Free «BlackBerry» UK Essay Paper
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RIM has been popular with government and corporate buyers since the time it expanded from pagers into the wireless telecommunications markets for its data encryption capabilities. Unfortunately, RIM has essentially failed in its efforts to strongly penetrate the mainstream consumer market despite its popularity (Angelina, Hammel, Kahn, Morris, & Naqvi, 2014). Additionally, as time went by, the lucrative private and public sectors contracts that had been RIM’s primary source of revenue for quite some time became targets of major players on the market, especially Apple. Given RIM’s humble beginnings and its path to the role as a leading player of the market of handheld devices, it was inconceivable to stakeholders and analysts that this once multimillion-dollar firm with multinational ties could accede so quickly and thoroughly to the pressures of an increasingly multifarious marketplace.
In view of Angelina et al. (2014), the rate of increase in business cycles within the telecommunications industry has resulted in RIM’s multiple acquisition by manufacturers and developers. It is all with an intention of diversifying RIM’s offerings and enhancing its users’ experience. However, the trappings of global scale competitiveness have resulted in missed opportunities and insurmountable errors. In essence, the competitive marketplace has taken a crippling toll on RIM. The paper reviews RIM/BlackBerry case study and presents a report of it by answering four key questions on RIM.
Major Trends in the Industry
The telecommunications industry where BlackBerry belongs has been characterized by short product cycles and intensive competition with regard to innovation. Since 2007, this industry has experienced unprecedented growth as the result of improvements in technology with regard to increased access to reliable wireless services and wireless data speed (Angelina et al., 2014). As the customer base continues to expand and with more options than ever before available to them, firms operating in all areas of this industry have to ensure that their products are reliable, innovative, and capable of meeting customers’ present and future needs at affordable costs.
The telecommunications industry has software and hardware providers and wireless providers. As the software and hardware providers jockey for top positions in the industry, the wireless providers search for approaches of increasing their subscriber base. All these players view their widespread method of achieving their objectives as through the notion of “handset exclusivity” (Angelina et al., 2014). According to Plunkett (2014), popular smartphones, especially the innovative ones, drive growth on the market for wireless services and offer wireless carriers the best chance to survive. This can be seen in the agreement between AT&T and Apple where AT&T became the exclusive wireless network carrier of the iPhone upon its launch in 2007 (Sweeny, 2013). The agreement was viewed by many as a brilliant move that ensured AT&T’s continual profitability even though future generation of the iPhone became available to multiple wireless carriers. In Holzer and Ondrus’ (2013) opinion, embracing the iPhone allowed AT&T an unprecedented access to new customers, and it has continually contributed to their record sales year after year.
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In January to June 2007, the telecommunications industry was fundamentally changed by Apple Inc’s latest innovation at that time, the iPhone (Sweeny, 2013). Prior to the introduction of the iPhone, smartphones possessed some combination of a keypad and a low-resolution screen that required the end-user to us the device by using the keypad or an included stylus. The iPhone changed this by replacing the traditional keypad with a 3.5-inch scratch-resistant multi-touch high-resolution glass display. The touch glass screen allowed users to control their iPhone with just a flick, tap, or pinch of their fingers. The iPhone leveraged the success of Apples’ iPod by integrating the iPod’s functionality into the phone. It also instantly enables music and video purchased via the iTunes store to become accessible through one’s iPhone (Sweeny, 2011).
In September 2008, Google, Inc. launched the Android as a rival to the iPhone’s iOS platform and as an attempt to woo customers from the iOS platform (Plunkett, 2014). The Android OS platform included features like a customizable user experience combined with real-time synchronization of Google services such as Contacts, Gmail, and Calendar among others. Since 2008, and through four full versions, Android has grown to become the world’s most used smartphone platform, taking over nearly 50% of the global smartphone market by 2011 (Sweeny, 2013). It is estimated that Android held 48.6% share of total smartphone subscribers in the United States as of January 2012 (Angelina et al., 2014). The rapid adoption of Android OS among smartphone users was largely due to Google innovative licensing strategy. First, unlike RIM and Apple, Google does not manufacture its own mobile phone devices. Instead, licenses third-party manufacturers to install Android on their devices. Additionally, Google has made Android available as open-source software, and thus does not charge a licensing fee for manufacturers that choose to utilize this OS on their devices.
