The Problem
How can Research In Motion, RIM, succeed in gaining brand dominance in the mobile
smartphone market place, adapt to new technology and consumer behavior, and create an
Iconic brand name?
Key Findings:
Crucial facts in the case relating to the problem include:
 RIM is an incredibly successful business with lots to offer
 There is a huge market for smartphones
 With a huge market, comes many competitors
We used several sources of information in order to find a solution to the problem. Firstly, the
background of Blackberry and RIM; this gave us a good understanding of the brand and the
direction which they would like to follow. Secondly, information about the major competitor to
Blackberry, the Apple iPhone; this was crucial in choosing the solution to the problem. And
finally, an abundance of research information and stats; both were used quite thoroughly
throughout the case study.
Several assumptions needed to be made in this process including:
 RIM has a great Research and Development department
 The economy will continue to improve
 The market for smartphones will continue to increase and will maintain a
relatively inelastic demand.
Blackberry’s Target Market
Since RIM started producing cell phones in 1999, their target market has always been the
segmentation related to the business world. Now as the years go on more and more
competitors are producing smart phones, although most of them do not compare to the variety
of BlackBerry’s. It is a concern that there are more competitors however, because as cost of
technology decreases all mobile phones will become smart phones eventually, so RIM will have
to find a way to keep consumers now and put themselves on top of the others. BlackBerry at
the moment is considered to be a well known brand and leader in producing smart phones. Due
to their focus on that segmentation they have limited themselves and left out a huge available
market that all their competitors compete for.
1
The Youth Market Trend in Canada
Kids (6-9)
Percentage of
Canadians who use
cell-phones
Teens (10-14)
Teenagers (15-18)
0%
50%
100%
1
http://mobileireland.net/cell-phones/how-many-people-have-cell-phones-in-canada/how-many-people-have-cellphones-in-canada.php
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RIM has begun to realize that and has started to produce applications with games, facebook,
and msn messenger to reel in some of the younger consumers. If other competitors are looked
at, however, it’s noticeable that they aren’t offering the best product. RIM’s next goal should be
to demolish the competition in the demographics of the younger generations and become a
leader in not only the business world, but the social world too.
SWOT Analysis
Strengths
RIM has developed and maintained
excellent customer service, and a loyal
customer base.
Offer a high product depth, with
alternatives for customers.
A very high brand awareness among
consumers helps sales and customer
loyalty.
Long-term relationships have been created
and sustained with businesses.
Opportunities
The cell phone market is very large and
inelastic. The demand for the newest
technology is very substantial.
Huge international market outside of
Canada, waiting to make invest in the
latest technology.
Consumers are willing to pay a high price
for the newest innovative products on the
market.
The Blackberry brand has been accepted
by consumers, giving them more
opportunity of sales in contrast to most
competitors.
Weaknesses
Their brand image has been built up
successfully, but directed in only one
direction. The business market.
There is no face to face business to
consumer relationships. There is always a
middle man selling RIM products to the
consumers. Ex: Apple has its own store
Although RIM has a large product depth,
the products are very repetitive.
Threats
They are in very competitive market that is
always changing and updated constantly.
Due to RIM’s technological creations and
advancements many companies are
building off their ideas.
The economy and the Canadian dollar are
a great threat. Due to the increase in the
CDN dollar, the value of RIM’s stocks have
fallen.
The significant risks involved when
competing with Apple, and possible loss
financially.
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Alternatives
There are three alternatives that Research In Motion can look at to increase their brand
dominance and grow their market share:
1. The first alternative is to diversify their product lines. That is, to increase the
types of technology that they sell. This would include mp3’s, laptops, and
desktops. The advantages of this alternative would be that it would definitely
increase their customer base. People already trust RIM to sell very reliable
phones so it would be easy to convince them to also purchase music players and
computers from them. Also it would expand their brand image to include many
different products. Lastly, there would definitely be an increase in sales, which
will lead to an increase in revenue. Some of the downfalls of this alternative are
that there is a high risk and they will need to invest a lot into their new products
without knowing if they will be successful or not. Also, there are a lot of
competitors because there are many more computer brands than cell phone
brands. This could also lead to a negative effect on their brand image of their
Blackberry’s. Their other products could be unsuccessful and lead to consumers
being angry towards RIM and not trusting any of their products.
