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Thursday, May 26, 2011



The BlackBerry Smartphone is the undisputed market leader in the Smartphone device arena with more than 29 million subscribers and growing. One reason for RIM’s early success was its prescience in providing customers with embedded, integrated access to email and messaging applications.( D, Laura) Blackberry’s Research in Motion (RIM) is the designer and manufacturer of the award-winning BlackBerry Smartphone, used by millions of people around the world. The company also creates solutions for the worldwide mobile communications market, including the software that allows the BlackBerry Smartphone to provide mobile access to email, applications, media and the Internet. RIM is the company behind the BlackBerry brand. The innovative and award-winning BlackBerry product line includes best-in-class Smartphone, as well as software for both enterprises and small businesses. The integration of BlackBerry Smartphone and software provides mobile access to email, applications and more. It also allows virtual real-time communication, so one can stay in touch and up-to-date with the people and things that matter most. (

The blackberry wireless mobile system could integrate e-mail, phone, instant messaging (IM), Short Message Service (SMS), internet, music, camera, video, radio, organizer, Global Positioning System (GPS), and other various applications in one wireless solution. Some of the key features of the Blackberry such as immediate pushed message delivery, the small and convenient size, long battery life, and ease of use made it popular with a busy business people who valued the safe and secure delivery of corporate mail and seamless extension of other enterprise and internet service. (Mazutis, D. 2007)
RIM was a world leader in the mobile communications market. Founded in 1984 by 23 years old university of waterloo student Mike Lazaridis, RIM designed manufactured and marketed the very popular line of BlackBerry products that had recently reached 14 million subscribers worldwide and had just over $6 billion in revenue. (Mazutis, D. 2007) RIM was the second developer in the world in 1988 to develop products for the Mobitex wireless network which was the first Blackberry’s network. In 1990, RIM came up with the DigiSync Film KeyKode Reader and it was very successful that they won Oscar for the DigiSync. In 1991 they introduced the first Mobitex protocol converter (MPC) and RIM also introduced the first Mobitex point-of-sale solution. Further, RIM introduced the Interactive Pager (a.k.a. RIM 900), the first two-way messaging pager. In 1998 RIM licensed the Intellisync Synchronization Platform from Puma Technology to enhance its wireless handhelds. (Halevy, R. 2009)
RIM introduced the BlackBerry wireless email solution, BlackBerry Enterprise Server Software for Microsoft Exchange and the RIM 850 Wireless Handheld as well as the RIM 802D OEM radio modem and the RIM 902M OEM radio modem during 1999. In early 2008, RIM was one of Canada’s largest companies with a market capitalization of $69.4 billion. (Mazutis D., 2007).
The significant turning point in the telecommunication industry that shaped the overall strategy was increasing demand beyond just cell phones to smart phones with all the functions of mobile phones with fully integrated email, browsers, and organizer applications. By the end of the 2007, the number of wireless subscriber connections worldwide had reached 3 billion all over the world which signals the need of RIM’S to go globally to compete in the international market. For example, India is experiencing the fastest growth rate with a 60 percent increase (during 2007) and room to grow with 21 percent market penetration.  Beside this, in 2007, smart phones represented only 10 percent of the global mobile phone market in units. However, the segment was projected to reach over 30 percent in next five years. This worldwide demand for wireless mobile especially Blackberry’s demand is fueled by several factors of global trends such as Commercials availability of high speed wireless networks, the emergence of mobile access to corporate intranets, and Broad acceptance of email and text messaging as a reliable, secure, and indispensable means of communication.
Another turning point in the RIM’s evolution over time was about the security protection of the Blackberry source code. This is the huge challenge to the Blackberry from its competitors which can also be consider as the threat of the RIM due to its entrance into the global market and business. In addition to this, expanding to immerging market is also complicated by restrictions regarding cryptographic because some leading government such as the United States, Canada, Russia and China regulate the import and export of encryption product because of the nation security issues. Going global further increases the challenges for the Blackberry RIM such as issues related to organizational design, communication, and integration between head office and other geographically dispersed locations.
