just stated that it would migrate its workforce from Blackberry to Apple iPhone. This means that the workforce of the Standard Chartered would be provided options between Apple iPhone and Blackberry as per their convenience (Skipworth, 2010). Most of the workforce has chosen Apple iPhone over Blackberry for convenience. Majority of the North American companies have acquired Apple iPhone as their official work phones. We can observe that the sudden impulsive decisions taken by the management of the company have contributed significantly to the downfall of the company. Lack of Effective Leadership Style The various kinds of leadership style exhibited by the managers help in enhancing the productivity of the employees. It is evident in multiple situations and stages that the leadership style exhibited by the managers is Authoritarian Leadership style. The Authoritarian leader is mainly concerned with the profitability and the manufacturing process of the company. Active participation in decision making is discouraged and the leader establishes a well defined set of rules and expects the employees to adhere as per the rules and policies. Informal communication is strictly discouraged and employees are expected to follow the hierarchy level and instruction is disseminated through the hierarchy level. Although, leaders exhibiting this kind of leadership style like to achieve timely targets but it is necessary to understand that this particular leadership style has various disadvantages. For example authoritarian leadership prohibits active participation which can hamper the creative and independent thinking of the employees. The lack of participation of the employees has hampered the creativity and productivity of Blackberry. It is very evident that the employees are debarred from creative and innovative thinking which is reflected in the repetitive design of the mobile handset devices. The organizational culture does not promote innovative thinking by the employees which has led to irrational decision making by the management. This kind of leadership style is not flexible and cannot promote a congenial work environment. The leadership style exhibited by Mr. Thorsten Heins has restricted the thinking ability of the employees working in the organization which has also curbed the strategic thinking and decision power of the managers (Rana, 2012). Ineffective Strategic Decision Making Decision making is a fundamental skill required for the successful planning and excellent delivery of performance. Effective strategic decision making helps in procuring the required resources and effectively utilizing these resources for the successful delivery of performance. We can observe that lack of strategic thinking and planning by the Blackberry top management has led to several business failures. The effect of strategy and leadership are intertwined and the perfect combination of these two elements results in successful performance of the company. When Apple introduced their Apple iPhone in the market the management of Blackberry should have analyzed the marketing strategy. Blackberry introduced their first touch screen much later and that too in response of the mobile handset device much later in the market. This decision reflected that the management of Blackberry was imitating the concept of Apple iPhone even though the phone features and facilities were unique from that of Apple. Thus, we can observe that Blackberry failed to implement an innovative strategy which could have helped in retaining its market position. Conclusion Thus, we can observe that the sudden reduction in the market share and the downfall of Blackberry were contributed to several factors like intense competition within the mobile phone industry, lack of technical expertise and creative, innovative thinking. The sudden downfall of Blackberry is one of the most exemplary examples which determine that lack of well defined strategic goals and objectives can lead to sudden failure of the company. However, intuitional decision making is very integral part of strategic management decision making which can help the management to formulate and lay down policies for effective performance (Tomekova, 2011). We can observe that the management of Blackberry had failed to make intuitional decision making while the Apple iPhone and Samsung phones were penetrating deeper into the market. The management of Blackberry also failed to exhibit different types of leadership approaches at various stages and multiple situations which could have helped in the successful accomplishment of targets and objectives, cooperative decision making and innovative thinking and development. Recommendations We have identified several challenges faced by Blackberry which have been the cause of downfall of the Blackberry. Firstly, to address the problem of lack of effective managerial decision making it is suggested that the managers of the company collaborate with the various departmental units of the organization which can promote innovative thinking and independent thinking. Independent thinking of various employees of the organization will enable innovative and creative thinking within the organization which can improve the existing process further and help to develop the core product further. The team manager will take several initiatives like brainstorming session which help in facilitation and exchange of several ideas. This will help in improving the communication skills between the employees, employees and