Strategic Position of BlackBerry - Case Study Example

?Executive Summary The objective of this paper is to highlight the current strategic position of BlackBerry as well as technological issues, which the company encountered last year. It was significant to touch the area of technological issues because such technological issues can hamper the brand image of the company and customers immediately switch to other brands. This paper analyzes critical position of BlackBerry by showing statistics where the market share of BlackBerry is not even close to its competitors. Such statistics reveal that company is trapped in predicament. The industry in which BlackBerry is operating, it is crucial to adapt to rapid changes relating to software and hardware advancements. It is imperative for BlackBerry to develop a sustainability business model because even the survival of the company is imperiled. Introduction and Global Overview of Issue Research in Motions (RIM) is a leading mobile communication company and the company behind the success of award-winning brand BlackBerry. The product lines of award-winning and innovative BlackBerry includes smartphones and software for both small businesses and enterprises. Research In Motion (RIM) develops the supporting platform and devices of BlackBerry. Research In Motion (RIM) is a Canadian hardware and software company located in Waterloo, Ontario. BlackBerry allows virtual real time communication so that one can stay connected all the time with people and things that matter the most. The chief selling point of BlackBerry is that it provides push email access globally via wireless networks and provides a wireless messaging system. Other factors that contributed for the popularity of BlackBerry are its systematic and comprehensive approach to security. The devices of BlackBerry are versatile and offer range of functions such as email, SMS, telephony, web browsing and so on (O’Connor, n.d.). Smartphones is a mobile device that offers the features of phone as well as PC-like functionalities such as e-book reader, internet, e-mail, external USB keyboard, VGA Connector and so on. BlackBerry is one of the dominant brands in the industry of smartphones. It has enjoyed a large market share and large number of loyal customers over the past few years. BlackBerry is a wireless device launched in 1999 by Research in Motion (RIM). While the BlackBerry has a comprehensive built-in framework for security at both server and device level, it is still prone to various probable attacks (O’Connor, n.d.). The degree of severity of these attacks may vary as per the involvement of user; the backdoor of device allows exporting confidential data from the device itself to be utilized as proxy for attackers. However, the attacks are certainly autonomous and require user to perform number of actions in order to make the attack successful. In addition, the practicality of these attacks largely depends upon the configuration of the current control provided in BlackBerry devices such as IT Policy Setup, Application Control, and Firewall. Usage of these mechanisms of available security, the risks associated with the prior mentioned attacks can be reduced greatly. The prime purpose of this report is to analyze the current strategic position of BlackBerry in the industry of smart-phones. Global smartphone market has become extremely competitive and crowded in recent few years. In the last year, the statistics revealed that the smartphone market is led by Android (Google) having 70.1% share, followed by iOS of Apple at 21%, BlackBerry stands at 3.2% while Windows Phone at 2.6% (Teh, 2013, p. 1). The worldwide growth of smartphones market is 41.7% whereas the BlackBerry has experiences negative growth by declining by 43.1% (Teh, 2013, p. 1). In few words, it can be said that BlackBerry is in predicament. Despite losing market share, BlackBerry still has 79 million users all over the world. Immediate attention based in benefits, usability and features already overcome during the promotion of the latest smartphones offered by BlackBerry that is, BlackBerry 10 OS also known as BB10 on January 30, 2013 (Teh, 2013, p. 1). The focus of the paper primarily revolves around the possible threats to the prevailing position of BlackBerry. It also touches the various functions that it offers, environmental impact, organizational impact, economic impact, and ease of use of BlackBerry devices. Company Background Smartphone market is vigorous with rapid changes, both in hardware and software innovation and rivalry in smartphone ecosystem; it is definitely integral for BlackBerry to develop a sustainability business model in order to meet long-term challenges before it loses even a small part of its current 76 