Blackberry Strategic Analysis: Basic of Strategy, 2020

This essay provides a comprehensive strategic analysis of BlackBerry Limited, examining its establishment, governance, and specialization in enterprise software and IoT. The analysis covers BlackBerry's mission, vision, and geographic presence, along with its sales, revenue, and competitive position within the smartphone industry. The essay explores the company's chosen differentiation strategy, its associated risks and issues, and an external analysis including industry scope, PESTEL analysis, Porter's Five Forces, industry life cycle, strategic groups, and key success factors. An internal analysis delves into the value chain, corporate strategy, and business strategy. The conclusion offers recommendations based on the findings. The essay highlights the decline in BlackBerry's market share due to competition from Apple and Android, the shift to software and security systems, and the need to adapt to the changing competitive environment. The PESTEL analysis identifies key factors influencing the smartphone industry, including political, economic, sociocultural, technological, environmental, and legal aspects. The essay also emphasizes the importance of sustainability and consumer privacy.

Université Paris Dauphine - 2020
Basic of Strategy
Blackberry – Strategic Analysis
Final Essay
Aybike Isik Muftuoglu
Aya Rachid
Zhuoran Zheng

Table of Contents:
Introduction p2
- Establishment, Governance and Speciality
- Mission and vision
- Geographic zone
- Sales, revenue and competitive position
- Strategy chosen
- Risks and issues
I- External Analysis p5
- Scope of the industry
- Pestel analysis
- 5 forces of Porter
- Life cycle industry
- Strategic groups
- Key Success Factors
II- Internal Analysis p14
- Value Chain
- Corporate Strategy
- Business Strategy
Conclusion p17
Recommendations p18
Bibliography p19
1

Introduction:
Blackberry
· Establishment, Governance and Speciality
BlackBerry 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 company
is 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-vision
Mission : 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 zone
2

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 2013
they felt behind in the competition, losing most of their market shares and market dominating
power.
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 Chosen
BlackBerry’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 the
time. 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 Issues
The 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 that
contains 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% globally
today has less than 0.02% of the market share (Appolonia, 2019).
5

(IDC - Smartphone Market Share - Vendor, 2020)
- PESTEL Analysis
There are several factors impacting the demand and growth in the international smartphone
industry such as political, economic, environmental and legal factors. However, switch in the
consumer lifestyles and technological innovations drive the demand also.
From the political point of view, government’s actions and impacts on the company indicates
political actions. The mobile phone sector is mainly affected by actions taken by the
government and the regulations that are put in place in both the home and host countries.
Through tax policies that influence the cost of doing business, network licensing charges,
protection of intellectual property, the government support and so on, all affect the
company’s performance.
Economic factors also have a huge impact on international businesses and the economic
conditions in specific markets affect both sales and revenue directly. Which means that the
worldwide situation of the economy or significant local economies affects both demand and
sales of smartphones brands. In fact, the economic situation has a direct influence on several
important factors such as employment and purchasing power of consumers (since a high
unemployment rate will automatically lead to lower sales and without any doubt have an
impact on the company’s overall profitability and revenues and vise versa for a higher
employment rate situation). The exchange rates and stability of the currency in both home
and host countries is crucial, since it will impact on the company’s profitability, especially
6

