The purpose of the Business Strategy Report on BlackBerry Limited was to assess the strengths and weaknesses of the organization and to recommend changes based on these findings. This report is extremely important at this current time, as BlackBerry Limited is a 20-year-old business that is in jeopardy of closing due to poor sales and an extensive loss in revenue. The major highlights of this report include BlackBerry’s fall from the top of the industry to the bottom, BlackBerry’s weak strategic plan for saving the company which includes pushing new merchandise with poor operating systems and outdated technology, and BlackBerry’s denial that the company is in danger of collapsing. The final conclusions for this strategic report determined that BlackBerry must focus on producing innovative products for a larger demographic of the market or sell the company before the brand becomes obsolete.
BlackBerry Limited, formerly known as Research in Motion (RIM), is a Canadian business that was founded in 1984. At the time, 23-year-old founder Mike Lazaridis created a telecommunications organization in Waterloo, Canada that would eventually develop and produce high tech pagers by 1999 (BlackBerry, 2013). By 2006, BlackBerry would become the leader in wireless technology, creating Smartphones that were a necessity for business professionals, government officials, and those who wanted instant access to their email and the internet. BlackBerry would also open offices in Europe, Latin America, North America, and in Asia Pacific (BlackBerry, 2013). Unfortunately, Blackberry’s popularity and success would be short-lived, as other wireless competitors such as Apple, Inc. started producing cell phones that were more advanced than Blackberry’s products.
In 2007, Apple released the first iPhone, and soon after, Google would introduce Android to the wireless market. These phones were equipped with camera phones, a large selection of applications, faster internet connections, and larger screens than those of BlackBerry’s products. Further, these newly released phones came with tough screens, which enabled users to access the applications on their phones by using their fingertips instead of using a trackpad on the phone’s keyboard. Many users flocked to purchase these innovative cell phones, which would soon greatly decline sales of BlackBerry’s phones and products.
Currently, BlackBerry Limited is a business that is seriously struggling to alive in the telecommunications market due to falling sales of its wireless products and services. As a result, in 2011, BlackBerry had to lay off 2,000 workers, and in September of 2013, BlackBerry announced that it would lay off 4,500 more workers by the end of the year (Velazco, 2013). Further, BlackBerry’s founder, Mike Lazaridis stepped down as CEO of the company, and the company recently changed its name from Research in Motion to BlackBerry Limited. Finally, BlackBerry just announced a one billion dollar quarterly loss, and the company is now up for sale (Austen, 2013). Plunging sales, massive layoffs, and an enormous quarterly loss not only shows the challenges that the company is facing, but it can also help one predict its current industry position.
The current industry position for BlackBerry Limited is shocking. BlackBerry, which was once an organization at the very top of the cell phone market, now sits at the very bottom of the market. The dramatic change in position is due to strong sales by competitors and a lack of technological changes in its products. Further, BlackBerry wasted money on producing products that failed to be successful, such as the BlackBerry Playbook. Overall, BlackBerry’s poor industry position is making the company lose millions of customers, and more customers are turning to other companies such as Samsung's smartphones now since the future of Blackberry is uncertain.
In the 1990s, the vision of BlackBerry was quite simple. The company sought to revolutionize the mobile industry and become a global leader in wireless technology (BlackBerry, 2013). BlackBerry implemented their vision, and it was successful. BlackBerry’s Smartphones were innovative, and millions of users from around the world flocked to purchase the devices. However, times are now tough for the organization, and BlackBerry is now on a new mission. As BlackBerry (2013) explains, the company “aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences.” Fortunately, BlackBerry has several new strategies to achieve its mission.
Currently, BlackBerry Limited has three strategies to save their business from collapsing any further. First, BlackBerry has introduced a new line of innovative mobile phones. BlackBerry has now released a line of BlackBerry 10 Smartphones, which now come with 4G networks instead of the standard 3G networks (BlackBerry, 2013). The plan behind this strategy is to entice those customers who like quick and easy access to the internet to purchase a BlackBerry 10 phone instead of the iPhone 5 that is currently being released on the market. Next, BlackBerry has decided to trim its workforce down to 7,000 employees, and the company will now offer four phones in each of their lines instead of six devices (Velazco, 2013). This strategy will allow the company to cut costs while employees focus their attention on selling fewer products. Finally, if all else fails, BlackBerry intends to sell their company. BlackBerry is currently valued at $4.7 billion, and Fairfax Financial Holdings of Toronto, BlackBerry’s largest shareholder, has made an offer to purchase the company (Austen, 2013). However, the selling of BlackBerry is not definite, as other companies and the organization’s original owner, Mike Lazaridis, has expressed interested in purchasing some or all of the company.