2. The second alternative would be to develop the product line depth of
Blackberry. This would include creating a new improved Blackberry phone that
has advantages over its competitors. The advantages of this solution would be
that it would tend to everyone’s needs and therefore expand their target
market. It would also improve brand image. Most importantly, it would be the
most convenient phone for consumers to purchase because it would encompass
all the needs of business people as well as those in the younger market. Some
disadvantages would be that this phone would be more expensive because the
phone will require a lot of new technology and applications. Also, they would
have to reposition their brand in consumer’s eyes. Blackberry is currently known
as a business oriented phone, RIM would have to reposition their new phone to
target a younger crowd without losing their older market. Finally, a third
disadvantage is that because the competition is steep it would be hard to find
ideas that have not already been used by other competitors. The market is fierce
and therefore it would be hard to think of a new innovative idea that no one else
has thought of yet.
3.
The final alternative that RIM could potentially choose is creating a Blackberry
mobile network. This would mean that customers could go directly to RIM and
join their network. RIM would thus create a business to consumer workplace,
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rather than sending their phones to companies such a Telus, Rogers, and Bell.
The advantages of this alternative are that it is convenient to purchase phones
and services at the same time. You could pick your phone and pick your plan
both at RIM. Also you would probably find cheaper plans because you are
working directly with the consumers, which would be very appealing to
customers. Also because it would be business to consumer, there would be no
middleman, which would also prove to be advantageous to RIM. Some of the
disadvantages of this alternative are that RIM would lose its revenue from
companies such as Telus and Rogers, because they would stop retailing their
phones everywhere and only carry them at RIM stores. Also this is a difficult
market to break into so there is a high rate of failure. Lastly, they would have to
develop a new reputation as being the best network or people will not choose to
use them.
Solution (Alternative #2)
RIM has two goals in regards to positioning itself versus other smart phones on the market,
specifically the Apple iPhone. First they need to maintain their positions as world leaders in
business smart phones and secondly they need to corner the younger market of entertainment
focused consumers.
To achieve these goals RIM needs to take two steps.
1. They need to create a far more robust app store with a wider range of offerings for all of
the different BlackBerry users.
2. They need to develop an iconic product to compete in consumers’ consciousness on the
same level as the iPhone.
Robust App Store
Blackberry’s already have a huge install base but the Blackberry App Store is seen as subpar
when compared to the Apple App Store. This is simply a question of numbers. Apple has 85 000
apps available, Blackberry has about 2000.2
Therefore the trick to making the BlackBerry store more successful is to increase the
number of Apps available. To that end there are five available strategies:
1) For a limited time give 100% of revenue earned through app store to developers
This promotion could be great way to open the flood gates and start getting the BlackBerry App
Store populated. Certainly RIM would have to eat the operational costs of the infrastructure
during the promotion but it would be an investment in long term returns. Also not as expensive
as it fist sound when you consider that BlackBerry’s business model involves earning income
through the sale of phone contracts and the apps are simply a means to that end.
2
http://en.wikipedia.org/wiki/List_of_digital_distribution_platforms_for_mobile_devices
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2) Offer developer’s rewards for high performing Apps
One of the major challenges facing the Apple App Store is quality control. Though they have
85,000 apps a huge number of those are free with little functionality and production values. In
order to not only add quantity but quality to the BlackBerry App store cash rewards could be
offered to developers who have applications that reach certain targets in user ratings.
3) Offer developers rewards for conditional development
As smart phones become more and more popular the applications that run on them become
more entwined in popular culture. As this trend continues particular applications and
application developers will become highly anticipated and generate strong consumer interest.
Fostering relationships with key developers would allow for RIM to develop an App store noted
for its high quality applications. There are three ways to nurture those relationships:
1. Offer developers rewards for developing exclusively for the Blackberry store. This is a
second party relationship similar to many corporate partnerships between game
development studios and the single consoles they publish for.