concerning the international trade and also an unstable currency tends to discourage
international investors. These factors, and their resulting impact on aggregate demand,
aggregate investment and the business climate, in general, have the potential to make a
company highly profitable, or extremely likely to incur a loss. On the other hand, inflation
rates tend also to have an impact on the financial situation and in consequence deteriorate the
purchasing power but also harm the costs of raw materials and other inputs.
However, players within the smartphone industry are encouraged to work towards building
and mastering economies of scale in order to maintain the business costs and have a control
over the final price of the product in the optic of fighting the economic instability.
Nowadays, smartphones have become considered as necessary goods, since people are
always connected on the go and carry them everywhere. Thus, sociocultural factors have to
be considered closely in the area of business. In fact, social trends are also playing a key role
in driving demand within the smartphone industry since they are considered now part of
consumers’ lifestyles, so it is all about integrating features that the customer’s lifestyle. And
for that, smartphone businesses study all the possible trends to know what people might like
or not in order to bring adapted model to the market. This is why, today the consumers are the
core of the picture and knowing their needs, habits, trends and preferences help create
appealing models and subsequently grow sales. Thus, social patterns have direct influence
over the success of a firm.
There is no doubt that the technological conditions as well influence the performance of the
smartphone industry since customers demonstrate their preferences for technologically
advanced products. In fact, technology is as the core of this industry, and play a central role
in its growth as it is an important source of competitive advantage for brands. This is why the
leading brands in the industry invest a huge part of their profit each year in the research and
development department in order to constantly and consistently innovate abring new models
with improved features. However, since imitation is very common within the industry, it is
common that the companies now focus more and more about the quality and user experience.
Thus, since the technology innovations switch in a fast way, the product's life cycle of
smartphone is very short and require an agile and quick reaction to adapt to the market.
In view of environmental factors, now more than ever actions and impacts of businesses on
the community and environment have become a major concern since government agencies
have put in place various regulations related to the environment protection; such as
companies producing extra amount of waste may be faced to fines and quotas; which have an
impact on the financial situation of a firm Thus, environmental impact of businesses has a
direct effect on their image within the society. So, there is no doubt that an industry as big as
the smartphones one needs to focus on sustainability. Moreover, investing in sustainability
allows a company to reduce its operational costs. Leading smartphone brands in the industry
developed a heavy focus on CSR and sustainability to make their products free from risks for
the users and the planet (which concern 100% reliance on renewable energy sources as well
as water conservation, recycling and use of environmentally safer raw material for the
production of smartphones. Other environmental factors such as the weather conditions have
7

to be taken into consideration as it may have direct impact on the transportation of both the
resources and the finished product, which can affect the release dates of the final product.
As it has been stated, technology and smartphones are now part of each individual’s life,
which mean the legal aspect has to be considered very closely. In fact, the industry’s core
concerns are mainly around consumer privacy and data security. Companies on the market
need to focus on compliance in order to operate successfully in different regions around the
world; it demands a closer look to the local laws that may impact the firm’s business (it can
be around labour laws, discrimination laws, health and safety laws, product quality laws and
so on). They have to be fully respected, so the companies can operate within the industry; a
breach of law can not only have financial consequences on the firm but also persecute the
brand image.
- 5 forces of Porter
Following, here is a deeper analysis on the threat of new entrants, the power of suppliers, the
power of buyers, the threat of substitutes and the intensity of rivalry among competing firms.
This study helps to determine either if the smartphone industry is attractive and profitable or
not in order to make educated decisions within the organization.
Threat of new entrants: Low
Within the Smartphone industry, there are already a number of well-established brands which
make the threat of new entrants considered as low. In fact, from one side, the existing
companies have already developed a relation with their customers that creates a certain brand
loyalty. Another very important factor is that the industry requires a huge capital in order to
enter it, since it also requires a lot of patents and high technology to fight in the industry.
Another obstacle is economies of scale since the ones already established operate with a large
economy of scale; which is hard to achieve for new players. Thus, the threat of new Entrant
in Smartphone Industry is relatively low.
Bargaining power of suppliers: Low to Medium
It is true that most of the suppliers within the smartphone industry are located in the Asian
region, which makes the coast cheaper. Thus, suppliers are smaller in size and have lower
financial strength compared to smartphone makers. In this case, suppliers see their bargaining
power going down and for instance becoming low since the big companies can easily switch
to other suppliers and give to the big companies a strong power of negotiation.
However, in the case of BlackBerry, the bargaining power of supplier won’t be considered as
low (except for the raw materials). In fact, BlackBerry is known on the market to have an
increased level of uniqueness due to its complicated system, which result in a higher
bargaining power. Moreover, the marketshare plays an important role when the company
8

deals with the supplier (the more the market share is high, the more this one will have control
over its supplier and vice versa).
Bargaining power of buyers: High
In the smartphone industry, it is common to observe a continuously increased number of
smartphones introduced within the market due to the fierce competition. Today, with internet
customers are well informed about the different choices they have on the market and the low
(almost no) switching costs involved in the processes give an extreme high bargaining power
to the customers. Because of that, we can notice that now more than ever companies do invest
a huge amount not only in marketing and customer research so they can stand out from the
noise but also invest aggressively in R&D.
Threat of substitute: Medium
The smartphones are regrouping a lot of functions and operations, from media, to camera, to
calls and so on, there is no doubt that what a smartphone offers are very diverse. A substitute
for that can be for example a tablet, laptop or normal mobile phone however their
performance level is low or do not offer everything; in this case we can consider that there
are no real substitutes to the smartphone, since they are even considered part of lifestyle.
However, in the case of BlackBerry that defends itself with their hardware storages are faced
to a new threat of substitutes: Dropbox and Google Drive. So, overall the threat of substitute
is considered as medium.
Intensity of Rivalry among competitors: High
Even though, the number of competitors in the smartphone industry are few, however a
majority of them are both large in size and have an important part of market share. Each
move of every competitors cannot be done without being unnoticed while trying to increase
their market share; which make the rivalry fierce. Also, the big and large companies have
significant levels of resources, that they use against each other. Which means, that the
smallest companies are pressured in a continuous basis in order to create new and advanced
products in a cost effective way while continuing to satisfy the trends.
9

