Most mobile companies produce handset devices such as Smartphones that vary in terms of size and usability. The current market for such Smartphones portrays a neck-to-neck competition in terms of market share and consumers. In the global market, the leading companies that produce Smartphones include Apple, Samsung, BlackBerry, Microsoft, Huawei, and Sony among others. Good strategies and increased innovation have ensured that these companies maintain their market share and customers. The stiff competition in the mobile market is driven by advanced technology that is also dynamic to cater for the difference in customer spending power.
The leading Smartphone companies such as Apple engage in profitable operations, thanks to their strategic supply chains. Such companies beat their competitors through innovation, extensive market, and efficiency in production. Even though such companies have been successful in the market, enterprises such as BlackBerry, which forms the basis of this paper, have been on the downfall trend due to poor strategies that they implement to guide them. The paper provides two case examples of companies, namely Apple and Motorola. While Apple succeeded because of proper strategy implementation, the Motorola Company failed because of poor strategy execution. Hence, BlackBerry can learn from these two companies to rectify its situation before it is phased out of the market.
The Rationale of the Strategic Analysis
BlackBerry Inc. is known for its provision of mobile-based services and communications. Recently, BlackBerry Inc. has been experiencing a fall in sales due to poor strategies. First, despite being the pioneer of mobile computing, the enterprise missed the meeting where stakeholders had met to discuss the Smartphone revolution. The company titled Research in Motion (RIM), which produced and marketed BlackBerry’s phones was not available to gain from the various issues that were discussed in the forum.
Poor marketing strategy hindered the company from studying the trends. Thus, the company lost its major market share to Apple and Samsung. This situation resulted in poor performance to the extent that the company almost became bankrupt. BlackBerry rejected offers for a buyout. Instead, it opted for sale. This turmoil has been brought about by poor strategies applied by the management. Thus, there is a need to conduct a strategic analysis of the company to guarantee urgency in revamping itself to regain the lost market share, including the loyalty of its esteemed customers.
Due to the decreasing performance of BlackBerry Inc. in the market, the management of the company must understand the advantages of effective implementation of business strategies in ensuring improved performance, profitability, and increasing the market share of the business. This research pinpoints poor implementation of business strategy as an issue in the company. A review of the literature has guided the research design and analysis of the data gathered from the respondents. Since the study is a case analysis on business strategy, BlackBerry Inc. is chosen since it has been experiencing issues of strategy in recent years.
Research Methodology and Design
This study is a case of BlackBerry Inc. It aims at evaluating the issue of poor business strategy implementation in the company. Hence, the qualitative research design will be preferred for this study (De Choudhury et al., 2010). Furthermore, the investigation will also be conducted using online materials that present various BlackBerry stores, which are available in the global market. The quasi-sampling method will be used to select the subjects for inclusion in the study. The quasi-sampling design was also chosen since it is best suited for qualitative studies (De Choudhury et al., 2010). The questionnaires will have open and closed-ended questions with minimal multiple choices.
Data Collection and Analysis
Data were obtained using the online administration of questionnaires to virtual staff and top management officials of the company. The selected sample size comprised of 400 participants who included 350 junior staff and 50 middle and top management officials. The analysis of the data collected was conducted in two parts. The first part included a univariate analysis that indicated details about subjects’ age distribution frequencies (De Choudhury et al., 2010).
The second phase of analysis was conducted on variables guided by the following hypothesis that improper implementation of business strategy does not lead to a recovery of the lost market share and improved performance in BlackBerry. The implementation of the inferential statistics is expected to elaborate information that might be inferred to the general performance improvement of the company. The analyzed data will inform whether the proper implementation of the business strategy will make the company not only regain its lost market share but also improve its performance.
Business strategy involves various components that a business has to embrace to guarantee improved performance and healthy competition where an organization remains at the top in the aggressive market environment. The research conducted examined the performance of BlackBerry Inc. through the analysis of its product innovation and differentiation, technological advantage, and pricing strategy.
Concerning product innovation, 55 percent of the respondents mentioned that BlackBerry Inc. has currently been facing challenges when introducing new products in the market. The situation has been fuelled by the shift of consumers towards other competitive products from companies such as Apple, Huawei, and Samsung among others. In the recent past, BlackBerry performed poorly in ensuring improved innovation, despite the available techniques and business models. It failed to grasp the opportunity of the Smartphone revolution at the required time. About 15 percent of the respondents indicated that the company never emphasized a system that is based on its culture of improvement to harness creativity among its staff members and/or streamlining designs among others.
