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Blackberry Strategic Plan: Assignment
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Added on 2020-11-10
Blackberry Strategic Plan: Assignment
Added on 2020-11-10
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BLACKBERRY – STRATEGIC ANALYSISFinal EssayUniversité Paris Dauphine - 2020Basic of StrategyAybike Isik Muftuoglu Aya Rachid Zhuoran Zheng
Table of Contents:Introductionp2-Establishment, Governance and Speciality -Mission and vision -Geographic zone-Sales, revenue and competitive position-Strategy chosen -Risks and issuesI-External Analysisp5-Scope of the industry -Pestel analysis-5 forces of Porter-Life cycle industry-Strategic groups-Key Success FactorsII-Internal Analysis p14-Value Chain -Corporate Strategy -Business Strategy Conclusionp17Recommendationsp18Bibliographyp191
Introduction:Blackberry· Establishment,Governance and SpecialityBlackBerry Limited is a Canada origin company established by Mike Lazaridis and Douglas Freign in 1984, with the name of Research in Motion. Jim Balsillie hired by Mike Lazaridis and Lazaridis himself were the co-CEOs of the company until 2012. Now, John S. Chen is the CEO of the company. Some other members of the board of directors of BlackBerry are; Prem Watsa, Mike Daniels, Timothy Dattels, Lisa Disbrow and Richard Lynch.The specialty of Blackberry is enterprise software and Internet of Things (IoT). The companyis best known with its smartphones that are mainly designed for business people, with keyboards and buttons that are characterized with the company. Also, BlackBerry is the first company to implement email services in cell phones.· Mission-visionMission : To be the world’s leading provider of end-to-end mobility solutions that are the most secure and trusted.Vision: Securing a connected future you can trust.As we can understand from the mission and vision statements of blackberry, one of their priorities is the security system that they implement in their devices and they are trying to make a difference, attract customers, give them value through this security.· Geographic zone2
BlackBerry is a Canadian company, but the products are distributed in the markets worldwide.Sales revenues, outcome and competitive position·BlackBerry’s key business segments and the approximate amount of revenues that they gather from each are;o Enterprise Software (44% of total revenue)o Licensing IP and others (32%)o Technology Solutions (22%)o Handset & Related Services As we can see from the list, there is a sharp decline in the sales revenues of BlackBerry beginning from 2012, due to an important decline in the active BlackBerry subscribers.This decline is mainly the outcome of the competitive position and the newcomers as competitors in the market.In 2007, when the biggest competitor iPhone and Google Android has been released, Blackberry managed to overcome the competition and maintain high revenues due to the RIM’s head start and well developed distribution network. However, between 2010 and 2013they felt behind in the competition, losing most of their market shares and market dominatingpower.3
What makes BlackBerry different in the market is its full keyboard and e mail services as it gives the opportunity to work outside of the office for business people as well as its private BBM messaging service that is only eligible by the BlackBerry users. However, with crowding competition and new developments like iPhone which has no keys on it while having a full keyboard “when needed” take the attention and the handset of the competitors get more demand.Now, the biggest part of the revenue comes from software and security systems due to the unsuccessful competitive position of BlackBerry in smartphone industry.· Strategy ChosenBlackBerry’s strategy regarding its smartphones was differentiation. They aimed to produce phones that offer unique attributes which would be valued mainly by the businesspeople. BlackBerry was the first to produce a phone with full keyboard like a small computer and an e-mail service that allows people to be online and reachable all thetime. Those attributes of the smartphones of BlackBerry were unique and pioneering in the industry, they succeed to give a differentiated value to their target customers and they quickly became the most dominant company in the market. Services of the phones, special to BlackBerry like the private messaging system BBM is another unique attribute. Also they sustained that differentiation strategy with their well developed security system,which is their company mission as well.· Risks and IssuesThe main issue of BlackBerry is that they were once the market dominating company with the biggest shares in the market; however, with competitors like Samsung and iPhone they lost their value and faced a significant decline in their revenues.Reasons behind it;o The platform that BlackBerry used as a base has less functionality and capabilities in comparison with the base platforms of Apple and Android.o Apple and Android developed systems that are open to third parties to create apps for those phones which give them an opportunity to invest in those brands while BlackBerry used a closed system. This caused Apple and Android to have multiple attractive apps with a wide range than BlackBerry, which creates more value for the consumers.o BlackBerry underestimated those factors that will most likely to affect the preference of non-business customers, and they keep focusing on their 4
already on hand business users. However, in the long term this affected their revenues and competitive power significantly.o They become insufficient in responding to the changing competitive environment quickly and effectively.o The differentiation strategy that they tried to implement has failed regarding those changes in the industry. They are no longer able to give a differentiated and better value to consumers in order to be chosen over other companies in the market.I- External Analysis -Scope of the industry The smartphone industry is defined as the mobile phones that contains more advanced computing capabilities, strong hardware capabilities, extensive mobile operating services thatcontains multimedia functionality such as music, videos and so on and also connectivity than regular phones such as touch screen interface and virtual keyboard (Smartphones - Statistics & Facts, 2020).There is no denial that the smartphone industry is huge and definitively growing rapidly. In fact, according to the study done by GMSA Intelligence, it is predicted that by 2025 80% of mobile connections will be smartphones (Global Smartphone Companies: An Overview, 2019) The companies Samsung, Apple, Huawei, Xiaomi, Oppo and Vivo have control over more than 75% of the global smartphone market as it can be seen on the graphic below. However, Blackberry that once controlled over 50% over the US smartphone industry and 20% globallytoday has less than 0.02% of the market share (Appolonia, 2019).5
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