“Rise and Fall of Blackberry” Case Study
Introduction
The foundation for developing smartphones started with the Research in Motion (RIM) when it launched BlackBerry in 1999 (Himsel & Inkpen, 2017). During those days, BlackBerry was the best mobile phone which owned one platform that could be used to protect or manage and maximize how innovative endpoints are set up in the business, making their customers lead the technology curve that will give each industry a new shape (BlackBerry Limited, 2020). However, BlackBerry was displaced from dominating the mobile industry following the emergence of other related companies like Apple, which released the iPhones. According to Hicks (2012), RIM was becoming successful almost naturally until some years later, but when Apple produced the first iPhone which toppled its long-term strategy of attracting professionals, especially those who were addicted to email devices. Apple’s success was attributed to its increased market share by producing smartphones targeting not only business professionals but also the whole population comprised of tech-hungry consumers (Hicks, 2012). Eventually, the dramatic shift of the mobile industry opened doors to new competitors, new consumers, and new business alliances, and RIM scrambled to make changes due to its costly mistakes. The purpose of this paper was to discuss the rise and fall of Blackberry.
The industry that formerly BlackBerry competed in
BlackBerry initially competed in the telecommunication industry, where it produced an always-on mobile email product having a keyboard (Himsel & Inkpen, 2017). During those days, phones and PDAs experienced burdensome email connections, and people using them were needed to call the producers, create a connection via the website, or using a unique phone number to contact customer care for assistance (Himsel & Inkpen, 2017). BlackBerry had an infinite connection to a wireless network and applied software to develop corporate email servers remitting incoming messages from an email address that already exists to the BlackBerry (Himsel & Inkpen, 2017).
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BlackBerry’s success during this era was attributed to various internal and external environmental factors causing change initiatives at different scales within the RIM. One of the internal factors leading to BlackBerry’s success was the mobile wireless connections which enabled it to become the top producer of mobile email product having a keyboard. The wireless email service enabled to provide a handset device functioning like those of the PDA, as well as an encrypted email that was synchronized with addresses their users have (Hicks, 2012). Another internal factor that played a critical role in BlackBerry’s earlier success was the leadership team. According to Himsel and Inkpen (2017), RIM executives jointly agreed that their main aim was to develop technology that would satisfy the needs of the consumers (Himsel & Inkpen, 2017). The executive’s spirit of teamwork can be compared to the unity of command principle proposed by Henri Fayol’s theory of administration. The principle argues that a business that wants to become successful should have only one plan, one objective, and one head for each of the plans. This means that if BlackBerry’s early success would not have been achieved if the executive had a different plan and objectives (Uzuegbu & Nnadozie, 2015). Therefore, mobile wireless connections and teamwork spirit of the executives were the main internal factors causing change initiatives at different scales within the RIM.
On the other hand, the ready market was the main external factors leading to BlackBerry’s earlier success. RIM’s marketing campaign at the entailed “wireless email evangelists” to reach out to Fortune five hundred firms. It is during this period while conducting product promotion that RIM successfully managed to penetrate the companies within Wall Street (Himsel & Inkpen, 2017). Hicks (2012) recounts how Balsillie, co-CEO of RIM, believed the mobile phone would hook any person who experiences their email service. As a result, when BlackBerry devices were released in the Wall Street and Capitol Hill, they received several customers belonging to different professions such as barristers, legislators, and journalists. He went after early adopters, too, providing tech conferences with free units (Hicks, 2012). Moreover, when BlackBerry launched BlackBerry Messenger (BBM), an instant message system, its publicity increased due to its encryption and privacy, not accessing government servers. This enabled the company to get a ready market from leaders such as U.S. President Obama (Himsel & Inkpen, 2017). Therefore, the available market was the main external factor causing change initiatives at different scales within the RIM.
BlackBerry’s reaction to the market indicators to change
BlackBerry made a costly mistake while reacting to the market indicators to changes leading to its failures. BlackBerry responded sluggishly to the needs of the consumers as well as those of the market changes (Trivedi, 2017). Cut-throat competition within the telecommunication industry led to the emergence of smartphone segment characterized by an advanced operating system integrated with different features such as email, cameras, video games, and media players (Trivedi, 2017). BlackBerry’s business rivals such as Nokia, Samsung, Siemens, Motorola, and HP also developed wireless email devices. PalmOne, on the other hand, had released a million devices known as the Palm Treo to the market (Trivedi, 2017). Similarly, Microsoft added mobile email software to its servers and providing it free of charge to its users. Besides, Microsoft created a version of Windows OS to be installed in handsets. Apple could not be ignored since rumors spread that it was working on a mobile phone, dubbed the iPhone by some analysts (Trivedi, 2017). Therefore, BlackBerry’s reaction to the market indicators to change was so slow, making it lag as rivals continue to thrive.
