BlackBerry Failure

BLACKBERRY FAILURE 1

Institution Affiliation:

Abstract

Research in Motion is a leading Canadian company that owns one of thelargest Smartphone companies in the world, BlackBerry. However, thecompany gradually lost competition to the main industry players,Samsung and Apple. The first management failure that facilitated theswift decline was the company’s failure to manage project risks.Secondly, the company failed to maintain effective customercommunication as it approached an ambitious development stage. Therewas also a lot of executive disagreement that led to marketingfailure. Once the company decided to concentrate on the flop Playbooktablet, it lost focus on the Smartphone and led to its globalfailure. The phone’s Operating System did not appeal to thetech-savvy customers, who opted to purchase rival products. Thecompany also over-relied on the American corporate market, failing toidentify the global consumer market. Weaknesses from the SWOTanalysis were also not adequately addressed. As a comeback effort,the company decided to rebrand itself and adopt a different marketingstrategy since 2013, however, focusing in the UK and U.S. markets.The paper suggests possible strategies for rebranding and globalrecognition.

BlackBerry failure

Research in Motion is Canada’s largest, most successful and mostinfluential technology firm ever. One of its product, BlackBerry, wasone of the world’s most admired Smartphones. It was the firstSmartphone to have distinct features that paved a way for innovationsby today’s leading Smartphone manufacturers across the world. Atthe height of BlackBerry’s fame, it was among the fastest growingSmartphones in the world. However, the phone’s market muscle begandeclining swiftly about seven years ago. Today, it remains only aminor player in the vast Smartphone industry. It has lost itscompetitive edge to the main smartphone manufacturers currentlyruling the market, IPhone and Samsung. This dramatic failure isattributed to failure to perform in a number of areas, such asmanagement, marketing and technology. This paper looks atBlackBerry’s global failure and possible strategies that could havebeen implemented to improve its global performance.

Managementfailures

Projectrisk failure

One of the major triggers BlackBerry’s failure was project riskfailure. BlackBerry made rush decisions to develop it next generationdevice in response to market competition. This was after Applereleased its first Smartphone in 2007. After doing so, BlackBerry’sengineers made research into the new IPhone to study its structureand investigate the reasons why it was performing so well in themarket (Strasser, 2013). This was a move motivated by feeling amongstthe BlackBerry developers that rival Smartphone developers werecoming up with technology designs that had serious competitionimplications for them. In doing so, they decided to develop aSmartphone that would at least match Iphone’s latest device, andwent ahead to do so without carrying out enough project riskevaluation. The company’s failure to react to their customer’sneeds cost them dearly. To worsen the situation, the company decidedto abandon their renowned physical keyboard, and went ahead in favorof a touchscreen device. This was very unsuccessful.

RIM failed to maintain effective customer communication as itapproached its ambitious development stage. Part of the function ofthe marketing department of any large organization is to keepconducting qualitative conversations with the customers as a tacticto get a deep understanding of how they feel about the company andits products (Sweeny, 2009). By failing to do this, RIM was not in aposition to understand what the customers felt about its newproducts, especially the re-designed touchscreen Smartphone andBlackBerry tableted, which in fact, left out some of the featuresthat the customers had earlier fell in love with. According toGoetsch &amp Davis (2014), when a company fails to keep activecommunication with the customers, they will have no choice other thanto keep guessing from the boardroom. RIM failed to utilize itscorporate and government customer base to sustain it through theturbulent period characterized by stiff competition from the mainrivals. Additionally, failing to identify the customers’ needssmoothened their path to self-destruction.

Executivedisagreement

Another major mistake that RIM made was failure to agree on who theirtarget customers were. At one time, former Chief Executive Officer(CEO) Mike Lazarids confused the corporation with customers. At thesame time, other top executives at the company wanted BlackBerry toaim their products at their consumers. Martinez &amp Del Bosque(2013) asserts that if a business fails to identify who theircustomers are, they are definitely on the path to failure. Byidentifying the target customers, a technological firm such asBlackBerry would change its branding and public relations asstrategies to attract the customers and making them part of theirbusiness. Given that BlackBerry failed to identify their targetcustomers, they focused all their organizational and enterpriseenergy on developing products that were not received well in themarket. Given the availability of other mobile technologies thatprovided what the customers wanted, BlackBerry lost its ground in themarket, ending up becoming a failure as other Smartphones pickedground smoothly.

