Blackberry under New Strategic Management - Report Example

Ansoff’s Analysis of Blackberry under New Management: Innovation, Product and Marketing Strategies of Present Time Introduction: In modern world smart phone is the integral part of people’s day to day activity. If one consider the fact that concept of smartphone came into operation only few years back, it is very shocking that within few years’ time it is now the smart phone is the most common thing among modern technology. Blackberry is one of the well-known names in the field of communication and the first model was introduced in the market way back in 1999. In 2003 BlackBerry bring together the first model of so called smart phone. This was a device that not only worked as a communication device but also allowed individuals to access email and web browsing as well(BBSCNW).After the introduction of Blackberry, various other companies also launched smartphones (companies like Samsung, LG, and Micromax etc.) With the continuous development of other companies Blackberry is facing stiff competition, and company is now changing its operation completely after the recent modification in the ownership of the company. The main objective of this paper is to analyze the new management under Ansoff’s matrix and a comparative analysis of the present and past financial standing and corporate strategies of the organization taking into consideration the overall perspective. BlackBerry: Future Marketing and Innovation Turbulence: Over the years with the increasing availability of cheaper smartphone from various companies Blackberry is continuously losing out their own customer base. Despite the recent innovations such as Blackberry services which was launched in 2011 to hold on to its market position, Blackberry is continuously losing out their market as 60% of the US Blackberry user is now want to switch to other smartphone operators. In the beginning, Blackberry was the sole player in the smart phone industry, but as the other players were started to enter the market, innovation was the need of the hour. But the top management did not able to understand neither the importance of innovation nor the importance of aggressive marketing and promotional strategy. As a result new players were easily able to reach out to the customers who were using the same old Blackberry service over the year and looking for changes (Maqsood). Innovation Turbulence: After lunching the first ever smart phone, Blackberry was stick to their old software applications, mobile phone applications and features. The users almost all the time labeled the innovation by Blackberry as boring and more of a one dimensional. Maqsood in his review mentioned that “since its debut in 2009, only 26,000 Blackberry applications have been developed till 2011. The Blackberry’s core competence was its push e-mail and BBM (Blackberry Messenger Service), but lately almost all mobile phones come with the push e-mail facility whereas the new iMessage introduced by Apple is gunning for BBM services.”(Maqsood). From the very beginning, Indonesia is being considered as the jewel in the crown of BlackBerry, as Blackberry always enjoyed a mass appeal among the people of this country. The demand for the product in the Indonesian market is also decreasing as the sale of Blackberry smartphone sale in this country was dropped rapidly to 21% in the second quarter of 2013 from 39% that of 2012. Blackberry was very slow to take advantage of their popularity among the corporate and government officials and to reach out to the common people.Due to lack of innovation, BBM was not a preferred solution for the people of modern times as new companies are coming up more advanced services and software solutions (IBN). Future marketing and innovation turbulence can be measured more in depth by using the matrix approach. No one can predict the future as what will be happen next, however one can predict the future trend based on present situation and can take necessary action accordingly. There are 10 distinct features based on which the marketing and in0vation turbulence can be measured. These are Marketing behavior of the competitors(s), sales aggressiveness, marketing aggressiveness, marketing strategy, Industry capacity against demand; (Future marketing turbulence parameters), innovation of the competitors, innovation aggressiveness, technological change, innovation and customer strategy and product life cycle (Future innovation turbulence). (Smith & Underwood, 32-33) Future Market Turbulence Competitors’     Level     Market Behavior 1 2 3 4 5                         market strategy           sales aggressiveness           marketing           aggressiveness           industry capacity Vs. Demand           The above chart representing the future market turbulence for the Blackberry. The top management needs to analyze the present scenario and evaluate all factors in scale of 5. For the first parameter 1 and 2 suggest that competitors are saving their customers, 3 represent growing market and 4 and 5 represents expansion of sale for the competitors. For next 2 