SWOT and TOWS Analysis for Blackberry Company - Case Study Example

SWOT and TOWS analysis for Blackberry Company of the Contents Contents 2 Background Study 3 Discussion 4 SWOT Analysis of Blackberry 4 Strengths of Blackberry 4 Weaknesses of Blackberry 5 Opportunities for Blackberry 6 Threats of Blackberry 7 TOWS Analysis of Blackberry 8 Conclusion 10 References 10 Background Study Blackberry Limited is a pioneer in telecommunications and wireless handset manufacturing company based in Ontario, Canada. The company is recognized for its mobile based technologies and best selling original Smartphones. Initially, the company was known as Research in Motion (RIM) which was involved in manufacturing and distribution of Blackberries. In 2013-2014, the company has experienced severe downfall in terms of market share and profitability. Change in leadership style, infusing fresh capital into the company, modifications in strategic decision making- nothing could control the immediate situation. Experts are of the opinion that the downfall started early in 2007 since when Apple’s iPhone started capturing the market. Blackberry failed to recognize the potential threat impending from expansion of iPhone. In 2011, when Apple was enjoying the success of iPhone 4S, Blackberry was suffering from server problem for several days. The company was charged for trademark infringement in late 2011 and the company’s balance sheet illustrated a net loss at the end of 2012 (McQueen, 2012). Though launch of BB 10 had signaled renaissance for the company, the initiative went in vain along with the company’s effort for two years and 15 acquisitions. Somehow the company absorbed the blizzard through its CEOs and CFO’s initiative to sell off their shareholding. Employees experienced severe turnover in between. In early 2013, Fairfax announced to acquire Blackberry but could not accelerate the process due to absence of sufficient finances. Since 2014, the company has taken serious initiative to restructure the financial and operating health of Blackberry Limited. Individuals experienced in restructuring are included in the management. Present CEO of Blackberry, Mr. John S Chen is trying hard to reposition the company in the coming future (BlackBerry, 2013). In this paper, SWOT and TOWS analysis of Blackberry will be done for understanding the strength and weaknesses the company is experiencing in internal environment as well as opportunities and threats to be encountered in the external situation in which Blackberry is operating. Discussion SWOT Analysis of Blackberry SWOT analysis refers to a strategic management technique which is required for evaluating strengths, weaknesses, opportunities and threats prevailing in the company specific business environment (Dahlen, Lange & Smith, 2010). Strengths of Blackberry Highly Secure Phone The basic competitive advantage of Blackberry is derived from its highly secured mobile phones using RIM technology. Phones are made secured by using encrypted network named VPN (Virtual Private Network) which allows sending and receiving emails with negligible possibilities of stealing information. This Unique Selling Proposition (USP) of Blackberry attracted corporate and government entities to a great extent (United States Securities and Exchange Commission, 2014). Strong Focus on Constricted Customer Segment Concentrated focus narrow customer segment such as Corporate and Government helps the company to understand the requirements well and accordingly design its products. Hence, focused approach to satisfy the narrow base customer need is a key strength for Blackberry. International Mobility The Blackberry devices can be used from anywhere in the world with any mobile carriers. This enhances the company’s strength in terms of mobility and portability. Government Collaborations Understanding the secured applications of Blackberry Smartphones, many US governmental agencies including FBI and CIA have adopted Blackberry for official purpose. With US President, Mr. Barack Obama using Blackberry mobiles, the company has been enabled to enhance the security factor and reliability of its products further in customer’s mind (United States Securities and Exchange Commission, 2014). Weaknesses of Blackberry Poor Marketing Efforts Blackberry had an established market way before launching of Apple’s iPhone or Samsung Galaxy series. However, the company spends trivial amount in marketing and promotional activities. In 2012, Blackberry experienced a significant downfall in market share with Apple’s and Samsung’s effort to expend more than 10 times ($400 million) and 8 times ($334 million) respectively. Hence, poor marketing effort and inability of the brand to enhance its visibility are the main weakness for Blackberry (Bielski, 2006). Blackberry’s Own Operating System The customer base for Blackberry is too small to be profitable for application developers and to maintain the sustainability of its own operating system. Insufficient funds of Blackberry Limited results in frequent server problem due to lack of maintenance and outdated version of OS combined with multiple delays in launching updated version. Dependency on Narrow Customer Base Huge dependency on Government and Corporate clients led Blackberry to put very less emphasis on other market segments. Though high security features of Blackberry devices are widely accepted to the Government and Corporate clients, the company has not received any long term contract from this customer base. Hence, loss of contact with one of those agencies leads the company to experience considerable loss in market share and profitability as the customer base is really narrow (Bielski, 2006). Negligible presence in Tablet Market Blackberry’s effort to capture its loss market by introducing RIM’s Blackberry PlayBook tablet went in vain as the product failed to ensure its market presence. Such initiative resulted in further loss in the growth and profitability and reduced Blackberry’s possibility to compete with Apple and Samsung in the Tablet segment (Bielski, 2006). Figure 1: SWOT Analysis of Blackberry Opportunities for Blackberry Scope for Advertising in Mobile Market Blackberry still have an immense opportunity, if the company can strategically market its products and utilize advertisement as a weapon to capture the untouched market segments. Expected Growth of Smartphone, Tablet Market and Cloud based Services The Tablet and Smartphone Market is expected to grow at an annual rate of 50% by the end of 2015. Cloud based services in which Blackberry expertise, is expected to drastically grow by 2020 and reach worth $240 billion. Such increasing demand will definitely strengthen future market position for Blackberry (Mazo & Trautschold, 2010). Acquiring