Blackberry Right Strategy Essay Example

Blackberry Right Strategy Essay Example Blackberry Right Strategy Essay Blackberry Right Strategy Essay The implementation of correct strategy in an organization is of vital importance. The reason for this is that strategy helps an organization to reach goals and it helps an organization to prosper. The correct Strategy and implementation also helps an organization to have a competitive advantage over its rivals. An organization with a competitive advantage can dictate terms to its rivals and can buy of niche markets supplying similar products. The aim of this assignment is to form an analysis of the strategic positioning of blackberry’s firm. This assignment will compare blackberry to its arch rivals and will review if blackberry’s performance is better than its rivals or not. We will also explain the reason behind the rebranding phase from the change of Research in motion to Blackberry. We will assess if we agree with the current strategies or not, and give a reason to why we think so. RESEARCH IN MOTION REBRANDS ITSELF AS BLACKBERRY CEO Thorsten Heins announced that his company will no longer be known as Research in Motion at a Blackberry event. He stated that it will be rebranded as â€Å"BLACKBERRY†. We have reinvented the company, and we want to represent this in our brand, Heins said. One brand. One promise. Our customers use a BlackBerry, our employees work for BlackBerry, and our shareholders are owners of BlackBerry. (Website 1). Blackberry is also changing its stock symbols to reflect the change. It will be listed as BBRY in NASDAQ and BB in TSX. * It’s out with the old and in with the new as RIM rebrands itself with a new name, a new operating system and a new phone. It’s a bold step for a company that made several missteps after ruling the smartphone segment and believes it must start over from scratch with new products and a new brand. By changing its name and launching an excellent operating system that runs on impressive phones, BlackBerry is doing more than writing a new chapter. It’s starting a new book. The importance of this cannot be overstated as the company that once defined the smartphone segment struggles to remain relevant in the era of Google and Apple. Even though Blackberry is turning this new leaf through Rebranding they must not forget that whilst they were regrouping their competitors were constantly improving. Samsung and Apple in particular have become so dominant in the mobile industry. They managed to get into the cell phone industry through their Brand names Samsung and Apple which are world renown and very reliable products. Once in they took the world by storm by releasing A grade products in the Smartphone industry and have just made their Brands stronger. Blackberry needs to recognize their presence and start becoming much more innovative than they have been in the past. They need to ensure that they build a strong brand to compete and become better than the likes of Samsung and Apple. STRATEGIC POSITIONING OF BLACKBERRY Strategic positioning is the overall intended objectives and approach to a situation. Most business managers will carefully develop a well thought out strategic position and take considerable steps to communicate it to staff clearly so that all parts of the business can be operating towards the firms stated goals. Blackberry has to realise that they are competing in a high velocity market which is turbulent. What this means is that the technology is improving at such a rapid pace that they have to keep up to the pace otherwise they will fall back in the race to supremacy in the phenomenon of Smartphones. Short product life cycle poses a huge threat to Blackberry therefor in order to eliminate this demon they need to ensure that they constantly invest aggressively in Ramp;D to stay on the leading of technological know how (Corporate Strategy Notes, Tailoring Strategy to Fit Specific Industry and Company Situations, Page 4 of 8). At Present Blackberry is not doing so therefore their strategic position is unstable and they face the problem of falling behind their current rivals and new rivals. A case in point is Blackberry. Not so long ago, it was arguably the standard corporate accessory. If you were working for a blue chip multinational, chances are that a Blackberry phone was your standard issue kit. Now it’s very different. Apple’s iPhone has successfully made the transition from niche to mainstream use, while Samsung and other android mobile providers have developed feature-rich devices for non-Apple users. Blackberry got squeezed from both sides, and is now struggling to define its relevance. It recently launched its new product, the Z10, which at first glance could be mistaken for the iPhone. While it’s not easy for a brand to create a strong and differentiated competitive position in a crowded marketplace, that’s a more sustainable strategic alternative than either a) copying your competition or b) ignoring your competition in the hope that it will go away. As competitive positioning strategies go, this â€Å"head in the sand† approach is not only wishful thinking, but does nothing to build a brand’s credibility. Effective competitive positioning demands that you understand not only the real benefits your product offers to your customer base, but that you also understand and can articulate how those measure up against your competitors. Pretending they don’t exist gets you nowhere. The strategy chosen by Blackberry is dependent on situational factors and the direction the organizations owners wish to take. At present the situational factors include the threat and competition posed by Apple and Samsung in particular as they are emerging and improving day by day therefore Blackberry has to have the right strategy in order to keep up with them. Blackberry’s strategic position in the market is unstable at present because of the several external and internal forces being presented. The reason that we say it is unstable is because internally Blackberry is carrying out their strategies efficiently. That doesn’t mean that they are in a good place, because you can have Great Strategies, but they could be implemented poorly and in this case you can have mediocre strategies which are being implemented brilliantly. The efficient implementation masks that the strategy is mediocre but as we see in the performance of the product on a financial and technological level it does not live up to the standards in the competing smartphone industry. Therefore this is our core reason for saying that Blackberry’s strategic position is unstable. IF they don’t change their strategic position from being unstable to stable it may cause them to falter in years to come. If Blackberry releases a new line of Smartphones and they are a flop in the industry they will go from bad to worse and the consequence of that will result in the company losing lots of profit. If they do decide to formulate new strategies and implement them with efficiency it will result in them being able to compete in the market more fiercely and they would become much more financially and technologically stable. Whilst it is very easy of the tongue to say we are just going to adopt new strategies and succeed, we need to ensure we carry out Research and Development actions to ensure we obtain vital information to devise a plan of how we are going to go forward. RESEARCH AND DEVELOPMENT Research and Development departments are common in many larger companies, especially those working with newer products or technologies subject to important shifts. While research and development work can be instrumental in creating new products or adding features to old products, the work that the department does is more complex than simple innovation. Ramp;D is connected to marketing, cost management and other parts of business strategy. (Website 2) Blackberry has made a valiant effort with their Ramp;D department however it isn’t fully up to the standards of their competitors in the ndustry. This doesn’t mean that they are bad, their competitors are just on another level at present. More efficient Research and Development will ensure they get on par or even surpass the performance of their competitors. Blackberry has been good in the development phase as they have had their set norms being the Curve, Bold and Torch which they have developed and upgraded really well ov er the years. The curve has had the 8900 which was primarily 2G, however through development they now offer the 9380 which has a 2G-3G option and that is just focusing on one aspect. Others may include a slimmer phone, more user friendly buttons, variety of different colour options etc. This shows us that the Smartphone is constantly improving however it isn’t going that extra mile to ensure that they get a larger market share. A possible reason for this is that Blackberry is content with their profit as it stands and they do not want to risk investment being lost if they have a new proposition being a flop. The consequences of Risks are Rewards or Punishment and there is a very fine line between them. Blackberry has come out their shell in recent months with their release of the Q10 and Z10 Smartphones however it hasn’t really lifted off the ground very well. Sales are low and there consumers prefer the Apple iPhone or the Samsung S3 because they feel it is much easier to use and it has more to offer. The new release looks somewhat identical to the iPhone, some begin to think that Blackberry has adopted the strategy of copying the competition thinking that it may benefit them however the technology also has to match that of the iPhone, and so far it isn’t living up to those standards. Therefore Blackberry needs to go back to the drawing board and carry out thorough Research and Development programmes on how they really want to move forward because the Q10 and Z10 is more of a flop then a success as it stands. Even though the overall outlook on the new release is good, it still falls short of the standards of its competitors. Blackberry needs to find that cutting edge and decisive new form of technology that will allow them to compete up there with the likes of Samsung and Apple or even better them. For now they are just playing second fiddle and trying to catch up to the rapid pace that their competitors are moving at. The External Environment PORTER Porter’s 5 force analysis plays a vital role in how Blackberry goes about working around competition, and how they isolate competitive advantage or disadvantage of the company. It will also enable Blackberry to strategize accordingly to ensure they are up to standards in the market. 1. Competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry†. The 1st Force enables for Blackberry to distinguish their Rival sellers in the industry and be able to release new cutting edge technology that is better than theirs in order for them to keep up to speed and stay ahead of the competition. 2. â€Å"Competitive pressures associated with the threat of new entrants into the market†. This Force enables Blackberry to realise that there is alwa ys the threat of new entrants in the market. To eliminate this pressure Blackberry always needs to have the latest technology to ensure that if new entrants emerge in the market with good technology they can compete with them or eliminate them instead of losing market share. 3. â€Å"Competitive pressures coming from the attempts of companies in other industries to win buyers over to their own substitute products†. The 3rd Force shows Blackberry that companies like Samsung and Apple who are generally associated with Tv’s and Ipod’s respectively in a totally different industry can come into the market with substitute products and compete with them. At present Samsung and Apple have first class products with the best technology and Blackberry is falling back very fast. This is a major area of concern and is an area where Blackberry needs to catch up with very fast or it will result in them soon being a midget in the market. 4. â€Å"Competitive pressures stemming from buyer bargaining power and seller-buyer collaboration†. From the 4th force Blackberry realise that it must have a good customer relationship in order for them to gain a bigger market share. Blackberry must allow the buyer some bargaining power otherwise the buyer will feel hard done by and may seek elsewhere. There must be a good level of collaboration between buyer and supplier that will ensure that Blackberry moves forward smoothly in the market. 5. â€Å"Competitive pressure stemming from supplier bargaining power and supplier-seller collaboration†. The 5th force shows Blackberry that they must have a good relationship with their suppliers in order to obtain their materials at good low prices. If the collaboration is good the result would be low production cost and higher profits. (Corporate Strategy Notes, Analysing the External Environment, Page 2 0f 6) GENERAL INDIRECT ENVIRONMENT (PESTEL) There are some factors that Blackberry has no control of in the external environment and they have to work around these problems. On the Political Sphere they are affected by the taxation policy which may ultimately affect their returns therefore they need to ensure that their profits are good and their tax is up to date which will enable them to be in the safe zone with the tax man. They have to also come to terms with the foreign tax regulations. The Economic sector is probably one of the most delicate. Changes in the economic sector have to be acted upon stealthily because it can affect the Blackberry in a big way. Inflation poses a big threat because with inflation comes higher cost for everything. Interest rates also play a major role. Social influence is a sector which Blackberry thrives on. The social sector includes lifestyle changes, levels of education, social mobility etc. The aim of Blackberry is to attract the masses with their product which will enable them to become more connected socially. Their Blackberry Messenger service does wonders in regard to this because it allows people to network at a high pace. The technological environment poses one of the biggest threats to Blackberry. As technology is rapidly improving it will be up to Blackberry to keep up with the pace, if not then they will lag behind and may suffer losses. They have no control over how fast technology improves therefore they will have to be on the ball. The Environmental sector includes waste disposal and energy consumption in connection with Blackberry. Blackberry needs to find the most efficient and green methods in manufacturing their product in order for them to save money and be safe in regard to the protection laws. Blackberry has to ensure at all times that they do not violate any labour laws and Employment laws. They must also make sure that they are keeping up to scratch with the Health and Safety Standards to ensure they don’t obtain any fines that would cause them loss of profit. (Strategic and Operations Management, Module 5, External Environment Assessment, General Indirect Environment, Page 23) SWOT ANALYSIS The purpose of the Swot analysis for Blackberry is to clearly identify their strengths, weaknesses, opportunities and threats. It is important for Blackberry to know where they stand and where they need to improve. Blackberry has various strengths in the industry. Their social networks are among the best out there and this is probably the only reason that Blackberry is surviving in the market. They need to continue using this as their major advantage over their rivals. At present Blackberry has a large consumer base because of