Rim vs apple - ZEN Portfolios by cuiliqing

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									Table of Contents
Introduction: ................................................................................................................................................. 2
Problem:........................................................................................................................................................ 2
Key Findings: ................................................................................................................................................. 2
ASSUMPTIONS .............................................................................................................................................. 4
SWOT Analysis: ............................................................................................................................................. 4
Competitive Analysis:.................................................................................................................................... 6
Target Market: .............................................................................................................................................. 7
RECOMMENDATIONS: .................................................................................................................................. 7
       ALTERNATIVE 1: PRODUCT DEVELOPMENT .......................................................................................... 7
       ALTERNATIVE 2: DIVERSIFICATION ....................................................................................................... 8
       ALTERNATIVE 3: NEW PRODUCT .......................................................................................................... 9
Solution: ...................................................................................................................................................... 10
Implementation Plan: ................................................................................................................................. 10
Plan B: ......................................................................................................................................................... 11
Course Concepts: ........................................................................................................................................ 12
References/Bibliography:............................................................................................................................ 13




                                                                                 1
Introduction:
RIM, with their Blackberry Smartphone’s and their innovations, are becoming the leaders in the
Smartphone market of today. However, the Smartphone market is getting more and more
competitive every day. RIM’s biggest competitor, Apple’s iPhone is becoming a threat to RIM’s
dominance of the market while other companies (Sony, Palm, Nokia...) are slowly taking on
market shares as well. RIM needs to develop and come up with a marketing strategy which will
secure their leading position in the future.



Problem:
How can RIM secure and maintain their leading position and make Blackberry the most
recognized brand in the Smartphone market?



Key Findings:
Facts and Research

      Over 14 million users in 135 countries
      Very global brand: 92% of revenues come from outside of Canada
      Positioned as a brand for business professionals (executives, professionals, industrial
       markets)
      Good reputation due to its reliability and efficiency
      Easy to use email and text messages
      Popular among professionals and corporations/enterprises that want a secure server
      Fastest growing company in the world; market share grew from 10.9% to 21% in the span
       of 1 year(2008-2009)


Extensive Smartphone products:

      Blackberry Smartphone series (6200, 7100, 7200, 8700, 8800)
      Blackberry Curve (8300, 8520, 8900)
      Blackberry Pearl
      Blackberry Pearl Flip
      Blackberry Bold
      Blackberry Storm
      Blackberry Tour


      With the introduction of the Blackberry Storm, RIM entered in to the consumer market
       where Apple IPhone leads the group. At the same time Apple introduced the IPhone 3G
       and the new 2009 IPhone 3G S which let apple enter the professional, industrial market.


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   On August 2009 the Smartphone penetration forecast of global handsets was raised by
    Analysts at RBC Capital Markets to 35.1% or 504 million units, by 2012. That’s a
    substantial increase from the old forecast of 395 million.


   RIM recently acquired Torch Mobile, a company expected to aid Rim in developing a
    new Blackberry browser and software.


   On October 2009, RIM launched his new version of Blackberry Storm, called Blackberry
    Smart. The new phone has better software than the previous one. With this move Rim is
    going to compete better against Apple IPhone.


   Requests for Blackberry devices in Indonesia (fastest growing mobile consumer market
    in the world; will become the third largest mobile market by 2010) increased by 842%
    while requests for Apple IPhones increased just 205%.


   RIM has a contract with China Telecom (biggest operator in China) to offer their devices
    to costumers. This will put RIM in front of Apple who had to sign a contact with a
    smaller operator with smaller costumer base than Mobile China.




                                            3
ASSUMPTIONS

We assume RIM has enough resources for development and marketing of new or existing
products.




SWOT Analysis:
STRENGTHS:

         Existing customer base. The company has developed and achieved a high level of
          recognition within the original target market.
         Well known, recognized brand name. (Blackberry)
         High level of technological skills and knowledge, (With acquisition of software
          production companies).
         Possession of innovative technologies (Push Email, BBM, BES*)

          * Quick Summary on BES

          BES- BES stands for BlackBerry Enterprise Server. It gives your BlackBerry access to
          a corporate intranet. The intranet is the private, internal, network within a company.
          It’s kind of like a mini-internet that is cut off from the rest of the world. Many
          intranets allow you to communicate with the Internet as well, but with added layers of
          security.