Failure to comprehend the taste of preference in the design of products varies from one customer to another explains the reason why BlackBerry could not sustain its industry position (Trivedi, 2017). For example, Lazardis, RIM co-CEO, believed that BlackBerry’s keyboard would still be competitive with its rivals who had advanced to touch screen. Lazardis reiterated that he was not able to type on iPhone the same as his friends claiming that it is difficult to write on a piece of glass (Himsel & Inkpen, 2017). To prove his confidence over BlackBerry’s keyboard success, he despised Apple over their short presence in business. He added that Apple’s battery lasts for a short period and that no one would like to use a phone whose battery will die after a few hours (Himsel & Inkpen, 2017). Therefore, Lazardis was overconfident over the success of BlackBerry’s keyboard devices and underrated the Apple product, which was reacting to the customer’s taste by producing iPhones with the screen touch keyboard.
It was surprising to see the Apple products, which were belittled eventually soaring while BlackBerry, which had been dominating the market declining. Hubris theory of entrepreneurship argues that confidence explains why a new venture crop up despite a very high rate of failure in the same industry (Bernoster, Rietveld, Thurik, & Torrès, 2018). The argument could be used to understand why companies like Apple were launch in the products successfully, while BlackBerry declined. However, Lazardis was overconfident about the future success of their keyboard devices. Hayward Shepherd and Griffin (2006) warn that people who are overconfident risk damaging their ventures by limiting their resources. The authors concluded that overconfidence plays a significant role when entering a new market, but not much help when it comes to operating a business. Therefore, one of the lessons to learn from BlackBerry’s keyboard failure was underestimating the effect of customer’s taste of a product, thus struggling to sustain its industry position.
How BlackBerry managed the change initiatives
To cope with the changes in customer’s preferences, RIM planned to launch its first touchscreen phone called Storm to compete with the iPhone. Unfortunately, the Storm received negatives reviews with one of their buyers, claiming that it was “the Edsel of smartphones, an absolute smeller from top to bottom” (Himsel & Inkpen, 2017). It was found that the Storm had several technical problems leading to incurring a cost of $500 million to replace nearly one million phones (Himsel & Inkpen, 2017). Another plan RIM had as a way of managing change initiative was launching the BlackBerry App World in 2009, which had 2,000 apps as compared to the 65,000 apps Apple had developed by the end of the summer of 2009 (Himsel & Inkpen, 2017). Although the plan moved towards responding to the customer’s need by meeting their taste of mobile phones, BlackBerry still could not match the iPhone. Therefore, RIM should have considered investing all their energy to develop more apps in their BlackBerry App World as well as upgrading the Storm rather than launching the Bold, which still had the physical keyboard (Himsel & Inkpen, 2017). RIM should have realized that customers no longer liked smartphones with a physical keyboard.
RIM had planned to continue widening access of BlackBerry products into the prosumer as well as the consumer market. Some of the initiatives that would make the company’s plan materialize was balancing the BlackBerry architecture with the success of applications like BBM to improve e-commerce opportunities (Himsel & Inkpen, 2017). As a result, Blackberry gave much of its attention to the longevity of the battery, QWERTY keyboard, high security, and physical strength of the phone. These features attracted many customers, including the corporate and government organizations, who were able to buy BlackBerry at the set high prices. However, RIM failed to realize that a wide market share is comprised of consumers with low purchasing power (Trivedi, 2017). Therefore, Blackberry should have considered the cost of its phones if it was affordable to the ordinary consumer who formed a large market share. Poor marketing could be blamed in this case since it failed to consider the affordability of mobile phones by the ordinary consumer in the market.
Partnership with Verizon Wireless was another initiative RIM had strategized as a way of managing the changes in the market. This partnership led to the launching of Strom, BlackBerry’s first smartphone with touch screen, in 2009, which media referred to as the “killer of iPhone” (Himsel & Inkpen, 2017; Cagna, 2019). On the other hand, Apple formed a partnership with AT&T to increase the market share of the iPhone, what the medial referred to as the “BlackBerry killer” (Himsel & Inkpen, 2017; Cagna, 2019). Nonetheless, the RIM-Verizon partnership never worked to the expectation of each party involved as Storm was negatively received by the buyers after it was found that it had several technical problems (Himsel & Inkpen, 2017). It was, therefore, evident that the partnership failed to produce phones that could gain a competitive advantage over the iPhone. Since the problem with BlackBerry had an architecture that could not appeal to the consumers who preferred the touch screen key to the physical keyboard smartphone, there was no need for forming the partnership. Therefore, Rim should have done it solo and negotiate network access rather than partnering with Verizon.