BlackBerry Limited has seven functional points of emphasis that need to be analyzed. First, when it comes to research and development, “BlackBerry was Canada’s biggest spender throughout the last 12 months since the company spent $1.44 billion” (Quinn, 2013). The business has created a new line of mobile devices that are receiving excellent reviews from consumers, and the organization is about to launch a revolutionary mobility management solution for businesses. Ironically, despite the high level of spending and new technological products that were developed and released for businesses and consumers, BlackBerry’s layoffs hit the research and development department extremely hard. In 2009, research and development had 5,000 employees (McQueen, 2010). However, many of BlackBerry’s recently terminated workers were employed in this department.
BlackBerry’s massive layoffs are a direct result of the business’s declining sales. Recent data revealed that the company lost almost $950 million in the second quarter, and this dramatic loss of revenue is due to poor sales of the BlackBerry 10 line of cell phones (Velazco, 2013). Further, sales are down since it is now widely known that BlackBerry is in jeopardy of becoming obsolete. Therefore, to ensure customers of BlackBerry’s status in the market, the company recently released a statement worldwide explaining that BlackBerry was in good financial shape and that the company would not be closing anytime soon. Unfortunately, this marketing strategy may not be enough to save BlackBerry, as many businesses and users are now reliant on and comfortable with using the innovative products that Apple and Google have been producing for years.
After reading and hearing all of the negative data on BlackBerry’s current finances, one could posit that the company is ready to file for bankruptcy and close their business for good. However, a recent press release from BlackBerry has surprised the world. BlackBerry (2013) stated that “We have substantial cash on hand and a balance sheet that is debt-free. We are restructuring with a goal to cut our expenses by 50 percent in order to run a very efficient, customer-oriented organization.” BlackBerry does have substantial cash on hand, as the company had $2.6 billion in cash on hand in the last quarter. However, the business used up about $500 million from July 2013 through October 2013 (Austen, 2013). Further, in 2009, BlackBerry was valued at $28 billion, but today, the company is only worth $4.7 billion (McQueen, 2010). If sales continue to decline, the cash on hand will continue to be spent as the business tries to recover from its losses, and the value of the company will continue to decline as well.
The Human Resources department at BlackBerry Limited is known as the Organizational Development department. This department is divided into two different sections which include Global Learning and Talent Management and Compensation and Benefits. In 2009, the Organizational Development department oversaw the hiring, training, payroll, and regulations of 12,000 employees that worked for BlackBerry (McQueen, 2010). Now, the Human Resources department will be undergoing significant changes, as the staff at BlackBerry will be reduced to 7,000 employees by the end of 2013.
BlackBerry Limited began operating its business in Waterloo, Ontario under the direction of co-CEO’s Mike Lazaridis and Jim Balsillie. After the company saw extreme growth, it expanded its operations to include several locations in Canada and overseas in Europe, Latin America, North America, and the Asia Pacific (BlackBerry, 2013). However, due to BlackBerry’s current financial status, the organization has announced that it will shut down several offices in Canada. Further, Thorsten Heins has now replaced Lazaridis and Balsillie as CEO of the company, and Heins is now in charge of the future direction of the company.
Ten years ago, BlackBerry Limited was one of the most innovative and successful technology companies in the world. BlackBerry’s operating system was revolutionary, as it allowed businesses to run over a secure and reliable network. Further, Blackberry’s QWERTY keyboard allowed consumers to quickly send emails and text messages. Unfortunately, technology changed throughout the last decade, and BlackBerry’s operating system became a thing of the past since consumers wanted touch screen phones with faster internet connections. Nonetheless, to save the company, BlackBerry has revolutionized its products and services for consumers. BlackBerry has “introduced a new multi-platform cloud-based enterprise mobility management (EMM) solution that will allow businesses to easily secure and manage corporate and personal devices” (BlackBerry, 2013). Further, BlackBerry has upgraded the speed of its internet connections and enlarged the screens of its phones for fast and easy touch screen browsing.
Originally, BlackBerry manufactured its products in several plants in Canada and overseas. Then, the products were distributed through major cell phone carriers, such as AT&T. Consumers were able to purchase Blackberry’s mobile phones directly from the cell phone company, and BlackBerry would be in charge of honoring warranties and shipping the consumer new merchandise if the phone was defective. Fortunately, BlackBerry has upgraded its Distribution and Logistics plan, as consumers can now purchase Blackberry’s products directly from their website. Doing this has allowed BlackBerry consumers to purchase equipment that has been yet to be released, and customers can also purchase products directly from the manufacturer without having to go through cell phone carriers.
A Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis can be used to assess BlackBerry Limited. First, BlackBerry has several strengths in its organization. The company has been in business for approximately 20 years, and the company’s name is well known around the world. Next, Blackberry still has millions of loyal customers who refuse to use any other brand of mobile phones except for those that BlackBerry produces. Finally, BlackBerry’s products are priced slightly lower than their competitors, which is attractive to consumers during these rough economic times.
Conversely, BlackBerry Limited also has three weaknesses that are revealed through a SWOT Analysis. First, BlackBerry’s products do not appeal to a wide range of demographics in the market segment, which limits the number of consumers that purchase their products. Then, BlackBerry’s brand has a poor reputation, and buyers have complained that the company’s merchandise has outdated technology and internet capabilities. Finally, the third weakness of BlackBerry Limited is that the company is in jeopardy of closing. As a result, many consumers are hesitant to purchase their products in fear that their phones will not be serviced and guaranteed by the company in the immediate future.
Additionally, a SWOT Analysis of BlackBerry Limited revealed that there are three opportunities for BlackBerry to act on. First, the newest trends for cell phones are those with touch screens. If BlackBerry continues to produce more phones with touch screen capabilities and the company starts to break away from their QWERTY keyboards, more consumers will purchase their products. Next, changes in the market have resulted in consumers wanting to purchase colorful phones that come with accessories. If BlackBerry begins to colorize their products and shy away from their standard black phones, the phones will appeal to a larger sector of the market. Lastly, a final opportunity for BlackBerry includes upgrading the technological capabilities of their phones. If BlackBerry switches all of their phones from a 3G to 4G network, many users will continue to stay with BlackBerry due to the high speed of its operating system.
Finally, three threats were uncovered when a SWOT Analysis of BlackBerry was conducted. First, changes in technology have made BlackBerry’s operating system and merchandise outdated and unappealing to new and old consumers. Then, competition from other companies is crashing sales for BlackBerry. Specifically, the products that Apple and Google have been releasing are revolutionary and appealing to a wide range of demographics. Lastly, a final threat for BlackBerry is the obstacle of avoiding closure. BlackBerry’s value has dropped by roughly $20 billion within the last three years, and the company continues to lose money each quarter of the fiscal year.
Additionally, a strategic analysis of BlackBerry Limited has revealed BlackBerry’s low-cost provider strategy. BlackBerry uses this strategy when they are selling phones with contracts. BlackBerry will offer the phone to the consumer at little to no cost if they sign a contract with a mobile carrier and purchase a data plan. For example, a customer can purchase a BlackBerry Z10 valued at $500 for $1 if he/she signs a two-year contract with AT&T. This strategy attracts consumers into purchasing the product while it increases the volume of sales for BlackBerry.
Further, BlackBerry also uses the best cost provider strategy when selling the BlackBerry Playbook. This strategy plans on giving the customer a high-quality product at a low cost. The BlackBerry Playbook was released to rival Apple’s iPad. However, BlackBerry sells its product for hundreds of dollars less than the iPad, making it attractive to consumers since both devices have similar capabilities and applications.
Then, BlackBerry employs a niche market strategy with a lower cost when selling mobile devices for business to business use. For example, BlackBerry is infamous for selling mobile devices to the business sector of the market since these phones have secure networks and innovative encryption. Since BlackBerry sells large quantities of phones to each organization, BlackBerry can offer the products at low cost to the business. In turn, BlackBerry has satisfied the needs of their niche market, and consumers are likely to return to BlackBerry to purchase future products and services.
Finally, BlackBerry Limited utilizes a focused strategy based on differentiation when offering mobile phones to business professionals. Blackberry offers consumers, several models of a phone, to satisfy the needs of a variety of business professionals. For example, BlackBerry offers its customers five models of the BlackBerry Curve, and three models of the BlackBerry Bold. In all, the plan behind this marketing strategy is for BlackBerry to satisfy the needs of its niche group.
Then, policy analysis can be applied to BlackBerry Limited. First, BlackBerry’s corporate direction has recently just changed due to the newly released fiscal report for the company. Since BlackBerry is losing cash quickly, the company is now focusing on providing business with mobile devices instead of attracting new customers. This direction is completely different than the original direction of BlackBerry, as the company sought to provide users throughout the world with high tech mobile devices.
Next, business ethics is extremely important to BlackBerry and its employees. The Code of Business Standards at BlackBerry revolves around the value of integrity. Specifically, the ethical codes mandate that employees adhere to the policies and laws that govern BlackBerry and its employees in different countries, employees and business partners perform with integrity, and that all confidential information pertaining to BlackBerry and their products is not disclosed (BlackBerry, 2013). Further, BlackBerry will not accept bribes and they value health and safety in the workplace.
Then, social responsibility is another important policy at BlackBerry Limited. According to BlackBerry (2013), the company is “committed to global sustainability by improving the economic, social, and environmental impacts of our day-to-day operations.” After assessing the organization, it appears that BlackBerry has soundly maintained this ethical premise. For example, to implement this policy, BlackBerry has developed energy-efficient buildings, the company recycles paper, and it has developed a new data center that was built to green standards (BlackBerry, 2013). Furthermore, the company’s main operations facility in Ontario is also certified under the country’s Environmental Management System. Finally, BlackBerry’s social responsibility policy mandates that they do not support child labor laws and employees willingly work in their plants and facilities.
Finally, BlackBerry’s public policy also includes practices and procedures within the organization. As a corporation, BlackBerry focuses on ethics, people, the environment, and the community. All of BlackBerry’s employees and operating facilities must adhere to the regulations and codes that govern these four focus areas as they carry out BlackBerry’s mission and vision. Employees are subject to the termination of employment and other legal procedures if they violate BlackBerry’s ethical codes or the laws that govern the operating facility.
Lastly, a Financial Analysis can be conducted to assess BlackBerry Limited’s current financial status. Based on BlackBerry’s Second Fiscal Quarter Fiscal Results that were released on September 27, 2013, BlackBerry’s Income Sheet shows that the company made a $1.6 billion profit. However, BlackBerry had a GAAP loss of $965 million based on continuing operations (BlackBerry, 2013). BlackBerry’s loss has now diluted shares by $1.84 per share. Overall, BlackBerry’s Income Sheet shows that the company is underperforming, which is exactly what industry experts predicted would happen to the company in this year.
Additionally, BlackBerry’s Balance Sheet revealed that the company has $2.6 billion in cash and investments. Interestingly, BlackBerry Limited has no debt (BlackBerry, 2013), which will help the company stay afloat through the rest of the fiscal year. Further, BlackBerry’s Cash Flow Report showed that the business “used $136 million in operations, and the use of cash included tangible assets of $268 million and capital expenditures of $112 million” (BlackBerry, 2013.) Unfortunately, information from the Cash Flow Report has some experts positing that BlackBerry will not be able to stay open in the next year.