million users. As per the financials of the first quarter of 2013, that reveals that BlackBerry just drops another 3 million users (Teh, 2013, p. 1). A large multinational cannot lose such a large market share unexpectedly. There are numbers of important decisions taken due to which this situation occurred. Russell (2012) states that vicious circle of problems for BlackBerry started in 2007. When Mike Lazardis was asked about iPhone, as it was a new launch, Lazardis said, "[I am not] impressed with the iPhone. It won't threaten BlackBerry." (Russell, 2012) This mistake caused the company to focus on hardware than the software, or in other words, the corporate customers rather than the end subscribers. MD of Magister Advisors, Victor Basta said the RIM always considered a corporation to be their customer, rather than the employees who work in these corporations. Basta further stated that it is a misguided view that they offer corporate-mandated phones (Russell, 2012). Despite of the endeavor of Lazardis and the corporation to alter the tone of BlackBerry as devices of Apple commenced to dominate the market, it was too late. Above all, RIM encountered acute mortification when last year, the company faced a systems failure. For several days in October, the company lost its instant messaging service and email services across Middle East, Europe, India, Africa, Chile, Argentina, and Brazil. The company, in clarification, blamed, ‘switch failure’, unsurprisingly, customers switched off (Russell, 2012). Despite of all these problems, Russell (2012) states that RIM still has substantial advantages. The instant messaging service of BlackBerry is one of its few differentiators in an increasingly monotonous market. Its penetration into the corporate markets is the best and excluding its last years technological problems, the products of RIM are considered as unfailing if not daring (Russell, 2012). On September 21, 2012, BlackBerry’s chief executive, Thorsten Heins apologized to customers who underwent the disturbance (itv, 2012). Description and Analysis of Options Although the market players possess common traits when it comes to barriers to entry, rivalry, and substitution, each firm has some unique characteristics upon which it strives to achieve its position in the industry. The increasing trend of smartphones is not a prevailing phenomenon only in businesses, but also at individual level. However, substantiality of smartphones in business can never be denied. With a smartphone, the office is at one’s fingertips. Due to such significance, these smartphones have become extremely competitive when it comes to the features, which they offer. The alternate options of BlackBerry can be compared with BlackBerry through various measures. The software, which they incorporate, design, size, battery storage, camera, processor, display, and weight can compare them. Despite of all these characteristics, one of the key distinguishing factors is the technology through which the smartphones run. This technology can primarily be judged by judging the operating system of the respective smartphones. Apple iOS To the large number of people, the best known software for smartphones is perhaps Apple’s iOS. Its governing author, that is Apple, dictates the development of iOS solely. It offers software updates such as bug fixes and new features being offered by Apple through iTunes. This software is considered as extremely user friendly and any new smartphone user can easily pick up this software. iOS is also considered to have first movers advantage in producing apps through developers. Over 500,000 apps are available through App Store of Apple. Many of these applications cost an average of 69p but it also offers a decent collection of free apps. It is purely touch-screen base software that supports only on-screen keyboards. It also includes standard applications such as e-mail, web browser, maps and so on. In addition, this software also has built-in system of parental control (Knelo, 2012). Android The second most significant competitor of the industry is Android. It comes in the form of ‘Google’s Android Operating System’. This software has been designed in order to provide an open competition to iOS. Google internally develops this software before discharging it to manufacturers of smartphones free of charge. Through, Android platform has been adopted by companies such LG, HTC, Samsung, Sony Ericsson and Motorola. These smartphone manufacturing companies take the basic software from Google that is Android operating system and add their relevant customizations to their phones before shipping them (Knelo, 2012). Large number of Android users has caused developers to make applications on the platform of Android. In this