- Industry Life Cycle of Smartphones
Introduction
Before the first appearance of smartphones in the market many advertisements made about it
in order to represent the futures of the newest technology in the market which is a new and
different product that needs to be known and understand by the customers in order to create
demand. Usually companies invest highly in marketing and promotion in this phase in order
to get a fast start with high demands. Apple, Blackberry, Android and many other companies
invested in marketing projects when the smartphone industry first developed, and products
launched. In the introduction phase of this industry there was a transition from the antennas
which were launched at late 90s to handsets that are introduced in 2000s. While the
customers of the market were used to big antennas that they can carry with them but mainly
used for calling each other or texting messages in the latest ones, smartphones like handsets
came up to the market with many other innovations like internet connection, mailing,
accessing many platforms and in a size that is much more smaller and convenient to carry
with you. And this transition that is the creation of a new industry began with the introduction
through marketing and promotions.
Growth
After people meet with the idea of the product and start seeing it in the market the demand for
the smartphones increased in time. At first mainly the businesspeople are the ones that are
using smartphones as it gives them the opportunity to work outside the office but mainly after
the launch of iPhone in 2007, consumers that are not only businesspeople also get involved in
the industry and target customer segment. This increased the scope of target consumers of the
industry widely and increased the sales mostly after 2016. During this fast growth phase also
the competition in the market increased. As we mentioned in this report Blackberry was once
10

the market leader, then Apple, Samsung and many other brands got into the industry. In this
phase companies invest in competitive marketing strategies and mostly differentiation
strategy in their businesses to gain competitive advantage.
Maturity
Day by day, the new features that are presented by the smartphone companies become lesser,
in comparison with the first smartphones introduced. For example, now, people are used to
phones that have no keys and full screen. Therefore, when a company like Apple introduces a
new phone with new innovations the shocking effect in the market is not the same as it is in
2007 when all of the abilities of smartphones are new to the customers. Also, every year a
new model is introduced to the market by each competitor, but not every consumer buys the
new one regularly and many of them use the phones on an average of 4 to 5 years and high
prices of the newest version also affects this situation. Therefore, in recent years this industry
is in the maturity stage having steady sales in the market as it can be seen from the table
below as well.
Smartphone sales from 2007 to 2020, from:https://www.statista.com
11

- Strategic Groups
Before going into its own strategy, a firm must know who its competitors are and where they
stand. Strategic groupings within the smartphone industry are made based on different factors
such as: brand identification, channel determination, product quality, technological position
and so on.
As it has been shown on the market share graphic, Apple, Samsung and Huawei are the ones
leading the industry possessing more than the half, they are the ones with the highest
technology and leading the trends. In fact, all of them and especially Samsung offer a wide
range of smartphones models with different design in order to target a large customer base.
They are also considered as high end within the smartphone industry due to their high price.
On the other side, Xiami, Oppo and Vivo focus on the mid-market following trends
established by the leaders and trying to copy it and offer it with a lower price.
However, Blackberry and Nokia that were once market leaders on the industry and leading it
with their high part of market share have seen their percentage decreasing during last years
until becoming almost absent and forgotten. In fact, both of them, were popular because of
two things: making both their own devices (which is the easiest part when entering this
industry) and especially building the operating system that runs it (which is the difficult part).
In fact, BlackBerry is still one of the few and rare that creates and puts in place their own
12

