Blackberry Strategy Leadership Plan (Case Study Sample)

Blackberry Company Analysis Institutional Affiliation Student’s Name Date Blackberry Company Analysis Introduction This paper analyzes Blackberry Company by describing its strategy, financial standing, industry trends and its general impact on the business, competition, and the detailed strategy for addressing the organizational challenges, proposed changes in the management plan and the alternative leadership approach. Organization overview Blackberry, a product of Research in Motion (RIM) Company, is a corporation that deals with production of mobile phones. RIM Company was founded in 1984 by two students who majored in engineering - Mike Lazaridis, and Douglas Fregin. The company did not make its headline after foundation until late when the founders made a breakthrough in technology by finding a way workers could receive emails, while being away from the office. They called the service Blackberry, and it became the base for wireless telephone devices that came up later. Blackberry started with a device that was known as an interactive pager back in 1996 and in 1990, when the Blackberry 850 was released. As it continued developing, Blackberry became the most useful device with RIM becoming the most valuable technology company. It enjoyed the monopoly and was the preferred gadget among respected senior executives, presidents and celebrities. The advent of competition in the form of Android and iPhone spelled a new era for Blackberry. Technology kept changing too rapidly, and consumer preferences also changed with that margin. Blackberry were caught on the wrong side of changes and ever since the company has struggled with dwindling sales, plummeting share prices, and market obscurity among other issues (Galliers & Leidner, 2014). The entrants of iPhone into the market, which specifically catered to consumers and not executives, maligned Blackberry, and it moved from a household name to having little or hardly any connotation with the smartphone industry. Once a giant player has fallen and was consumed by the changing consumer preferences that it did not anticipate. Though the company has continually diversified to accommodate to the changes, their gains have been low, and the company was in the perpetual loss. Financial position and Organizational Challenges Blackberry financial position as per the first quarter of 2016 was at $658 million. It is broken down to 40% hardware sales and 38% service while software and technology licensing contributed roughly 21% (Schlegelmilch, 2016). In the same quarter blackberry won 2600 enterprise customer and also sold 1.1 million blackberry smartphones which translates $240 million. It also improved on price per share at $0.05 per share up from $0.11 for the same time last year (Blackberry, 2016). The organizational challenges facing Blackberry stem from poor strategic plan and positioning, and the fact the Blackberry is mostly concentrated on corporate users. Overdependence on government agencies and corporate users has proved the company’s poor strategy, as the market is shallow and easily exploited to capacity. The strategy to have a constrict market penetration, targeted at government agencies, has impeded its profits and stalled its growth. Competitions have overtaken it for the lack of a tailored product that is user-friendly and affordable. Blackberry has concentrated on producing high, expensive and secure phone. In fact, a loss of contract with at least one government agency would result in massive revenue loss for the company. Another challenge is the company’s inability to communicate its value proposition to customers. Over the years, many clients, particularly the youths, have switched allegiance to iPhone and Samsung, as they are trendier, as compared to Blackberry. The use of Blackberry has been left to the older generation, something that has given the pioneer mobile phone maker a beating regarding its market presence. Therefore, critical to Blackberry’s growth and profitability is its ability to convince new smartphone buyers of its value proposition and to convince smartphone users to switch to Blackberry. The lack of market presence, occasioned by inferior positioning and strategy, has seen Blackberry’s competitors gain market shares at its expense. Revenue from government and corporate consumers has been small, and Blackberry has been running losses due to low sales and the dwindling share price. Recently, it appointed a new chief executive officer in a move to revive its fortune. The changes are pseudo-practical, but the CEO is hanging on to them. Blackberry has been rigid in adapting to changes, this has seen its market share plummet, and has affected new market encroachment in terms of growth and profits. Whereas competitive firms have developed applications that are compatible with applications like Netflix and Instagram, among others, Blackberry again has lagged behind losing the few customers