History and Background of Blackberry - Case Study Example

Student Name: Course Name and Code: University: Date of Submission: Report on BlackBerry History and Background of BlackBerry The conception of the Blackberry device marked the beginning of the smartphone revolution which has provided viable solutions to business people. The iconic Blackberry has its history dating back to 1999 when it hit the market in the form of a two-way pager (Halevy, 2009, para, 12). It was not until 2002 that the more hip Blackberry design was introduced, thus allowing users to browse the web, use mail, send text messages, send internet fax and make calls among other wireless services. In 2004, RIM announced that the number of BlackBerry subscribers around the world had reached over 2 million (Joe, 2008, para 5). This was an improvement from 1 million recorded in the previous year. In May 2005, the number of subscribers increased to 5 million and BlackBerry currently has over 20 million subscribers (WebHostingReport, 2010, para 3). The first BlackBerry devise was more of a pager and was labeled the 850. The 850 used two AA batteries. Consistent with the existing market, the 850 provided a solution to businessmen through providing a wireless PDA. The use of internet was not really popular in 1998 when this model was being developed. The 850 was followed by the development of the 857/957 series, which looked more or less like the current BlackBerry models. Apart from having a bigger display, the series came with the rechargeable lithium battery. The memory was also expanded to 8MB as compared to 850’s 4MB. The series had the ability to sync about 10 emails and was generally a great improvement from the 850. The next device was 5810, which came with a full-color screen and was followed by the 6000-series. Increased demand in CDMA as opposed to GSM which previous BlackBerry devices were using before led to the production of BlackBerry 6750 which also had a 10 MB memory and provided services for Verizon Wireless, America’s number one wireless communication provider at the time. After this, BlackBerry devices were designed for both GSM and CDMA networks. Various Blackberry devices were introduced in the market after this including 7200-series, 7500-series, 7700-series and the 8800-series. The Sure Type model was later designed and released as 7100t in late 2004. The devise was however bulky and it was not until 2006 that the SureType took off when Blackberry Pearl was released initially for GSM networks only before CDMA was incorporated in Pearl 8130 in late 2007 (AnandTech, 2007, para 1). Later models even included WiFi. BlackBerry Curve introduced in May, 2007changed the face of BlackBerry by including a camera, which was previously considered unprofessional and thus excluded from the devices. Other devices include Blackberry Storm, Blackberry Bold and Blackberry Tour among others. Relationship marketing and transactional marketing The major difference between relationship marketing and transactional marketing lies in the kind of relationship that exists between the company and the customers. For relationship marketing, the company seeks to establish long-term relationships with customers (Kong, 2008, p. 28). Accordingly, customer retention and satisfaction are highly emphasized. Such companies extend their communication with customers beyond the regular advertising and promotions. This is a marketing strategy that has gained popularity in the recent past due to the fact that competition has increased significantly. Tools for customer relationship management have therefore emerged and businesses continue to seek ability to maintain strong relationships with customers in order to enhance repeat demand. Transactional marketing denotes a relationship in which companies focus on single transactions at the point of sale (Kong, 2008, p. 28). This strategy aims at maximizing the volume of sales and exerts little effort if any in establishing a relationship with buyers. Unlike relationship management which is oriented towards the product benefits and solutions, transactional marketing focuses on product features. The low contact with buyers insinuates that marketers are rarely interested with what buyers think or how they receive the product, given that the relationship ends at the point of sale. This kind of strategy is undesirable especially where competition is high and customers value the benefits that are likely to emerge from the products. BlackBerry utilises relationship marketing strategy. This can be evidenced by the fact that BlackBerry maintains proper communication lines with its customers. The company has a dedicated sales and support team that takes care of the customers’ inquiries such that the company can be said to be concerned about customers. Market environment Political Economic Social Technological Legal Environmental Political stability at home and in countries where BlackBerry has market Change in government systems Trade restrictions Environmental and tax policies Changes in economic conditions including inflation and deflation Disposable income level High prices for components Demand and supply constraints Fluctuations in exchange rates Changes in social trends Increased demand for mobile internet Population growth Challenges in business people’s schedules that call for multiple-application devices. Career attitudes Advancement in technology Competitors’ technological abilities Cost of technology The need for research Technological incentives Changes in regulations New system of government New consumer protection laws Employment laws Health and safety laws New laws on environmental conservation Laws on pollution Location of distributors Pollution risks Recycling considerations Political Trends Political factors play a significant role in the eventual success of a company as they influence different aspects of the business. Political stability is therefore highly desirable as far as business success is concerned. Political instability leads to destruction of businesses and highly affects the people’s disposable income level (Applegate and Jonsen, 2007, p. 29). For example, war could lead to undesirable effects on countries where it occurs, thus impacting on sales. Businesses may have to be closed until the fracas can subside and some may eventually need to be closed completely due to damages caused during a war. BlackBerry sales may therefore be affected significantly thus impacting on profitability. Other political