BlackBerry Limited is witnessing a decline in terms of market share and revenue. The company struggles to retain its loyal customer base as the consumers are switching to other brands. This marketing plan emphasizes on different marketing aspects that need to be consider by the company in order to regain its old position. The paper describes major strengths of the company that can help the organization in developing competitive advantages and tapping opportunities available in the market. The company is required to formulate an effective marketing plan in order to overcome its weaknesses such as diversified product portfolio, inventions and limited applications.
The global Smartphone industry is registering good growth, but Blackberry’s market is declining. Company should identify new markets and customer segments while retaining the existing customers. Launch of Z10 applications, acquisitions of patents, innovative products, and development of wide range of products would facilitate the strong marketing strategy of the company. The marketing plan describes various initiatives that are needed to be taken by the company in order to make supply chain processes efficient, develop strong marketing strategies and attain desired marketing goals.
BlackBerry Limited, also known as RIM (Research in Motion Limited), is a telecom company. The company was established in the year 1984 by Mike Lazaridis with its headquarter in Ontario, Canada. The company is famous for its wireless equipments such as Smartphone & tablets. Till year 2010, the company was known for its innovative products, and for holding more than 40 percent U.S. market share. Continuously increasing competition and major challenges given by Apple, Samsung and Google, decreased the market share of the company to around 4 percent in American market (Business Insider). Total revenue generated by the company in year 2013 is US dollar 11.07 billion and net income US dollar (646) million (Google Finance). Declining market share and shrinking revenue require immediate effective actions in order to gain the old position in the market place.
Blackberry is operating in the telecommunication industry and delivering good products. The industry is very competitive, unstable and evolving. Huge number of competitors and invention of new technologies make industry an uncertain place (Bresnahan, T. F. and S. Greenstein). Blackberry is not in good financial position as the net revenue of the company for year 2013 is negative. The industry is lead by the companies such as Apple, Samsung, Google and Microsoft. Various Asian countries such as India and China and east European countries realize the potential of the industry, hence liberalized their markets (Dedrick, Jason and Kenneth L. Kraemer).
The industry is noticing a good growth in the Smartphone market due to introduction of different brands and availability of products at affordable rates. The significant growth in the industry is also related with introduction of advance technologies. However, it can be said that the growth phase of the industry will soon be over, and industry will attain the maturity stage on product life cycle (Kotler, P. & K. Keller). At that stage companies survives only by changing their products, bringing innovations and diversifying product portfolio. The position of RIM is declining because of declining sales & market share.
Porter’s five forces model helps in understanding industry profitability and blackberry’s adaptability towards five forces.
Threat of new entry: Low
- Higher investment cost in infrastructure and technology.
- Strong brand value
- It is difficult for new operators to achieve economy of scale due to low sales volume during initial years.
- Knowledge and expertise.
Threat from rivals: high
- Blackberry does not have well managed diversified product portfolio as compare to its competitors.
- Lack of strong marketing activities and budget.
- Blackberry has lack of innovative products as compare to its competitors such as Apple and Samsung.
Threat of Substitute: high
- Products such as tablet, regular handsets, and notebooks are the major threat to the company as company do not have rich diversified product portfolio.
- Loosing base of loyal customers and declining market shares.
Bargaining Power of Suppliers: low
- Globalization increased the access of suppliers to all locations across the world. This resulted in increasing availability of supplier.
Bargaining Power of Buyers: High
- Availability of the huge range of brands and products increase the bargaining power of customers.
- Present customers are price and technology sensitive. Availability of advance technology at low cost pulls the buyers.
Blackberry was a performer till year 2010 when other companies were slow in responding to the needs of customers. However, today the industry is dominated by other players and Blackberry is struggling to retain its customer base. The company is facing hard competition from Apple and Samsung, who are the market leader in Smartphone. The company is not among top five players in Smartphone market.
Blackberry requires improvement on several aspects in order to regain its market position. Company introduced cost optimization program in order to improve its operations. This program helped Blackberry in selecting problem areas such as the invention of innovative products, optimum utilization of resources that need attention in order to achieve growth. Company also launched CORE program to analyze business functions and related aspects; emphasis is placed on continuous improvement (Neely). These initiatives will help the company in building strong, diversified product portfolio and in improving value chain. Blackberry’s liquidity ratio is 2.7, and the company is rated as low risk. On risk scale, Blackberry’s score is 81 (FHR report). The low risk position and sufficient fund increase the possibility of company’s success. Company is required to develop healthy diversified product portfolio in order to minimize the risk and maximize the gain.
The target consumer segment of Blackberry is corporate, business and government consumers. The products, developed by the company, are suitable for people who frequently use their phones to communicate or exchange information. Blackberry’s products are suitable for all age, gender and class of the people. The size of Blackberry’s target market is very small. Other segments of customers such as students, life style oriented people, do not find Blackberry’s Smartphone lucrative because of poor operating system and fewer applications. It is important for the Blackberry to increase the number of products and introduce advance technology in order to increase the size of target market.
Bresnahan, T. F. and S. Greenstein. "Technological Competition and the Structure of the Computer Industry." The Journal of Industrial Economics, 47(1) (1999): 1-40.
Business Insider, Australia. "Entrepreneur." 24 September 2013. Entrepreneur. 10 March 2014 <http://www.entrepreneur.com/article/228549>.
Dedrick, Jason and Kenneth L. Kraemer. Asia's Computer Challenge: Threat or Opportunity for the United States and the World? . New York: Oxford University Press, 1998.
"FHR report." 22 December 2011. RapidRatings. 10 March 2014 <www.rapidratings.com/images/custom/research_in_motion,_12_22_2011.fhr.pdf>.
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Kotler, P. & K. Keller. Marketing Management. London: Prentice Hall, 2011.
Neely, A. "The performance measurement revolution." International Journal of Operations and Production Management, 19 (2) (1999): 205-228.