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In October 2010, Microsoft joined the mobile telephone industry through introducing the Windows Phone OS as a successor to its previous mobile platform, Windows Mobile (Holzer & Ondrus, 2013). Microsoft’s strategy was that of differentiating itself from its competitors by availing to the end-users a “glance and go” experience (Plunkett, 2014). The strategy is the reason behind Microsoft’s proprietary user interface dubbed “Metro”, which is the most visible dimension of how Microsoft competes in this space. The adoption of Windows has been slow compared to its competitors, accounting for only 1.3% of all smartphone consumers as of end 2011 (Angelina et al., 2014). However, this changed with Microsoft entering into a partnership with Nokia. Later in April 2012, Nokia launched its first Windows Phone equipped devices under the names of Nokia Lumia and subsequent ones under just the name Lumia.
Apparently, the wireless industry has consolidated in relation to the variety of mobile platforms available to end users, with the “Big Four” operating systems (Windows Phone, BlackBerry, iOS, and Android) accounting for about 80% of all active smartphone devices globally (Sweeny, 2013). Symbian accounted for 15% but it has since been abandoned in favor of Windows Phone (Sweeny, 2013). A current trend within this industry is the rising number of litigations with regard to mobile technology related patent. Since 2006, lawsuits related mobile handsets have been increasing yearly by 25% (Holzer & Ondrus, 2013). A by-product of this trend are the increasing acquisitions by companies within this industry. According to Sweeny, (2013), these acquisitions take place for purposes of enhancing a firm’s patent portfolios and limiting its litigation exposure. For example, Google acquired Motorola Mobility for $12 billion in August 2011 for purposes of securing over 17,000 patents owned by Motorola, thus protecting its patent from being litigated (Damianos, 2012).
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Since RIM introduced the BlackBerry, one of its strengths has been enterprise services highlighted by BlackBerry’s proprietary Blackberry Enterprise Sever (BES). This, coupled with its ease of integration within a company’s existing IT infrastructure and its unparalleled data security, saw BlackBerry carving itself as the go-to standard for enterprise users within a short time. For most of the 21st century’s first decade, this position was unchallenged. Recently, however, BlackBerry’s position within this market has not only been challenged, but is also in serious jeopardy as more and more users migrate to other mobile platforms, notably Apple’s iOS, Android, and Windows Phone OS. A report published in fall 2011 disclosed that the iPhone had become the top smartphone for the enterprise use with its market share increasing from 31% in 2010 to 45% in 2011, whereas BlackBerry’s share fell from 35% to 32% over the same period (Holzer & Ondrus, 2013). A more recent study on popular smartphone OS singled out Android as the most popular one with 44%, followed by Apple’s iOS with 26%, then BlackBerry with 24%, Windows Phone with 3%, and HP/Palm and others at 3% (Plunkett, 2014).
BlackBerry’s Core Competencies and Distinctive Competencies Revealed by the 4-Criteria Tests
Rao and Krishna (2013) define core competencies as the capabilities that serve as a source of a given firm’s competitive advantage over its rivals and help distinguish it from its competitors. Core competencies are usually identified and built using two major tools to create and sustain competitive advantages. These tools are the Four Criteria of Sustainable Competitive Advantage and Value Chain Analysis. In this respect, BlackBerry’s core competencies comprise of factors outlined in their recent annual information that influences success on the smartphone market. These competencies as illustrated in BlackBerry Annual Report (2012) include, first of all, smaller and lighter devices. RIM assumes that the sizes and functionalities of their devices are vital if they are to compete favorably.
Customers want to minimize the devices they have to carry anywhere they go. Thus, RIM believes that by giving their customers the most ‘Bang for their Buck’, they will be in a position to maintain their status as the market leader (BlackBerry, 2012). Another competency is long battery life. RIM believes that the definition of a good device is in how long its battery is able to last. Even though a device may have the most features and the best functionality, in case it is unable to sustain its operation for over 60 minutes off its charger, then it will ultimately fail (BlackBerry, 2012). Another competency is intuitive device interface and ease of use. RIM stands for the fact that consumers want devices that are easy to figure out and easy to use. Advanced features in a product are important in a device, but they become useless if the customer does not know how to access them (BlackBerry, 2012). Another competency is the device’s ability to integrate with corporate PBX. BlackBerry believes in the need to integrate with corporate PBX coverage as a measure of enabling employees to be able to accessing corporate phonebooks fully and anywhere they go. This competency is relevant to and keeps with BlackBerry’s mobile devices office utility (BlackBerry, 2012).
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Extensive wireless network geographic coverage is also another competency that RIM utilizes by making use of major carriers with wide ranges of coverage since phones are useful if they can get coverage. RIM has not limited themselves to a single network, leaving the decision of which wireless network to use to the customer (BlackBerry, 2012). Another vital competency is competitive pricing of devices. RIM believes in reasonable pricing of devices to attract the interest from customers. In this respect, RIM matches the prices set by its rivals in the market. Device flexible architecture is also another key competency. BlackBerry devices’ infrastructures are such that they can effortlessly be added to the existing wireless network systems (BlackBerry, 2012). BlackBerry’s end-to-end security is another key competency. RIM upholds designing devices to be tailored to fit the purpose for which the organization wants them to perform. Due to this, customers are saved from having to reequip their system completely. Instead, it allows them to continue their business immediately in a more efficient manner.