With the complete collapse of BlackBerry Limited expected in the near future, there are several recommendations for the company’s products, technologies, and distribution that need to be implemented to save the company from closing. First, BlackBerry needs to revamp their products and services to rival those of Apple and Google. Blackberry’s products were designed for businesses and business professionals to share data through secure networks. Unfortunately, BlackBerry’s current phones are not business savvy or appealing to consumers today. The letters on the phones QWERTY keyboards are too small to see or type on, the internet connections are the slowest on the market, and the screens on the phones are way too small to read large passages of data. Therefore, it is recommended that BlackBerry focuses on creating new cell phones that have similar features and applications to those of the iPhone and Android. For example, BlackBerry needs to create phones that solely connect to a 4G network, they need to enlarge the screens on the phone to ensure that users can quickly and accurately retrieve data, and the company needs to create applications that allow users to see one another when directly communicating on the devices.
Next, to save BlackBerry Limited, BlackBerry needs to rethink their marketing strategy. While BlackBerry’s products and services were designed for the business sector of the market, this market does not constitute the largest population of cell phone users today. Demographically speaking, Generation X and Y are the biggest sectors of cell phone users, and they want fast-acting, quick downloading, music playing, colorful cell phones that are loaded with hundreds of different applications. Therefore, BlackBerry needs to stop producing their standard black cell phones for professionals and start revamping their products and services to suit the needs of a younger generation of users.
Additionally, BlackBerry Limited needs to increase its marketing strategy, as BlackBerry advertisements across mass media outlets are rare these days. Today, rival cell phone companies, such as Apple and Google, spend millions of dollars advertising their products and services on the internet, on television, and in newspapers. In contrast, BlackBerry will only sporadically advertise the company on the internet or in newspapers. Therefore, it is recommended that BlackBerry spends more money advertising its new products across internet websites and social media sites, such as Facebook, to attract new customers and a younger sector of the market.
Then, to save Blackberry Limited from closing its business, it is recommended for the company to update its technologies. Currently, BlackBerry’s operating system is poorly designed, and it does not live up to the operating systems of the iPhone and Android. Further, even with the release of BlackBerry’s newest operating system for the BlackBerry 10 line, consumers are still complaining of constant technological problems with their phones. Therefore, it is recommended that BlackBerry spends money to completely redesign their operating system so that the phones are able to quickly send, receive, access, and store data at high rates of speed. Additionally, it is recommended that BlackBerry also applies technological changes to the operating system of the BlackBerry PlayBook, as the tablet’s capabilities do not compare to that of the Apple iPad.
Also, a fourth future strategy for BlackBerry is to focus on the distribution of the company’s products and services. Today, most BlackBerry customers purchase their phones through cell phone service providers, such as AT&T and Verizon. When a consumer signs an agreement with a cell phone company, they must wait a specific amount of time to be eligible for an upgrade of their phone. Therefore, to improve and push the distribution of BlackBerry’s products, it is recommended for the company to offer its products through their website at a discounted price. This strategy will allow BlackBerry to directly ship their products to their consumers without the hassle of signing a contract with a specific mobile service provider to obtain a phone. In addition, it is recommended that BlackBerry offers newer models of their phones for customers for a low cost if they are signed up with a mobile service provider. This strategy will enable Blackberry to increase the distribution of its products to new and existing customers while gaining a profit off of the surplus of unsold phones the company has sitting at their facilities.
Not only does BlackBerry need to improve their distribution methods, but they also need to strategize how they will advance the way the company operates. Currently, BlackBerry has its main headquarters in Canada and offices throughout the world. However, it is difficult for BlackBerry’s CEO to oversee the day to day operations of the organization when there are so many facilities and offices to be managed. Therefore, to cut costs, it is recommended for BlackBerry to return to its original roots and to solely operate out of Canada. This will ensure that the operations of the company can be closely monitored and any changes that need to be made can quickly and effectively be identified and implemented.
Lastly, the seventh area of BlackBerry that warrants improvements is the company’s alliances. To date, BlackBerry has four alliances partners, and these alliances include the Royal Bank of Canada, TiVo, Thompson Reuters, and NII Holdings (Shipilov, 2013). However, these alliances were not strong enough to increase BlackBerry’s product innovation and improve their operations, thus leading to the financial downfall of the company. Therefore, it is now recommended that BlackBerry begins to seek new and stronger alliances to improve its network advantage. For example, BlackBerry should seek a relationship with Microsoft to improve its operating system and to upgrade the Microsoft Office packages that come preloaded on their phones. Further,
Blackberry could inquire about a partnership with a car manufacturer, such as Ford, to install BlackBerry’s newly designed operating system in company cars. These recommendations will not only help BlackBerry to create a strong network advantage against competitors, but it will improve BlackBerry’s products while creating exposure for the company in different markets.