The company also lay off some employees who were skilled as indicated by 60 percent of the respondents. These workers were employed in various competitor enterprises. Thus, the loss of skilled workers led to reduced profit margins. BlackBerry has been slower in terms of innovating products as revealed by 40 percent of the respondents surveyed. The respondents noted that the new products that have been released in the market have been facing criticism. For example, BlackBerry’s OS (Java) was not only difficult to use but also unstable. Products such as BlackBerry 7 and 10 have also been criticized for being out of date while items, for instance, BlackBerry Tablets OS (QNX), have been criticized for having the incomplete software.
Most of the respondents (about 57 percent) mentioned that the company was to be acquired by other superior competitors. Companies such as Samsung could buy the company since it had reached the point of being phased out of the market. BlackBerry denied this idea as indicated by the respondents who noted that the buyout rumor cost the company about 30% of its shares.
Reduced Skilled Workforce
About 60 percent of respondents agreed that the company had been recording a financial drop since 2011. This situation has pushed the company to reduce its workforce in various departments. More than 2000 jobs that were cut in 2011 led to the laying off of about 10 percent of employees. Roughly, 24 percent of the same respondents indicated that a further reduction in finances took place in 2013. This situation reduced the company’s employees by about 11% by the end of 2013. Most of these employees were from the Research and Development Department. Here, they were conducting tests on new products. By the end of 2013, approximately 4,500 workers had been laid off.
Almost all the respondents (about 90 percent) consented that the structure of the dual CEO was ineffective. As indicated by the respondents, both leaders had their unique ways of understanding the organization’s functions. Mike Lazaridis and Jim Balsillie did not issue a proper direction to the employees. The respondents noted that a dysfunctional kind of leadership and management structure existed. They revealed that about six leaders in managerial positions were changed during the period 2011 to 2013. This change led to confusion by employees who did not know the clear direction of the company.
The leaders based the company’s dimension strategy on market shares, financial strength, and its relative strength in the market. As indicated by 70 percent of the respondents, stiff competition in the market has led to the fall of BlackBerry in terms of its global ranking. The company is currently losing its market shares to Apple, Samsung, and Microsoft among other competitors.
Initially, BlackBerry was financially strong after the release of its Smartphones. Afterward, the financial strength began to weaken due to the introduction of Apple’s iPhone and the growth of Samsung and HTC Android handsets (Mallinson, 2015). In the US alone, a sales volume drop to 3 percent from 9 percent was witnessed due to the stated reasons. In terms of subscription by its customers, 60 percent of the participants indicated that a drop was experienced from 80 million to about 79 million subscribers.
Other reasons that led to the drop of finance include poor cost structure, as confirmed by 50 percent of the respondents, and the market share decline of about 1 percent from 20 percent that was experienced in 2009. The overall situation reduced the company’s spending system relative to Nokia as indicated in Figure 1.
Expansion and Competition
About 63 percent of the respondents confirmed the well-calculated move by BlackBerry when it expanded to new markets after the introduction of BlackBerry Pearl 8100 with multimedia and camera. This model was followed by the Curve 8300 series and Bold 9000. However, the peak of its expansion was reached during the years 2007 and 2011. During this time, the company started experiencing the fall of market shares due to the poor satisfaction that its customers demonstrated in 2008. The respondents indicated that BlackBerry Storm never performed well in the market due to poor distribution networks.
Competitors such as Google’s Android, Apple, and Samsung penetrated the USA market and beyond, thereby slashing BlackBerry’s market shares by a great percentage. About 45 percent of the responses consented that many investors and media were concerned about the ability of the company to face such stiff competition. Other respondents also indicated that the management of the company at the time never followed the right strategic track. These events hampered the company’s performance in both the US and Canadian markets.
The majority of the respondents specified Apple and Microsoft companies as the key competitors of BlackBerry. These two organizations had established Smartphone Android and Windows OS mobile devices. The sales of BlackBerry’s Smartphones completely reduced due to the introduction of Apple’s iPhone and Android from the Google Company. Media contributed negatively to the company’s progress as a single independent enterprise.
About 74 percent of the respondents agreed that Apple was the destroyer of BlackBerry, especially in 2010 and 2013 after the former exhibited tremendous growth of iPhone Smartphones. The Smartphones of the competitor enterprises steered the slow market penetration by BlackBerry’s products. The respondents furthermore indicated that Android mobile operating systems that run the hardware of Sony, Motorola, HTC, LG, and Samsung among others increased the competition. Most BlackBerry phones experienced poor sales due to the products being unappealing. Besides lacking customer applications, they had obsolete operating systems that could not run the devices faster when surfing the internet.