Leadership role played in the Blackberry between the years 1999-2016
Leaders, starting from Balsillie and Lazaridis to John Chen, have played significant roles in management as well as the implementation of change with RIM. By 1996, RIM was under the leadership of Michael Lazaridis, working Jim Balsillie, who was appointed as his co-CEO in 1992. According to Himsel and Inkpen (2017), both of them were known for having self-confidence in their abilities. The duo worked in collaboration to execute their duties and showed their unstoppable quest for innovating wireless telecommunication at RIM. For example, in 1996, they led RIM in launching the first two-way messaging pager known as the Inter@ctive Pager. The device made it easy to use a wireless data network as a medium for receiving and sending messages (Hicks, 2012). In 1998, again, the two leaders were in the forefront while the RIM launched 950 Wireless Handheld debuts, which were named the BlackBerry some years later. In the following year, 1999, BlackBerry 850 Wireless Handheld PDA was launched (Hicks, 2012; Himsel & Inkpen, 2017). The few examples reveal how Balsillie and Lazaridis’ leadership role focused on improving RIM’s performance through technological innovations.
The other leadership role was increasing BlackBerry’s sales volume through product promotion. For example, RIM conducted a marketing campaign at the local level promoting their “wireless email gadget leading their way to enter companies in Wall Street. As a result, RIM’s sales volume was approximately 800 000 by June 2000 (Himsel & Inkpen, 2017). The third leadership role was seeking marketing partnerships with a firm like Compaq, AOL, and Nortel Networks to singing contracts entailing branding, bundling and reselling BlackBerry phones (Himsel & Inkpen, 2017). The four leadership role was seeking strategies for gaining a competitive advantage over the chief rival iPhone, Apple’s product. To obtain a competitive advantage, the leaders sought new partnership opportunities for RIM what led to the formation of RIM-Verizon partnership. As a result, BlackBerry’s first smartphone with a touch screen called Strom was launched in 2001, which media referred to as the “killer of iPhone” (Himsel & Inkpen, 2017; Cagna, 2019). This confirms that the leaders’ effort towards shining over the competitors.
Another leadership role was the immediate replacement of the employee who resigned to ensure the company’s operation remains uninterrupted. For example, when long-serving workers were quitting their jobs, Lazaridis and Balsillie took the initiative of recruiting their confidants with the same individual visions for the future (Himsel & Inkpen, 2017). To some extent, the leaders took after the office of the resigning employees. For example, the chief marketing officer resigned from his duties with RIM in 2011, Balsillie surprised many people by taking the office of the outgoing chief marketing officer (Himsel & Inkpen, 2017). In January 2012, Thorsten Heins, who once served as a chief operating officer at RIM, was appointed to work as co-CEO with Lazaridis. One year later, John Chen took the place of Heins to become the new CEO until 2016. A significant leadership role witnessed during Chen’s reign was replacing the physical keyboard with a touchscreen keyboard (Himsel & Inkpen, 2017). Such a leadership role was aiming at adopting the changes in the market to meet the customers’ needs.
Although the leadership roles mentioned only focused on those that aimed at making BlackBerry successful in the market, various blenders are resulting from the leadership roles responsible for BlackBerry’s failures. For example, resistance to change costed RIM dearly, resulting in losing a significant market share. For instance, Lazaridis was not interested in joining the stiff competition in the consumer-phone market at the time when RIM was struggling to dominate the consumer smartphone market. He argued that the consumer-phone market had narrow profit margins. Moreover, he dismissed the idea of including cameras or music players in the Blackberry, claiming that it would neither help the government nor military agencies, which formed the most significant percentage of the company’s customers (Himsel & Inkpen, 2017). On the same note, Apple was despised when it produced the iPhone with a touchscreen keyboard. For example, Lazardis claimed that he was not able to type on iPhone the same as his friends claiming that it is difficult to write on a piece of glass (Himsel & Inkpen, 2017). Such a leadership decision was misleading as it underscored the value of meeting the customers’ needs. Therefore, leadership roles contributed to the Blackberry’s success and failures.
Conclusion
The purpose of this paper was to discuss the rise and fall of Blackberry. Several factors led to the Blackberry’s earlier success, for example, launching mobile wireless connections, teamwork spirit of the executives, and ready market from the government sectors. However, Blackberry’s success was cut short following the emergence of rivals such as the iPhone, which focused on satisfying the consumer needs by acknowledging the tastes of a product. To be on par with its competitors, RIM should have realized that customers no longer liked smartphones with a physical keyboard, consider the affordability of the mobile phones by the ordinary consumer in the market, and negotiating network access alone rather than partnering with Verizon.
References
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