operating system and focus deeply on both hardware and software which gave them a strong
reputation due to the high-level importance they give to the privacy. However, BlackBerry
and Nokia have seen their sales decreasing, and have been put behind the scenes because they
have been too rigid and did not adapt quickly to new trends.
- Key Success Factors
If the introduction of iPhone back in time taught something to the smartphone industry is that
Hardware Design is very important; consumers do give a huge importance to their
smartphone design (and this why Blackberry failed at the beginning because they didn’t
introduce large-screen, slim devices and so on).
Since smartphones are part of lifestyle nowadays, consumers are constantly both in need and
seeking for new Application Availability; this is all about experiencing now.
Also, the Brand Reputation is crucial key success factor since people will only invest in
something they already know about or heard positive feedbacks. Well-known company easily
attract customers since they need to feel secure about The Operating System and know that it
is reliable (this is how BlackBerry did gain the trust of professional’s workers).
So, this is noticeable that Blackberry is definitely in a case of inferiority according to its
competitors due to its low market share within the industry. However, despite the rise of the
technology and use of internet, the rise of income and mainly the day after day growing
importance given to the data’s privacy and so on that seems to be all but opportunities to
Blackberry there is no doubt that the threats are major due to the technological advancement
of the main players in the industry and their huge amount of investment they do put in order
to satisfy the changing taste of the customers.
13

III- Internal analysis
- Value chain
Because of the huge shift of BlackBerry’s positioning, our analysis consists of both its
smartphone segment in the past and the current software segment
Primary activities:
Inbound logistics: In the smartphone segment, raw materials for manufacturing the hardware
of mobile phones are glass, plastics, and metals with the most common being aluminium
alloys, lithium cobalt oxide, carbon graphite, copper, and Platinum. Before 2016, some
factories in Asia and South America were the raw material suppliers for BlackBerry phones.
At that time, RIM's four biggest suppliers accounted for 90% of its production costs. They are
Elcoteq SE, Jabil Circuit Inc., Multi-Fineline Electronix Inc., QUALCOMM. All of these
companies have its manufacturing units in China, India, Malaysia, Mexico, and Brazil where
the labor cost is relatively low. Although BlackBerry phones are claimed to be the most
secure cell phones in the world, its supply chain was not transparently unveiled to its users.
Now since the hardware production is licensed to other companies, RIM no longer has its
inbound logistics for the mobile phone segment.
Operations: In 2016, RIM decided to stop producing its own phones and to license its brand
out instead. The Company licenses its device security software and service suite, as well as
related brand assets, to TCL, PT BB Merah Putih, and Optiemus. The design, manufacture,
sales, and customer support of BlackBerry-branded smartphones is undertaken by these
licensed partners. During fiscal 2017, the Company launched its last BlackBerry-designed
Android smartphones, the DTEK50 and DTEK60. During fiscal 2018, the Company sold
through its remaining inventory for these and other legacy devices such as the PRIV secure
Android smartphone as well as smartphone accessories and non warranty repair services, and
no longer expects significant revenue from these activities. Nowadays, BlackBerry’s key
business segment is enterprise software, licensing IP, and technology solutions. Enterprise
software sells software products including the BlackBerry enterprise mobility suite, which
provides endpoint management and BlackBerry AtHoc, a secure communications platform.
Licensing IP is responsible for the monetization of the Company’s global patent portfolio as
well as the mobility licensing operations, which license the BlackBerry brand and device
software to handset vendors. Technology solutions includes BlackBerry QNX embedded
software as well as several emerging businesses such as the BlackBerry Radar fleet
management solutions.
Outbound logistics: At the end of fiscal 2008, BlackBerry smartphones were available in 135
countries through over 350 carriers and channels. RIM has successfully managed its global
expansion and distribution through the development of strong channel partnerships. Until
now, BlackBerry mobile phones are still in the market. Customers could purchase them on
BlackBerry’s official website, and electronic devices retail stores, for example Best Buy in
Canada, Alibaba in China, Bouygues in France, both online and in their physical stores. As
14

