Table of Contents
Introduction: ................................................................................................................................................. 2
Problem:........................................................................................................................................................ 2
Key Findings: ................................................................................................................................................. 2
ASSUMPTIONS .............................................................................................................................................. 4
SWOT Analysis: ............................................................................................................................................. 4
Competitive Analysis:.................................................................................................................................... 6
Target Market: .............................................................................................................................................. 7
RECOMMENDATIONS: .................................................................................................................................. 7
ALTERNATIVE 1: PRODUCT DEVELOPMENT .......................................................................................... 7
ALTERNATIVE 2: DIVERSIFICATION ....................................................................................................... 8
ALTERNATIVE 3: NEW PRODUCT .......................................................................................................... 9
Solution: ...................................................................................................................................................... 10
Implementation Plan: ................................................................................................................................. 10
Plan B: ......................................................................................................................................................... 11
Course Concepts: ........................................................................................................................................ 12
References/Bibliography:............................................................................................................................ 13
1
Introduction:
RIM, with their Blackberry Smartphone’s and their innovations, are becoming the leaders in the
Smartphone market of today. However, the Smartphone market is getting more and more
competitive every day. RIM’s biggest competitor, Apple’s iPhone is becoming a threat to RIM’s
dominance of the market while other companies (Sony, Palm, Nokia...) are slowly taking on
market shares as well. RIM needs to develop and come up with a marketing strategy which will
secure their leading position in the future.
Problem:
How can RIM secure and maintain their leading position and make Blackberry the most
recognized brand in the Smartphone market?
Key Findings:
Facts and Research
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Over 14 million users in 135 countries
Very global brand: 92% of revenues come from outside of Canada
Positioned as a brand for business professionals (executives, professionals, industrial
markets)
Good reputation due to its reliability and efficiency
Easy to use email and text messages
Popular among professionals and corporations/enterprises that want a secure server
Fastest growing company in the world; market share grew from 10.9% to 21% in the span
of 1 year(2008-2009)
Extensive Smartphone products:
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Blackberry Smartphone series (6200, 7100, 7200, 8700, 8800)
Blackberry Curve (8300, 8520, 8900)
Blackberry Pearl
Blackberry Pearl Flip
Blackberry Bold
Blackberry Storm
Blackberry Tour
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With the introduction of the Blackberry Storm, RIM entered in to the consumer market
where Apple IPhone leads the group. At the same time Apple introduced the IPhone 3G
and the new 2009 IPhone 3G S which let apple enter the professional, industrial market.
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On August 2009 the Smartphone penetration forecast of global handsets was raised by
Analysts at RBC Capital Markets to 35.1% or 504 million units, by 2012. That’s a
substantial increase from the old forecast of 395 million.
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RIM recently acquired Torch Mobile, a company expected to aid Rim in developing a
new Blackberry browser and software.
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On October 2009, RIM launched his new version of Blackberry Storm, called Blackberry
Smart. The new phone has better software than the previous one. With this move Rim is
going to compete better against Apple IPhone.
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Requests for Blackberry devices in Indonesia (fastest growing mobile consumer market
in the world; will become the third largest mobile market by 2010) increased by 842%
while requests for Apple IPhones increased just 205%.
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RIM has a contract with China Telecom (biggest operator in China) to offer their devices
to costumers. This will put RIM in front of Apple who had to sign a contact with a
smaller operator with smaller costumer base than Mobile China.
3
ASSUMPTIONS
We assume RIM has enough resources for development and marketing of new or existing
products.
SWOT Analysis:
STRENGTHS:
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Existing customer base. The company has developed and achieved a high level of
recognition within the original target market.
Well known, recognized brand name. (Blackberry)
High level of technological skills and knowledge, (With acquisition of software
production companies).
Possession of innovative technologies (Push Email, BBM, BES*)
* Quick Summary on BES
BES- BES stands for BlackBerry Enterprise Server. It gives your BlackBerry access to
a corporate intranet. The intranet is the private, internal, network within a company.
It’s kind of like a mini-internet that is cut off from the rest of the world. Many
intranets allow you to communicate with the Internet as well, but with added layers of
security.
