Blackberry Strategic Plan: Assignment

Added on - 10 Nov 2020

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BLACKBERRY – STRATEGIC ANALYSISFinal EssayUniversitéParis Dauphine - 2020Basic of StrategyAybike Isik MuftuogluAya RachidZhuoran 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 Analysisp14-Value Chain-Corporate Strategy-Business StrategyConclusionp17Recommendationsp18Bibliographyp191
Introduction:Blackberry·Establishment,Governance and SpecialityBlackBerry Limited is a Canada origin company established by Mike Lazaridis and DouglasFreign in 1984, with the name of Research in Motion. Jim Balsillie hired by Mike Lazaridisand Lazaridis himself were the co-CEOs of the company until 2012. Now, John S. Chen isthe 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, withkeyboards and buttons that are characterized with the company. Also, BlackBerry is the firstcompany to implement email services in cell phones.·Mission-visionMission :To be the world’s leading provider of end-to-end mobility solutions that are themost 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 theirpriorities is the security system that they implement in their devices and they are trying tomake a difference, attract customers, give them value through this security.·Geographic zone2
BlackBerry is a Canadian company, but the products are distributed in the marketsworldwide.Sales revenues, outcome and competitive position·BlackBerry’s key business segments and the approximate amount of revenues that theygather from each are;oEnterprise Software (44% of total revenue)oLicensing IP and others (32%)oTechnology Solutions (22%)oHandset & Related ServicesAs we can see from the list, there is a sharp decline in the sales revenues of BlackBerrybeginning 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 ascompetitors 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 theRIM’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 itgives the opportunity to work outside of the office for business people as well as its privateBBM messaging service that is only eligible by the BlackBerry users. However, withcrowding competition and new developments like iPhone which has no keys on it whilehaving a full keyboard “when needed” take the attention and the handset of the competitorsget more demand.Now, the biggest part of the revenue comes from software and security systems due to theunsuccessful competitive position of BlackBerry in smartphone industry.·Strategy ChosenBlackBerry’s strategy regarding its smartphones was differentiation. They aimed toproduce phones that offer unique attributes which would be valued mainly by thebusinesspeople. BlackBerry was the first to produce a phone with full keyboard like asmall 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 inthe industry, they succeed to give a differentiated value to their target customers and theyquickly 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 withthe biggest shares in the market; however, with competitors like Samsung and iPhone theylost their value and faced a significant decline in their revenues.Reasons behind it;oThe platform that BlackBerry used as a base has less functionality andcapabilities in comparison with the base platforms of Apple and Android.oApple and Android developed systems that are open to third parties tocreate apps for those phones which give them an opportunity to invest inthose brands while BlackBerry used a closed system. This caused Appleand Android to have multiple attractive apps with a wide range thanBlackBerry, which creates more value for the consumers.oBlackBerry underestimated those factors that will most likely to affect thepreference of non-business customers, and they keep focusing on their4
already on hand business users. However, in the long term this affectedtheir revenues and competitive power significantly.oThey become insufficient in responding to the changing competitiveenvironment quickly and effectively.oThe differentiation strategy that they tried to implement has failedregarding those changes in the industry. They are no longer able to give adifferentiated and better value to consumers in order to be chosen overother companies in the market.I- External Analysis-Scope of the industryThe smartphone industry is defined as the mobile phones that contains more advancedcomputing capabilities, strong hardware capabilities, extensive mobile operating services thatcontains multimedia functionality such as music, videos and so on and also connectivity thanregular 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. Infact, according to the study done by GMSA Intelligence, it is predicted that by 2025 80% ofmobile connections will be smartphones(Global Smartphone Companies: An Overview,2019)The companies Samsung, Apple, Huawei, Xiaomi, Oppo and Vivo have control over morethan 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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