About 80 percent of the respondents agreed that BlackBerry’s management opted for restructuring and the laying off of its employees due to the experienced slow growth. About 2000 workers had lost their jobs by 2011, with those from the internet service department suffering most. A mass defection was then experienced since such an event happened when Apple was on the verge of launching its iPhone 4S. Twenty-four middle and top management officials admitted that the restructuring was not only done at the wrong time but also was an infringement of the trademark of the name BBX. This situation delayed the launch of BlackBerry 10 in the market.
Therefore, the company reported a loss in 2012. Later, the top management officials resigned, a move that directly affected the company’s performance since it brought losses as indicated by the stakeholders. The company had no chief technology since David Yacht’s departure. Therefore, the company lacked innovation and technological advancement as confirmed by 84 percent of the respondents.
BlackBerry’s Business Strategy Analysis
A critical analysis of BlackBerry captures the various aspects and tools such as SWOT Analysis, EFE, IFE, and Space matrices that provide information about the capacity and position of BlackBerry’s operations. These tools will provide information on the perspective of the various fierce competitors and market segmentation. The information can be used to predict the future operations of the entity.
The External Factor Evaluation (EFE) Matrix
The EFE matrix is an efficient tool that can evaluate BlackBerry’s external factors. The tool categorizes external factors into opportunities and threats. Thereafter, it assigns weights to each factor. The values are assigned between 0 and 10. These factors are further rated based on how the company is responding to the threats and opportunities in terms of the strategies it uses. The factors considered include 1- poor, 2- below average, 3- above average, and 4 – superior. A weighted average score is then determined through the multiplication of each factor by the rating. Finally, the total weighted score is determined through the addition of all the weighted scores.
|Growth of Smartphone market||10%||3||0.3|
|Strong balance sheet||12%||1||0.12|
|Stronger position in the market||6%||1||0.06|
|Growth of the advertisement market||12%||2||0.24|
|Mergers and acquisitions||3%||1||0.03|
|Relations with other companies||2%||2||0.04|
|Faster email messaging||8%||2||0.16|
|Poor management of security data||15%||1||0.15|
|Management of Bring Your Device technique||14%||2||0.28|
|The rapid change in technology||6%||1||0.06|
|Saturated Smartphones in the market||2%||2||0.02|
|New software applications||2%||2||0.02|
|Scale: 1- poor, 2- below average, 3- above average and 4 – superior.|
Table 1: External Factor Evaluation for BlackBerry.
The BCG Matrix
The BCG Matrix is a crucial tool that can be deployed to demonstrate the performance and competitiveness of the company in the mobile phone sector. Initially, BlackBerry was the leading wireless company that introduced Smartphones in the market. During this period, the company maximized its revenue to the tune of $ 85M in 2000 and $ 20B in 2008. Thereafter, the company had been experiencing a fall in such revenue for three subsequent years to the level of about $11B in 2013. It has also registered a drop in the overall net income from $3B as profit in 2011 to about $ 0.6B loss in 2013. This information has been summarized in Figure 2 below.
Currently, the competition for Smartphones is at its peak where the market situation is saturated. The Smartphone industry is at the maturity stage that exhibits how established competitors in the market environment are offering various brands with numerous capacities. Research conducted by the IDC (2013) indicated that the shipment of Smartphones increased by about 40% with a decline in average pricing by 12%. Furthermore, the report indicated that more organizations provided room whereby employees introduced their gadgets to work (BYOD). Thus, a change in the market was exhibited. Currently, an overlap of the market exists between enterprise and consumer segments. Competition still is noted in the software that merges the applications, programs, and systems of the Smartphones (Finley et al., 2013).
The cost of products is an important element that competitors in this industry have to consider. Many competitors buy components from market suppliers who serve different companies in the same industry. Therefore, many companies are vulnerable to matters that relate to mergers or alliances. Thus, unhealthy competition might arise (Finley et al., 2013). Companies are copying new product features to the level of eroding differentiation of the various devices that are released on the market. For example, ‘touch screens’, which were a feature of Apple’s iPhone, is currently offered by most vendors, including BlackBerry. Economic situations have also affected the pricing strategies of various devices and hence the witnessed high elasticity in pricing (Finley et al., 2013).
Resellers who deal with Smartphones possess a high bargaining influence. Thus, they tend to dictate the prices of these products. The industry is currently majoring in the establishment of various components of Smartphone devices such as hardware and software (Finley et al., 2013).