WEAKNESSES:
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Main production and development of the product is in Canada (One plant in Mexico). So
the company’s profit highly depends on the fluctuation of the foreign currency versus
Canadian dollar. This could be a big problem since 92% of revenue comes from outside
Canada.
Don’t have a really diverse business.
Rely too much on their old, well recognized technologies.
4
OPPORTUNITIES:
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Untouched market of young people under the age of 16, which gives them an opportunity
to target them with a new device. This consumer market is the exact market apple
targeted with their IPhone.
Expand globally to countries they don’t have their operation in.
Increased world demand for smartphones
THREATS:
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Governments around world denying our product
o RIM has an encrypted email system that is unreadable and a lot of governments
do not like this because it does not give them complete control over people
involved in crime while making an investigation. India is in the works now of
possibly shutting down RIM in their country. If any other countries follow suite it
could be bad for blackberry
Increasing competitive pressures
Emerging of new substitute technologies
o If any of competitive company would introduce better business software Rim
would have trouble since their main product is focused on business consumers.
Apple developing their push email would take away one of the premier
advantages that RIM have over them
5
Competitive Analysis:
Smartphone Market Share
Nokia
20.5
RIM
4.2
40.8
4.3
Apple
HTC
10.7
Samsung
19.5
Other
In the Smartphone market, as of March 2009, Nokia lead with a 40.8% of the shares.
However, at Nokia’s expense, both RIM & Apple are gaining more shares in the Smartphone
market. In second place, RIM had 19.5% of the shares. In third place, the rapidly growing Apple
iphone had a 10.7% of the shares. At this rate, Apple is gaining ground on RIM, and RIM could
easily lose its place. A possible issue with Apple though is that its distribution is more limited
relative to RIM. For example, RIM distributes its products to all of the carriers in Canada.
However, Apple only had Rogers as a carrier. Other competitors include HTC, Samsung, Sony,
and Palm.
However, RIM’s current competitor is Apple. Apple’s iPhone is strong competition for
RIM’s BlackBerry Storm:
Price 8GB
Features
Storm
$599.99 (Telus)
iPhone
$580.00 (Rogers)
o Larger than 3” display
o Internet access
o Email & text messaging
o Multimedia (video, music)
o Camera
o Touch Technology
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Position
o Towards more casual
business crowd (away from
traditional users)
Market
o business market
(professionals, executives)
o “Hip, funky, keeper of
cool” Continual
reinvention and
wanting to appeal to
business crowd.
o consumer market
Both products are positioned as leading edge Smartphone. Consumers are likely to perceive
similar value in both products. However, there is more appeal to either one depending on the
consumer’s perceived wants and needs.
Target Market:
Blackberry has targeted its market to have more potential on many aspects.
User background: Change from the traditional businessman consumers to young generation
users.
Cost: Develop a variety of different economical cell phones to reach consumers with different
income.
Serviceable range: Cover the market of Asia and Australia, and stabilize the position of North
America.
Technical support: Exploit third party software products and related media.
RECOMMENDATIONS:
ALTERNATIVE 1: PRODUCT DEVELOPMENT
Acquire new companies and knowledge which would develop new, simpler software that is easy
to use and navigate. Invest bigger amounts of money in R&D of new software.
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Advantages:
1) Introduce new operating software for all of blackberry smart phones that includes a new
menu which is more simplified and comparable to basic cell phone operating software.
This could help penetrate younger generation cell phone buyers that would normally try
to avoid Blackberry products due to their lack of user friendly multimedia software.
2) This would help target the consumer market because adding options, such as more
themes into their operating software, as well as a “custom” option will give people the
opportunity to set their menus and icons to a more personalized look. Also by keeping the
new software as an option, there would not be a negative effect on the market for
blackberries because the existing operating software will still be available for those who
prefer the current one.
3) By developing multiple software styles, generally more consumers in the cell phone
market will have their hands on blackberry’s line of smart phones. Thus, they can start by
learning the basics of smart phone use with the new simple software and as this
generation grows to the working age, they may switch over to the existing software that is
advantageous to individuals in business.