These key turning points of the RIM’s greatly shaped its strategy over the year. For example, RIM’s R&D efforts focused on improving the functionality, security, and performance of the blackberry solutions as well as developing new devices for current and emerging network technology and market segments. In March 2007 RIM employed just over 2100 people with different R&D areas of expertise. RIM’s R&D had increased significantly both in terms of the total number of employees as well as the geographic scope of its operations. Since 2000, the R&D group had grown more than 10 fold, from 200 to 2100 people and expanded to two more locations in Canada, as well as in the United States and in England.
One of the major strength of the RIM is that, it has highly sophisticated distribution channel regulated and control by its service providers such as Rogers, TELUS etc. the key weaknesses of the RIM is that it finances it project primarily from the bank’s loan instead of cash from other money-making projects/products in the organization which is consider as an expensive way of financing. The market of these kinds of devices is extremely attractive therefore competitors are entering this market of hand held devices. All the competitors such as Nokia, Samsung, and Motorola etc are the threat to RIM. Strong brand loyalty is an opportunities for the RIM.
RIM, casual, informal and a relatively small company which is slowly maturing relies on centralized decision making. RIM has fast-paced development environment and it has product functional teams. Some of the major competitors of the RIM are Motorola, Handspring, Nokia and Good Technology (Good Technology is a tiny private company with less than 5% of the market share). Microsoft and Dell on the other hand also provide threats of new entrants to RIM.
As the major group of the target customers of the RIM is the early adaptors, this market is relatively price in-elastic in nature. This means that the change in price is less sensitive to cause the change in the demand of the RIM’s product. RIM enjoys minimal influence from its suppliers because there are virtually no suppliers at all.  Therefore, the level of influence of the suppliers is minimal. RIM has strong presence and brand in the global market today. They have growing market share globally in their Smartphone and RIM is market leader in North America. Not only this but also they have strong wireless E-mail and Qwerty products and they have healthy financial performance. Some other major weaknesses of the RIM are they have weak position in consumer mobile device market and they have limited application. But they have high growth in consumer and small and midsize business market especially for qwerty Smartphone’s and wireless E-mail.
But RIM is facing equally tougher competition than ever before, from a range of competitors. Until now, competitors have been small niche vendors, but after going forward to international market RIM will compete with large global players such as Nokia and Microsoft, as well as with operators, many of which have launched their own branded email services. It is unclear what impact the newcomers will have on the market, but many enterprises are willing to consider them as valid alternatives to BlackBerry today.

RIM, on the other hand is facing high threats from the substitute product because this market has a larger influence on these substitute products. Several other new entrants are appearing (including Microsoft as of late with Smartphone). In 2007, Key competitors to RIM’s Black Berry line-up included the palm Treo 700 and 750, Sony Ericsson P900 series, the Nokia E62, Motorola Q, and the Apple iPhone. Symbian, a proprietary Operating system(OS) designed for mobile devices and jointly owned by Nokia, Ericsson, Sony Erickson, Panasonic, Siemens AG, and Samsung, held an estimated 65 percent worldwide share of the converged devices, shipping 77.3 million smart phones in 2007. This was significantly ahead of Microsoft’s windows Mobile OS (12%), and RIM’s BlackBerry OS (11%).However in North America, RIM lead with 42% of shipments, ahead of Apple (27%), Microsoft (21%) and Palm (less than 9 %). But Apple had recently announced that it would be actively pursuing the North American business segment. In addition to this Microsoft recently revamped its marketing efforts and announced an end to end solution for enterprise customers as well as desktop grade web browsing for windows mobile enabled phone. And Google had entered the fray with Android, an open and free mobile platform which includes an OS, middleware and key applications. Rivalry, it seemed, was intensifying.  (Mazutis D., 2007).