These gadgets have numerous applications that require the merging of various operating systems from companies such as Windows Phone OS and Google’s Android. The software is shared across the market environment of which BlackBerry’s QNX is unfortunately not well positioned. BlackBerry is grouped under others, which have the lowest shipment. An opportunity arises in a given industry. Hence, the management of various companies must always be on high alert to ensure that they grasp each opportunity that comes. However, BlackBerry missed such an opportunity when the Smartphone revolution emerged. Apple and Samsung quickly grabbed the opportunity in 2007 when the former company (Apple) launched the iPhone series (Finley et al., 2013).
Therefore, BlackBerry lost its market share to these enterprises. Furthermore, BlackBerry never responded in time to such threats. Besides, the market niche had already been captured following the delay, which occurred before the introduction of the Z10 model (Finley et al., 2013). The survival of various companies such as BlackBerry in this industry will be based on various factors. The first element will be the management of security and privacy by individual enterprises, followed by a shift in networking and devices that change with customer demography, and lastly innovation of features that possess lucrative operating systems that allow for several applications.
Porter’s Five-Force Matrix
The above information about BlackBerry can be summed up using Porter’s Five-Force Matrix as shown in Table 2 below.
Table 3 below shows the leading Smartphone retailers in terms of their shipment volumes and market share. From Figure 3, BlackBerry is seen to take the least share of the only USD1200 in terms of developer returns.
|Top Five Smartphone Vendors, Shipment, and Market Share 2013 (Units in Millions)|
|Vendor||2013 Shipment||2013 Market Share||2012 Shipment Volume||2012 Market Share||Year-over-year Change|
|BlackBerry and others||394.9||39.30%||290.5||40.10%||35.90%|
Table 3: Smartphone Shipment 2012-2013.
The IFE Matrix
The IFE matrix reveals a company’s primary competencies that allow it to attain a competitive advantage. Table 4 shows the IFE matrix for BlackBerry.
|Key internal factors||Weights||Rating||Weighted score|
|Strengths||Brand name easily identified||0.01||4||0.04|
|High-class R&D leading to innovative products||0.04||3||0.12|
|Leading in encryption and security messaging via email push systems||0.06||4||0.26|
|Company portfolio diversified||0.7||3||2.1|
|78 million active users||0.06||3||0.18|
|A strong financial base of $ 2.1B||0.05||4||0.20|
|Weakness||Delay in releasing new products||0.03||2||0.06|
|Surrendering to competition||0.02||1||0.02|
|Poor marketing strategies||0.03||2||0.06|
Table 4: BlackBerry’s IFE Matrix.
SWOT Analysis for BlackBerry
Most of the strengths that BlackBerry possesses are enterprise-oriented as compared to those that relate to consumers. The company is still leading in encryption and security messaging via email push systems that need no firewall across enterprises (Reisinger, 2016). Furthermore, the company has about 78 million active users and a financial base of $ 2.1billion. Other aspects of its strength include its possession of middleware software that runs its data. The company has stronger ties as evidenced by over 600 carriers of its software globally. Recently, the company has been striving to reposition itself to recapture its lost loyal customers due to competition. More than 500 organizations use their BB services (Mishra & Choudhury, 2013). This figure denotes the largest niche for a competition that the company has ever had.
The major weakness that BlackBerry has been demonstrated in the recent past is its delay in releasing products that can compete with Apple and the Bring Your Own Device (BYOD) that have dominated the market environment. This weakness has derailed the company from successfully accessing the consumer segment to position itself for competition. Therefore, the company has not successfully differentiated itself by providing unique products.
Competition is currently weakening BlackBerry’s revenue, especially from hardware sales. Currently, 75% of revenue is being affected by competition. Another aspect that damaged the company’s reputation was its inability to continuously innovate and/or provide new products to the market. Poor marketing strategies have also contributed to the failure of the company in terms of grabbing and keeping its consumer market segment secure. Samsung has been heavily spending around $ 402M on advertisement and marketing as compared to BlackBerry’s $39M as shown in Figure 4.
BlackBerry has an opportunity to capture by firmly positioning itself in the market (BlackBerry Limited, 2014). For example, the recent surveillance data and global voices on scandal released by the NSA give an open window for the company to recapture market segments where it initially commanded. BlackBerry can secure the consumer market segment since it has the BBM message system that can be made available in various operational systems owned by iOS and Android.
