1.0 Executive Summary 1.1 History of Blackberry in 1984, Mike Lazaridis
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1.0 Executive Summary 1.1 History of blackberry In 1984, Mike Lazaridis founded an electronics and computer science consulting company called Research In Motion (RIM). For years the company focused on a breakthrough technology, which they called it as the ―BlackBerry‖. It is an easy, secure, and effective device that allowed users to send and receive e-mails while away from the office. Since email had become so popular, people who were on the go needed a way to access their email without having to find a computer. RIM grew into one of the world‘s most valuable tech companies. The BlackBerry became the indispensable accessory of business executives, heads of state, and Hollywood celebrities. The first BlackBerry smart phone was developed in 2003 and in a remarkably short time, they have managed to completely change the way that people communicate. This was a device that not only functioned as a telephone but also allowed for the sending or receiving of email and text messages as well as web browsing. RIM‘s BlackBerry Messenger (BBM) instant messaging service is once popular before. The plan of BBM was to push wireless carriers to adopt as a replacement for their short text messaging system (SMS) applications. 1.2 Current competitive position Since the introduction of the BlackBerry, there was a lot of competitors have appeared on the market and now they are competing with some of the biggest companies in the telecommunications industry. This competition combined with improving technology has resulted in a huge increase in the number of functions that you will find on your BlackBerry. Apple and Samsung are over taking blackberry rapidly. The company neither anticipated nor responded quickly to the threats posed by Android and the iPhone. BlackBerry was focused on efficiency, keyboards and security while Apple devoted its attention to broadly appealing concepts like performance and ease of use. Despite having an initial edge in the corporate world, BlackBerry was facing a difficult battle when trying to influence wider audience that did not care about encrypted email or network bandwidth. BlackBerry did not start revamping its operating system (OS) until it bought QNX in 2010, see appendix 2 to learn more on the blackberry timeline. By then, this has already given both Apple and Google a huge opportunity to build up their market share and they sometimes did so in ways that BlackBerry had not expected. Blackberry did not just lose its tentative grip on the mainstream for smartphone market but also slow to acknowledge the ―Bring Your Own Device‖ trend, which saw workers replace company-issued BlackBerrys with personal smartphones. 2.0 External Analysis 2.1 Political Corporate and government clients were the faithful and reliable backbone to BlackBerry‘s business model, because they would sign multi-year agreements for its enterprise services, known as Blackberry Enterprise Server (BES). They are highly sensitive towards data control and security which banks and US government will likely to invest on RIM. So far Blackberry has been the only and the preferred smartphone of choice for the White House including President Barack Obama. However, some countries like China, India and UAE are politically against RIM, they raised their concerns over the security features of Blackberry devices as these countries‘ governments cannot access to the database of users to track some people especially terrorist suspects‘ activities. Another major political concern is that some European countries have imposed stricter regulation regarding to hygiene and safety stands for manufactures which could impact the operation of RIM as they faces pressure from the usage of toxic contents, energy usage and recycling. 2.2 Economic Economic factors play a key role in the smart phone industry as demand is fairly elastic and it is mostly based on consumer income. With the fairly stable pace of economy in the developing countries like China, India and South East Asia countries, people are likely to be able to afford on new advanced smartphone. Since the sales of blackberry are made throughout the world, the exchange rates will also have an impact on RIM as the fluctuation in exchange rates can slowly make Blackberry competitive. On the other hand, after the financial crisis in 2008, many countries‘ government adopt the east quantitative financial policy to introduce low interest rate to stir the economy and encourage domestic consumption. 2.3 Social For younger generations, smartphones are necessities. Studies showed that about 78% of teens now have a cell phone, and almost half (47%) of those own smartphones (Madden and Lenhart et al., 2013). Social networking sites like Facebook can be addictive, and mobile devices are invaluable to the growing number of daily commuters. Accordingly, smartphone makers are integrating dozens of new services into each new model to keep users staring at their screens. Younger generations seem focused on technology and are willing to pay a higher price regardless of their income. Moreover, people think that newest smartphones symbolize high status. As the needs for more functions of mobile phone increase, the smartphone market driven by the social factors also increase significantly. 2.4 Technology As the growing dependence on mobile devices for entertainment, communication, social networking and other uses will likely tax networks with increased data traffic, making the challenge of expanding airwaves for carriers more acute. The industry has slowly expanded its allocation of spectrum and is boosting high-speed service as a whole. Technological advances over the past decade like 3G, new camera-flash and fingerprint scanning technology, and improving battery life of the phone has had an impact on RIM. Additionally, the ever- changing competition in the market is competing on the software offering of the product. On the other hand, consumers tend to prefer user-friendlier and personalize phones. 3.0 Internal Analysis 3.1 Strength Blackberry is the only platform approved for use in national security agencies and is the number 1 choice for enterprises and government. Blackberry is a very secure mobile phone with encrypted network that allowed sending emails between phones without possibility of stealing the information. This has become the unique selling proposition of Blackberries and was a very attractive feature for corporates and governments that other phones didn‘t have. With the current treat of terrorist, a security operation system is highly essential for some company and organizations. Additionally, Blackberry has pretty strong focus on their narrow customer target audience, they will be able to be more focus on the approach of satisfying the needs of this narrow segment and for this case, Blackberry‘s target audience are mainly cooperate and governments. The second strength of blackberry is that it has its own self-developed operation system that can minimize the risk of patent. For example, if Google stop providing license rights to produce LG Android phone. LG will be at risk as they are heavily depending on Google‘s Android system. 3.2 Weakness One major weakness of Blackberry is that they are highly dependent on government and corporate contracts. Although Blackberry offers the most secured phones among the markets to governments and corporate, but it does not guaranteed to receive long- term contracts from government and corporate. If there is a loss of one contract, it can directly impacted blackberry badly. Another factor, is that Blackberry is launched to the market with an impression of an business oriented phone, for instants with QWERTY keyboards and with business software and apps which many people classified them as boring and it does not catch the attention of the consumers in the market or even finds that the keyboard and screen are too small. They won‘t be able to rival their competition of IOS or Android in terms of apps market, as more popular apps are available in competitor‘s software market. 3.3 Opportunity Research showed 34% of American adults ages 18 and older own a tablet computer like an iPad, Samsung Galaxy Tab, Google Nexus, or Kindle Fire—almost twice as many as the 18% who owned a tablet a year ago (Zickuhr, 2013). Professors predict that tablet market would expect to grow by 50% annually from 2011 to 2015. And according to this statistics, Blackberry will have a great opportunity to strengthen its position in the fast growing market and capture a small portion of the market share. Besides entering to the tablet market, the key competitive advantage in technology sector is strong patent portfolio. Blackberry should get this chance to discover its patents by engaging in costly R&D or through acquisitions of other firms. News even reported that BlackBerry's patents could be worth $5bn if it finds a single buyer (Liam Tung, 2013). 3.4 Threat One of the most severe threats that BlackBerry faced and similarly, with the other tech companies are rapid technological change. Companies are under the pressure to release new products faster and faster to meet the consumers‘ needs and also to remain competitive with their rivals. This is especially hard when a company wants to introduce something new, innovative and successful. Not only that, there is also an increased competition for government contracts. Government renews its contracts with suppliers every few years and BlackBerry has to compete with such formidable players as Samsung and Apple for contract renewal. Although BlackBerry has an advantage over competitors in providing highly secure mobile devices, however it has to compete on other phone features, which the company competes poorly. BlackBerry has already been outcompeted by Samsung on renewing some of US government contracts last year. 4.0 Problem Statement One of the key issues that Blackberry faced is failing to meet the market demand.