WEAKNESSES:

     Main production and development of the product is in Canada (One plant in Mexico). So
      the company’s profit highly depends on the fluctuation of the foreign currency versus
      Canadian dollar. This could be a big problem since 92% of revenue comes from outside
      Canada.
     Don’t have a really diverse business.
     Rely too much on their old, well recognized technologies.




                                               4
OPPORTUNITIES:

     Untouched market of young people under the age of 16, which gives them an opportunity
      to target them with a new device. This consumer market is the exact market apple
      targeted with their IPhone.
     Expand globally to countries they don’t have their operation in.
     Increased world demand for smartphones


THREATS:

     Governments around world denying our product
          o RIM has an encrypted email system that is unreadable and a lot of governments
             do not like this because it does not give them complete control over people
             involved in crime while making an investigation. India is in the works now of
             possibly shutting down RIM in their country. If any other countries follow suite it
             could be bad for blackberry
     Increasing competitive pressures
     Emerging of new substitute technologies
          o If any of competitive company would introduce better business software Rim
             would have trouble since their main product is focused on business consumers.
             Apple developing their push email would take away one of the premier
             advantages that RIM have over them




                                              5
Competitive Analysis:


         Smartphone Market Share

                                   Nokia
         20.5                      RIM
 4.2                   40.8        Apple
 4.3                               HTC
       10.7                        Samsung
                19.5
                                   Other




        In the Smartphone market, as of March 2009, Nokia lead with a 40.8% of the shares.
However, at Nokia’s expense, both RIM & Apple are gaining more shares in the Smartphone
market. In second place, RIM had 19.5% of the shares. In third place, the rapidly growing Apple
iphone had a 10.7% of the shares. At this rate, Apple is gaining ground on RIM, and RIM could
easily lose its place. A possible issue with Apple though is that its distribution is more limited
relative to RIM. For example, RIM distributes its products to all of the carriers in Canada.
However, Apple only had Rogers as a carrier. Other competitors include HTC, Samsung, Sony,
and Palm.

      However, RIM’s current competitor is Apple. Apple’s iPhone is strong competition for
RIM’s BlackBerry Storm:



                               Storm                               iPhone
Price 8GB                     $599.99 (Telus)                     $580.00 (Rogers)
Features                                              o Larger than 3” display
                                                        o Internet access
                                                     o Email & text messaging
                                                    o Multimedia (video, music)
                                                           o Camera
                                                       o Touch Technology



                                                6
Position                        o Towards more casual                 o “Hip, funky, keeper of
                                  business crowd (away from             cool” Continual
                                  traditional users)                    reinvention and
                                                                        wanting to appeal to
                                                                        business crowd.
Market                          o business market                     o consumer market
                                  (professionals, executives)



Both products are positioned as leading edge Smartphone. Consumers are likely to perceive
similar value in both products. However, there is more appeal to either one depending on the
consumer’s perceived wants and needs.




Target Market:


Blackberry has targeted its market to have more potential on many aspects.

User background: Change from the traditional businessman consumers to young generation
users.

Cost: Develop a variety of different economical cell phones to reach consumers with different
income.

Serviceable range: Cover the market of Asia and Australia, and stabilize the position of North
America.

Technical support: Exploit third party software products and related media.




RECOMMENDATIONS:


ALTERNATIVE 1: PRODUCT DEVELOPMENT
Acquire new companies and knowledge which would develop new, simpler software that is easy
to use and navigate. Invest bigger amounts of money in R&D of new software.




                                                7
Advantages:

   1) Introduce new operating software for all of blackberry smart phones that includes a new
      menu which is more simplified and comparable to basic cell phone operating software.
      This could help penetrate younger generation cell phone buyers that would normally try
      to avoid Blackberry products due to their lack of user friendly multimedia software.

   2) This would help target the consumer market because adding options, such as more
      themes into their operating software, as well as a “custom” option will give people the
      opportunity to set their menus and icons to a more personalized look. Also by keeping the
      new software as an option, there would not be a negative effect on the market for
      blackberries because the existing operating software will still be available for those who
      prefer the current one.

   3) By developing multiple software styles, generally more consumers in the cell phone
      market will have their hands on blackberry’s line of smart phones. Thus, they can start by
      learning the basics of smart phone use with the new simple software and as this
      generation grows to the working age, they may switch over to the existing software that is
      advantageous to individuals in business.