Patent through Amalgamation Blackberry may gain competitive advantage through strong patent portfolio, investing huge in Research and Development or through acquisition of other firms. The companies have already shown progression through implementing buyout offers and accepting infusion of fresh capital from Angel Investors. Blackberry can further enhance business partnership with third party providers to imitate the success strategies followed by Apple or Samsung and instill the latest apps and features used by those (Raban & Leijdekkers, 2009). Threats of Blackberry Saturated Smartphone Market The market for Smartphone and Tablets has already been saturated in developed nations such as the US and Canada. Apart from these matured market, Smartphone and Tablet is experiencing slow growth in developing nations as well due to various economic and financial downturn. This hinders further expansion of Blackberry (Raban & Leijdekkers, 2009). Rapid Technological Change Competitors’ capability to release products with slightly differentiated features at a very fast pace has become big challenge for Blackberry as the company believes in introducing innovative products which requires sufficient time for research and development. Incremental Competition for Government Contracts While Blackberry used to be the sole supplier of Government and big Corporate, the company is facing competition with Apple and Samsung for renewal of contract. The highly secured mobile features have been outnumbered by Apple and Samsung due to their exciting features. In 2013, Samsung outnumbered Blackberry by wining renewal of some US Government contracts through optimum quotation (Tilson & Lyytinen, 2012). TOWS Analysis of Blackberry TOWS Analysis provides strategic alternatives to understand how a company’s strength can be used for capturing its opportunities and minimizing real and potential threats and how weakness can be reduced through utilizing opportunities and diminishing threats TOWS Matrix Strength Highly Secure Phone Strong Focus on Constricted Customer Segment International Mobility Government Collaborations Weakness Poor Marketing Efforts Blackberry’s Own Operating System Dependency on Narrow Customer Base Negligible presence in Tablet Market Opportunities Scope for Advertising in Mobile Market Expected Growth of Smartphone, Tablet Market and Cloud based Services Acquiring Patent through Amalgamation Blackberry can maximize its business opportunities especially in emerging consumer markets through enhancing its sophisticated brand image. The company should also capitalize its competency in research and development for creating innovative applications, accessories and control systems. Focus should be shifted towards self employed individuals and students of higher education for capturing potential customer base and reducing dependency on matured markets. Emphasis should be given to create and expand content creator community to enhance opportunities for Tablet market from the professionals, social users and other interest group. Products should be created in order to satisfy increasing needs of B2B customers at an affordable price (Wargo, 2009). The biggest weakness of Blackberry lies in its lack in marketing and promotional strategy. As identified, the company should drive rapid promotional strategies to raise interest among customers’ mind and take maximum advantage of the projected growth in Smartphone and Tablet market. In order to achieve a large market share, Blackberry should also reduce dependency on Government and Corporate contract and concentrate on the businessmen and technical student who have the capacity and requirement for Smartphones and Tablets (Wargo, 2009). Threats Saturated Smartphone Market Rapid Technological Change Incremental Competition for Government Contracts Brand equity should be utilized to differentiate Blackberry products from any other market players. Strength should be broadening in data management to Cloud Computing for SMEs in B2B and individuals in B2C The maximum threat Blackberry experiences are from its Competitors such as Apple and Samsung. Hence, it will be better for the company to create its own pathway rather than following the footsteps of its major competitors. In this way, Blackberry will be able to cope up with the technology changes, bring modification and uniqueness in the saturated market and create brand awareness among both B2B and B2C consumers (Aghighi, Fontanini, Scott & Yeoh, 2014).   Conclusion Blackberry used to be the market leader in Smartphone and Business Phone segment since its inception. However, due to some internal structural turmoil and external competitive pressure, the company went on a verge of losing its competence. Therefore, strategic tools such as SWTO and TOWS have been applied to identify the internal strength and weakness as well as opportunities and threats of Blackberry. If the company can successfully exploit its strengths and utilize opportunities lying in business environment through minimizing threats and weaknesses, Blackberry will certainly regain its competitive position in upcoming future. References Aghighi, S., Fontanini, L., Scott, J. K., & Yeoh, P. B. (2014). A Conceptual Model to Describe the Decline of European Blackberry. Retrieved from http://apsjournals.apsnet.org/doi/pdf/10.1094/PDIS-11-13-1124-FE Bielski, L. (2006). The SWOT for Retail IT Reveals the Interconnections of Technology; If You Want to Know-And Serve-You’re Customers Better, Think in Terms of STP from the Infrastructure to the Application Layer. Academic Journal Article, 98(11), 131-138. BlackBerry. (2013). Legal. Retrieved from http://global.blackberry.com/en/legal.html Dahlen, M., Lange, F. & Smith, T. (2010). Marketing Communications: A Brand Narrative Approach. New York: John Wiley & Sons. Mazo, G., & Trautschold, M. (2010). BlackBerry Curve Made Simple: For the BlackBerry Curve 8520, 8530 and 8500 Series. New York: Apress. McQueen, R. (2012). The Blackberry. London: Hachette. Raban, R., & Leijdekkers, P. (2009). Advancing the m-learning research agenda for active, experiential learning: Four case studies. Australasian Journal of Educational Technology, 25(2), 250-267. Tilson, D., & Lyytinen, K. (2012). Change and Control Paradoxes in Mobile Infrastructure Innovation: The Android and iOS Mobile Operating Systems Cases. IEEE Xplore Digital Library, 4(2), 1324 – 1333. United States Securities and Exchange Commission. (2014). Registration Statement Pursuant To Section 12 Of The Securities Exchange Act Of 1934. Retrieved from: http://us.blackberry.com/content/dam/bbCompany/Desktop/Global/PDF/Investors/Documents/2014/Q4_FY14_Filing.pdf Wargo, J. M. (2009). BlackBerry Development Fundamentals. New Jersey: Pearson Education. Read More