Disadvantages:
1) Existing customers may start looking at other smart phones if they begin to doubt
blackberry’s software’s quality for business use. For example if business consumers get
the impression that blackberry is switching their focus to basic cell phones, it may make
them think twice before getting the latest blackberry device.
2) It could be expensive.
3) If new acquisition would not result in any good software development the company
would suffer financially. This could be a really risky move.
ALTERNATIVE 2: DIVERSIFICATION
RIM could introduce an online application and music store. This would diversify applications
available for download on blackberry smart phones and generate extra revenue from sales of
music, videos, application and other online products. Applications would bring many new
options and features to the phone that will attract the younger generations of cell phone users,
expand and impress the existing customers.
Advantages:
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1. Give opportunities to external companies that focus on application developing because
that will enhance their own business too. These are consumers that are focused on more
entertainment and veracity of cell phones programs.
2. Improve daily productivity of blackberry users. Consumers can expand their phone
functions considerably. For example the ability to edit spreadsheets, finding the closest
Chinese restaurant or learning the details of a current song the user is listening to.
3. Gain a competitive advantage that was previously missing in their cell phone consumer
market while targeting consumers that demand additional features on their mobile
devices.
4. RIM could benefit from this diversification by raising the revenue and be more
competent with Apple IPhone.
Disadvantages:
1. The store will lack trust with consumers and will be unfamiliar. It will take time for
consumers to adapt to the new features and abilities that these phones offer.
2. The current market of business workers that RIM targets may suffer. People in this
market may view blackberries as less professional.
3. In order to create an application market, blackberry will have to spend money on
upgrading phone specifications, such as the internal processor, screen control and the
touch flow feature (on some phones).
ALTERNATIVE 3: NEW PRODUCT
Introduce a new product, such as a “Babyberry”, which has more features that are entertainment
oriented and less professional. This product will target the younger generation and the consumer
market focused on entertainment. This would satisfy customer needs since more and more
consumers are looking for a well priced gadget with entertainment features.
Advantages:
1. Penetrate a new market of cell phone users that are mainly younger, and are game and
multimedia seeking consumers
2. An increase in market penetration without losing existing customers, as the current
product line will continue to exist
3. A newer phone, with a new look and a strong internal processor and disk space which
attracts a new type of consumer would strongly damage Apple market position.
Disadvantages:
1. RIM’s line of blackberry smart phones may be too large. This could decrease market
penetration if there consumers have difficulty with making difficult choices.
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2. The product will have to be priced lower than that of other models, as the target market
falls in a lower income bracket and that would hurt the profit margins of the company.
3. New product could be rejected by consumers since the market recognizes RIM as a
business oriented company and not a entertainment one.
Solution:
The recommending solution for RIM would be Alternative 3; the introduction of a new product
in their smart phone line. This is the most suitable solution as it will allow RIM to compete with
the iPhone in the consumer market, while keeping their loyal customer base intact. The
blackberry name would stay as a brand for RIM’s phones in the Business market, while the new
“Babyberry” would be a synonym for the fun, entertainment, consumer market.
Implementation Plan:
1. Find out what iphone users would like to have on a phone that they don’t have now in
terms of entertainment and media. There are millions of forums on the internet. Go into a
forum talking about iphone and ask everyone what needs to be done to iphone. Take the
best ideas and implement them on the new blackberry.
2. Test out a few different features and decide which one is the best to use and go with that.
3. Make sure the phone has lots of storage (8-16g internal)
4. Create a phone and test to make sure there are no glitches before it hits the market (beta
testing).
5. Once the phone is finished make sure it is properly tested before entering the market.
6. Market the Phone extensively
7. Figure out what age group really loves to play with their phones.
8. Advertise on TV programs that are viewed by the targeted consumers.
9. Get a BIG hype going about this phone
10
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Product:
To successfully create the new product (Babyberry), RIM needs to change the existing
blackberry software. They need to adapt to new software so it is more user friendly, has
better entertainment capability (better camera, music player...) and has a stylish look and
feel.
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Price:
The price of the Product needs to be appealing to the young consumers who will be the
targeted market of the product but still high enough for RIM to make a profit. RIM
should take in consideration selling the new product device without profit since it could
make money on data usage and application purchases.
