Research In Motion

Case Study

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Table of Contents
Introduction ............................................................................................................................................ 4 History and Background of the Organization............................................................................................ 4 External Environment Analysis ................................................................................................................ 5 Internal Environment Analysis ................................................................................................................. 5 Strategic Options ..................................................................................................................................... 7 Evaluation of Options and Choice of Option ............................................................................................ 8 Action Plan .............................................................................................................................................. 9 Bibliography ............................................................................................................................................ 9

Research In Motion Ltd

Introduction
Since the entrance of Google Android smart phones and Apple iPhones into the smart phone market segment, Research In Motion (RIM), has experienced drastic fall in the market share of its BlackBerry mobile devices especially in the USA. There are also signs that the companys growth in the international markets may be waning. RIM used to own 55% of the smart phone market share but it is now in third place with Googles Android phones being first and Apples iPhone second in place. In February 2011, RIM was number two with 28.9% market share based on an average of the previous three months. By May 2011, its share dropped by 4.2% to 24.7% while Googles Android platform led with 38.1% and Apple with 26.6%. This fall in market share has also resulted in the fall of RIMs stock prices, impending layoffs and share repurchase program.

History and Background of the Organization

Research In Motion Ltd (RIM) is a Canadian telecommunication and wireless device company for the international mobile communications field. The company was founded in 1984 by Mark Lazaridis, who currently serves as its co-CEO along with Jim Balsillie, and its headquarters is located in Waterloo, Ontario, Canada. Just like any technology start-up, the company was formed in a one-room office by Mike Lazaridis at a tender age of 23. Mission and Vision RIM provides groundbreaking advances in wireless technology and world class support and seeks to become a leading designer, manufacturer and marketer of innovative wireless solutions in the international mobile communications field. Core Business The companys main selling point is the BlackBerry smart phone that acts as a Personal Digital Assistant (PDA). This device is manufactured for the enterprise segment of the mobile phone market. This segment includes businesses, corporate organizations and government institutions. The company dominates the enterprise market due to the sophisticated features of the BlackBerry phone that suite this market.

External Environment Analysis

The entrance of competitors like Google and Apple with better smart phones for the consumer market has triggered a loss of the market share for RIM. More people are buying Android platform phones and Apple smart phones more than they are buying BlackBerry smart phones. This correlates to reduced sales and thus a drop of market share and stock prices. Furthermore, corporate organizations and government institutions are turning their heads towards the purchase of Google and Apple smart phones, thus the loss of the enterprise market that is RIMs main source of revenue. The reason as to why more people are turning their purchase preference towards Google and Apple smart phones is because of the touch screen feature that comes with the phones and their affordability. In addition, basic features of the BlackBerry phone such as solid calendar system and reliable email capabilities (such as email push) are available in the rivals phones plus other innovative features. The plummeting of RIM stick prices has prompted its sixth largest investor, the Montreal based Jarislowsky Fraser Ltd, to reduce its holding of 10.2 million shares by at least half. This shows reduced confidence by investors on the companys capability to improve its performance in the stock market. More and more investors are getting disappointed and therefore reducing their share ownership in the company since the stocks are no longer profitable. Mobile network operators that sell phones on contract basis are stopping the sale of RIM mobile devices. One such example is the UKs largest mobile carrier called O2. It has stopped the supply of RIMs new tablet computing device due to issues that affect end to end customer experience. In other words, the customers are not satisfied with the BlackBerry tablet, called the PlayBook, as it has few features that will benefit them. RIM released the BlackBerry PlayBook in reaction to the highly successful iPad that is sold by Apple Inc. The iPad is the highest selling computer tablet due to its versatile features, perfect usability (good end user experience) and aesthetic design. RIM released the PlayBook too quickly with incomplete features. It, therefore, cannot be compared to the Apple iPads perfection. Consequently, RIM has been under heavy criticism from the media especially the technology community and press due to the lackluster of the BlackBerry PlayBook. There has been a lot of negative review which has affected RIMs image resulting in dropped sales.