2. Offer developers rewards for developing games exclusively for the BlackBerry store.
Instead of having a developers’ entire product line offered exclusively thought the
BlackBerry App Store RIM could offer a smaller incentive for individual projects released
on their platform.
3. A third option is to offer an even smaller incentive for Applications that are developed
for multiple App stores but released exclusively on the Black Berry App store for a
limited period of time before wider distribution.
Iconic Product
Traditional marketing strategy suggests that segmenting your market into smaller categories
and then developing products and branding campaigns for those separate divisions is the most
effective way to sell a product.
The rising star in the Smart Phone market is Apple’s iPhone. In just over two years they have
sold over 45 million iPhone OS units (iTouch and iPhone)3 and had over 2 billion apps4 sold
through their App Store. What makes the iPhone distinctive is that there is no market
segmentation. There are three iterations of the iPhone and every one of them looks identical.
Every one has the same features with only improved power in the backend technology. The
iPhone is an icon.
Instead of making a handset to compete with the hundreds on the market Apple made an icon.
3
4
http://www.theiphoneblog.com/2009/07/21/apple-q3-2009-conference-call/
http://www.apple.com/pr/library/2009/09/28appstore.html
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How can a product line compete with an Icon?
It can't. So RIM needs to make a better Icon.
To that end we propose that RIM introduce their newest mobile communication platform- the
Blackberry Stream. Not only will this be the latest addition to the Blackberry family but it will
become the only product RIM puts on shelves. On top of that they offer a heavily subsidized
trade in program so that people with older model BlackBerry's can trade them in for the new
Stream at a very cheap price. The old Blackberry's need to come out of the market. When
people think BlackBerry they need to think Stream.
Defining the technical specifications and design of the BlackBerry Stream lies outside the
scope of this document. The details of the design will require further analysis of what features
make the iPhone so popular and integrating those with the successes of the existing Blackberry
platform.
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Appendix:
Course Concepts:
Product Life Cycle: We used the product life cycle concept to show how we would like our new
Blackberry Stream to become a star. We feel as though the current Blackberry lineup is fading
and needs a fresh face.
Product Development Strategies: We chose to develop the product line depth by introducing a
new product that will eliminate the need for any previous Blackberry phone. The Blackberry
Stream will do it all, and more, in order to satisfy any consumer needs.
The Four P’s:
Product: Our main focus is to introduce a new and “iconic” product that will cater to every
consumer’s needs.
Place: The Blackberry Stream will be available at every phone service company which presently
carries Blackberry products.
Promotion: Maintain current promotion campaigns, which entail full page newspaper ads as
well as some television commercials. Much focus will be put in viral marketing, which we view
as the future to business promotion.
Price: Our plan is to offer the Stream at a very competitive price to all our competition. This will
be between the range of $700-950 retail, as well as lower rates with a contract.
Brand Development: Our priority is to be certain that consumers are familiar with our brand
and know our products. First we will tackle brand awareness, developing brand loyalty will
follow. In order to be successful, we must build a healthy business to consumer relationship.
All References:
This list includes references already listed in the doc.
1. Developing for the BlackBerry (http://na.blackberry.com/eng/developers/started/)
2. BlackBerry Market Research Panel (http://blogs.blackberry.com/2009/09/join-theblackberry-market-research-panel---rim-wants-your-input.html)
3. Blackberry’s sold (http://www.electronista.com/articles/09/02/05/50m.blackberries.sold/)
4. Corporate use of iPhone
(http://www.electronista.com/articles/09/10/01/shift.driven.by.subtle.differences/)
5. Canadian Cell Phone use ( http://mobileireland.net/cell-phones/how-many-people-havecell-phones-in-canada/how-many-people-have-cell-phones-in-canada.php)
6. Smart Phone Distribution
(http://en.wikipedia.org/wiki/List_of_digital_distribution_platforms_for_mobile_devices)
7. Apple 2009Q3 Report(http://www.theiphoneblog.com/2009/07/21/apple-q3-2009conference-call/)
8. Apple App Store Success(http://www.apple.com/pr/library/2009/09/28appstore.html)
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