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Promotion:
RIM will introduce a new advertisement which will focus on a healthy life style with
Blackberry and Babyberry as a way to go (Business and Leisure) on TV and health/sport
newspaper ads.
The new phone would be offered with a special promotion (“get rid of the toxic with our
antioxidants”) which would offer a trade discount if an old phone is traded for a new
blackberry/ babyberry.
The new phone would be introduced with new gadgets for the phone (Better
accessories)
The phone would be introduced to sports group, and a contract would be offer to a
Canadian Hockey team to sponsor the new phone.
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Place:
The new phone would be given out through RIM’s well known distribution network.
RIM could sign a contract with Nike/Adidas/Gatorade to promote new phone as a part
of their sport apparel and sport lifestyle.
Plan B:
Low prices to meet the needs of a less executive market. There is a much larger market of people
that cannot afford a brand new top of the line BB. That market looks at blackberry as some kind
of social status that they want to be at. If suddenly they can reach that status by being able to
afford one, they will all be buying one. We have to lower the price $50 and advertise that it’s so
much cheaper than competitors. Drop the price sales go up.
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Course Concepts:
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4 P’s used in the Plan Action.
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We determine the product, price, place and promotion for our solution action plan.
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Growth Strategies, used in Alternatives. Product development and Diversification.
Product development is used in our first alternative where RIM would focus on existing
customer by making their product suitable to newly developed customer needs.
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Diversification is used in our second and third alternative. In this case RIM would
develop new product to attract new targeted consumers
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Target Market segmentation is used Alternative 3
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We chose a part of a market we are going to target with our product. In our case those are
the consumers who could have interest in a entertainment devices which would offer a
slick look and lots of fun.
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With our new promotion (“get rid of the toxic with our antioxidants”) in the solution we
used the concept of Social Responsibility. By taking old phones we are helping the
environment as well as the consumer who gets a discount.
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We chose a part of a market we are going to target with our product. In our case those are
the consumers who could have interest in a entertainment devices which would offer a
slick look and lots of fun.
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References/Bibliography:
Roger’s website
Telus’ website
http://en.wikipedia.org/wiki/Blackberry_storm
http://en.wikipedia.org/wiki/IPhone
http://slyn.blogspot.com/2009/09/blackberry-storm-vs-iphone-3g.html
Data from March 2009
http://www.intomobile.com/2009/03/11/smartphone-gains-boost-apple-and-rim-marketshare-atnokias-expense.html
RIM Case Study
http://rimcase.blogspot.com/
Apple, RIM poised to lead smartphone market
http://www.telecoms.com/13891/apple-rim-poised-to-lead-smartphone-market
BlackBerry vs iPhone: The Browser Wars
http://techgeer.com/2009/08/26/blackberry-vs-iphone-the-browser-wars/
RIM BlackBerry vs. Apple iPhone: RIM is winning?
http://techgeer.com/2009/09/02/rim-blackberry-vs-apple-iphone-rim-is-winning/
Lots of information was found on Google search and these web-sites:
Business : Will Apple Connect with the World’s Biggest Mobile Market?
Apple and Research In Motion (RIM) well positioned to lead the smartphone market | telecoms.com telecoms industry news, analysis and opinion
BlackBerry co-CEO on iPhone marketing: "a dangerous strategy" | The BlackBerry Beat | ZDNet.com
What Blackberry Teaches Us About Global Branding « X-Cultural Marketing | E3 European Agency
Network
- B2B Marketing Features
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Poll: Can BlackBerry Browser beat iPhone to surf net? | Technology & Gadget News
BlackBerry Beat IPhone - All About Telecommunications
Mobile Web: BlackBerry Leads Apple in World's Third-Largest Mobile Market
Blackberry Losing Business Customers to iPhone?
Gartner Says Worldwide Mobile Phone Sales Declined 8.6 Per Cent and Smartphones Grew 12.7 Per
Cent in First Quarter of 2009
Research in Motion battles BlackBerry's competitors - Aug. 17, 2009
TradingMarkets Online Stock Trading Investing
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