This software was used several within 24 hours of its availability. The BBM is secured. Therefore, it provides the enterprise with sustainability over a long period if BlackBerry invests in R&D on the BBM for innovation. Another opportunity is on the creation of a more secure data network system on mobile phones.
This development can guarantee a reduction of susceptibility issues that threaten to eliminate all BlackBerry Company’s clients. Hence, the company should grasp this opportunity to enhance its performance. The introduction of BYOD is a benefit to BlackBerry. The company should take advantage of this development, instead of fighting it. BlackBerry can use the BYOD concept to manage the products of its competitors using the middleware that handles patent-protected data.
On the issue of threats, BlackBerry should harness such opportunities in time to avoid being beaten by the stiff competitors such as Apple and Google. Furthermore, the company should not surrender to the various governments such as the US and Canada that put more pressure on the company when it comes to providing its data to various security agencies. The company suffers the threat of relocation to a country that is different from Canada where it is currently headquartered. A close partnership between the two nations might interfere with its operations. Table 5 below sums up the above information.
Comparison with Apple & Motorola
Two major scenarios where business strategies were applied successfully and/or unsuccessfully were selected. The best alternative was that of Apple, unlike Motorola that collapsed due to poor business strategy.
Apple’s Business Strategy: The Best Likely Case
Three people, namely, Steve Jobs, Ronald Wayne, and Steve Wozniak formed the Apple Company in 1976. The company is the third-largest manufacturer of mobile phones. Currently, the company’s headquarters are based in California. The main business strategies that are highlighted in the report demonstrate how the company has ensured its survival in a competitive market environment where BlackBerry is currently facing challenges.
Apple Company is known for its quality and unique mobile phones worldwide. The innovation strategies of the company have been successful, thanks to the staff members who have been tirelessly dedicating their time and skills to the company’s culture of teamwork, goal, and the desire to serve their customers well. Furthermore, the company bases its innovation strategy on techniques, procedures, quality, and models such as iPod and iPhone among others. The management has also adopted a system of cultural improvement and teamwork, which form a unique feature that is missing in competitor companies such as BlackBerry.
Products that are released in the market are not only easier to use but also are ergonomic to the consumers. The management has also been embracing partnerships with other companies to guarantee improved innovation. This collaboration has brought together different employees from diverse cultural backgrounds, networks, and ideas among others, and hence the overall expansion of the enterprise. Companies such as BlackBerry have been venturing into the acquisition strategy to ensure improved investment, unlike Apple that majorly invests in the supply chain systems. Apple only acquires such entities as a way of adding important values to its already produced devices before being released into the market.
Apple has developed numerous products since the launch of Apple II in 1977. The chronological advancement has ensured the introduction of Apple products continuously. Such devices and features include the G3 Computer, the iPod and mini iPods of 2001 and 2004 respectively and the iPod shuffle of 2005. Other products that were invented after the return of Steve Jobs included the 2005 iPod nano, the MacBook of 2006, and the iPhone and iPod touch of 2007. The launch of the MacBook Air technique fuelled the introduction of the iPad tablet in 2010, the iPod touch 4G, and the iPhone 4 that had new features, including voice calling and FaceTime technology. Other products that were introduced in the market thereafter included iPad 2, iPhone 4S, the 2012 iPad 3, iPhone 5, and the iPad Mini.
The change of leadership in Apple was seen as a strategic decision. The late Steve Jobs who had to return to the company in 1977 provided the first exemplary leadership (Hansen, Ibarra, & Peyer, 2010). Steve Jobs introduced a centralized leadership style where he was making most of the decisions as to the CEO. This leadership structure was different from that of BlackBerry where two CEOs served the company (Hansen et al., 2010). Later, Steve Jobs decided to incorporate everybody on board for proper management of the company (Hansen et al., 2010). Such decisions led to the improvement of the company in terms of its revenues from $ 2 billion to $ 417 billion at the end of 2011. This revenue enabled the company to become the world’s most valuable enterprise to the level of surpassing Microsoft Inc (Ireland & Webb, 2007).
Contrary to the leadership situation at BlackBerry, Steve Jobs built a team of leaders around him who took over after he passed on. Tim Cook, who became the CEO, introduced the cooperate approach to leadership in decision-making. He not only reduced Apple Company’s retail stores but also streamlined its strategies while at the same time ensuring that sales were pushed higher towards the high-end retail stores with minimal inventory. Unlike Steve Jobs, Tim Cook managed both software and hardware teams that could now operate together.