Back in 2010, while BlackBerry was focusing all its efforts indeveloping PlayBook, a part of the executive team was worrying thatthe company was neglecting its core enterprise market. What was goingon in the company could be termed as “misplaced priorities”. Theenterprise sales and marketing division used a lot of resources in aneffort to hire employees to help push more BlackBerry devised intothe corporate world. However, within the core business operation, thecompany swayed away from marketing the Smartphone to the globalmarket, and instead, focused on the BlackBerry tablet, PlayBook(Miller, 2011). According to a former employee, the marketers wereasked to focus all dialog on the new tablet when they had anopportunity to discuss with their Smartphone clients. This was amajor distraction that turned all the attention from marketing theSmartphone, and instead, promoting the new tablet. As a result, thecompany recorded the lowest ever enterprise sales in the marketingdivision. RIM may have taken their eyes off the BlackBerry to spendtime and resources on a tablet which had been hastily designed anddeveloped. The company’s tablet sale was just 1.1% of the globaltablet market. The futile effort to promote the tablet sacrificed thealready known Smartphone. Failure to recognize its marketingpriorities thus dearly cost BlackBerry.

Executive disagreement at RIM thus plays a big role in the BlackBerrySmartphone’s failure. Cecere, Corrocher &amp Battaglia (2014)compare RIM with the most successful Smartphone companies in themarket. One of them is Apple. Apple’s executives, just as the otherleading companies’ executives, set their marketing tone, which wasfollowed by the rest of the employees at the company. When Steve Jobsintroduced the iPhone, everybody who was in the conference halllistened to him attentively. Later on, other executives and topmanagement who hit other stages while marketing the device spokeusing almost the same words that Steve Jobs used when firstintroducing the iPhone. The executives not only teach the rest of thecompany how to coordinate to market their products successfully, butthey also set the tone for achievement. It is quite obvious thatRIM’s executives and top management failed to set this tone. Forinstance, they could not even manage to set their differences andparallel ambitions to identify the target market and its needs.

Technologicalunderperformance

Business strategists have identified that BlackBerry’s change instrategy partway through its ambitious development path contributedto the unprecedented failure. RIM had earlier on responded to sometechnological aspects of the BlackBerry Smartphone, such as theoperating system, into more advanced ones. In the technology world,taking an action such as changing a gadget’s operating software isknown as porting. By porting, it meant that BlackBerry had to developits operating software right from scratch. Prior to this, there arereports that RIM had not adequately assessed whether porting was aviable option before it went ahead to globally market the forthcominggadgets (Cecere, Corrocher &amp Battaglia, 2014). As time went by,the company kept announcing that they would release the newSmartphones with new technology, and did not hope to lose the globalmarket by doing away with the plans. Nonetheless, as time advanced,it became rather clear that they indeed faced a steep challenge indelivering what they had promised the global market. By the time, thecompany had to deliver the Smartphone they had promised, they haddelivered a below-standard gadget, which was poorly received.

Corporatemarket over-reliance

On the global market, RIM failed to substantially define itsBlackBerry Smartphone. In the United States, there is a predominantfeeling that BlackBerry is a device mainly used for official purposesin the office (Tseng, Liu &amp Hu, 2014). RIM had equally managed toshake off all corporate competition as regards to smart devices inNorth America. Even years before smart devices were developed,BlackBerry had entrenched the corporate world in North America. Thedevices were already equipped with consumer-oriented features, suchas mp4 music players and social networks connectivity. This wasbefore the company reached out to consumers. However, the companyfailed to do the same for other global geographical regions, whichhad millions of potential customers. Despite the fact that the NorthAmerica BlackBerry users found it easy to use the BlackBerrySmartphone outside of the office, other users worldwide still borethe notion that the device was predominantly corporate-oriented.

Factors from SWOT analysis

A SWOT analysis conducted by researchers unveiled some of theweaknesses which brought down the company. According to the analysis,RIM was unable to market the BlackBerry brand. The Smartphoneindustry has one of the most aggressive marketing in the entire smartdevices industry. Leading companies such as Samsung and Apple investbillions of dollars in advertising to the world. Instead of investingin marketing the brand across the world, the company’s managementlet their own reputation do the marketing for them. This wasdisastrous as they may have failed to recognize that other companieswere producing and marketing brands with far much better featuresthan BlackBerry. Menzel (2013) notes that BlackBerry’s brand waswell known in the market even before Apple and iPhone launched theirsuccessful Smartphones. Even by the time Steve Jobs was unveiling thefirst iPhone, RIM had a better quality product and enjoyed largersales than all other Smartphones. However, being in a virtual“comfort zone”, the company began spending significantly loweramounts on marketing than the upcoming rivals. While RIM was spendinga mere $41.3 million on marketing, Apple was spending $400 million,while Samsung was spending $334 million (Jurevicius, 2013). Thismeant that despite the fact that it had better quality items, it wasnot able to sell them to the consumers, given that they knew littleor nothing about its perceived quality. The inability to market theproduct led to a decline in BlackBerry’s brand reputation, and itbegan losing customers swiftly. According to research conducted in2012 by Interbrand, RIM’s BlackBerry brand was one of the fastestdeclining amongst the top 100 global brands. Jurevivius (2013) saysthat the decline in the brand is an indication of deteriorating brandappeal in the market.

