BlackBerry Company Fail - Essay Example

BlackBerry Company Fail BlackBerry Company Fail According to Albert Einstein, “the measure of intelligence is the ability to change.” Most failures are a result of failing to adapt and very often failure starts with success. In the business world adaptation is vital to survival. Technology is an area where changes occur daily, particularly in the mobile phone sector where competition is cutthroat (Kint, 2014). It is imperative to understand what adaptations are required for systems to succeed, what prevents systems from successful adaptation. It is upon those doing the job to make the required adaptations for they are often aware of what is wrong. Blackberry, the Ontario-based smartphone company, had opportunities to survive and adapt but it took the wrong direction. U.S President Barack Obama was quoted saying that one of the things he was addicted to was his BlackBerry. One of his reasons was that the phone had advanced security features (Herman, Hadlaw and Swiss, 2014). The company was started in 1984 by engineering students Mike Lazaridis and Douglas Fregin and was for a long time a global leader in communication products. This was until it failed to see the impact of the iPhone, became blind to competition (especially from cheaper Asian rivals), and delayed in launching new phones. Despite being named by Fortune magazine in 2009 as the world’s fastest growing company, BlackBerry dropped a plan to be acquired for $4.7 billion and laid off its chief executive. This is in contrast to Apple, where Steve Jobs managed to turn it round through adaptability after being 90 days from the verge of bankruptcy in 1997 (Kint, 2014). Success and failure in the technology business are rarely predictable. BlackBerry had an obvious lead in the market, and its managers discussed various ways of coming out of the predicament but in the end they made the wrong choices (Rao and Klein, 2013). Basically, they did not fail to adapt, but they made the wrong adaptations. Long time survival is about making the right adaptations. In the book Adapt: Why Success Always Starts with Failure, Financial Time’s columnist Tim Harford stated that, “success comes through rapidly fixing our mistakes rather than getting things right the first time” (Hitt, Ireland and Hoskisson, 2014). The Globe and Mail of Friday 27th September 2013 investigative report revealed that Verizon asked Blackberry to create a touch screen but the result was a failure leading Verizon to turn to Motorola and Google (Hitt, Ireland and Hoskisson, 2014). In 2012 BlackBerry’s CEO Jim Balsillie quit the board and cut all ties to Blackberry after his plan to shift focus to instant messaging software was opposed by the company’s founder Mike Lazaridis. In addition, CEO Thorsten Heins opposed Mr. Lazaridis’ plan of emphasis on keyboard devices and instead launched the touch screen phone Z10 – with disastrous results. Another reason for BlackBerry’s failure was the shift by smartphone users from hardware to software applications. While it had gained a reputation with phone features that suited corporate users, the general public was a different cup of tea (Herman, Hadlaw and Swiss, 2014). Corporate leaders did not want personal applications like games, music and cameras on their phones while average users were not so bothered about features like battery life and security. BlackBerry was in a dilemma. In 2014, Thorstein Heins sat down with the board of directors to launch a new phone to turn around the company’s fortunes: the BlackBerry Z10. Mike Lazaridis suggested that BlackBerry keep its trademark keyboard-equipped mobile phones despite the invasion touch screens smartphones. However, his suggestion was shot down (Hitt, Ireland and Hoskisson, 2014). This was a fatal mistake and a crucial turning point in the company’s fortunes, since it walked away from a product popular with corporate customers into a crowded touch screen smartphone market. This move signaled the company’s changing fortunes, resulting in a $965 million loss, unsold phones and loss of 4500 jobs. The launch of its smartphone was a fizzled affair and came at a time that many touch screen phones were already in the market. For a company that was a leader in the smartphone business, it is amazing how BlackBerry lost its position. Obvious causes of this were disagreements in the boardrooms. Significantly, this period was also marked by the advent of smaller, versatile, and more adaptable players in the technology sector, leading to the downfall of Canada’s biggest technology company. The company was unable to turn around its fortune’s because it was blinded by its success and failed to adapt. Its response to competition was late, out of touch with consumers and its leaders did not work in harmony (Rao and Klein, 2013). It reacted slowly and dismissively to the launch of Apple’s iPhone in 2007 and delayed in getting an advanced operating system into the market in a highly dynamic industry. Mr.Heins, two directors, Mr. Laziridis, and Mr. Balsillie disagreed on crucial matters at critical times. The company’s structure was also a problem. It had two CEOs, with Mr. Laziridis being in charge of engineering, product management, and supply chain, and Mr. Balsillie presiding over sales and finance. This was appropriate in the beginning, but as the company grew the two centers of power clashed, leading to divisions in the company (Herman, Hadlaw and Swiss, 2014). The result was limited adaptability at a time when market and consumer tastes were rapidly changing. For example, Mr. Balsillie came up with a plan to use wireless carriers to adopt BlackBerry’s popular instant messaging service, BlackBerry Messenger (BBM). The idea was to have BBM in millions of non-BlackBerry phones and charge for its usage; a major source for revenue. This plan was derailed by Mr.Heins with the support of Mr. Lazaridis (Rao and Klein, 2013). A plan to expand to China was shelved due to internal squabbling by the directors. While Mr. Balsillie backed it, it was opposed by Mr. Lazaridis and other directors. The opponents argued that the move would distract the company from the launch of its smartphone (Herman, Hadlaw and Swiss, 2014). Worse still, the Chinese partners were kept in the dark. Another factor was that Blackberry relied on employers buying phones for their employees hence its overreliance on corporate customers. However, many businesses encourage their employees to use their personal phones rather than the company one. References Herman, A., Hadlaw, J. & Swiss, T. (2014). Theories of the mobile internet: Materialities and imaginaries. Chicago: Routledge. Hitt, M., Ireland, R. & Hoskisson R. (2014). Strategic management: Concepts and cases: Competitiveness and globalization. London: Cengage Learning. Kint, J. (2014). Stopping RIMs downfall. A repositioning of the Blackberry brand. New York: Grin Verlag. Rao, P. M. & Klein, J. (2013). Strategies for high-tech firms: Marketing, economic, and legal issues. New York: M.E. Sharpe. Read More