Mini-Case study: The downfall of Blackberry

Ali Moussi
Universteit van Amsterdam
6068324
[email protected]

continuously take losses, while section 3 expands on the

1. INTRODUCTION influence of management which allows such losses to
In 1984 Research In Motion (RIM), later renamed Blackberry continuously happen.
was founded. The company designed complex wireless data
connection networks which were used by the police forces,
military, ambulance services and such. Following rapid growth 2. INNOVATIVE COMPETITION AND
and innovation, RIM developed a revolutionary pager, a device
that can be used to send and receive messages which used their
CYCLIC ADAPTATION MISALIGNMENT
In the period 1984 to 2007 Blackberry was extremely successful
communication technologies. Soon, this personal
in their launches of innovative products and services. During
communicator was labelled as the next big thing. The
this period we can see a clear pattern in the adaptive cycle of
Inter@active was deployed in 1996 as RIMs first handheld
Blackberry. Their secure data connection networks where
communication device. In the next years, RIM continued a
exploited, and conserved which made the company a key player
steady line of innovations and improved the handheld
in enterprise communication. Soon, these technologies where
communication device greatly. By 1999, RIM launched the
released and through innovation and reorganization their
Blackberry rebranded devices and email services which allowed
products where significantly improved, even new products were
users to sync their devices with corporate email systems.
introduced like the pager, and the BBM messenger service for
Demand exploded, innovation continued. Blackberry became the
consumers. A cycle that Blackberry used to steadily improved
iconic in enterprise communication while their Blackberry
their mobile communication businesses. This made them an
Messenger (BBM) service was introduced to consumers that
incredibly valuable company in 2007. Also, in 2007 Apple
used a secure protocol that can be used to communicate with
introduced the iPhone with which Apple claims to have
friends. In 2007 the company became the most valuable
reinvented the phone. This reinvention was a well thought
company in Canada worth over 67 Billion, with 10 million
product learned greatly from the success of the largest players in
subscribers to their services and introduced their newly
the business.
developed Blackberry Curve devices. Unfortunately, in 2007 the
Apple iPhone was introduced. This moment onwards, the During this introduction of the iPhone, cyclic adaption
success of Blackberry was no longer groundbreaking, followed misalignment occurred for Blackberry. I define cyclic adaptation
by a period of decline and unsuccessful products, ending in an misalignment as the situation in which a business lags one or
uncontrolled strategic focus which a great loss of value and more phase behind on their competitors in the adaptive cycle in
market share as a result as depicted in figure 1 which illustrate the domain of pioneering innovation technologies. Argued is
the market share of Blackberry in smartphone sales of the that in a situation of pioneers and innovation, cyclic adaption
provider Verizon (iPhone was first sold at Verizon in Q111). misalignment causes a company to always be one step behind
the competition and therefore miss out on many opportunities
In this case-study, I argue why this happened to blackberry in
and therefore lose market share.
relation to innovation and managerial decision-making. Section
2 discusses how innovation of competitors caused Blackberry to This happened at Blackberry when the iPhone was launched, an
innovative mobile connectivity device which offered many of
the desired features. The iPhone brought some crucial
innovations that the blackberry lacked. The first is design. The
2007 iPhone was successfully designed to be extremely user
friendly and intuitive. Google, introduced their android platform,
and started to focus on designing a user centered interface for
their operating system. It was not until 2008 that Blackberry
introduced the Blackberry Storm in an attempted to create a
device that was designed to give the user an optimal experience
through intuitive interfaces and device design. But it was flawed
and unsuccessful. A year later, blackberry reached their
reorganization step of the adaptive cycle and introduced their
Blackberry Storm innovation. However, at this point the
competition (Apple & Google) where already in the next cycle
of adaptation.
Secondly, in 2008 Google introduced their Playstore. A virtual
store in which users could purchases application that they