RIM’s collaborations and international research consortiums raised not only logistical but also legal issues from different standpoints. These are the key legal and technology related environmental issues of RIM that greatly affect the future sustainable competitive advantage of the RIM’s business. For example, source code loss, software piracy, and product imitations were more common in some countries where IP protection laws and its enforcement lagged the United States or Canada, leading to both explicit and tacit knowledge “leakage.” For example, despite its strong commitment to China, Nokia was recently forced to file suit against two Beijing firms for manufacturing and selling mobile phones that were a direct copy of its proprietary and legally protected industrial designs. Other large high tech companies such as Cisco and Microsoft had also suffered source code breaches. Some of Rim’s key competitors had a long history of global expansion of their R & D activities for example Symbian and open and R & D in Beijing in August 2007, already having three others in the United Kingdom and India. Motorola had been present in china since 1993 when it established its first and R & D centre there as part of its global software group (GSG).
Beside this, RIM has filed various intellectual property lawsuits against different companies over patents they held on wireless email devices. Recently they sue Samsung over the name of Samsung’s new smart phone, the Blackjack. But such lawsuits against those reputed company by the RIM under patent right does not hurts Samsung rather it will help them to gain market attention and popularity.
RIM had success in bringing people on board through acquisition. Several years earlier, RIM had acquired Slangsoft, a high tech start-up in Israel that was developing code which allowed for the ability to display and input Chinese characters- key to tailoring BlackBerry for Asian and other foreign markets. The European mobile telecommunication market, in particular, was highly “nationalistic” with end users favoring home-grown companies over foreign solutions. Establishing a presence there through acquisition could buy RIM goodwill and serve as a portal to this lucrative market. The economic downturn in the United States and recent competitor’s plant closures in Europe presented RIM with potential for opportunistic acquisitions, either of technology or of software engineering talent (Mazutis D., 2007). Some of the major supplemental strategies RIM has employed over time are:
*      Strategic alliance
*      Acquisition
*      Licensing
*      Partnerships
*      Vertical integration of technology
*      Outsourcing
*      Growth strategy
*      Global expansion
In 2009, HP and Research in Motion (RIM) announced to establishing a strategic alliance to deliver a portfolio of solutions for business mobility on the BlackBerry platform. The solutions, which include support for BlackBerry Enterprise Server 5.0, are focused on increasing service levels, reducing operations costs and improving productivity for customers. Both HP and RIM plan to design and launch offerings to increase the productivity levels of the growing number of global mobile employees, enabling businesses to extend the return on their investments in mobility.
Some other key strategies that RIM is particularly emphasizing are differentiation and focus strategy. Blackberry is position as one of the expensive cell phone and it is also considered as well developed product. One of the unique and outstanding feature or attributes of the Blackberry is that it’s push email system which differentiate itself from the rest in the industry. This is a key feature of the Blackberry for business people and executives who are highly time sensitive because they don’t have to manually log in and check their email.  Obviously this was a very useful feature to businesses world-wide, as information is very time-sensitive.  But RIM is facing high risk of new entrants and risk of availability of product substitute due to the market entry of the world market leading company in smart phone segment as Microsoft and Motorola both of these companies have already developed their own versions of “push” email technology.  Microsoft is providing huge threat to the RIM because it has huge worldwide presence of phones using its windows mobile operating system. Beside this, Microsoft also has competitive advantage in large customer base that uses Windows Outlook email system. Because of this, Microsoft is providing huge threat to the RIM as it can steal market share of RIM. Therefore, RIM today is quickly changing its product attributes and features understanding the unique changing needs of its customers investing heavily in the research and development.
            But today there is the clear-cut move in RIM’s business strategy that they are now no more applying focus strategy and RIM no more concentrate in specific target market of business executives rather it has expanded itself into the consumer segment. They are now relying heavily on a differentiated feature /attributes set and the brand equity targeting all the market segment of the industry globally.