Disadvantages:

   1) Existing customers may start looking at other smart phones if they begin to doubt
      blackberry’s software’s quality for business use. For example if business consumers get
      the impression that blackberry is switching their focus to basic cell phones, it may make
      them think twice before getting the latest blackberry device.
   2) It could be expensive.
   3) If new acquisition would not result in any good software development the company
      would suffer financially. This could be a really risky move.


ALTERNATIVE 2: DIVERSIFICATION
RIM could introduce an online application and music store. This would diversify applications
available for download on blackberry smart phones and generate extra revenue from sales of
music, videos, application and other online products. Applications would bring many new
options and features to the phone that will attract the younger generations of cell phone users,
expand and impress the existing customers.



Advantages:



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   1. Give opportunities to external companies that focus on application developing because
      that will enhance their own business too. These are consumers that are focused on more
      entertainment and veracity of cell phones programs.
   2. Improve daily productivity of blackberry users. Consumers can expand their phone
      functions considerably. For example the ability to edit spreadsheets, finding the closest
      Chinese restaurant or learning the details of a current song the user is listening to.
   3. Gain a competitive advantage that was previously missing in their cell phone consumer
      market while targeting consumers that demand additional features on their mobile
      devices.
   4. RIM could benefit from this diversification by raising the revenue and be more
      competent with Apple IPhone.


Disadvantages:

   1. The store will lack trust with consumers and will be unfamiliar. It will take time for
      consumers to adapt to the new features and abilities that these phones offer.
   2. The current market of business workers that RIM targets may suffer. People in this
      market may view blackberries as less professional.
   3. In order to create an application market, blackberry will have to spend money on
      upgrading phone specifications, such as the internal processor, screen control and the
      touch flow feature (on some phones).


ALTERNATIVE 3: NEW PRODUCT
Introduce a new product, such as a “Babyberry”, which has more features that are entertainment
oriented and less professional. This product will target the younger generation and the consumer
market focused on entertainment. This would satisfy customer needs since more and more
consumers are looking for a well priced gadget with entertainment features.

Advantages:

   1. Penetrate a new market of cell phone users that are mainly younger, and are game and
      multimedia seeking consumers
   2. An increase in market penetration without losing existing customers, as the current
      product line will continue to exist
   3. A newer phone, with a new look and a strong internal processor and disk space which
      attracts a new type of consumer would strongly damage Apple market position.



Disadvantages:

   1. RIM’s line of blackberry smart phones may be too large. This could decrease market
      penetration if there consumers have difficulty with making difficult choices.


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   2. The product will have to be priced lower than that of other models, as the target market
      falls in a lower income bracket and that would hurt the profit margins of the company.
   3. New product could be rejected by consumers since the market recognizes RIM as a
      business oriented company and not a entertainment one.



Solution:
The recommending solution for RIM would be Alternative 3; the introduction of a new product
in their smart phone line. This is the most suitable solution as it will allow RIM to compete with
the iPhone in the consumer market, while keeping their loyal customer base intact. The
blackberry name would stay as a brand for RIM’s phones in the Business market, while the new
“Babyberry” would be a synonym for the fun, entertainment, consumer market.




Implementation Plan:

   1. Find out what iphone users would like to have on a phone that they don’t have now in
      terms of entertainment and media. There are millions of forums on the internet. Go into a
      forum talking about iphone and ask everyone what needs to be done to iphone. Take the
      best ideas and implement them on the new blackberry.
   2. Test out a few different features and decide which one is the best to use and go with that.
   3. Make sure the phone has lots of storage (8-16g internal)
   4. Create a phone and test to make sure there are no glitches before it hits the market (beta
      testing).
   5. Once the phone is finished make sure it is properly tested before entering the market.
   6. Market the Phone extensively
   7. Figure out what age group really loves to play with their phones.
   8. Advertise on TV programs that are viewed by the targeted consumers.
   9. Get a BIG hype going about this phone




                                                10
          Product:

          To successfully create the new product (Babyberry), RIM needs to change the existing
          blackberry software. They need to adapt to new software so it is more user friendly, has
          better entertainment capability (better camera, music player...) and has a stylish look and
          feel.