BlackBerry focuses on its business in software segments, the outbound logistic expenditure is
shrinking.
Marketing and sales: According to BlackBerry’s annual reports, the sales, marketing, and
administration expense accounted for 65% of the total operating expense in 2008, and 43% in
2018. And 14.7% of the revenues was generated from selling, marketing and administration
in 2008, whereas 50.1% in 2018. However, this figure is for the whole business of
BlackBerry. In 2008, BlackBerry phone segment was an essential part of the business, but
this segment barely existed in 2018. The investment in marketing and sales now mainly
focuses on its software and services especially those strategic industries with vertical-specific
use cases, including regulated enterprise markets, such as financial services, government,
healthcare, professional services and transportation, and other markets where embedded
software and critical infrastructure are important, such as utilities, mining and manufacturing.
What worth mentioning is that in both of the segments, marketing and sales generated the
most amount of operating revenue.
Service: During its mobile phone era, BlackBerry launched multiple customer care facilities
in the US, and expanded its multilingual training programs including English, French, Italian,
German, Spanish, Simplified Chinese, Japanese and Brazilian Portuguese. In fiscal 2008,
revenues from its technical support programs grew more than 50%. BlackBerry devices are
generally covered by a time-limited warranty for varying periods of time. The Company’s
warranty obligation is affected by product failure rates, differences in warranty periods,
regulatory developments with respect to warranty obligations in the countries in which the
Company carries on business, freight expense, and material usage and other related repair
costs. However, the Company does not have any warranty obligations associated with
BlackBerry-branded smartphones sold by licensing partners.
Support activities:
Infrastructure: According to BlackBerry’s annual report of fiscal 2019, BlackBerry achieved
positive free cash flow of 582 million for 2019, of which both of the cash flow from
operating activities and financing activities are positive. And the figure is improved
compared with the year of 2018 and 2017. The Company’s main campus in Waterloo consists
of three leased buildings. The Company also operates facilities in the United States, Latin
America, Asia-Pacific, Europe and the Middle East. As at the end of fiscal year 2019,
BlackBerry has 85 million USD in property, plant and equipment net of accumulated
depreciations, and has net intangible assets such as goodwill, intellectual property, and
acquired technology in total of 1068 million USD.
Human resources: As of February 28, 2019, the Company had 3,945 full-time employees.
The average BlackBerry salary ranges from approximately $36,986 per year for Business
Manager to $217,927 per year for Senior Sales Manager. Average BlackBerry hourly pay
ranges from approximately $13.49 per hour for Leasing Specialist to $21.00 per hour for
Software Test Engineer.
15

Technology: In the United States, the BlackBerry hit its peak in September 2010, when
almost 22 million users, or 37% of the 58.7 million American smartphone users at the time,
were using a BlackBerry. At that time, 964,841,000 USD was invested in Research and
Development, which took up 28.3% of the operating expense. R&D expenditures resulted in
6.5% of revenue. R&D efforts in fiscal 2010 remained focused on developing its own
operating systems and applications, with full keyboard designed for professionals. However,
BlackBerry’s platform declined to install third-party applications such as Google and
Microsoft. And in 2010, BlackBerry was involved in the smartphone antenna performance
issue raised from Apple. Apple even called out specific device manufacturers, including
BlackBerry-maker Research In Motion, and showed a video clip of RIM's popular
BlackBerry Bold 9700 seemingly experiencing wireless signal decreases when placed in the
"iPhone 4 Death Grip". RIM is a global leader in antenna design and has been successfully
designing industry-leading wireless data products with efficient and effective radio
performance for over 20 years. During that time, RIM has avoided designs like the one Apple
used in the iPhone 4 and instead has used innovative designs which reduce the risk for
dropped calls, especially in areas of lower coverage. In fact, the Bold 9700 has the same
network technology and 2G band as the one in iPhone 4, and even in their newest devices,
iPhone 11 and BlackBerry Key2, the network technologies don't have significant differences.
As BlackBerry is transforming from a mobile company to a software and service company,
today BlackBerry’s R&D focuses on the Enterprise of Things. It’s the network of
smartphones, computers, vehicles, sensors, equipment and other online devices within the
enterprise that communicate with each other to enable smart business processes that span
across people, connected endpoints and their data. Until now, BlackBerry has leveraged
many elements of its extensive technology portfolio to extend security and reliability to its
solutions for the Enterprise of Things, including unified endpoint management (“UEM”),
cybersecurity solutions, embedded systems, crisis communications, enterprise applications,
and related services, with hosting available on the Company’s global, scalable, secure
network, as well as in the cloud. In 2019, 219 million USD was expended in research and
development, which accounted for 24.2% of the operating revenue. No matter in the current
situation or 10 years ago, research and development has always been the second largest
source of operating revenue.
Procurement: Completed the acquisition of Cylance Inc. , an artificial intelligence and
cybersecurity leader, for $1.4 billion in cash, plus the assumption of unvested employee
incentive awards. The acquisition of Cylance in late fiscal 2019 has provided the Company
with a leading artificial intelligence and machine learning-based platform consisting of
CylancePROTECT, an endpoint threat prevention solution that uses machine learning to
prevent suspicious behavior and the execution of malicious code on an endpoint, and
CylanceOPTICS, an endpoint detection and response (EDR) solution that provides both
visibility into and prevention of malicious activity on an endpoint.
To sum up, marketing and R & D are the ones that create most value for the company
according to its source of revenue. And the core competency of BlackBerry is the technology
for its security system. The device offered many security features including encryption of
16