factors, score of 1 & 2 represents low sales and marketing aggressiveness, 3 represent moderate and 4 and 5 resembles to over aggressive marketing and sales strategies. Last part is very important as it suggest the demand v supply/capacity to supply factor. Score of 1 & 2 represents excess demand, 3 means equilibrium and 4 & 5 means excess capacity compare to demand. (Smith &Underwood, 33)If one analyzes the condition of Blackberry, scores will be either 4 or 5 which suggest that company is expected to face a high marketing turbulence in the future. Future innovation turbulence  Market Behavior     Level     Of Competetors 1 2 3 4 5             innovation           aggressiveness           technological change           innovation strategy           customer strategy           product life cycle           Like product turbulence innovation turbulence also based on the competitors innovativeness, their product life cycle, and their strategy. In the field of mobile, the direct competitors of Blackberry are Samsung, Nokia, Apple Sony etc. in terms of innovativeness these companies are now way ahead of Blackberry with more advanced smart phone applications. So to compete with them either Blackberry has to think something out of the box or they can go back to their strength that is providing BBm service to corporate and government. Blackberry is now going back to the old basics of the company and let Nokia, Sony to fight it out against Samsung and Apple in the field of Smart phone. In order to find out the main strength, Blackberry must adopt the seven-pass portfolio balancing model. In the first phase of that they must decide which product or service of the company is most attractive among the customer and which one is less attractive. Based on this they can derived their future plan. They can also use the BCG matrix to figure out which product or service has to more demand in the market. They must focus on the Star and question mark group with proper balance between them and can abolish the operation of the Cash Cow and The dog scheme which yield minimum result. Like the competitors they must also focus on the economy of scale and economy of scope. These two parameters are important as these two give proper cost benefit analysis. Product life cycle is another important part. They must figure out which product or service has the demand in the market and can focus on those to speed up their survival. (Underwood, 210-217) Corporate Strategy: Marketing and Innovation Aggressiveness Product Portfolio and Product: After pressing tremendous pressure from the competitors and after change in the top management there is a distinct change in the corporate strategy adopted by the company to gain control in the market. In order to compete with other smart phones Blackberry also introduced the touch screen mobile in the market with the same old BBM and other facilities. But the main limitation of Blackberry was still there such as the limitation in sending mails to any other networks apart from BBM and less application to interest common people etc. Moreover people mainly the top bosses and corporates who always used to like Blackberry was unhappy because the new touchscreen mobile of Blackberry not delivering as per their expectation. But when John Chen took over the charge of CEO of the company in the last half of 2013, he started to implement new corporate strategy for the organization to gain the momentum for the company. The main objective of his new strategy is to “stabilize the companys losses and preserve its cash to focus on parts of the business it can grow in the future” (Reardon). In order to achieve the same he segregated the operation into 4 distinct areas namely: Device; Enterprise software; BlackBerry Messenger and QNX and machine-to-machine. Under device subdivision, the company is in partnership with device manufacturing organization Foxconn, which will design and manage all the new Blackberry models. Under this new strategy, Blackberry can even look for abandoning the old non performing devices even. In order to strengthen the position in the market, Blackberry is again focusing on providing services to various government and private enterprises that were the backbone of their success. “The new strategy will put a greater emphasis on building up the companys end-to-end security and productivity software tools for businesses.” (Reardon). The company is constructing a sales force that will aim "regulated verticals" which include government agencies, banks, health care, and other businesses where ruling and security checking are essential. The QNX software business, according to CEO of the company is the crowned jewel of BlackBerry, but the problem is generating revenue out of this application. Analysts predict that this can contribute to a larger extent to the profit of the organization but for that the company needs to wait a bit longer period of time. In order to expand their business, Blackberry is looking for new partnership with Google Android and Apple iOS to get the BlackBerry software on those platforms as well (Reardon). If the deal I successful