factors include policies and trade restrictions that may exist in countries where BlackBerry is sold. Changes in systems of government may also affect business to a great extent since the new government may come up with new laws. Economic Trends Various aspects of the economy keep changing and these are bound to affect BlackBerry’s profitability potential. Such changes result in increased sales or decreased sales depending on the changes witnessed. Inflation for example leads to a general increase in product prices such that it could affect the company’s profitability to a great extent (Butler, p. 88). It would lead to an increase in the prices of BlackBerry components and thus increase the production costs. This would in turn lead to lower profits for the company. Alternatively, the company may opt to increase the prices of their devices; which would definitely lead to a decline in demand thus limiting the company’s profitability potential (York. Cravens and Piercy, 2006, p. 104). On the other hand, very low prices for goods experienced during deflation could mean minimal profits for the company. The company is also threatened by changes in currency exchange rates which could impact on the company’s profitability from global sales (Plaster and Alderman, 2006, p. 236). An example of the recent global economic crisis effectively describes how a company may be affected by economic factors. BlackBerry recorded a decrease in sales in the first quarter of 2010 and fell short of its 11.4 million phones estimate by selling only 11.2 million phones (Miller, 2010, para 6). Demand and supply constraints could also impact on BlackBerry as they affect the profitability of the company. Demand is affected by a variety of factors including the level of income, price, presence and price of substitutes, social trends and personal attitudes among other factors (Smith and Raspin, 2008, p. 63). Most people would find the price of the BlackBerry rather high and may prefer to get other smartphone models. This insinuates that the price of competitors plays a significant role in defining demand, such that BlackBerry must aim at standardizing their prices in order to avoid being outdone by competitors (Smith and Raspin, 2008, p. 65). Social trends and attitudes are also likely to affect the demand for BlackBerry hence the need to study changes in the market and consumer reviews. Further, individual disposable income dictates their demand for a good, such that BlackBerry’s sales may be affected by changes in disposable income. When the disposable income is high, demand is expected to be high as opposed to when the disposable income is low. Supply constraints include the availability of supplies, the prices of supplies and changes in the market that are likely to affect supply (Upshaw, 1995, p. 174). Increases in the price of supplies would mean reduced profitability due to the increase in production costs. A decrease would however be advantageous because it would reduce the cost of production. Notably, the increase in the number of suppliers would give BlackBerry an opportunity to negotiate prices such that production costs are reduced significantly. Since the selling price for the BlackBerry may not accompany this reduction in production costs, the company is bound to gain significantly from increased profits (Hamel, G & Prahalad, 1996, p. 298). Social Trends The BlackBerry is highly favored by the current internet obsession that has influenced the lives of most people (Lion and Green, 2007, p. 3-4). This has led to increasing demand for the device which allows people to access the internet from anywhere. It is notable that the use of smartphones is increasing at a high rate as people seek to be more flexible in their work (Lectura, 2010, para 1-5). More individuals are demanding devices that allow them to perform a number of operations without having to go to the office, including email and browsing options. Changes in social trends in future will require BlackBerry to be further enhanced, such that the company must continually study the market to identify changes that are likely to affect the demand for BlackBerry (Smith and Raspin, 2008, p. 63). Increased population growth has a positive impact on the company as it will mean more business in future. Further, changes in career attitudes could impact on profitability. Notably, the number of businesspeople is advancing at a high rate and this could increase the demand for BlackBerry devices. Technological Trends Blackberry currently enjoys top-level technology that is challenging for competitors to imitate (Lion and Green, 2006, p. 2). This not only allows a high level of sophistication but also gives users a quality tool for performing unique purposes. Technology however is highly dynamic and is bound to advance as time goes by (Allen, 2009, p. 77). Furthermore, individuals are likely to expect BlackBerry to come up with more sophisticated products in future. This means that RIM must continually engage in research in order to ensure that more advanced technology is developed. Such advancement will ensure that Blackberry stays ahead of competition and thus enhance continuity. Notably, BlackBerry’s competitors may have better technological ability thus enabling them to come up with sophisticated technologies for smartphones. The iphone for example has been a great source of competition with its touch screen smartphone (Miller, 2010, para 3). This insinuates that technological advancement poses a threat to BlackBerry and should therefore be given absolute priority. Legal Trends BlackBerry is bound to be affected by changes in the legal environment since the laws affect the manner in which it operates. Changes in regulations may make business harder or increase the costs for the business (Allen, 2009, p. 76). This may result from the introduction of a new system of government and changes in consumer protection laws and health and safety laws. The company would also be careful to ensure that employees are well taken care of and that employment laws are complied with. Environmental Trends The environmental factors vary from the location of the business to the changes in climate and laws that could affect the business. BlackBerry may be affected by new environmental laws; given the increased need for environmental conservation that is currently being emphasized. The location of the distributors could also affect the sales. The company is also expected to reduce pollution levels and