to competition with a mobile platform that accommodates such applications. Trends, Opportunities and Constraints The industry trends have shifted to cloud storage system. Apple has I-cloud, and there is Google Drive for Android phones. The market is in infancy and is expected to grow rapidly till 2020. Blackberry Company needs to re-strategize itself and exploit the existing market in order to benefit from the growing demand. Another growing area is the tablet market that Blackberry has little presence in. According to Kaur (2013.), the tablet market is expected to surpass one billion sales in 2017. Blackberry can reinvent by maximizing this market and, in turn, insert itself into the already saturated smartphone market. Blackberry has over 100 million customer base, and the company looks to leverage opportunity with their customers. It needs to devise a product that will counter Samsung’s S8 and iPhone 7 that is set to be released into the market sometime this year. The move by the company to reject a buyout, sale offer and a fresh capital injection by angel investor is seen as a positioning for the company to reenergize the market. This can also be attested by the fact that Blackberry has a new CEO and has also revamped organizational structure by streamlining and layoffs to cut the wage bills. Blackberry has ventured into integrating third party applications and features into the phones. Both Samsung and Apple have benefited from third party application, something Blackberry can mimic to spur its profit margins. Competition is introducing a new generation smartphone twice a year; this is the speed that Blackberry has to catch up with. Samsung’s launch of S8 and Iphone’s upcoming launch of IPhone 7 is expected to cause a buzz in the technology industry. Competitions from Asia, like one plus, are also entering the market with impeccable products. Others include HTC and Sony who are already marketing aggressively to capture the remaining market share that is yet not taken by the big players. The industry is witnessing high demand for wearable devices, commonly known as ‘gears’. This trend is shifting its attention to compatible devices that the smartphone can integrate with. These include smart watches and sunglasses, among others. Technology continues to advance, and the changes continue to take place. Consumers place a high value on user friendliness and consolidation, and if those are coupled with device security, then it will become a best seller (Roets, Bevan-Dye, & Viljoen, 2014). Constraint includes saturation of the smartphone with affordable and quality mobile phones from China. The mobile technology is fast cycle market with rapid changes and new products’ innovations. There is the existing need to keep pace with the technological advancements in order to maintain a competitive advantage over competition. Technology becomes outdated, and some can be replaced quickly enough even before their cost is recovered (Grover & Saeed, 2003). Blackberry’s Competitive Landscape As far as competition is concerned, the mobile market is predominantly a two-horse race with Apple and Samsung, commanding 109% of profits. Regarding operating profits from feature phones, Samsung amassed 56%, while Apple managed to get 53% with the competitors like Blackberry, all losing out except Sony, which broke even. While Apple and iPhone are enjoying a bigger chunk of the industry, that figure could be lowered when China’s giants like Lenovo, ZTE, Huawei and Coolpad. According to IDC, Apple goes neck to neck with Samsung and closed the gap in the last quarter of 2014. Regarding the shipment, Apple takes the second position, while Samsung leads. While Samsung leads regarding purchases, Apple is the most profitable, buoyed by its new models and the anticipation brought by the pre-launch of iPhone 7 is set to soar the high profits. Apple’s dominance is credited with its high-end products that have not been infiltrated by low-end devices that enjoy lower production costs. Samsung is the undisputed leader in market shares, while Apple is second with its high-end positioning. Low-end Chinese phones like Xiaomi, Huawei, and ZTE, are providing cheap and reliable phones that mean other players like Blackberry have no place to compete in the market (Cecere, Corrocher, & Battaglia, 2015). Samsung has streamlined its operation and product portfolio to counter infiltration by low end and midrange phones. Apple growth can be attributed to its push into the Chinese market and other countries, as well as increase appetite for a large screen. Addressing Organizational Challenges In order to address the organizational challenge, first the company needs to learn how to adapt to change. One significant aspect of change would be to embrace Android and integrate it with the Blackberry system. Another possible solution would be to lay off staff to provide a lean, efficient workforce that aligns to revamp the strategy that is competent enough to take a r...