“RIM and HP are working together to deliver solutions to customers that weave mobility into their daily operations – from innovative new services in the cloud to managed mobile services for the enterprise,”(Balsillie, J.). Through their collaboration with HP, businesses will have access to an expanded set of applications and services for their BlackBerry Smartphone deployments. “On Dec. 3, RIM made a hostile takeover offer for Certicom, which specializes in wireless VPN security and encryption, in $52.4 million” (Goldstein, P.). Furthermore RIM also announced that they acquired Chalk Media Corp. Mobile Chalkboard is a product from Chalk that allows an organization to create and securely deliver multimedia content to their population of Blackberry’s.
As an International expansion strategy of RIM in Europe, Car Phone Warehouse introduced several Blackberry smart phones in multiple colors and the Curve 8520 was the most successful BlackBerry Smartphone launched ever through this channel. Vodafone U.K. had a strong quarter with launches of Storm 2, Bold 9700, and Curve 8520. Beside this, RIM had an excellent quarter in France with all carriers in the region delivering strong growth. These carriers successfully target the 15 to 25 year old market segment with the Curve 8520 and offered cap service pricing packages which were supported by marketing and promotional campaign targeting this segment and highlighting unique features of the BlackBerry platform, such as BlackBerry Messenger. Furthermore, there continues to be strong demand for BlackBerry Smartphone in the Middle East. In Saudi Arabia, the Curve Blackberry was launched across multiple carriers and when coupled with an expanded retail presence and the introduction of prepaid service on Saudi Telecom, the BlackBerry subscriber account base in the region grew substantially.
In Latin America, the successes of new product launches have moved BlackBerry products to the leadership position in the Smartphone market in the region. This combination of appealing new handsets, tiered pricing structures, and strong brand recognition has enabled BlackBerry products to continue to aggressively grow in the market. Carriers throughout Latin America are offering attractive service packages and supporting BlackBerry Smartphone with extensive promotional and marketing support. (Research in Motion F3Q10 (Qtr End 11/28/09) Earnings Call Transcript)
For example, in Venezuela, Telefonica and Digitel both promoted the launch of the Curve 8520 with integrated marketing campaigns and point of sale promotions targeted at both university students and corporate customers. In Mexico, Tel-Cel aggressively launched the 8520, which was supported by a marketing effort that highlighted BlackBerry Smartphone in combination with their existing lower tiered pricing packages, and promoted the capabilities of BlackBerry Messenger. India continued to show strong growth in , building on the momentum of the Curve 8520 launch and the expansion of our distribution relationship with Reddington which now offers several BlackBerry Smartphone’s, including the BlackBerry Curve and BlackBerry Storm through the network of retail stores in 45 cities throughout India. China on the other hand, represents a large new market opportunity for BlackBerry products and services and we are moving forward with our plans to more aggressively target this region. Last week, RIM and China Mobile announced a deepening of our strategic relationship with plans to launch BlackBerry service for individuals and joint collaboration on the development of BlackBerry Smartphone’s that support PDS CDMA as well as PD LTE. In 2007, RIM announced that RIM and China Telecom have signed an agreement and they are working closely on plans to offer BlackBerry products and services to China Telecom’s customer base in China. To further support their efforts in China, RIM is also exploring opportunities to manufacture and conduct R&D activities in the region. Furthermore, In the United States, T-Mobile launched the BlackBerry Curve 8520 with a prepaid voice and data option starting at $50. This is the first time a large North American carrier has offered a prepaid BlackBerry service plan. (Research in Motion F3Q10 (Qtr End 11/28/09) Earnings Call Transcript)
RIM is working with a Java OS (Operating System) with so much security and encryption and their use of security is what makes them so trustworthy. But the fact is that that RIM’s OS is more than antiquated. There are so many limitations to RIM’s OS, and even RIM’s data network that it offsets all the wonderful things they’ve managed to accomplish. Furthermore, in two years Apple has practically matched Research in Motion (RIM) in almost every consumer area while having the most advanced mobile operating system with the most advanced mobile SDK on the planet.