such efforts may increase costs. BlackBerry may also consider recycling options which tend to save costs. BlackBerry’s definition and profiling of customers Blackberry targets business customers and therefore includes features that are likely to appeal to this group of customers (Renowden, 2010, para 1-2). The marketing theory applicable for this kind of selection is customer segmentation. Customer segmentation refers to the process of identifying the customers that the company will target for its products (Kumar, 2008, p. 44). BlackBerry defines its customers in terms of their needs and the level of convenience required in accessing information and organizing duties. Further, customers are profiled by their characteristics which include busy schedules, urgency in addressing various business issues such as reading mails and the convenience of proper time planning. Useful research for BlackBerry The form of research conducted by SIS International Research and Technology Sales Leads is analysed as follows: SIS International research Technology Sales Leads Market research Feasibility tests Emerging market research Market sizing Industry synthesis On-demand market intelligence studies Competitive intelligence Supplier network research Strategic planning Political polling High-End IT telemarketing (Enterprise prospecting) Marketing trends IT industry trends Channel marketing Online marketing solutions Search engine optimization Website landing pages Creative and direct mail BlackBerry should make use of Technology Sales Lead services to analyse the market. Notably, BlackBerry uses a considerable aspect of technology; such that it is important for the company to follow technology trends. The technology information would be useful to the organization because it would aid the company in developing better models in future. BlackBerry would also benefit immensely from information about the IT industry trends, channel marketing and online marketing solutions. Exploring market trends through a research by the company would play a significant role in increasing BlackBerry sales. It would also identify sources of competition and thus work towards improving its competitiveness. Product anatomy The core: BlackBerry’s core lies in its convenience and flexibility that the device provides users. The BlackBerry aims at providing exceptional features that allow users to use a mobile phone that can perform other functions such as internet access, email access, scheduling and time management through the organizer and the ability to store information without having to get an extra gadget. The BlackBerry enables users to access their office work on the phone such that one can work away from the office without needing to carry a laptop to check mail. Actual: The BlackBerry device and the various features is the actual aspect of the products anatomy. The device has a QWERTY keypad and the features included such as the rechargeable battery, the memory and other product features such as the ability to connect to the internet and to organize one’s work. Augmented: The Company gives a warranty for the BlackBerry devices such that they may be repaired or replaced in case they are faulty (us.blackberry.com). It also provides customer support such that users find it easy to address challenges. Furthermore, the devices have a help option which allows users to seek clarification about features they are not familiar with. Potential: Customers expect the BlackBerry devise to serve them like a computer substitute. Accordingly, they expect the company to develop the product further to provide other services such as ability to play videos and save documents. Product life cycle Market introduction This represents the initial phase where the business is being set up. A high level of expenses characterises this stage as the owners seek to equip the business with the necessities. During this stage, sales are slow because customers have not yet identified with the product (Kurtz, MacKenzie and Snow. 2009, p. 502). The company has to prompt customers to buy its products and there is generally little income if any during this stage. Growth stage At this stage, the product is developing and there is increased recognition of the product. The sales volume increases appreciably and profitability begins to increase (Stapleton and Thomas, 1998, p. 102). It is at this time that customers begin to identify the product from others in the market after trying it or getting reviews from others. Similar products are likely to emerge during this stage and competition is definitely bound to increase. Maturity stage This is the stage may be described as the peak of the product’s potential. The product is well known across the market and enjoys significant brand recognition. Sales peak at this stage and the product experiences market saturation (Cant, Strydon and Juste, 2009, p. 241-243). Competition is also high at this stage and the product’s price is likely to reduce so as to counter competition. The company must therefore engage in activities aimed at differentiating the brand and diversification is required in order to raise the market share and thus reduce the chances of reduced profits (Cant, Strydon and Juste, 2009, p. 243). Saturation/ decline stage This is the final stage of the cycle and it is characterized by declining sales and profitability from the product. Prices reduce significantly and the costs are said to be counter-optimal (Kurtz, MacKenzie and Snow. 2009, p. 503). In essence, the product is no longer profitable as before and the product could end up being scrapped from the market. BlackBerry is at the maturity stage. The company is already well established in the market and attracts a large number of customers. Notably, Competition is very high as other mobile device manufacturers such as Samsung, Ericsson, Apple, Nokia and Motorolla among others are determined in coming up with sophisticated smartphones that offer great features for customers to enjoy. They are also cheaper such that the price of BlackBerry devices have been reduced in order to counter competition. The differentiation efforts by BlackBerry can be evidenced by the development of new BlackBerry models which often consist of advanced features that have not been used by competitors. Reference List Allen, M 2009, Analysing the Organisational Environment, Select Knowledge Limited, UK. AnandTech 2007, BlackBerry Pearl 2, 8130 launched! 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