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RIM Blackberry Tumble By: Joshua Hauger and Sophal Espiritu [Type text] RIM Blackberry Tumble By: Joshua Hauger and Sophal Espiritu BA305 Leon Chickering Joshua Hauger and Sophal Espiritu [Type the company name] RIM BLACKBERRY TUMBLE 1 Background Research in Motion (RIM), now officially known as its commercially proven name of Blackberry, experienced a dramatic shift in consumer use leading to reduced unit sales and revenue. Leading causes of sales loss are communication breakdowns both internal and external, design conflicts and flaws, as well as marketing errors on behalf of the CEO and marketing team. Its social media struggles also highlight communication struggles which could have been avoided. This report will attempt to analyze the various aspects of Blackberry’s challenges and present possible courses of action (COA) available to change the current catastrophic market share losses. Communication Factor -Internal All large organizations require great communication flow between staffing elements; particularly between design, finance, and marketing teams. Communication interruption with these groups will inhibit an institution’s ability to design, manufacture, and distribute products in a timely and useful manner. Blackberry experienced this communication breakdown on an ambitious scale. During initial startup Blackberry found an excited consumer base demanding smart phone technology capable of generating an on-the-go office environment. Designers, including hardware and software developers, exploited technological abilities to deliver a handheld device capable of voice communication, email, and wireless access protocol (WAP) – commonly referred to as simply internet access. Initial introduction into the market RIM BLACKBERRY TUMBLE 2 place was excitingly fast and highly profitable. However, as with all technologically driven products the market has many powerful competitors, namely Apple and Microsoft. Both of Blackberry’s strongest competitors delivered powerful devices capable of exactly the same properties as the Blackberry model 850. Blackberry did not meet the competition with the same vigor found with initial entry. Blackberry did not fail in the software capacity, but failed to communicate well with the customer. Overconfidence rang superior and design elements supporting WAP technology were slow to change. Blackberry models commonly utilize a QWERTY style keyboard and limited touch screen processes. In fact, Blackberry will not market a fully integrated touch screen input until release of the Blackberry 10 scheduled to release in March 2013. The Apple IPod was released with full touch screen integration in 2007. This puts Blackberry a full six years behind one of their strongest and most popular competitors. Consumers clearly articulated a demand for full touch screen capabilities and Blackberry failed to head this demand. Failures to communicate well with consumers generated an unexpected shift away from Blackberry products. Hardware design teams expectantly receive majority of the finger pointing. Design elements were slow to change and Blackberry missed the proverbial iron while it was hot. Design teams did not listen to the consumer. Additional criticism must be placed on marketing’s failure to also listen to the customer, but on more than one area. Marketing departments play a pivotal role in keeping a pulse on the consumer base. A large portion of this maintenance is in the form of customer interaction and observing market trends. The trend away from QWERTY data interface RIM BLACKBERRY TUMBLE 3 clearly shifted to touch screen application. Marketing failed to monitor consumer trends and placing a premium on consumer satisfaction. Technology is not a standstill industry. Remaining constant too long will inevitably generate downfall for any organization. One topic of intrigue rests in Blackberry’s internal communication. Now former CEOs Mike Lazaridis and Jim Balsillie failed to run an organization with great communication processes. The irony here of course is that Blackberry was a leading distributor of communication devices. “One former employee says the situation got so bad that internal deadlines simply weren’t taken seriously. As a product launch date inched closer, it was common for a few teams working on the same project to realize they were unlikely to make the date, but no one spoke up, under the belief that another team was even farther behind.” (Castaldo, 2012) Executive officer responsibilities include ensuring the flow of communication. Understandably a CEO does not work at the functional level; however frequent internal staff meetings and milestone briefings would have openly identified teams falling behind on their assignments and provided a forum to motivate the team. COA recommendation for future organization policy is to conduct quarterly staff meetings to encourage free flowing exchange of information. As product introduction date into the marketplace gets closer meetings would occur on a bi-monthly schedule to ensure product is ready for a timely introduction. Communication Factor - External Internal organization communication remains empirically important to ensure RIM BLACKBERRY TUMBLE 4 cross talk amongst staff elements. However, perhaps equally important is communicating the product offered to the market. Blackberry has become synonymous with failing to communicate well with their consumers. Bloomberg BusinessWeek brought this information to light, “The first Blackberry TV ad ran in 2008, nine years after the product was launched, when it was already racking up sales of more than $6 billion a year.” (Brady & Miller, 2010) Advertisement remains a paramount focus toward maintaining frequent interaction between an organization and consumers. Reaching target consumers is self-limiting when advertisement fails. Consumers may know about the Blackberry and may have friends that own one, but word of mouth will never wholly disseminate information to potential consumers as found in commercial advertisement. An immediate COA to turn this around is to highly publicize introduction of the newest Blackberry model using all forms of media available, i.e. online, print, and television campaigns. Communication to customers during the 2007, 2008 and 2011 power outages of its networks was another catastrophe of its own. The company was well-known for speed and reliability, and also for providing internet and email services to its customers. During these periods of power outages, millions of global users lost services for days in Europe, the Middle East, Africa, Canada and North America. This failure was thought to be caused by a malfunction of one of the company’s main pathways, which was responsible for the connection between main email servers and Blackberry’s network. During this crisis the company gave little or no information to its customers regarding issues nor provided an estimated timeline for the fix. Even if the situation hasn't RIM BLACKBERRY TUMBLE 5 changed, by regularly informing users that it is being worked on provides assurance that their woes are being taken seriously. The business partners of Blackberry seemed to be as affected by the blackouts as BlackBerry users. The partners began to question whether or not Blackberry could conduct services reliably. They feared that the blackouts may be the beginning of a trend of poor service. Blackberry had many successful competitors that were not experiencing these issues. To stay relevant in its field, Blackberry needed to act swiftly to resolve this issue. The pathway malfunction also caused the internet service to become interrupted, which could have even more devastating consequences. It was found that people were using devices such as smart phones to conduct business when they were out of the office. People used laptops in the past for such activities, but have since switched to smart phones as they are easier to transport and more convenient. Interruptible internet service will hinder the ability of these workers to successfully conduct business activities on the go. Becoming known for unreliable services could irreparably damage Blackberry’s business. Nearing the end of the 2011 power outage crisis, “The company’s co-founder Mike Lazaridis apologized in a video message to BlackBerry users, saying services "are returning to normal” in parts of the world, but he wasn’t able to say when they will be fully restored.” He later went on to say, “We know we've let many of you down. You expect more from us. I expect more from us.” (Lonescu, 2011) By reaching out to customers in this way, and taking personal responsibility without trying to push blame, it showed delayed accountability. However, not offering more insight to causes of the problem left customers and the media feeling skeptical and RIM BLACKBERRY TUMBLE 6 increasingly frustrated. Openness, speed and transparency are key factors in crisis situations. Compensation isn’t a bad idea either. “The company later offered $100 in free apps to customers affected by the crisis as an apology and to compensate them for their down time. The number was a staggering 70 million consumer and corporate users.” (The Canadian Press, 2011) Social Media Responses Social media offers a range of potential benefits in business communications with its consumers and the general public. In this rapidly changing environment, managing social media outlets can be more of a challenge than companies have bargained for but it’s an art which requires perfecting. In order to manage this influx of incoming and outgoing messages, companies such as Blackberry should have
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