Possiblestrategies

According to Strasser (2013), BlackBerry’s market and project riskfailures could easily have been mitigated by adopting simple riskmanagement strategies. Risk management strategies provide a structureand coherent approach for the purposes of categorizing, evaluatingand dealing with any organizational risks. This involves regularupdating and re-assessing of risks on the basis of planning forfuture development and taking action. As for BlackBerry’s case,once the executives and management noted that it was beginning todecline in 2010, they had to realize that they still had an advantageof having already occupied and taken over a profitable niche market.Therefore, by carefully assessing and categorizing all market threatsthat were presented by the main rivals, the company did not have todevelop an entirely new product by scrapping the design ad structureof the existing one. The wholesale redesign and redefinition of itsoriginal product changed its identity, which meant that the formerlovers of the old device lost touch with them.

Customercommunication

One of the major causes of failure that have been identified in thepaper is that BlackBerry failed to communicate well with theircustomers, so as to have important information and feedback regardingtheir products and services. According to Jobber &amp Ellis-Chadwick(2012), all successful marketing efforts have to begin with athorough understanding of the customers. Therefore, BlackBerry oughtto have conducted an analysis of its current clients and why theychose their products. This entails putting a research plan andcollecting information about demographic patterns and othersignificant insights as regards to their products. By undertakingthis, the corporation would have managed to uncover its “uniqueselling positions. According to Papadopoulos &amp Heslop (2014),unique selling positions are the main benefit that drive the sales ofthe products when communicated efficiently. This would helpBlackBerry to solve its problems effectively. For instance, thecompany would have managed to identify the kind of applications thatthe users wanted and the hardware design that mostly interested them.Market communication would also have effectively helped the companyto rebrand and feel new and important all over again.

Redefineniche market

Armstrong et al (2012) say that one of the most effective steps inthe business planning process is clear identification of the nichemarket, and revision of the same whenever necessary. BlackBerry is aSmartphone most synonymous with corporate and professional use. Thisis because from the start, the company targeted corporates as theirniche market. It performed really well in this area, and regardlessof the stiff competition, it is facing these days, it remains one ofthe most favorite for corporate use. However, this seems to behurting its global profits, mainly because it concentrated inoccupying the American corporate market. Its main competitors aremaking billions of profits every year by diversifying into theconsumer market. Therefore, as a new global marketing strategy, thecompany needs to redefine its niche market, and target the consumermarket as well.

Marketingcampaign 2013-2015

Since 2013, RIM has attempted to adopt different marketing strategiesfor BlackBerry. The brand’s executives took a different approach in2013 to market its new Z10 Smartphone, which was first marketed tothe US customers (Ion, 2013). Instead of going for the billboardadvertisement which it was used to, the company decided to launchadvertising which they planned to use to take over the Smartphoneindustry. The ad campaign was started in the United Kingdom and wasset to go to the United States after the company evaluated itssuccess. According to the company’s promoters and advertisers, theydecided to use this platform so as to compete against their rivals,Samsung and Apple. This move was made after the company realized thattheir campaign effort was one of the causes why it had failedearlier. The new approach focused on security and productivity, whichwas a strategic move that was applauded by international advertisersand seemed to bear fruit two years down the line.

According to the company’s advertisement team, there were some mainobjectives that RIM had in mind while creating the new strategy in2013. The first objective was to ensure that at least youngprofessionals became aware of the new smart phone device andconsidered buying it (Associated Press, 2014). Secondly, they wantedto ensure that at least 60% of IT departments in medium and largecompanies became aware of the device’ capabilities and consideredpurchasing it for their staff. Finally, they generally wanted toensure that at least 75% of BlackBerry users became aware of the newSmartphones and considered upgrading to them.

Conclusion

Seven years ago, RIM’s BlackBerry phones recorded one of the mostunprecedented downfalls. Going from becoming the leader in Smartphonemanufacture, the company was overtaken by its main rivals, Samsungand Apple. The unforeseen failure was facilitated by poor performancein management and technology. The company’s inner managementwrangles between the executives and stiff competition highlighted bydynamic developments in consumer technology added to its bunch ofwoes that finally brought it down. Since 2013, the company has beenstrategizing comeback by efforts to rebrand itself and occupy alarger market base than before. The company can also use somestrategies like redefining niche market and adopting risk managementstrategies to avoid future collapse.

References

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