Introduction
Black berry, one of the well known mobile manufacturing companies, is expected to leave it the business of making mobiles soon. The reason is the current poor performance of the company (Austen, 2013). The company has made a deal of $4.7 billion for its privatization; however, it seems useless to solve the current problems of the company (Connors, 2013).
The company has been performing poorly for last few years in terms of its revenue, sales, profitability, and cash flows. The market share of black berry was declined to 5% in 2012 from 20% in 2009. The decline in the financial performance of the company is the biggest challenge that the company has been faced for last many years. The market share declined when the revenue of the company decreased. The revenue of the company was declined in 2013 to $11,073 million from $19,907 million in 2011 (Marketline, 2013). The revenue of the company was declined by 45% in 2013. The company did not make any profit from last few years; however, it faced a loss of $1 billion because of the unsold Z10 smart phone. The revenue of the company was declined due to the unsold new smart phones as the revenue was mostly generated by the sale of older phones (Connors, 2013).
Reasons for Poor Performance
As it is repeatedly discussed that the financial performance was declined due to the unsold new smart phones, it means that something went wrong with the new product of the company. Here, the question arises that either it was the features of the product or something else was wrong that made the company to face huge loss and decline in its revenue and cash. Hessman (2013) has reported that it is not necessarily important that the financial performance went poorly due to the product itself. It means that there might be other reasons and causes these deprived performances. Some of the major reasons and causes are found as a quality gap, delay in the production of Z10, the performance of competitors and problem with its innovations.
Quality gap
BlackBerry is faced with critical issues relating to product quality, as a result of failing to cope with emerging developments in terms of technology and innovation. The company’s response to competition is poor. The launch of BlackBerry 10 has improved its competitive status against its near rival iPhone to some extent, but the company has to endeavor to regain its lost differentiation that has been the source of attraction for customers for years. For this purpose, the company has to work hard on improving the quality of its playbook and other features that do not keep pace with the modern criteria of satisfaction at all (Palenchar, 2013).
Delay in Production
Delay in the production and launch of the company’s products (as discussed above) can justifiably be considered one of the strongest reasons behind current status of the company. Today’s mobile market is characterized by dynamism where competitors come up with newer and newer updates in short intervals. Hence, the time-lag between the generation of idea and launch of the product makes its new products lose their competitive strength, as the product lifecycle is already narrowing in the wake of rapid changes in the market (Marketline, 2013). Therefore, BlackBerry is in the utmost need of ensuring the timely launch of its products and their entry into the market before customers are attracted by any new update by some other company.
Competitors’ performance
Certainly, some giant industry players are fairly outperforming the company the clearer idea of which can be gathered from the comparative chart provided below:
(Olenick, 2013)
Highlighted parts in the figure show how BlackBerry Z10 is being outcompeted by two nearly competitive models of smartphones launched by Samsung and iPhone. It is crucial for any well-established company to keep a critical eye on the current and expected moves of its competitors. Any failure in this regard gives rivals a potential chance to take the fair lead in the race because a company cannot respond appropriately or effectively to any new update of its competitors if it is not anticipated well enough.
Problem relating to innovation
Innovation is, certainly, one of the key success factors and lies at the bottom of the competitive advantage of almost all industry players such as iPhone, Samsung, and Nokia to name only a few. It is found that newly launched products of the company do not meet the standards of innovation set by its competitors. Customers are in quest of novel features, or old features updated innovatively. Therefore, to ensure its long term survival, it has to come up with out-of-the-box manufacturing ideas, or it is almost “game-over” for BlackBerry referring to its mobile market.
Summary
Potential reasons, as discussed, for the company’s below the mark performance include low product quality, production delays, competitor’s growing competitive strength, uncompetitive approach to innovation. Each of the threats mentioned above is of critical nature because it challenges BlackBerry’s competitive posture. On the whole, the company remained short of meeting the emerging requirements of customer satisfaction wherein its competitors fairly excel. Therefore, BlackBerry has to come up with a comprehensive and multi-dimensional strategy to address all the identified issues. It has to improve the level of its differentiation by working on quality and innovation. It also has to minimize the production cycle to ensure timely launch of its all products. For this purpose, BlackBerry should increase its focus on research and development to develop an insight into key success factors in today’s mobile market and ways to achieve them.
References
Austen, I. (2013). BlackBerry’s Future in Doubt, Keyboard Lovers Bemoan Their Own. New York Times.
Connors, W. (2013). BlackBerry Posts Loss as Phones Go Unsold. Wall Street Journal.
Hessman, T. (2013). A Long Fail from the Top. Industry Week, 32
Marketline. (2013). Company Profile: Research In Motion Limited. Marketline,
Olenick, D. (2013). Analysts See Dell's Privatization A Positive Step.
Palenchar, J. (2013). Analysts: BlackBerry Facing Tough Battle.
The economist. (2013). BlackBerry: Still in a jam.