than Blackberry Apps can be available for more common people and it will open a new market segment for them. Blackberry and Ansoff’s Matrix: The Ansoff Matrix is also based on the aggregated score of the above 2 tables as the new market development and diversification is clearly based on the grand total of product and innovation turbulence. After the initial setback, in the last 2 years Blackberry as an organization changed drastically. Not only in terms of its operation, in last two years, they have also change their marketing strategies, develop new target market, and most importantly added new products to their offerings to attract more number of customers. Market Development: In a long run BBM and QNX is the main business focus of the company. To gather more market share, Blackberry is now deciding to open up its BlackBerry Messenger client as an application for other iOS and Android mobile operator. In their opinion, this is potentially a profit making decision for the company as more people can avail the service of BBM. As Dormehl (2014) in his report mentioned the speech of the present CEO of the company where he has mentioned that “BlackBerry is focusing on several key areas to capitalize on our traditional strengths in security and enterprise while we also leverage our QNX Embedded Business to focus on future growth opportunities in machine-to-machine communications,” he says. “I believe machine-to-machine computing is the computing model of the next decade, and we are well positioned to lead.”(Dormehl). New Product Development & diversification: Under the product development and diversification scheme, Blackberry in the month of February, 2014 launched 2 new smartphone in the market alongside updating its messaging and enterprise security technologies as a part of their revival strategy. The new smartphones of Blackberry “include a new flagship device with a QWERTY keyboard that resurrects the company’s legacy physical track pad and menu buttons, as well as a full-touch device designed for the Indonesian market which marks the first smartphone to come from BlackBerry’s new manufacturing partnership with Foxconn Technology Group.” (Hartley). Apart from this new product development, “BlackBerry unveiled eBBM Suite, a new messaging platform for enterprise users in regulated industries which is designed to tie the company’s popular BlackBerry Messenger (BBM) technology deeper into its security infrastructure. The company also launched the latest version of its BlackBerry Enterprise Service (BES) technology.”(Hartley). Management Responsiveness and Capabilities: For any organization, the mindset of the CEO and top management is absolutely important in order to recover from its own bad situation. In modern business environmentcompanies cannot only focus on the incremental improvement; they must occasionally undergo performance transformation to b at the top and stay there. While analyzing the role of the CEO’s in this kind of transformation 4 distinct features have to be there in a CEO who is trying to save the company and want to bring it back to the top. These are: The transformational process has to be meaningful for one and all.Role-modeling desired mind-sets and behavior. The action of any successful CEO always encourages other employees to support and practice new advanced processes. CEO must develop a strong and dedicated top team based on capability of the senior officials CEO must every time look for the success. The personal involvement of the CEO during financial and symbolic value crisis always encourage others to give a little extra effort and this little extra effort from all can take the company to the top.(Aliken&keller, 2007) In order to recover the company from its all-time low situation in the market, his thought process is already appreciated by the industry. “Chen has confirmed BlackBerry will no longer compete with the likes of Samsung and Apple directly, but will instead focus on the attributes that make the company unique: its understanding of business users, its market-leading security, innovation within messaging, and, last but not least, QNX.” (Goodwin). While analyzing the steps taken by him it is very clear that to gain market he is not looking to go for innovation and cheaper smart phone production, instead he is focusing on the core competencies of the company which once made it the leader in the market. Depending on the core business strength to rebuild the organization is amore measured and fruitful way in comparison to trying out new innovative things to compete with the other competitors.In order to ensure resurgence of any company, role of the CEO is very important. John Chen is one of the well known corporate of the Silicon Valley. Before taking over the charge of Blackberry, he was associated with Sybase Inc. This company was also facing the heat and while being in charge of the company decision taken by him to sell it to SAP was considered as the best by several experts. Olson (2012) in her review mentioned that “Chen is a troubleshooter. He took the reins of money-losing database firm Sybase in 1998 and led it back to profitability within a year.”