Internal Environment Analysis

RIM used to create a supportive workplace that identified and encouraged employees accomplishments. Financial Post, a business publication, identified RIM as one of the 2008 Top Best Companies to work for and has also been named as Canadas Top 100 Employers for 2007 by Macleans magazine. The company fostered an enjoyable work environment where
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individual efforts were eagerly attained and recognized. This competitive advantage had made dedicated employees at the low level to make RIM the leader in wireless mobile communications and has been the case in earlier years. In contrast, presently, the top level leadership has been performing below expectations with time. Bureaucracy has cropped in whereby the middle management cannot make decisions to spur the company forward. There have been complaints that the CEOs of the company refuse to listen ideas that can push the company forward in the realm of wireless devices. An open letter, reportedly written by a senior RIM executive and published by Boy Genius Report, pleads with RIM co-CEOs Jim Balsillie and Mike Lazaridis to make some big shake-ups in the company's organizational structure, culture and leadership. In Newmans article (2011), the writer explained his or her anonymity by saying that "the culture at RIM does not allow us to speak openly without having to worry about the career-limiting effects." This letter goes ahead to show that a change of leadership is required to bring a change in the way business is done within the company. A change in leadership has the effect of bringing innovation and revitalizing the company.

Another competitive advantage that RIM has is the production of high quality and highly secured mobile devices. This is RIMs strong point. Mobile devices are used majorly in communication which includes emailing and storage of contacts. To enable secure communication, RIM makes use of NATO-grade encryption to secure messages and provides the ability to freeze or wipe data from stolen BlackBerry devices. This is the reason why the enterprise market prefers RIM devices to conduct daily business activities. However, when it comes to production of software for its mobile devices, this is where RIM fails. RIMs main rivals have a large array of application software, commonly known as apps, in their store repositories but the CEO of the company has said that they want to focus on useful apps instead of having a large thriving app store. This is may seem efficient but it is a disadvantage for the company because the end user or customer has a diversified taste. The development of mobile applications for the BlackBerry device is also difficult for software developers. This is due to two reasons: a) There is a lack of standards between the different BlackBerry operating systems that run the different models of the phone. The code for similar apps needs to be optimized for each version of the BlackBerry operating system. This therefore delays development and implementation. b) There is a diverse specification of the BlackBerry devices hardware. This ranges from form factor and screen resolution to components like GPS and touch screen. This makes it hard to make a standardized application.
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A lack of diversity and ease of software development has resulted in production of expensive applications that are hard to sell. The company has also failed to perform good research and development. This has resulted in the production of incomplete products such as the BlackBerry PlayBook, a tablet computing device. RIM is known for making high quality hardware and the PlayBook can attest to that. However, it fails in providing good functionality due to lack of good software applications. It succeeds in hardware but fails in functionality. In addition, the world is now heading towards 4G technology, a better and faster means of communication than 3G. While other companies are incorporating 4G hardware into their devices, RIM is still inputting 3G hardware into its mobile devices. This reduces its preferences as a business communication tool.

Strategic Options
1. Research In Motion Ltd should invest heavily in research and development because technology changes at a very fast rate. According to Moores law the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. In other words, technology based on the integrated circuit improves at a fast rate exponentially every 18 months. RIM should take the initiative of studying global technological trends and the needs of the market where there is a change in the social order. With research and development the company will introduce fewer products that are of high quality and meet the needs of the end user. This cuts down costs of production because the company does not need to invest its resources in a large array of different products. For instance Apple Inc have focused only three main mobile products, the iPhone (a smart phone), the iPad (a tablet computer) and the iPod (a digital media player) yet they have succeeded. 2. The leadership and the work culture are in need of a serious make over. The CEOs of the organization have been at the forefront of the organization for the last 20 years and have partly been responsible for the decline of the market share through the decisions they make. Since they are the founders of the organization they should hand over the leadership to a younger and vibrant person as they sit on the sidelines. They will be able to offer hands off leadership style. The culture of bureaucracy should be eliminated as it prevents innovation and intelligent decision making. All levels of management should be given decision making status. That way, everybody will be held responsible for the input they make and at the same time rewarded for their contributions. Leaving the decision making to only two people is not only ineffective but suicidal to the once renowned global company.

3. RIM should also focus on creating a diverse selection of mobile software for its mobile devices. Its major competitors have a large selection in their app stores that meet the needs of the consumer. RIM can partner with technology communities and universities to organize conferences that will focus on promoting BlackBerry as a suitable platform to develop for. Such conferences can attract students, software development companies, entrepreneurs or individuals interested in mobile application development to come together to learn about the BlackBerry operating system and the kind of market they kind of market they can develop for. This in essence will build capacity to increase the number of applications in the BlackBerry app store. In addition, RIM should focus on standardizing its operating systems so that developers can be able to develop applications that will run in all mobile devices. For instance, a developer can develop an application that can work on different models of the BlackBerry phone that use different versions of the operating system. 4. The company should focus on reducing the proprietary costs of the mobile devices if they want to have a big share of the consumer market. BlackBerry devices are of high quality but very expensive. It has a strong foothold in the enterprise segment of the market and it is possible that this is the reason as to why RIM mobile devices are unaffordable to most consumers. This gives it an ease of entering the consumer sector. However, the costs have to be reduced to increase the purchase power of consumers. This will boost sales since consumers know the high benefits of owning a BlackBerry device.

Evaluation of Options and Choice of Option

Given the current financial state of RIM, the company should implement a strategy that will be both cost effective and affordable. Research and development would require a heavy investment of funds and this will not suite RIM at the moment. In addition, some investors have reduced their stocks in the company and the share prices have gone down. This means that the funding source is limited coupled with low sales. Partnering with academic institutions and technology communities to hold developer conferences requires a lot of planning and organization. This is not an immediate strategy due to its time consuming nature. The former and latter options can be implemented later once that company is on stable ground. The reduction of the mobile devices cost is a good action initiative especially for global markets like Asia and Africa that are emerging in terms of technology. However, functionality of the devices need to meet the current technology trends and needs. This option can be implemented after the organization has seen a rise in the number of software developers for the BlackBerry operating system platform. The best option would be changing the leadership and culture of the organization because it determines whether or not the other options will be implemented. The leadership is paramount in the running of the company because it can steer the workforce
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either toward success or failure. The company is in need of leaders who are to open to change especially when it comes to technology trends and the demands of the product end users.

Action Plan
Action Steps Hiring of new CEOs to head the company and give the current ones a different and less responsible role Individual(s) Responsible Time frame (position) The Board of directors 2 months and the shareholders of the company Resources or Cost This will require the hiring of a venue to hold the AGM meeting. In addition communication cost will be involved in informing the shareholders about the upcoming meeting Hire coaching experts to oversee the training of all staff and ensure the new values are shared by all personnel. Implementation of training sessions that will require resources such as literature, audio and video

Change the work CEOs and middle level culture of the managers organization from a bureaucratic setting to an open minded setting where every suggestion is considered so that everybody can feel that they are part of the company

4 months

Bibliography
Castens, Martin 2011, 10 June, Evaluating the pros and cons of RIMs PlayBook tablet, Memeburn, viewed 7 July 2011, available at http://memeburn.com/2010/10/evaluating-the-pros-and-cons-of-rims-playbook-tablet/ Castens, Martin 2011, 22 June, RIMs week from hell A sign of things to come, Memeburn, viewed 7 July 2011, available at http://memeburn.com/2011/06/rims-week-from-hell-asign-of-things-to-come/ Dess, Gregory G. & Miller, Alex 1993, Strategic Management, McGraw-Hill, New York.

Kesslar, Sarah 2011, 7 June, Why apps, not Apple, are killing BlackBerry, Mashable, viewed 7 July 2011, available at http://mashable.com/2011/06/07/rip-rim/ Newman, Jared 2011, 1 July, Drama in BlackBerry land: RIM Exec reportedly rips superiors, Techland, viewed 5 July 2011, available at http://techland.time.com/2011/07/01/blackberry-drama-rim-exec-ripssuperiors/?xid=newsletter-techland Research In Motion Ltd. (RIM.TO) 2011, Reuters, viewed 7 July 2011, available at http://www.reuters.com/finance/stocks/companyProfile?symbol=RIM.TO RIM 2011, Working.com, viewed 7 July 2011, Canada, available at http://www.working.com/profiles/rim/index.html RIM CEO BlackBerry has a winning global vision. Markets Disagree, 2011, 16 April, Mobility Feeds, viewed 7 July 2011, available at http://www.mobilityfeeds.com/mobilityfeed/2011/04/rim-ceo-blackberry-has-a-winning-global-vision-markets-disagree.html Sweeny, Alastara 2009, BlackBerry Planet: The story of Research In Motion and the little device that took the world by storm, John Wiley & Sons Canada Ltd., Ontario. Wasserman, Todd 2011, 7 July, BlackBerrys blues continue as platform falls to third place, Mashable, viewed 7 July 2011, available at http://mashable.com/2011/07/05/blackberry-third-place-2/

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