As BlackBerry strategizes to improve their products and operations, the company must also realize that change is necessary within the business’s organizational structure in order to save the company from closing. Currently, Lazaridis still owns BlackBerry while Heins runs the company. Unfortunately, Lazaridis has been criticized for not embracing today’s changing technology and for his lack of approval of innovative ideas and products. Therefore, it may be in BlackBerry’s best interest to sell the business to a company who will be knowledgeable about innovative technology and ready to implement change to the company’s products and operations. Further, it is recommended for BlackBerry to assess the capabilities of their new CEO to determine if he is what the company needs to carry out their new mission and save the organization from closing. Although Heins took over a company that was already in the midst of crumbling, if he is not willing to implement change into the organization and technological advancement into BlackBerry’s products and services, a new CEO should be hired to oversee the organization and to bring innovation back to BlackBerry’s products.
Additionally, changes are needed within BlackBerry’s culture. BlackBerry must realize that they are not achieving their mission of creating innovative mobile experiences due to the fact that their products and services are now outdated. Therefore, BlackBerry needs to first listen to the wants and needs of their consumers, and change the way that they approach technology. Further, due to the massive layoffs throughout the business, BlackBerry’s culture is poor since employees do not have job security and a faith in their company. Fortunately, if BlackBerry embraces and implements technological advancement in their products and services, the company culture will improve as employees begin to trust the organization again and commit to carrying out BlackBerry’s vision and mission.
Then, to save BlackBerry from closing its business, the company needs to change its resources. Although BlackBerry has substantial cash on hand and no debt, the cash that they do have is quickly being spent and losses are starting to take its toll on the company. Therefore, BlackBerry needs to strengthen its ability to raise new funds by merging with a major company, such as Microsoft, or by selling the business to a financially sound organization. Further, BlackBerry must change the company’s intangible resources. Currently, Blackberry has a poor reputation for the quality of its products, and the lack of a strong brand is inhibiting the company from regaining its place in the market. Therefore, BlackBerry must seek out stronger alliances and higher innovative developers to improve its brand so consumers are convinced that BlackBerry is a reputable company.
Finally, changes are needed to BlackBerry’s company policies. For example, recent changes in company direction will only inhibit the growth and future of the organization due to the fact that many businesses have stopped using Blackberry as their service provider. Therefore, if the company continues to focus on service contracts to large organizations, they will be greatly missing out on profits since mobile phone users and buyers are of a younger, hip age demographic who use their cell phone for pleasure instead of business. Further, BlackBerry needs to change their policies when it comes to the consumer. Many BlackBerry customers feel that the company does not focus on people since they provide poor customer service and fail to honor warranties on their devices. Nevertheless, if BlackBerry improves its customer service and focuses on the wants and needs of people, more customers will want to stick with using the company services.
In summary, BlackBerry Limited, previously known as Research in Motion, is a telecommunications company that is in jeopardy of closing its doors after20 years of business. BlackBerry’s outdated technology does not compare to the innovative services offered by competitors, and both long-time consumers and businesses are now turning to products produced by both Apple and Google. Although BlackBerry’s brand is globally known, its merchandise is no longer respected, and the company has lost roughly $20 billion in value within the last three years. To save BlackBerry Limited from closing its doors within the next year, the organization needs to update its mobile devices and equipment, focus on selling its products to a larger demographic of the market, and assess the capabilities of their new CEO. If all else fails, BlackBerry should be sold to a company that specializes in innovative technology that will continue on with the BlackBerry brand and bring it back to the top of the industry.
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McQueen, R. (2013). BlackBerry: The inside story of Research in Motion. Toronto, Canada: Key Porter Books.
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Shipilov, A. (2013). Samsung beats BlackBerry in the global alliance game. Retrieved from http://www.forbes.com/sites/insead/2013/09/26/samsung- beats-blackberry-in-the-global-alliance-game/
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