employer. Secondly, to address the problem of lack of innovative and technological developments in Blackberry the company management should focus on implementation of The Reframing Matrix. The reframing matrix helps originally created by Michael Morgan would help in the development of an innovative product which would help in catering to customer needs and wants and also improving the existing process of the company (ODI, 2009). Thirdly, to address the problem of the inability of exhibiting the leadership approach would require the management to adopt various leadership approaches at multiple stages and situations. Leadership approaches will help in sorting out the social influence process and also determining the accurate goals and objectives of the organization. It helps in encouraging the employee behavior to such an extent that it would be able to deliver excellent performance by the company. The managers can adopt several approaches to improve the organizational effectiveness like transformational leadership or Charismatic leadership (Peterkin, 2012). Transformational leadership will help the employees in timely and successful attainment of goals and objectives with the cooperation of goals. Transformational leadership serves the purpose of a unifying theme and helps in successful group performance by attaining group goals and growth. Although, transactional leadership helps in attainment of goals and objectives too but unlike transformational leadership it does not promote active participation of the employees. The contingency theory on the other hand helps in providing managerial solution to a particular complex problem (Nwafor, 2012). We have observed that the managerial solutions offered by the author of the study will help in addressing various challenges faced by the company but will be time consuming and exhausting process. Although, there is no singular approach which help in solving the complex problems faced by the management the company can adopt an approach which was previously utilized by other companies. The success rate of the approach should be utilized after careful evaluation by the marketing analyst of the companies. It is generally observed that the mobile phone companies like Samsung and Apple adopt varied techniques which help in improving the managerial decision making and the existing business process. The varied techniques include processes like Brainstorming session, systematic delegation of authority, development of an effective committee and the careful evaluation of the performance of the employees and managers. These techniques have helped in the systematic goals and objective attainment and delivery of excellent performance. Brainstorming helps in the exchange and facilitation of new ideas and development of a foundation for an effective plan. The systematic delegation of authority allows the allocation of duties and responsibilities which in turn helps in effective problem solving and attaining overall team productivity. The development of responsible and organized committee will help in solving of complex managerial problems. Evaluation of performance by the committee, managers and the employee themselves will help in the improvement of the efficiency of the employees and the productivity of the organization on the whole. Monitoring the employee performance by the employee they will help in improvement of the performance appraisal system and also monitoring themselves (Anderson, 2013). If these techniques are executed smoothly and properly by the management then it would help the management of Blackberry to serve the purpose of a guide and also the help in addressing the specific management problem. The sudden downfall of BlackBerry since peaking in 2009 is a tragic end to a handset device that once held much potential and was regarded by many to be an integral component in their daily lives. It has come a long way in evolving from merely an instrumental tool to a vital ingredient for communication purposes. Yet the failure of Blackberry today can be blamed not merely on the increase in stiff competition but the failure to properly recognize consumer demand. The management of Blackberry should opt for organizational transformation which would not mean to necessarily to change the core value of the product or the attitude of the employees, process, behavior, values etc. The organizational transformation will help in delivering excellent performance by evaluation of the organizational process and identifying the weak elements and rectifying the error through systematic and proper managerial theories and approaches. Thus, we can observe that the managers at Blackberry can adopt several approaches with which will help it to adapt as per the changing environment and demonstrate effective behavior. References Anderson, A. (2013). Examples of workplace problem solving. 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BlackBerry vs Apple: Which is better for business users? The Telegraph. Retrieved from http://www.telegraph.co.uk/technology/mobile-phones/7750578/BlackBerry-vs-Apple-Which-is-better-for-business-users.html Tomekova, K. (2011). Strategic management: Decision making, environmental analysis. Retrieved from http://www.fpharm.uniba.sk/fileadmin/user_upload/english/Department_selection/KORF/Management/09_Strategic_management.pdf Warnica, R. (2012). The fall of the BlackBerry titans. Retrieved http://tech2.in.com/opinions/general/what-could-have-caused-the-fall-of-the-rim-empire/321602 Read More