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BLACKBERRY: THE REPRISE?
Transcript of BLACKBERRY: THE REPRISE?
INVESTORS and BOARD MEETING
NOVEMBER 6, 2013
5 - FORCE ANALYSIS
BARGAINING POWER OF SUPPLIERS
BARGAINING POWER OF CONSUMERS
- Consumer preferences for quality
- Ease of switching to substitutes
THREAT OF NEW ENTRANTS
- Oligopoly market
- High barriers to entry
- High investment costs
THREAT OF SUBSTITUTES
- Competing against other smartphones as well as tablets
- Apple, Android OS
DEGREE OF RIVALRY
- Fierce competition between players
- Rapidly changing technology
- Large number of suppliers
REVISITING THE INDUSTRY
1. Highly secure phones.
• Secure encrypted network allows for sending emails between phones without possibility of stealing the information.
• USP of BlackBerries
• Attractive feature for corporates and governments that other phones didn’t have
2. Strong focus on narrow customer segment.
• Governments and corporates
• More focused approach to satisfying the needs
3. Excellent hardware and user interface
4. Durability and battery life
1. Inability to market the brand.
• It spent and continues to spend significantly lower amounts ($41.3 million) on marketing, about
10 times lower than Apple ($400 million)
8 times lower than Samsung ($334 million)
2. BlackBerry OS.
• Low amount of apps in store deters customers from buying the phone or the tablets.
• Company lacks enough funding and coordination to develop its OS properly.
3. Dependent on government and corporate contracts.
• Not guaranteed to receive long-term contracts from the government
4. Poor presence in the tablet market.
• PlayBook tablet was an unsuccessful compared to Apple or Samsung who enjoy significant income and profit growth due to the tablet sales.
1. Growth of tablet and smartphone markets.
• Will be worth $100 billion by the end of 2015.
2. Strong growth of mobile advertising market.
3. Increasing demand of cloud based services.
• Expected reach $240 billion by 2020.
4. Obtaining patents through acquisitions.
• Patents can be discovered by engaging in costly R&D or through acquisitions of other firms.
1. Rapid technological change.
• Pressure to release new products faster
2. Saturated smartphone markets in developed countries.
• Affects BlackBerry’s ability to expand its market share in US and Canada.
3. Increased competition for government contracts.
• Government renews its contracts with suppliers every few years and BlackBerry has to compete with formidable players like Samsung and Apple for contract renewal.
MARKET [RE] POSITIONING
Reposition the BlackBerry handphone brand as a:
• HIGH END SMARTPHONE FOR CORPORATE CONSUMERS
EXPECTED MARKET POSITION: 2017
Global Operating Market Share %
GENERIC STRATEGY +
3. WHY will this sales goal help achieve our strategic objective?
• Battery Life
- Corporate life: meetings, travel, always on-the-go
• Re entering the market without damage to brand name/reputation
• Convincing existing Android or Apple users to switch to BlackBerry
• Sustaining/developing profitable products
• Reduced work force
• Technological advancements by 2017
GOAL: 10% Market Share, 3.8m Units by Q1 2017
Revival; gain market share through segmentation
Questions we will address
1. HOW MANY
units do we need to sell to achieve our desired market share in the corporate sector?
will we accomplish this goal?
will this sales goal help achieve our strategic objective?
FOCUS: Corporate Sector
Global Smartphone Sales = 225326000*
Corporate Sales = 17% of 225326000 = 38 million
Units to sell = 3.8 million
[ 10% of 38 million]
- Consumers know their needs are being addressed
• Gather brand loyalty
- Synchronizing Microsoft Office
- Wider range of Apps
- Faster/smoother interface
- BBM enhancements (corporate-friendly)
USP: Longest Battery Life
Expand marketing efforts:
- Separation of personal and work notifications
- Exclusivity of catering to corporate sector
- The famous QWERTY keypad
2. How will we accomplish our sales target of 3.8m units ?
Strategic partnership with established network providers worldwide
High-end smartphones for corporate consumers (carving corner to dominate)
• Expand target market
- more consumers aware of new brand image, triggering them to switch to BlackBerry
• Profitability of outsourcing
Legal Activities: Hire Law Firm
1. How many units
do we need to sell to achieve our desired market share?
Segment = 17%