A critical evaluation of the dimensional strategy captures the current market share, financial strength, and market strength (Hansen et al., 2010). The current data on market share shows that Apple is the best mobile manufacturer globally. It gained the market share after the launch of its iPhone 6. The iPhone brought a 42.4 percent increase in market share against the various competitors from the previous 41.4 percent that was recorded in April 2014 (Tshamano, 2014).
Innovation in Apple has enhanced its competitive strength in the market that is dominated by Samsung and Microsoft. However, the company’s current market share is increasing at a slower pace with a percentage below 50 percent. This finding follows the high cost of maintaining the gap that exists between it and its competitors. Although its sales have not been at the peak, the employees’ dedication has helped it to cope with competition challenges (Quinn, Doorley, & Paquette, 2013).
Piracy of the products by competitors has led to product similarities. The company’s main advantage lies in its clients’ loyalty and dedication. Apple’s competitors such as BlackBerry and Samsung among others have had a challenge in terms of winning clients to leave Apple’s products (Quinn et al., 2013). The company has maintained its customers who enjoy its products that have super-quality designs (Tshamano, 2014).
Apple’s revenue of about USD 170,910 billion accounts for a 9% increment in 2012. The operating income is over $ 37 billion. The present total equity stands at the US $ 11 billion with a net income of above $ 39 (Apple Inc., 2012). The company maintains approximately 425 retail stores in the global market. It had 90,000 employees in 14 countries by 2014. Apple operates various units of businesses at various markets where its stores are located. Its relative market strength enables it to be placed in a better position in terms of competition and its ability to have continuous investments. The company is also stronger in its operations and products such as tablets and smartphones among others. A determination of its investment rate is valued at the above one, which indicates a healthy market.
Apple has been getting improved returns on sales due to its effective advertisement. It has also been spending many financial resources in the advertisement, which is below the competitors’ spending as noted in Samsung. The increase in spending was done for iPad products, which resulted in higher sales than the previous years. Strength is also depicted in loyal customers with the ever-increasing closed ecosystems. Thus, it has a competitive advantage over its competitors such as Samsung, Huawei, and BlackBerry. The company has been benefiting from its innovative products, higher brand marketability reputation, and customer experience that are exhibited in its various retail stores. These stores provide a direct link between the customers and the company as a way of enhancing brand awareness.
On the contrary, the company has been placing higher prices for its products. Therefore, customers are forced to seek alternative products from their competitors. The company’s software is sometimes incompatible with the OS software. Besides, the witnessed decreased market share has led to less customer influence and hence a loss of many potential customers. Other weaknesses include accusations of infringement of other companies’ products. This situation has been damaging its reputation. In terms of opportunities, Apple can capture a larger market share due to the greater demands of iPad mini and iPhone 5 by the customers.
Thus, it should strengthen its competition in the market. Apple is also poised to benefit from the provider application processors that are used by competitor companies such as Samsung and Huawei among others. Thus, its future success is promising if it seizes such opportunity when it acquires the system. The various threats that are currently experienced by Apple include technological advancement that piles pressure on the company to release new products that are superior to those of its competitors. The pace of technological advancement may also reduce the company’s command, although it is currently enjoying a larger market share compared to those of its competitors.
Technology has greatly favored Apple since it can favorably compete with its rival competitors such as BlackBerry. The latter company does not consider stability and sustainability. Ireland and Webb (2007) put BlackBerry among the various competitors that Apple has managed to snatch market shares. Others include Samsung Electronics Co. Ltd., Google Inc., Microsoft Corporation, Dell Inc., LG Electronics, Lenovo Group Limited, Amazon.com Inc., International Business Machines Corporation, Cisco System Inc., Hewlett-Packard Company, and Sony Corporation among other companies. In summary, Apple has succeeded in dominating the market and/or competing with Samsung due to its platforms that are based on the renewal, continuous innovation and sustainable success (Quinn et al., 2013).
Other aspects that have been responsible for Apple’s performance include its efficient management that upholds the company’s vision and purpose. It also runs robust and numerous retail stores, thanks to its dedicated staff officials who have vowed to maintain customer loyalty (Yeoh & Koronios, 2010). Furthermore, the company has well-developed policies and proper methods of handling problems and developing solutions. The company has also paved the way for mergers and acquisitions to ensure it firmly remains in the market. For example, in 2015, Apple acquired previous San Francisco mapping Mapsense at $25 million. Besides acquiring Faceshift, which is a motion-capture company, it also merged with Linx, a camera tech company.