messages to and from the device “and users can password-protect the device with a fail-safe
mode that wipes the content clean after 10 failed password attempts” (IEEE Computer and
Reliability Societies, 2009, p. 68). Coupled with this “security options available to IT
administrators include the ability to disable message forwarding and attachment downloads,
along with hundreds of other features that users can turn on or off via policy settings” (IEEE
Computer and Reliability Societies, 2009, p. 68). These features made the device extremely
popular among financial services, healthcare and especially the government. Besides, the
change of BlackBerry’s major business also results in the significant shrink in its Human
resources, inbound and outbound logistics. The procurement process is also in difficulties
since the acquisition of Cylance Inc. is the only significant acquisition in the past few years.
Corporate strategy & business strategy
Ten years ago, BlackBerry was still a mobile communication company providing hardware,
software, and wireless solutions. Their business covers multiple industries such as mobile
phone industry, software industry, and wireless service industry. The business strategy at that
time was top differentiation strategy. BlackBerry focused on providing secured wireless
devices and platforms to its most general consumers, with a slightly more attention on
professionals who need a secured software system for business purposes. The uniqueness of
BlackBerry’s devices gained a distinct impression from the consumers. And, BlackBerry
insisted to maintain the classical full-keyboard design of the mobile devices, even after its
new rivalry Apple released the touch screen mobile phone, which made BlackBerry gradually
disconnected from its primary market. BlackBerry has underestimated the speed of revolution
in technology industry and misjudged its target customers' needs and preferences. In 2016, as
is mentioned previously, BlackBerry sold its hardware design and manufacturing segments to
other companies like TCL. Now, BlackBerry is only active in the software service industry.
BlackBerry’s current corporate strategy is to deliver secure endpoint management and
communications solutions to the enterprise customers. The range of target customer becomes
even narrower than before, which means BlackBerry has adopted focus strategy based on
differentiation. BlackBerry now is engaged in a hypercompetitive environment, each segment
has strong competitors such as Microsoft, Cisco, IBM Corporation. The security feature of
BlackBerry’s product is compatible with the relatively stable development trend of these
markets.
To conclude, over the years of development, BlackBerry has gained its corporate reputation
for its secured services and the respect of privacy, which is an essential strength for an
enterprise software company. Besides, the price of its service is in proportion with the
performance, and since BlackBerry partnered with other software companies, even with its
competitors, the software service provided by BlackBerry is compatible with all the other
common applications and hardware. Nevertheless, the scale of its business is still limited by
its targeted customers compared with its rival companies. And the transition from a mobile
devices company to a software-focused company was quite passive due to the mismatch with
users needs. Hence, the value and the stock price of the company fell significantly, which
may result in lack of financial resources and insufficient cash flows from investing activities.
17

What’s more, the technology commanded by BlackBerry is not unique in the industry and is
easily to be imitated. Innovation could still be a difficulty for BlackBerry to overcome.
Recommendations
Abandon BlackBerry branded smartphone completely
BlackBerry could simply give up its mobile phone market for good. This is the simplest
solution to help BlackBerry completely transform from a mobile phone company to a
software service company. Once the production of BlackBerry phones by TCL is officially
called off, BlackBerry phones will become the history. And according to the historical data,
the opportunity cost of its smartphone will not be significant. Instead, the company could
move 100 percent of its attention into Enterprise of Things and don't need to worry about
whether the reputation of its brand will be affected by the smartphone line. On the other hand,
risk takers may not favor this option because the low risk of this decision also has little
return. And some investors may regard giving up the mobile phone segment as a negative
signal for the value of the company hence BlackBerry would have less cash inflow from
financing activities.
Focus on business people and companies
Rather than abandoning the smartphone industry, Blackberry can also take a riskier action
that they can make their revenues and power in the market revive if they will be successful.
They have a highly developed security system and their mission as a company is also focused
on the security. Therefore, they can focus on giving the value to the end users regarding the
security and privacy system they developed, in which they are already successful and well
known for. As an average customer in the smartphone market will be less focused on security
in comparison with a business people as a smartphone user, narrowing the target market to
the professionals again can be a better option.
Blackberry has other segments that they produce revenues from, therefore they should not
only focus in the new ideas about smartphone industry but see this market as a
complementary in the whole business.
Focusing on professionals, will also narrow the competition for Blackberry as well. If they try
to reach companies and create collaboration with them rather than the end users, they can
start selling specialized smartphones for those companies and their employees which are
developed with the highest security and in the best way that a business people can make
everything about the office works easily. Companies should be the ones that Blackberry
should get in touch and sell their smartphones like a wholesale for the whole company
employees, creating them a secure and closed system that they use only for job, which will
also help the executives to track the work of employees.
By focusing in such a market and target customer, which are businesses as well Blackberry
can also avoid from the competition with companies like Apple and Android which are the
18