its social network BBM, it enables people to network socially and for business. Blackberry need to continue enhancing the technology in this sphere to ensure they keep the market interested with the product. Another Strength of Blackberry is that they offer you a variety of phones to choose from, it isn’t as limited as to the likes of Samsung and Apple. This offers the customer a choice as to what they prefer, many may not like a specific design so they opt for something else and Blackberry has many choices to offer therefore this is a major strength for them. Blackberry has many weaknesses which they need to rectify in order to keep up to the likes of Samsung and Apple in the industry. Blackberry does not advertise as much as Samsung and Apple, this means that their rivals are getting much more exposure than them. They need to rectify this matter otherwise they will quickly lose market share and consumer base. They need to advertise on platforms like television, radio and billboards in busy areas in order to make customers aware of their product. Blackberry has a lot of software problems which need to be rectified. They don’t have many features as to the likes of Samsung and Apple, this means that they begin to lag behind the likes of their competitors. Therefore Blackberry needs to carry out Ramp;D programmes in order for them to come up to standards. There will always be opportunities for Blackberry in the market and they need to pounce on them in order to move forward consistently. Blackberry Applications are constantly improving and this forms a major opportunity for them as customers like good applications and with the improvement they can lure more customers in. Blackberry Pricing is becoming more and more affordable for the average man and this is a good opportunity for Blackberry to cut profits and lower prices in order to get a large customer. Threats are the major concern of Blackberry because this is what dictates how they perform in the market based on the performance of their competitors. The major threat comes from the likes of Samsung and Apple because of their ability to be innovative to the extremes and release cutting edge technology on a regular basis. This will cause Blackberry to seriously lag behind therefore it poses a major threat. RECCOMENDATIONS We recommend that Blackberry develops new strategies in order to compete strongly in the market again because as it stands with their current strategies they are fairly unstable and in huge trouble if they mess up the slightest bit. Blackberry needs to do more advertising compared to Samsung and Apple to ensure that they are able to compete in the industry strongly. They need to implement long term corporate strategies in order to better their strategic positions. They need to have excellent strategies and implement them accordingly in order to become a better company. Blackberry needs to do more market research on the external environment. As we know the external environment is uncontrollable however Blackberry must develop back up plans that will enable them to adapt to change accordingly in the external environment. They need to research and monitor the progress of their competitors in order to keep up to par or keep ahead of them in the technology sphere in order to claim a larger consumer base. Blackberry needs to carry out more thorough Ramp;D programmes in order for them to develop new cutting edge technology which they can offer to their consumers, they further need to incorporate many more features in the phone which will make consumers much more interested in the product. The prime reason that we do not agree with the current strategies of Blackberry is because with their current strategies their strategic position is very weak. In order to change this Blackberry needs to adopt all of the above in order to come up to scratch with their rivals. CONCLUSION We have come to a collective agreement that Blackberry is still a major force in the smartphone industry however they are beginning to fade because of the competition in the industry. Blackberry lacks a good decisive strategy in order to compete on the levels of Samsung and Blackberry. Their technology is good but it’s not the best. They are not able to keep up to the speed that technology is improving and this is causing them to fall behind very fast. More thorough Ramp;D programmes and better strategies will enable them to fight their way back into the market and will give them the opportunity to get on par with their competitors and even surpass them. If they decide to keep their current strategies they will face the consequence of losing their large consumer base which they have achieved with great difficulty. They will lose a massive market share to the likes of their rivals and new entrants into the smartphone industry. Their stock shares have dropped drastically over the last few months because their sales have dropped substantially and the release of their new phone Z10 has not lived up to their expectations. Therefore this will result in them further falling behind in the industry. Now it is up to their corporates to formulate and devise new strategies and implement them with efficiency in order to move forward.