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As for other competencies, the BlackBerry trusted brand is another key one. RIM believes in brand equity and it has a very strong presence in its changed name and brand power of its BlackBerry line of devices. The brand power is seen especially in the business and corporate end. Another key competency is the Push-based output port architecture. Instead of having to rely on data being pulled by the phone, BlackBerry devices have the data pushed to them. It is what puts them in continuous contact with the network (BlackBerry, 2012). Additionally, extensive capabilities of customer care serve as a key competency. It means that RIM upholds the provision of support to customers who purchase their devices. Another competency is having a multi-network support. RIM devices are available on as many networks as possible, allowing the end-users to select which networks they want to get services with. In addition, the ability to connect to applications used by various enterprises and email serves an important competence. RIM devices support all key software for emails and enable its users to obtain their emails from their device. This enables BlackBerry to ensure its devices are of use to their customers (BlackBerry, 2012).
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Other competencies include enabling connectivity to social networking, personal messaging, multimedia and other applications, and stressing on access to every application used by third parties. RIM focuses on increasing the social features of its BlackBerry devices to make them more marketable to individuals not interested in the enterprise function of their devices. RIM places a large emphasis on such applications, thus making their devices very attractive to the consumer market. The strategy also allows for another area where the consumers can make money off their devices (BlackBerry, 2012).
The 4-Criterial Test is based on the need to sustain advantage over competitors, one of the two tools used to identify and build key competencies to create and sustain competitive advantage. These criteria are as follows. Value capabilities help in exploiting various opportunities and in neutralizing threats or exploiting opportunities in the existing outside the company’s internal environment. Rare capabilities imply that few competitors possess such capabilities. Consequently, costly-to-imitate capabilities mean that other companies cannot easily develop the product. Finally, non-substitutable capabilities mean that there exist no strategic equivalents (Porth, 2013)
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When summarized based on the 4-criterial test, a competence must be valuable, rare, costly to imitate, and non-sustainable. This reveals the following distinctive competencies to BlackBerry: (a) Reasonable battery life for their devices, (b) Device integration with corporate PBX, (c) Device flexible architecture, (e) BlackBerry end-to-end security, (f) BlackBerry trusted brand especially in the enterprise or corporate sector, (g) Push-based output port architecture, and (h) BlackBerry end-to-end security.
Apart from these seven distinctive competencies, BlackBerry has carved itself as a corporate or enterprise staple. It is emphasized by the seven distinctive competencies listed above and by the full deployment of the fully integrated BlackBerry enterprise Server (BES) as well as the recent release of BlackBerry Enterprise Application Middleware. Enterprise mobile is BlackBerry’s primary advantage where the company has sustainable competitive advantage over their rivals like Android, Apple’s iOS, and Microsoft’s Windows Phone.
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BlackBerry’s Level of Competitive Strength
Since the time the BlackBerry device was introduced, RIM’s strength has been enterprise services highlighted by its proprietary BlackBerry Enterprise Server (BES). The feature, coupled with BlackBerry devices’ ease of integration within company’s IT infrastructure together with unparalleled security, saw RIM carving its place as the go-to-standard for enterprise users. A company’s level of competitive strength is seen in its ability to harness one or more of its competitive advantages to offer value to the end user. The level of competitive strength can be described as falling under four categories depending on WCSA analysis (Holzer & Ondrus, 2013). These categories are as follows. The first category is low, characterized by excessive sustainable profits. The next moderate category is characterized by sustainable profits so long as competitors cooperate. The extreme category is characterized by price competition and no abnormal profits. Finally, high category is characterized by temporary profit/ advantage until competitors catch up or leap frog, and
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Based on these four levels and through the completion of a WCSA, BlackBerry still possess a higher, though reduced as compared to what it had in the early 21st century, level of competitive strength. It has this level despite the fact that it has been leapfrogged by its competitors - Apple’s iPhone and its iOS platform, Google’s Android and, more recently, by Microsoft’s Windows Phone OS. According to Damianos (2012), the level of competitive strength of a given firm can be evaluated under four stages, where its capabilities and resources can evaluate whether it is sustainable or not. They fall in such categories as “lack of competitive advantage, competitive parity, availability of temporary competitive advantage, and availability of sustainable competitive advantage” (Damianos, 2012). BlackBerry has the following capabilities and resources that illustrate its high level of competitive strength.
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