          Price:

          The price of the Product needs to be appealing to the young consumers who will be the
          targeted market of the product but still high enough for RIM to make a profit. RIM
          should take in consideration selling the new product device without profit since it could
          make money on data usage and application purchases.


          Promotion:

          RIM will introduce a new advertisement which will focus on a healthy life style with
          Blackberry and Babyberry as a way to go (Business and Leisure) on TV and health/sport
          newspaper ads.
          The new phone would be offered with a special promotion (“get rid of the toxic with our
          antioxidants”) which would offer a trade discount if an old phone is traded for a new
          blackberry/ babyberry.
          The new phone would be introduced with new gadgets for the phone (Better
          accessories)
          The phone would be introduced to sports group, and a contract would be offer to a
          Canadian Hockey team to sponsor the new phone.


          Place:

          The new phone would be given out through RIM’s well known distribution network.
          RIM could sign a contract with Nike/Adidas/Gatorade to promote new phone as a part
          of their sport apparel and sport lifestyle.




Plan B:
Low prices to meet the needs of a less executive market. There is a much larger market of people
that cannot afford a brand new top of the line BB. That market looks at blackberry as some kind
of social status that they want to be at. If suddenly they can reach that status by being able to
afford one, they will all be buying one. We have to lower the price $50 and advertise that it’s so
much cheaper than competitors. Drop the price sales go up.


                                                 11
Course Concepts:
     4 P’s used in the Plan Action.

     We determine the product, price, place and promotion for our solution action plan.

     Growth Strategies, used in Alternatives. Product development and Diversification.
      Product development is used in our first alternative where RIM would focus on existing
      customer by making their product suitable to newly developed customer needs.

     Diversification is used in our second and third alternative. In this case RIM would
      develop new product to attract new targeted consumers

     Target Market segmentation is used Alternative 3

     We chose a part of a market we are going to target with our product. In our case those are
      the consumers who could have interest in a entertainment devices which would offer a
      slick look and lots of fun.

     With our new promotion (“get rid of the toxic with our antioxidants”) in the solution we
      used the concept of Social Responsibility. By taking old phones we are helping the
      environment as well as the consumer who gets a discount.

     We chose a part of a market we are going to target with our product. In our case those are
      the consumers who could have interest in a entertainment devices which would offer a
      slick look and lots of fun.




                                              12
References/Bibliography:

Roger’s website

Telus’ website
http://en.wikipedia.org/wiki/Blackberry_storm
http://en.wikipedia.org/wiki/IPhone
http://slyn.blogspot.com/2009/09/blackberry-storm-vs-iphone-3g.html

Data from March 2009
http://www.intomobile.com/2009/03/11/smartphone-gains-boost-apple-and-rim-marketshare-at-
nokias-expense.html

RIM Case Study

http://rimcase.blogspot.com/

Apple, RIM poised to lead smartphone market

http://www.telecoms.com/13891/apple-rim-poised-to-lead-smartphone-market


BlackBerry vs iPhone: The Browser Wars

http://techgeer.com/2009/08/26/blackberry-vs-iphone-the-browser-wars/


RIM BlackBerry vs. Apple iPhone: RIM is winning?
http://techgeer.com/2009/09/02/rim-blackberry-vs-apple-iphone-rim-is-winning/

Lots of information was found on Google search and these web-sites:

Business : Will Apple Connect with the World’s Biggest Mobile Market?



Apple and Research In Motion (RIM) well positioned to lead the smartphone market | telecoms.com -
telecoms industry news, analysis and opinion

BlackBerry co-CEO on iPhone marketing: "a dangerous strategy" | The BlackBerry Beat | ZDNet.com

What Blackberry Teaches Us About Global Branding « X-Cultural Marketing | E3 European Agency
Network

- B2B Marketing Features




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Poll: Can BlackBerry Browser beat iPhone to surf net? | Technology & Gadget News

BlackBerry Beat IPhone - All About Telecommunications

Mobile Web: BlackBerry Leads Apple in World's Third-Largest Mobile Market

Blackberry Losing Business Customers to iPhone?

Gartner Says Worldwide Mobile Phone Sales Declined 8.6 Per Cent and Smartphones Grew 12.7 Per
Cent in First Quarter of 2009

Research in Motion battles BlackBerry's competitors - Aug. 17, 2009

TradingMarkets Online Stock Trading Investing




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