The reason RIM doing well in the market is because it has the entire package of product and services such as hardware, software, infrastructure, corporate integration, security, etc. every customers wants simplicity, ease of use. In addition to that they want more than what they really need. One of the major future problems of the RIM could be that people might hold off on purchasing a new BlackBerry if they know a newer and better one is being released in a couple months, and this hurts a company’s current product cycle. On the other hand, if someone on Verizon knows that the Apple is launching new improved iPhone two months from now, they might rethink jumping ship or switching to a different device on Verizon. Therefore, If RIM is really a Research in Motion then they have to start changing things up or newer and better operating systems like the iPhone, and web OS because the market is still wide open for other competitors.

In addition to this, For Rim, going global was problematic on a number of fronts, most notably because the black berry source code has to be protected. Not only this but also, expanding to immerging market was also complicated by restrictions regarding cryptographic. Encryption was seen as a dual use of technology which could have both commercial and military value and was thus carefully monitored. For example, The US government would not purchase any product that had not passed the Federal Information Processing Standard (FIPS) certification tests.  This would preclude any product that had encrypted data in China because if they encrypt data in China, they have to provide the Chinese government with the ability to access the keys. India had also recently notified RIM that it planned to eavesdrop on Black Berry users, clamming that terrorist may be hiding behind the encrypted messages to avoid detection. Even if these hurdles could be overcome, going global also brought with it additional challenges of organizational design, communication, and integration between head office and other geographically dispersed locations.
It is true that RIM has to face huge challenge in the global market while competing with those so called market leaders of the communication industry therefore to minimize and mitigate the impact RIM has to modify the BlackBerry to meet different regulatory requirements in the 160 countries in which it’s sold. The company’s 475 carriers demand customization, too, even for something as seemingly insignificant as the placement of their logos on the BlackBerry because it is a very difficult thing to ramp up production and meet all those requirements (Papageorgiou, G)
On the other hand, they have to intensify their recruitment and hiring process throughout the world to pull the world talented people into their organization. One option was to expand co-operation programs to other universities as well as increase the frequency and intensity of its new graduate recruitment efforts. Likewise, RIM could follow Microsoft’s lead and form a global scouting group dedicated to finding the best talent worldwide and bringing them into RIM. RIM was expanding the number of product and technology development facilities in locations such as Fort Lauderdale by recruiting through general job fairs. This strategy, however, had to be balanced with a number of trade-offs.  Such as RIM should ensure that its geographic expansion was not haphazard, but rather strategically executed and the cost of talent in various locations had to be carefully considered.(Mazutis, D)
The remarkable success RIM has experienced in recent years has created a unique set of challenges. According to Dany Toniutti, outsourcing program manager for RIM "the average lifecycle of some products has gone from just over two years to less than a year, and in some cases, less than six months." This is happening due to the fact that they are producing their devices so quickly without considering the real needs and the lasting attributes of the product. To solve the entire problems their decision making process to be accelerated. Furthermore, they should be able to investigate different ways to resolve issues quickly and what the impact of their strategy and product/services on cost and customer satisfactions.
In conclusion, Research in Motion (RIM) is an exceptional company that offers both highly differentiated products and services as well. In addition to this they are also in a rapidly growing industry, consumer Smartphone. Although it is fair to say that RIM's current position as strong in terms of competitive advantage and market share but in fact they have not adopted industries regarding market exposure and international penetration. Domestically RIM dominates the industry but plans regarding international expansion are insufficient regarding the competition. For example, the most evident areas were China and India both of which have promising robust demand with the continuing demographic shift. Some companies have gone as far as establishing institutions in foreign markets in order to source from local talent pools. Ultimately, it also fair to say that RIM has failed to meet the industry standard regarding penetrating Asian markets that promise huge opportunities of growth. Moreover, RIM will always be in business because of their source code that is valued both by executives and government employees alike for its high degree of confidentiality. (source: Stock pic)


Thompson, A.A., Strickland, A.J. & J.E. Gamble (2010) Crafting and Executing Strategy: The Quest for Competitive Advantage 17th edition. New York, McGraw-Hill Irwin (History of RIM and Blackberry smartphone. (Ronen Halevy on Feb 12th, 2009 at 2:03 pm EST)

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