Motorola Company: A Case of a Failed Business Strategy
Motorola was started in the US. The company was responsible for the invention of cell phone devices. Initially, the company had been progressing well with improved performance in a highly competitive market environment. However, an abrupt hitch led to the downfall of the entity. This failure can be attributed to the failed strategies that were laid out by the then management under the headship of Ed Zander (Sornum, 2010).
The company performed numerous mistakes that included the division of the enterprise as its main investor Carl Icahn demanded. The performance of the Motorola enterprise was noted to be on the wrong track in 2007 where its second quarter was an overall disappointment. The management assumed that such a downfall would not reduce the company’s performance largely since the home-based stores were still performing well (Sornum, 2010).
The first mistake that led to its downfall was poor leadership, just like the case of BlackBerry. The management of the company, especially in its various stores, registered reduced performance due to the reduced sales that resulted from poor business strategies. The lower sales led to a loss of $28 million from sales of about $ 8.7 billion compared to profits of $ 1.3 billion from sales worth $ 10.8 billion in 2006. The shipment of its devices also reduced due to the low demand by consumers (Sornum, 2010).
Just like BlackBerry, laxity was also another major mistake performed by the Motorola Company’s management. The management showed no urgency in ensuring innovation and proper market environment research. This issue led to missed opportunities. In a scenario that is similar to that of Motorola, the company failed to capture the 3G revolution (Davies, 2009). The management never considered the end-users of the new products, including the change in technology that was captured by the competitors. Thus, the company widened the gap that existed between it and its competitors. Secondly, innovators in the company were not aggressive and dynamic.
Competitors such as Apple majored in design while Nokia emphasized on graphics and games as additional features in the products. This situation was contrary to the case of Motorola that only produced Razr-lite that had retreads in puke colors. Therefore, most of its customers shifted to competitors’ products (Davies, 2009). Thirdly, poor timing was another mistake. The company left the right business wing at the unscheduled time. Initially, Motorola had the most spectrums, which it sold for equity in Nextel. Therefore, the company began its operations each year at zero sales as compared to its competitors such as Qualcomm, Verizon, and Sprint among others.
The leadership of Motorola was not turning every looming problem into an opportunity. The company had a computer expert who could use technology well to learn more about the shifting activities in the industry. For instance, Apple had a good leader, Steve Jobs, who was keen to grasp any opportunity that could have arisen. Furthermore, the management was not bothered about what its customers might need. Competitors picked such a chance to grasp the market shares that the company had acquired (Davies, 2009). Innovation is a factor that guarantees the strength of an enterprise in a competitive market.
Motorola stopped launching new products in the market. Competitor companies such as Google and Apple majored on iPhones, Smartphones and even ‘touch screen’ devices, which the Motorola Company missed. The company was late in tapping this chance, which could have pushed it to produce competitive devices that could draw more customers. Therefore, the company surrendered in competition.
In summary, the management of Motorola never saw the need for urgency in ensuring that every problem was solved in time. Furthermore, the management never took the chance to buy Nokia and Qualcomm, which were key competitors in the market to help it in solving the looming problems before it experienced a downfall. All the mentioned strategies negatively affected the Motorola Company’s performance, a situation that led to its downfall. A similar situation is currently noted in BlackBerry, which may soon be out of the market.
Business strategy involves various components that a company has to embrace to guarantee improved performance and survival in the competitive market environment. The discussion section will highlight the various business strategies that have been analyzed above. Product innovation has been low within the BlackBerry Company. Many customers have shifted to the products that have been developed by the competitors, especially Samsung and Apple among others (Mallinson, 2015).
The leadership of the organization has failed to emphasize a system that can guarantee profitability improvement and/or creativity among its staff members. The company can achieve this end by developing streamlined designs that capture the current customer needs. Besides, skilled workers have been laid off in the past few years due to the financial fall of the enterprise. Competitors such as Apple and Huawei among others have managed to capture these skilled employees to enhance their production. BlackBerry lost skilled labor, a situation that led to the reduction of its profit margins (Mallinson, 2015).
The company has not been releasing new products to the market. Besides, those that have been released face many objections. For example, BlackBerry OS (Java), BlackBerry 7, and BlackBerry 10 have been criticized for being old-fashioned (Mallinson, 2015). Hence, due to the financial downfall, it suffices to claim that BlackBerry may be phased out of the market. The idea of being acquired by Samsung would have been better since it would guarantee minimal losses.
However, this decision was contrary to what the management had planned. Most companies that have financial crises survive on mergers. Thus, a merger of BlackBerry and Samsung, which is a rival competitor, or the acquisition of Nokia and Qualcomm would have saved the situation (Mallinson, 2015). BlackBerry has lost about 2000 workers due to the reduced jobs in the premise. Such a move has led to the reduction of innovation, production, and eventually low-profit margins. It would have restored its situation if it could choose to benchmark from companies such as Apple.
