January 10th, 2018
Blackberry’s Market Place Situation Analysis
Blackberry’s market place situation is influenced by the competitiveness in the market and internal and external factors that affect its market communications. Market competitiveness may be determined with the assessment of the effects of Porter’s five forces on Blackberry’s position. Internal factors influencing the marketing communications include the resources the entity controls and the effectiveness of the entity’s leadership. External factors influencing market communications include political, economic, sociocultural, and technological aspects.
Five Forces Analysis of Blackberry Market
Five forces model evaluates how threat of new entrants, buyers bargaining power, the bargaining power of suppliers, threat of substitutes and competitive rivalry affect an entity’s outcomes (Dagmar Recklies, 2001). Blackberry’s status is affected by these factors to a varying extent. The threat of new entrants in the market for smartphones and tablet computers is minimal. New entrants would need to invest heavily in technology to offer solutions that are competitive with those offered by market players such as Apple, Google and RIM. For instance, in Gartner’s market share report of the second quarter in 2011, the four largest competitors, as evaluated by the operating system (OS), dominated the smartphone sales. Such players, which include RIM (Blackberry OS), Google (Android OS) and Apple (iOS), held more than 90 percent of the market share. The players enhance the barriers for new entrants by providing applications that enhance customer loyalty to the brand thus discouraging evaluation of alternative products that new entrants provide (Dagmar Recklies 2001).
The bargaining power of suppliers is moderate. The entity for instance requires the services of skilled software developers who can match the application innovations provided by competitors. However, to reduce the bargaining power of such labor providers, technology entities including RIM are turning to low-wage countries for their production operations (Tan 2011). Such a trend reduces the bargaining power by avoiding strong labor unions present in western economies from where the entities run their operations.
The threat of substitutes is considerable with substitutes such as PC’s, mobile phones, and laptops providing most of the functionalities offered by smartphones. However, smartphones offer extended advantages by combining the functionality advantages offered by PC’s and laptops, with the flexibility advantage offered by mobile devices. To reduce the threat by substitutes, RIM needs to make market communications that emphasize the security features of its communication that allow users to perform office duties while in remote locations.
The bargaining power of buyers is high. This results from the low switching costs for buyers due to introduction of devices by competitors that support similar functions. The reliance on a few significant customers for its revenues (RIM Ltd., 2011, p. 8) also enhances the bargaining power of RIM customers, who could influence the prices the entity offers for its devices and services.
The competitive rivalry in the smartphone market is very high with the competitors having minimal differentials in terms of functionalities offered by the devices they sell. For instance, Blackberry’s most significant differential over other smartphones is the security of its e-mail system with the Blackberry enterprise server solutions offering corporate clients with enhanced control over the information communicated via the blackberry devices (RIM Ltd., 2011). The high competition in the smartphone market is evident with the main players (Google, Apple, and RIM) having comparable market share in the global smartphone industry (Gartner Inc., 2011). Accenture however commands a relatively larger share with multiple mobile phone manufactures using its operating system (Symbian) in their smartphones (Gartner Inc., 2011).
Such competitiveness analysis indicates that RIM needs to accentuate its differential features in its marketing communications, while highlighting its value proposition for non-traditional market. With respect to corporate clients, RIM needs to highlight its continued commitment to security of its systems. Such a perspective would ensure that competitors do not lure the corporate clients to their products. RIM however, also needs to target its innovations towards individual consumers by increasing its research and development activities to come up with new applications that entice such customers to its products. The failure to keep up with the rate of new applications development has for instance been cited to have contributed to the Blackberry’s market share losses to competitors such as Android phones and iPhones (Blodget 2011; Chris 2011).
Go to part three here.