regard, over 400,000 apps are available for users through Android Market. It also supports devices having hardware keyboard and can be used in smartphones as well as tablets (Knelo, 2012). Microsoft Mobile Operating System Microsoft also jumped into the race and attempted to develop software for mobile phones. Released in 2010, this software, known as Windows Phone is new to users and has very few users as compared to Android and iOS. Many mobile phone manufacturers are using this software in their devices. Some of them include Lumia range of Nokia, LG Optimus 7, HTC Titan and Samsung Omnia 7. The range of apps available through this software is substantially smaller than Android and iOS but it is likely to sour as the software matures (Knelo, 2012). Compared to the above-mentioned most popular software worldwide, BlackBerry uses its own registered software / operating system on their smartphones called as “BlackBerry OS”. Few years back, BlackBerry devices such as BlackBerry Bold and BlackBerry Curve have remained quite popular because of their hardware keyboards. Nevertheless, the latest versions of BlackBerry OS have also incorporated touchscreens, which can be found in BlackBerry Torch and BlackBerry Bold 9900 (Knelo, 2012). Features of BlackBerry OS are more intricate than Android and iOS. It’s hardware keyboard is not competitive in the market of smartphones. Many people believe that touchscreen is an identity of a smartphone therefore; they do not believe that hardware keyboard can be a smartphone. Declining market share of BlackBerry is primarily due to its non-competitive operating system. The similar case has been of Nokia, which has lost a large part of its market share due to its obsolete operating software. Conclusion BlackBerry has been designed to be a secure platform. The strict adherence to security concerns made it very popular in corporations and governments worldwide. Despite of that, as mentioned in the beginning of the paper that there are certain malicious programs which can hamper the security. BlackBerry needs to ensure that the security concerns of users can be resolved via latest operating systems. Otherwise, it would continue to lose more subscribers, which has already been declining in the past couple of years. BlackBerry has developed a unique business model. The company primarily has two main sources of revenues, hardware sale (accounting for 61% of total sales in Q4 2013) and services subscription (36% of total sales). The rate of subscription has lowered due to high selling prices of phones. In addition, economic turndown may also reduce the revenues of the company in key markets like Europe and North America (account for 66.9%). Therefore, BlackBerry needs to juggles between service revenues and high margin along with consideration of economic issues prevailing in the key markets. Recommendation BB10 has taken a new start for the company. With devices like Q10 and Z10, BlackBerry needs to utilize current sources to uplift market share. In short-term, it is recommended that BlackBerry should focus on building core competency and software differentiation along with security features of BlackBerry. In addition, it should reposition its BlackBerry 10 and pricing should be medium to gain more subscribers and to find a way for long-term survival. In long-term, the company needs to launch BB10 in 600 other carriers. It should also get a license of OS since loyalty can be a good source of revenue. In addition, the company should license features of BB10 like Hubs and Balance to other platforms such as Android and iOS. Works Cited Cromar, Scott. (2010). Smartphones in the US: Market Analysis. Retrieved from: https://www.ideals.illinois.edu/bitstream/handle/2142/18484/Cromar,%20Scott%20-%20U.S.%20Smartphone%20Market%20Report.pdf ITV. (2012). BlackBerry chief executive apologizes for technical problems. Retrieved from http://www.itv.com/news/story/2012-09-21/blackberry-hit-by-technical-issues-again/ Kenlo. (2012, January 18). Mobile Operating Systems Compared: iOS, Android and Windows Phone. [Web Log Comment]. Retrieved from http://community.giffgaff.com/t5/Blog/Mobile-Operating-Systems-Compared-iOS-Android-and-Windows-Phone/ba-p/2776337 O’Connor, James. (n.d.). Attack Surface Analysis of BlackBerry Devices. Retrieved from http://www.symantec.com/avcenter/reference/attack.surface.analysis.of.blackberry.devices.pdf Russell, Jonathan. (2012 Jan, 23). BlackBerry's problems began with Apple's success. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9033921/BlackBerrys-problems-began-with-Apples-success.html Teh, Dave. (2013). Strategic Analysis - BlackBerry. Retrieved from http://daveteh.files.wordpress.com/2013/04/foundations-of-business-strategy-blackberry.pdf Read More