Figure 1 market share of Blackberry in smartphone

sales of the provider Verizon
desired on their mobile device. In that same year, Apple also successful enterprise communication architectures, and widely
introduced the similar App store. Both focused in on increasing used mobile devices equipped with BBM Messenger for
the number and quality of the available apps a user and consumers through innovation of their pager. No radical
download to ensure a good user experience with their devices. innovations were introduced, which gives me reason to believe
Again clear trend is visible in which these companies introduce the management remained too focused on improve the business
radical new innovations which they continue to exploit. and too little with research and development. This managerial
Blackberry did not. It was not until 2009 that RIMs APP world approach of adaptation cycles that are conservative and focused
was introduced. As a result the amount of apps available was on improving their products was developed pre-iPhone and
significantly lesser than that of the Apple Appstore and the worked well. But after this era the competitors brought radical
Google Playstore. A problem that remained and again, the as well as disruptive innovations to the market. An example of
competitors were one cycle ahead, and left Blackberry one step this is the cross-platform Whatsapp messenger which
behind. In an attempt to keep up, in 2010 blackberry purchased undermined the BBM in a fast pace. Here the blackberry
the company Ottawa-based QNX Software Systems which management still maintained in refining their own products
would help improve the design of the blackberry operating which was a waste of effort as they were replaced. I argue that
system to compete with what Apple and Google have been post-iPhone, Blackberry should have installed new managers
doing for years. who used more radical adaptation cycles to stay in a market with
Thirdly, and again in the same year, 2010 where Blackberry was fierce competition.
still finding their way of catching up, Apple introduced their
revolutionary iPad tablet. In order to not miss out again, this 4. CONCLUSION
time only a few months later Blackberry announced their RIM started with groundbreaking products and using relatively
Playbook tablet which would not be available till next year. In small adaptive cycles, Blackberry continuously improved their
that next year, Blackberry delivered an unpolished product products leading to an incredibly successful and valuable
which was not received well by the consumers. I believe that in company in 2007. However these conservative adaptation cycles
an attempt to make sure they do not lag behind too long again, that continuously improved the products of Blackberry
they speeded up their adaptive cycle process and announced eventually lead to their downfall. As the management learned
their innovative products to maintain market share. However this behavior in the years pre-iPhone, it is unlikely they will
this rush caused them to deliver products of lower quality which change this successful approach post-iPhone. This managerial
proved fatal as the Playbook was very unsuccessful. approach also caused Blackberry to remain in cyclic adaptation
These three examples show how Blackberry suffered from misalignment as the competitors used more radical adaptive
cyclic adaptation misalignment which caused the company to cycles which left Blackberry following a year behind. I conclude
stay behind on their competition which makes it a matter of time with arguing that Blackberry should have appointed a new
until Blackberry succumbs to the success of the competition. management with a fresh perspective managing Blackberry in
the new technological era with fierce competition. It is not until
2013 that the CEO and other managers stepped down, and
3. MANGERIAL EFFECT ON ADAPTIVE blackberry became desperate for a new strategic course. Even
considering tragically splitting the company and selling the
CYLE remaining parts to companies who are luring for Blackberrys
It is only logical consider why an organization would remain patents and technologies. November 4 2013, the sale plan is
behind in a state of cyclic adaptation misalignment and not make aborted and Blackberry receives an investment for one last try
an effort to catch up or redesign to match their competitors as under leadership of the new CEO John Chen. Is the new
the adaptive cycle is merely a model and also adaptive in nature management a good choice? I believe so. As long as
which means everything is possible. Continuing the analysis of Blackberrys adaptive cycle will become more radical and
Blackberry, an explanation for the fact Blackberry continuously innovative, in order to push the company out of cyclic
remained in cyclic adaptation misalignment is given in this adaptation misalignment. But time will tell.
section.
One reason Blackberry found itself trapped behind is that
speeding up their adaptive cycles did not yield desired results.
Recall, after Apple introduced the iPad, Blackberry responded
quickly with their playbook in an attempt to match up. I argue
that speeding up the adaptive cycles in a business is not the right
methodology to get an organization out of the cyclic adaptation
misalignment. Speeding up your adaption cycles leads to
rushing which results in quality loss as demonstrated by the
failure of Blackberrys fast responsive with the Playbook tablet.

Another reason why blackberry remain behind is from the

managerial perspective. Pre-iPhone, or before 2007, Blackberry
had little competition in their field of secure data
communication networks like BBM, email services, and even
some of their mobile devices where state of the art. What is
noticeable from the complete duration of the existence of
Blackberry is that their innovation consisted of refining their
existing technologies. This they did successfully leading to their