leaders of smartphone industry now. This new target can give them the opportunity to
become successful in its own target group again without getting in a competition that they
will probably fail regarding the market shares and dominating power.
Also, the company should be focusing more on IoT and software services as those were the
areas that they are more successful in while analysing the outcomes of this new development
in smartphone segment of the company and taking actions regarding.
19

Bibliography
Appolonia, A., 2019. How Blackberry Went From Controlling The Smartphone Market To A
Phone Of The Past. [online] Business Insider. Available at:
<https://www.businessinsider.com/blackberry-smartphone-rise-fall-mobile-failure-innovate-
2019-11> [Accessed 13 April 2020].
IDC: The premier global market intelligence company. 2020. IDC - Smartphone Market
Share - Vendor. [online] Available at: <https://www.idc.com/promo/smartphone-market-
share/vendor> [Accessed 13 April 2020].
Market Realist. 2019. Global Smartphone Companies: An Overview. [online] Available at:
<https://marketrealist.com/2019/09/global-smartphone-companies-an-overview/> [Accessed
13 April 2020].
Statista. 2020. Smartphones - Statistics & Facts. [online] Available at:
<https://www.statista.com/topics/840/smartphones/> [Accessed 13 April 2020].
The Verge. 2020. Blackberry Phones Could Disappear As TCL Partnership Ends. [online]
Available at: https://www.theverge.com/2020/2/3/21120107/tcl-blackberry-ends-phone-
global-rights-date-2020
Annualreports.com. 2020. [online] Available at:
<http://www.annualreports.com/HostedData/AnnualReportArchive/B/TSX_BB_2008.pdf>
[Accessed 24 April 2020].
Carr, J., 2020. Do You Know Who Manufactured Your Blackberry?. [online] Forbes.
Available at: <https://www.forbes.com/sites/jeffreycarr/2011/01/13/do-you-know-who-
manufactured-your-blackberry/#5cd8e1564112> [Accessed 24 April 2020].
Inboundlogistics.com. 2020. Global Logistics - Inbound Logistics. [online] Available at:
<https://www.inboundlogistics.com/cms/article/whats-leadership-worth/> [Accessed 24 April
2020].
2020. [online] Available at:
<http://www.annualreports.com/HostedData/AnnualReports/PDF/TSX_BB_2018.pdf>
[Accessed 24 April 2020].
Gustin, S. and Gustin, S., 2020. The Fatal Mistake That Doomed Blackberry | TIME.Com.
[online] TIME.com. Available at: <https://business.time.com/2013/09/24/the-fatal-mistake-
that-doomed-blackberry/> [Accessed 24 April 2020].
En.wikipedia.org. 2020. Blackberry Limited. [online] Available at:
<https://en.wikipedia.org/wiki/BlackBerry_Limited> [Accessed 24 April 2020].
20

Team, T., 2020. Blackberry Revenues: How Does Blackberry Make Money?. [online]
Forbes. Available at:
<https://www.forbes.com/sites/greatspeculations/2019/09/25/blackberry-revenues-how-does-
blackberry-make-money/#32ab3dbf2262> [Accessed 24 April 2020].
Business Insider. 2020. How Blackberry Went From Controlling The Smartphone Market To
A Phone Of The Past. [online] Available at: <https://www.businessinsider.com/blackberry-
smartphone-rise-fall-mobile-failure-innovate-2019-11?IR=T> [Accessed 24 April 2020].
2020. [online] Available at:
<https://www.academia.edu/7162061/An_Analysis_of_Black_Berrys_Strategic_Options_Fai
lure> [Accessed 24 April 2020].
21