For instance, under the leadership of Tim Cook, Apple decided to reduce some of the stores. It also streamlined the performance of the entire company instead of laying off skillful and innovative employees (Mallinson, 2015). The idea of reducing the workforce might have resulted from lower financial operations. However, such an idea leads to overall poor performance in the markets as exhibited by BlackBerry’s situation (Mallinson, 2015).
Initially, as revealed before, the company was being headed by two CEOs who had different objectives concerning the enterprise. Employees were unable to cope without proper leadership. The current administration was rather dysfunctional. Therefore, more employees were not dedicated and/or motivated, unlike the situation in other entities such as Apple, which had a streamlined leadership system (Mallinson, 2015).
Currently, the company has a reduced market share because of the stiff competition from top-performing companies such as Apple and Samsung (Mallinson, 2015). BlackBerry could have been stronger in terms of its financial performance in the market, especially when it was selling its Smartphones. It would have been motivated by the huge returns to develop other innovative items. However, with the introduction of Apple iPhone and the growth of Samsung and HTC Android handsets, BlackBerry has experienced a dwindling performance financially due to competition (Mallinson, 2015). The company lost its financial performance due to poor cost structures, loss of market share, and reduced spending (Mallinson, 2015).
BlackBerry’s key competitors include Apple and Microsoft. These two entities operated the Smartphone Android and Windows OS phones. Companies that have good business platforms perform better compared to their competitors. These companies uphold innovation, creativity, and employee motivation to attain their success and renewal. BlackBerry’s platform never considered sustainability in its economic means of development.
It could develop products without taking into account how the products would be made available continuously in the market. Such sustainability was a function of their features, most of which never appealed to the targeted clients. The company also had a missing robust business ecosystem and first-class leadership. Therefore, as revealed in the findings section, the business was not component-based and hence had a very poor capacity to identify and resolve the problem. Although BlackBerry was the first company to produce Smartphones in the market, it is indeed worrying that the company never developed and/or tapped the first-mover advantage. It had the advantage of controlling the market.
BlackBerry had its first-mover advantage when it had a steady stock. The then leadership is to blame for letting this opportunity disappear in the hands of its competitors, namely, Apple and Samsung among others. Otherwise, had it not been for this poor strategy implementation, especially its Smartphone technology, the company would be the best-selling businesses in the world. Hence, from the above information, the Space Matrix below reveals the way forward for BlackBerry Company.
BlackBerry’s SPACE Matrix
|Internal strategic position||External strategic position|
|Competitive Position (CP)||Industry Position (IP)|
Control over service providers and distributors
Ease of market entry
|Financial Position (FP)||Stability position (SP)|
Earnings per share
The price range for competing products
Market entry barriers
Ease of market exit
Demand price elasticity
Table 6: BlackBerry’s SPACE Matrix.
Based on the recommended scenario and analysis of BlackBerry Company, this research report has provided insight into the company’s situation after failing to execute its strategies properly. It has revealed the role that its management and/or leadership played in fuelling its failure. The leadership of the company must take the necessary steps to implement the highlighted strategies to avoid its collapse in the coming months. It can benchmark from Apple that had proper leadership and business strategies in place. Hence, the recent change in leadership should emphasize the strategies practiced by its aforementioned competitors, namely, Apple and Samsung.
Furthermore, the leaders must ensure that they recapture their original niche strategy of a secured messaging communication enterprise. The management should also be more aggressive in defending its position while at the same time ensuring an increase in its R&D spending to narrow the investment gap that prevails between it and its competitors. Lastly, the management should strive to employ and retain competitive human capital that can pull back its lost customers by grasping their loyalty through a customer-oriented marketing approach.
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Personal Information (Tick where applicable)
- Are you aware of the various business strategies the company is implementing? If yes, what are some of the examples?
- Does your company embrace the following business strategies? Provide a scale of 1 to 4 on how you rate the application of such strategies on the last box (Poor – 1, average- 2, above average-3, perfectly -4).
- What are some of the examples of your competitors?
- How do your products perform in the market?
- How do you survive in the environment of fierce competition?
- What are some of your strengths, weaknesses, opportunities, and threats?
- How do you deal with an opportunity when it arises?
- What is the financial status of BlackBerry?
- Do you see the company as a falling entity?
- What are the reasons for its current performance?