(Olson, 2012) While doing the resurgence work, Chen “ended up cutting 1,000 jobs which was 20% of staff at Sybase, lowering annual costs by $100 million. He also pivoted Sybase to avoid competing directly with dominant enterprise software players like Oracle and Microsoft and start focusing on niche parts of the database market.(Olson) In order to revive Blackberry he is also looking to follow the same route by cutting at least 40% of job, pulling down the operational expenses for the company, focusing more on the customers from government and the financial and telecommunications industries-the most familiar way of doing business in Blackberry. (Olson) While developing the future strategy, Blackberry has to figure out their X factor-a factor by which they can distinguish themselves from the competitors Based on this evaluation companies need to decide on their future strategies.       Marking     Parameters 1 2 3 4 5             Marketing           Innovation           Product           Portfolio           Technology           Strategic           Capacity           Management           Culture           Structure           CEOs Attributes           Internal           Technology           Strategic planning           Decision making           If the score of the above matrix is above 4 overall then it is very clear that company needs to undergo massive structural and functional reformation to overcome the turbulence phase. If we consider the above factor for Blackberry, then the value has to be 4 and over, so Chen as a new CEO has to ensure that all the above parameter addressed properly in order to ensure the growth of the organization. Conclusion: For any organization, failure is a part of their journey. Every organization must learn from their failure to develop the way of success. When Blackberry first faced the heat they need not work accordingly to overcome those situations. Instead they ignore those alarming situations and continue their old strategy. In last few years, their strategy was more scattered as there were lots of questions about their operations: is this a consumer device company? Is it an enterprise company? After Chen took charge, one may agree, “the way BlackBerry goes forward is to be the best manager of enterprise information and resources” (Mertz). In order to achieve the old position, they need to grow trust and must reach out to millions of people. Blackberry must demonstrate their security, reliability, and ease of use to gather their lost market. References 1. Aiken Carolyn & Keller Scott; The CEO’s role in leading transformation; McKinsey & Company: Insight and Publication; 2007; Web 28.3.2014 from http://www.mckinsey.com/insights/organization/the_ceos_role_in_leading_transformation 2. BBSCNW,A Short history of the BlackBerry, 2014; Web. 28.3.2014from http://www.bbscnw.com/a-short-history-of-the-blackberry.php 3. Cousineau Sophie; For a start, BlackBerry needs a cultural revolution, The Globe and Mail, 2013, Web. 28.3.2014 from http://www.theglobeandmail.com/report-on-business/for-a-start-blackberry-needs-a-cultural-revolution/article14599159/ 4. Dormehl, Luke, Is BlackBerry Actually Going To Turn It Around? Fastcolabs,2014, Web. 28.3.2014 from http://www.fastcolabs.com/3025892/is-blackberry-actually-going-to-turn-it-around 5. Goodwin, Richard, BlackBerry CEO Unveils 4-Stage Recovery Plan,Know Your Mobile, 2014, Web. 28.3.2014 from http://www.knowyourmobile.com/blackberry/blackberry-10/21702/blackberry-ceo-unveils-4-stage-recovery-plan 6. Hartley Matt, BlackBerry Ltd rolls out new phones, eBBM, enterprise messaging service, as part of comeback strategy, Financial Post, 2014, Web. 28.3.2014 from http://business.financialpost.com/2014/02/25/blackberry-ltd-rolls-out-new-phones-ebbm-enterprise-messaging-service-as-part-of-comeback-strategy/?__lsa=d90d-aa92 7. IBN Live, BlackBuried: How BlackBerry is losing its biggest market, 2013, Web. 28.3.2014 from http://ibnlive.in.com/news/blackburied-how-blackberry-is-losing-its-biggest-market/424590-11.html 8. John Chen: At a Glance; Forbes, 2014; Web, 28.3.2014 from http://www.forbes.com/profile/john-chen-1/ 9. Maqsood, Muhammad Umair, The Fall of Blackberry,The Express Tribune, 2011, Web, retrieved on 28.3.2014 from http://blogs.tribune.com.pk/story/9407/the-fall-of-blackberry/ 10. Mertz Steve, BlackBerry: The Way Forward, Berry Flow, 2013, Web. 28.3.2014 from http://berryflow.com/2013/12/bb-the-way-forward/ 11. Olson Parmy; New CEO: BlackBerrys Turnaround Could Take A Year And A Half; Forbes; 2013, Web; 28.03.2014 from http://www.forbes.com/sites/parmyolson/2013/11/05/new-ceo-blackberrys-turnaround-could-take-a-year-and-a-half/ 12. Reardon Marguerite, BlackBerry CEO Detail’s survival strategy; CNET, Web. 28.2.2014 from http://www.cnet.com/news/blackberry-ceo-details-survival-strategy/ 13. Smith L. Sandra & Underwood Jim; Thriving in E-Chaos: Corporate Strategy for Uncertain Time; iUniverse: business and Economics, 2002; Print 14. Underwood Jim, Thriving in E-Chaos, Corporate strategy for Uncertain times; 2002; Print Read More