Blackberry case PDF

Preview

Summary

Rise and fall of Blackberry...

Description

Tanya Sharma MGMT 680-601 The Rise and Fall of BlackBerry This case is a classic example of a product life cycle. Despite years of technological evolution and progression, blackberry was not immune to this concept. 1. Network Effect: The Blackberry 850 was released in the market with e-mail, wireless data technology and a QWERTY keyboard. The early Blackberry users consisted of firefighters, ambulance workers and law enforcement, this niche believed in the product’s security features and reliability. The device was soon adopted by major Wall Street corporations as the official device which added hundreds of thousands of new users to the Blackberry network. The unanticipated rapid growth at RIM lead to usage by high profile personalities like actors and athletes. This created a hype among general users influenced to use the same device as celebrities. IN 2004, RIM had more than two million users across forty countries through eighty carriers. Positioning/Channel Preemption: Balsillie saw potential of this resonating with Wall Street corporations. RIM adopted the Guerrilla marketing strategy where ground level Wall Street employees were given hundreds of devices. It was a major success as Wall Street employees pushed IT departments to adopt Blackberry as the official mobile device for respective companies. Orders by the thousands from companies like Merrill Lynch and Credit Suisse led RIM to go public in 1999 on the NASDAQ. The Blackberry management team along with Balsilie used similar tactic at Capitol and soon many congressional staff and politicians were using BlackBerry.

Learning effect: Research in Motion (RIM) was founded by Mike Lazaridis and Douglas Fregin in 1984. They were focused on wireless technology and introduced RIM as first of its kind wireless data technology developer in the region of North America. The Blackberry 850 was released in the market after years of struggling to develop an email device. It addressed crucial corporate requirements such as e-mail, wireless data technology and a QWERTY keyboard. It arrived as a technology leader and established their product as the industry standard. The other competitive companies were struggling to come up with a rival technology during which BlackBerry was working on new features constantly. Instead of relying on cellular telephone systems Blackberry functioned on data systems that held up extraordinarily well. Data systems could be used exclusively to communicate data in the form of text messages or emails by using dedicate data networks. 2. Technology uncertainty- Apple launched the iPhone in 2007 with a completely different strategy than BlackBerry’s. They wanted to cater to all smartphone users not just corporations. With more developments in the touchscreen devices, users shifted their focus from BlackBerry’s battery life, QWERTY keyboards and security features to iPhones and Androids which also provided a better access to applications. Android and iPhone were more user friendly for software developers than BlackBerry’s systems. Incumbent Inertia- In response to the iPhone and Android launch, leaders at Blackberry were overconfident and ignorant at best. BlackBerry’s inventor believed users prefer using a physical

keyboard rather than a touchscreen. Lazaridis was quick to dismiss Apple as a fad, and critical of the battery life, capacity and touchscreen feature. It was apparent that the management at RIM did not believe that the market was shifting. BlackBerry continued to work on enhancing what they thought made the device great- security, email and battery life. The company also continued to keep corporations as their target consumer market. Later, corporations started adopting iPhones and androids because they had email capabilities as well. Blackberry finally launched a complete touchscreen device “Storm” in collaboration with Verizon. The device failed terribly due to an underdeveloped technology in a market where Apple and other companies already possessed an advance tour screen tech. 3. Blackberry has been making phones for several years but the company failed to acknowledge the significance of the launch of iPhone and androids smartphones. For few years after their launch, BlackBerry’s growth continued because of the platform-tied enterprise customers and youngsters who were fond go the messenger service. But with increased popularity of applications like WhatsApp, Messenger, BlackBerry was losing out. Despite retaining its software security division which had a limited competition in software security industry, the company faced adversity in the hardware industry. As more people started using their mobile devices at home, the dearth of BlackBerry apps and software became an issue. When BlackBerry decided to launch its first fully touchscreen phone “Storm”, they suffered a terrible failure as they did not possess hardware and software technology advanced enough to compete with other competitors at the time. With companies like Apple which had a core competence in product design, software development, application development, and hardware and did not hesitate to outsource from a trusted provider, BlackBerry was far behind. 4. Despite the success of iPhones and Androids, Lazaridis was optimistic of BlackBerry’s sustainable advantage. However, tensions were now growing between Balsillie and Lazaridis. Lazaridis was certain that the BlackBerry 10 would resurrect the company while Balsillie was remained skeptical. One of the keys to the company’s early success had been the co-CEO structure: where Lazaridis was responsible for engineering, product management and supply chain, while Balsillie focused on sales, finance and other corporate functions. This complementary leadership structure was successful for a long time, as Lazaridis and Balsillie worked well together. However, the growing tension between the two led to a breakdown of communication, and RIM missed internal deadlines for launch dates as confusion and doubt spread among the company’s employees. The breakdown of communication and friction between management led to a disastrous 2011 for the company, where RIM’s network experienced tremendous difficulties for the first time, and the company was forced to undertake substantial layoffs due to rapidly decreasing sales....