Blackberry Competitive Analysis, Essay Example

Blackberry is a global telecommunication equipment industry company. Its headquarters are in Canada, however, the products’ customers are located worldwide. According to 2013 data, the company has 12.700 employees around the world.

The main competitor of the company are Nokia, Samsung and Apple. The marketing mix of the company consists of the following:

Product: a very strong product: high end mobile phone with advanced communication features, such as innovative push messaging system, internet faxing and instant messaging. 7

Price: while several customers claim that -just like Apple – Blackberry is overpriced, there is a strong customer base that has a brand preference related to Blackberry phones (Interbrand, 2012).

Promotion: the company targets professionals needing secure and reliable systems for mobile communication. Until recently, Blackberry was marketed as an “executive phone”, however, the company is now moving towards general markets.

Place: The phone is advertised through television and newspapers, targeting business professionals, however, partners’ advertising is benefiting the company, and Blackberry gains from creating partnerships with mobile network providers to market the product.

SWOT Analysis

Blackberry is only able to be competitive in its chosen marketing segment because it focuses on professional communication solutions. It relies on government contracts and large company agreements. Therefore, the greatest threat for the market of the company would be one of the competitors (Nokia or Apple) entering this segment and trying to bid for tenders. In  order to prepare for this threat, the company should diversify its product offers and start targeting general customers with simplified models.

Solutions for Cash Deficit

One of the main problems of Blackberry today is the cash deficit. Research and development is one of the greatest operation expense of the company, and in the year 2013, during the 13 years ending on 30/11/2013, the operating income was -5.025.00 M dollars (Blackberry, 2013). There was a drop in the operating margin of the company during 2013, as well. Even though by the first quarter of 2014 the company managed to reduce its cash deficit and operating loss, there is a need for implementing a long term strategy to maintain both competitiveness and profitability within Blackberry. The proposed solutions will be analyzed below.

1. Obtaining patents through acquisitions.

Blackberry has started to propose acquisitions in order to increase its competitive advantage through innovation and patents created by other companies’ research and development companies. However, this has not reduced the operating expenses related to research and development. Content providers, such as NewBay (2011) and competitors, like Paratek (2012) were acquired, still, it seems like the features of the phones have not been extended accordingly, while the costs of research and development remained high. It is advisable that the company only initiates acquisitions in the future if the implementation of new patents can be completed in a timely and cost-effective manner. Acquisitions in the future should be assessed by the management based on how much the new patents increase the company’s competitive advantage and how much money they save on research and development.

1. Increasing Apps market.

One of the reasons why Blackberry is unable to increase its market share today is that it does not have a strong presence on the apps market. Compared to Windows, Android phones, as well as Apple, Blackberry is only lagging behind the competition. Apps can increase the competitive advantage of the company, and are relatively cheap to develop. Blackberry, however, needs to ensure that the approved applications do not compromise the reliability and safety of the phones. Several companies have started to focus on developing a marketplace for customers that is easy to use on the devices. The company could enter collaboration with mobile network providers to create a “Blackberry” version of the apps featured on the provider’s site, reducing the cost of development and benefiting from joint promotion efforts.

1. Licensing intellectual property

It is important that Blackberry starts licensing intellectual property of the company in order to maintain its competitiveness. The cost of research and development needs to be considered when initiating and licensing new patents. All apps related to Blackberry system, found on http://appworld.blackberry.com/ need to be licensed. The greater selection of content, applications and software would increase the company’s competitive advantage. Currently, the company offers movies, TV-shows, as well as music and themes for download, while it is important to note that the selection is below Apple’s iTunes store’s or Google’s Play store. In order to maintain a customer base, the company needs to establish market needs, creating survey on the browsing, messaging and handset use habits of its existing customers.

References

BlackBerry (2013). Company. Available at: http://uk.blackberry.com/company.html

Interbrand (2012). Best Global Brands 2012. Available at: http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx