Rim Case Study
The Dependables “Your stocks are our business” BlackBerry’s Rise in Brand Power The Duelling Marketing Strategies of RIM versus Apple James LePage A00778266 Keith Ebenal A00676512 Salma Sharif A00794613 Jun Kyu Han A00782408 Alvin Yu A00787901 RMGT 1A ; FMGT 1M Introduction RIM and Apple are the two main companies in the smartphone market. RIM currently has a majority of the corporate and business professional portion of the market while Apple has a larger share of the mainstream consumer market with their new iPhone4. ProblemHow will BlackBerry successfully maintain the market place as well as grow against Apple’s growing success? Assumptions -The BlackBerry is entering the prime phase in its product life cycle -RIM/Apple will continue to expand new product lines and services -RIM/Apple will continue to expand into foreign markets and build new partnerships -There will be an increase in the number of different competitors -Demand for smartphones will increase -New functions/features will be added to future BlackBerries -RIM/Apple will continue to partner up with software developers and add new applications ResearchRIM (BlackBerry) -Canadian telecommunication and wireless device company, best known as the company that developed the BlackBerry smartphone -Main headquarters located in Waterloo, Ontario, Canada -Founded in 1984 by Mike Lazaridis (President, Founder, co-CEO), Jim Balsillie (co-CEO) -Launched the BlackBerry smartphone in 1999 as a 2 way pager -BlackBerry commands a 20.
8% share of worldwide smartphone sales – 2009, 34. 5 million sold representing 20% market share BlackBerry internet service is available in 91 countries worldwide on over 500 mobile service operators -BlackBerry models: Electron, Pearl, Pearl Flip, 88XX, Curve, Bold, Storm, Storm 2, Torch – The company’s revenue reached a value of $11 billion between 2005 and 2009 with 92% being generated outside North America -RIM has grown by expanding into foreign markets where it held 18. 7 percent of the global smartphone market share in 2009. -BlackBerry Torch costs approx. $183 to make per unit APPLE (iPhone) -Founded on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne -Main headquarters located in Cupertino, California, US Apple has many products such as (Mac – Pro, Mini, iMac, MacBook, Air, and Pro) -iPod (Shuffle, Nano, Classic, Touch) -iPhone (original, 3G/3GS, 4), iPad, Apple TV – In 2009, 25 million iPhone units were sold, 14% market share -Revenue in 2009, 42.
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91 billion, profit 8. 24 billion -2010 market share, 14. 2% share of worldwide smartphone sales -First Apple product sold called the Apple I, was an assembled circuit board -iPhone 4 costs approx. $188 to make per unit. It’s made in China General Smartphone Statistics -2008, over 151 million smartphones sold -2009, over 175 million smartphones sold 2008 2009, 15% increase in units sold -2009, smartphones accounted for 172.
4 million (14%) of the 1. 211 billion mobile phones sold that year. That’s 23. 8% more smartphone sales than in 2008 -2010 figures, smartphoness represented 61. 6 million (19%) of the 325. 6 million mobile phones sold, a sales increase of over 50% on Q2 2009.
-The Coda Research Consultancy predict global smartphone sales of some 2. 5 billion over the 2010-2015 period, and also suggest that mobile internet use via smartphoness will increase 50 fold by the end of that period. – Gartner expects over 500 million smartphones to sell in 2012.Mobile OS 2010 Market Share Mobile OS 2009 Market Share Competitive Analysis BlackBerry is the leader in business smartphoness; iPhone targets people who seek media. Apple has stronger foundation and capital to support its after-sale services, but up to this point none of BlackBerry’s competitors come even close to this functionality from an IT standpoint. With BlackBerry Enterprise Server, IT administrators can enforce hundreds of policies on the phone.
BlackBerry has a good reputation, but the iPhone market share of the smartphone business is growing rapidly.The prices for the newest BlackBerry and iPhone are very close, except Apple is willing to drop the iPhone’s price in order to increase its sales and market domination. If RIM follows, its profits will be reduced and it does not have as many other products as Apple to compensate for this loss of profit. SWOT Analysis BlackBerry: Strengths: Brand recognition – BlackBerry has excellent brand image and loyalty. Advanced key technology – Great product with advanced technology, such as the thumbwheel and QWERTY keyboard.
Enterprise market – One of the most trusted phones for the business-class mobile e-mail. Weaknesses: RIM business model – BlackBerry sells purely through operators which can be time consuming and costly. Cost of ownership – – BlackBerry has a high total cost of ownership. BlackBerry features – BlackBerry does not have a very large quantity of third-party software. Opportunities: Expanding portfolio of offerings, features and applications – RIM should respond with smarter pricing and marketing strategies.
Pack products for several categories and different segments.Extend range of third-party devices – BlackBerry does not have a very large quantity of third-party software. Threats: Competition – BlackBerry is facing tougher competition than ever before. The iPhone is the most complete all-in-one phone in the market. It has almost all the features of other phones and is relatively inexpensive. iPhone: Strengths: Innovative product – The touch screen ; several other features now included in all other mobile products originated in the iPhone.compatible – The phone is very compatible, versatile and is integrated well with iTunes and the Mac computer. Easy To Use – iPhone has all of the latest features, and is easier to access than other smartphones out there. Weaknesses: Enterprise consumers – It does not have a strong reputation like the BlackBerry does in the enterprise market. Price – Apple does not yet offer lower priced models for more cost conscious consumers. User interface – Long-term use of a flat, solid surface for input can become uncomfortable.
Opportunities: Increasing demand and expansion to a new target segment – Get iPod users to upgrade to iPhones.Upgradeable – Future versions could be hardware upgradeable. Partnerships – Apple can collaborate with many powerful global mobile phone companies. Threats: Downward pricing pressure – The iPhone is marketed as a high-end phone, but phone prices are almost certainly going to fall when other companies undercut the current price of iPhones. Target Market – Communication-focused users are mainly extroverts who live to communicate with others. They’re often in people facing jobs like sales.
They’re willing to pay extra for a mobile device that allows them keep up with others in multiple different ways.E-mail, SMS, voice, conferencing, video calling, and anything communication-related is compelling to them, and they will pay extra for a device that does it well. RIM will target the next generation of Tweens, who are adept to technology and social media, and have considerable influence on their parent’s consumer behaviour. The people I labelled “value-added users” are the mobile data market. But that’s only the beginning.
Higher prices are to the right. Smartphone sales start with the early adopters at the right, and then as prices drop, everyone will switch to smartphones and begin using all of their features.Information managers are an underserved market. Early PDAs targeted these users, but the device features were too limited to build a lasting franchise. The main champions of the PDA market, Palm and Microsoft, have now both focused most of their effort toward communicators. As a result, information manager innovation has basically ground to a halt, and the users in this space are very frustrated. The iPhone is not a BlackBerry killer. One of the things this chart shows immediately is why the iPhone is not a major threat to BlackBerry sales. They’re in very different markets.If RIM is hoping to move into the entertainment market with devices like the Pearl, iPhone definitely interferes with that.
But the immediate impact of the iPhone is on the products closest to it, meaning the Microsoft Zune and the Sony Ericsson music phones. Recommendations Alternative 1 Overall Growth Strategy – Product Development Apple has started to penetrate BlackBerry’s business market. In order to prevent this from continuing, BlackBerry could develop a new phone targeted completely at business users once again and abandon their recent diversification attempts.This new phone would be completely targeted at the business sector and avoid adding any of the other bells and whistles added to appease more casual users. Brand extension would be used in naming the new product.
Advantages: 1. New phone for specific target market. 2. Phones would be specifically targeted to business industry (voice calling, conference calls, easy e-email reading/writing, security features). 3. Could eliminate Apple’s penetration into the business market.
Disadvantages: 1. Other markets would be neglected. 2. Business users may already have BlackBerries and are not interested in upgrading. .
The costs of marketing and creating the new phone. Alternative 2 Overall Growth Strategy – Diversification BlackBerry currently has a strong hold on the business aspect market. Most company phones are BlackBerries and only recently have some started to switch to Apple. RIM could develop a new phone specifically designed only for younger users in order to try and steal some of Apple’s market share. Brand extension would be used in the product naming to give the new phone’s name a trendier, hipper identity to appeal to younger people. Advantages: 1.
New phone for new specific target market. 2. Phones would be targeted entirely around the young adult lifestyle (Blackberry Messaging, Facebook, Twitter, Text etc. ).
3. Directly hurts Apple’s prime market while gaining a new market for BlackBerry. Disadvantages: 1. Consumers may not respond to the new product because they view the brand as being more business oriented. 2. Costs for marketing and production of new products.
3. Apple market share may be impenetrable or very difficult to convince to switch. Alternative 3 Overall Growth Strategy – Market DevelopmentMany young users are already using BlackBerries because of their unique messaging features and keyboard. However this is primarily due to accident and word of mouth rather than a clever marketing design. Imagine if BlackBerry’s current phones were marketed towards a younger target market specifically and intentionally. Apple has a large percentage of this market right now so a competition type product positioning could be used to try to penetrate it.
Advantages: 1. Easier and cheaper to implement than many other alternatives. 2. Potential to gain many more new users. . Younger people will be consumers longer and may also soon be business users making the transition easier.
Disadvantages: 1. Current Apple phones may be more appealing to young users. 2. Could turn away prospective business users and leave them feeling neglected. 3.
New market campaign costs. Solution The solution best suited to solve BlackBerry’s problem is to use the Market Development strategy (Alternative 3). This strategy would allow RIM to reach a new, previously untapped, target market without spending a lot of money on a new product.The fact that BlackBerry’s current line-up of new phones already has all the features young people are after makes developing a new product with this goal unnecessary. The change would be heavily marketing these features to a younger audience rather than focusing on RIM’s current business market. Given the threat of Apple’s iPhone, this plan would also mitigate the BlackBerry’s largest threat by going after the iPhone’s main market.
Staying with the current target market would be a bad idea because it would essentially be playing defence rather than going after Apple and really growing RIM’s business.Overall, utilizing a Market Development strategy is the right solution. Plan of Action In order to properly implement the Market Development growth strategy that will cater towards a young adult target market, RIM must 1. Offer student discounts and lower prices in order to allow a younger market to purchase the product easier 2. Lower the prices to the accompanying apps and accessories for the BlackBerry to make them more available to younger consumers 3.
Produce more apps and accessories targeted at a younger consumer such as games and camera accessories 4.Begin to sell BlackBerries more in locations likelier to have younger consumers such as near malls and schools 5. Advertise BlackBerry heavily at schools and colleges and on TV stations targeted at a younger audience such as MTV 6. Offer giveaways and promotions at schools and colleges 7. Advertise on the internet on the websites most visited by young users such as Facebook and Twitter and launch a viral video marketing campaign on Youtube 8. Change the product packaging to make it more visually appealing to younger people as shown in the concept we’ve come up shown in the appendix (See Fig. ). Course Concepts SWOT Analysis Competitive Analysis Diversification Competition product positioning Brand Extension Market Development Strategy – employs the existing marketing offering to reach new market segments, whether domestic or international. Product Development Strategy –offers a new product or service to a firm’s current target market Marketing Mix (4 P’s) References http://www. Google. ca/search? source=ig;hl=en;rlz=1G1ACEW_ENCA402;=;q=apple+logo;aq=0s;aqi=g-s1g-sx9;aql=;oq=aple+logo;gs_rfai= http://www. google. ca/search? l=en;rlz=1G1ACEW_ENCA402;q=blackberry+logo;aq=0;aqi=g5g-s1g4;aql=;oq=Blackberry+logo;gs_rfai= http://www. associatedcontent. com/article/2639917/blackberry_strengths_weaknesses_opportunities.
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comscore. com/Press_Events/Press_Releases/2010/3/comScore_Reports_January_2010_U. S. _Mobile_Subscriber_Market_Share