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Table of Contents

Executive Summary ......................................................................................................................... 2

Key Findings .................................................................................................................................... 2

Problem Statement ......................................................................................................................... 2

Target Market ................................................................................................................................. 3

BlackBerry SWOT and Competitive Analysis .................................................................................. 3

Evaluation of Alternatives

Alternative One ............................................................................................................................... 4

Alternative Two………………………………………………………………………………………………………………………….5

Alternative Three …………………………………………………………………………………………….…………..…………..5

Implementation and Plan of Action……………………………………………………………………………………………6

Appendix 1…………………………………………………………………………………………………………………….……..8-19

Works Cited………………………………………………………………………………………………………………….…....20-22

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BlackBerry’s Rise in Brand Power The Duelling Market Strategies of RIM versus Apple

EXECUTIVE SUMMARY

The mobile communications market has been a battleground as several companies have

tried to gain market share over the past ten years. The big players in the North American

market have been Research in Motion (RIM) and Apple. RIM has enjoyed dominance in the

business and professional user market with their BlackBerry, while Apple has held the majority

of the market in the consumer area with the iPhone.

Apple may be RIM’s most visible competition in North America but on a global scale

neither company holds the biggest share of the mobile communications (smartphones) market

instead Nokia is the global leader in smartphone sales. A large percentage of RIM’s revenue

comes from outside Canada; they are a Canadian company competing globally.

(See figures 1.1- 1.6 in the appendix 1)

Key Findings

Visionary Marketing Group has studied the current smartphone offerings in North

America and the world, the global market share each of the key players hold, the stock market

value of these companies over the previous year, and consumer trend predictions of industry

critics. Today, most consumers have adjusted to the new phone technology. In our market

evaluations, we have assumed that the average mobile communication user will become more

technically competent.

Problem Statement

What product strategies can RIM use to gain a larger share of the global mobile

communications market?

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Target Market

The BlackBerry name has good brand equity. Maintaining favour among the business

users will continue to be RIM’s strength in the market place. Widening their target market to

win over a larger share of the consumer market will be RIM’s challenge.

Blackberry SWOT and Competitor Analysis

RIM is known globally with a clientele base of approximately 14 million. An extremely

strong brand loyalty along with extensive product lines and features has made for a noticeable

dominance in the business professionals market. RIM stock has experienced a sufficient

amount of growth and is currently a top competitor in the mobile communications market. In

North America, business savvy professionals prefer the use of BlackBerry because of the

products business oriented features and the BlackBerry’s secure information transferring

ability.

As with any company, there are some areas in which RIM requires improvement.

BlackBerry’s main focus has been business oriented and has made for a decrease in the features

of the entertainment and consumer side of things. Their browser speed could be faster in

comparison to other smartphones and the price of a BlackBerry comes with a hefty price tag.

The attempt and failure to pioneer a touch screen resulted in negative feedback.

RIM has two definite competitors that pose a threat in the mobile communications

industry: Apple and Nokia. Apple‘s iPhone has experienced tremendous sales and popularity in

North America, while Nokia is the leading provider of cellular phones in the European and Asian

markets. While BlackBerry’s main focus has been on the professional aspect, Apple has

experienced tremendous success in the consumer market. Apple focuses more on being a

portable entertainment/mobile phone device. There are extensive product lines for Apple

such as iTunes, apps, and movies. These enable Apple to appeal to all demographics interested

in the entertainment market. Nokia’s experience has been long recognized in the mobile

phone market establishing them as the current world leader. Their premium products allow for

relatively lower pricing than the BlackBerry and iPhone and, therefore, their phones appeal to

more demographics.

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Overall, all three competitors each hold their valued shares in the mobile

communication market by their offered features and brand dominance. The market for Mobile

phones seems to hold an unlimited amount of promise and opportunity for whichever company

can keep up with the latest advancements and achievement in technological trends.

(See figures 1.1- 1.6 for market share analysis and figure 1.8 for the full SWOT in the

appendix 1)

EVALUATION OF ALTERNATIVES

Alternative One: Macro Strategies – Product and Customer Excellence

Summary

Keep the customer happy and loyal by providing an excellent product with the features

they appreciate. One strategy to sustaining a large portion of the customer base is by offering

product excellence. Blackberry was the pioneer in the business networking and wireless

applications market. BlackBerry is a trusted name in the smartphone industry. RIM’s largest

customer is the US government (CIO). They chose the BlackBerry due to its superior security

features, therefore, maintaining security superiority will be a key strategy for maintaining and

gaining customer loyalty. Refining and perfecting the current product line by responding to

customer requests for more entertainment features, a simpler user interface, WIFI ability, a

better business application and a larger keyboard would keep the current customers happy and

would entice other customers to buy.

Advantages

1) Maintain their cutting edge business technology

2) Keep the current customers loyal

3) Gaining new customers

Disadvantages

1) Increased costs of research and time to refine the product

2) Perfection may never be possible. Constant change may be necessary

3) Competition will be fierce

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Alternative Two: Creating a New Product Line

Summary

In order to appeal to the more fun, entertainment seeking market, RIM could introduce

a brand new line to their existing BlackBerry line of smartphones. The new WildBerry product

will look and perform differently, creating interest in the targeted demographics. Various apps

and merchandise tied to the WildBerry would create a new revenue stream. Adding a new

product will widen BlackBerry’s product line.

Advantages

1) The new product will create a fresh image to target the consumer market, and separate RIM

from its known business reputation.

2) The name WildBerry is appealing and easy to remember. The blackberry reputation will

encourage customer acceptance of the new line.

3) Chance to offer new features and styles -New design and applications will ignite excitement

in consumers.

Disadvantages

1) Extra costs for creating and marketing

2) Balancing Promotion. Finding the right balance of marketing between the two different lines

will be challenging

3) Challenge of differentiating the new product from the BlackBerry having consumers

recognize new attributes and features associated with the new line.

Alternative Three: Strategic Alliance and Developing a New Use

Summary

In order for RIM to gain a larger share in the smartphone market, RIM could follow the

trend of what the consumers are looking for by adding more value to their products. Strategic

alliance with a complementary company could create a new use for BlackBerry and would

reposition BlackBerry to the introduction and growth phase of the product lifecycle without

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losing current customers. The creation of a wireless and contactless payment method built into

the smartphone would enable consumers to pay for products or services without swiping a

credit card, signing or carrying cash.

Advantages

1) We are becoming a cashless society. This alliance strategy allows RIM to benefit from the cashless trend.

(See figure 1.7 in appendix 1)

2) This strategy may reposition the life cycle of Blackberry to the introduction and growth

phase.

(See figure 1.8 in appendix 1)

3) This technology will be copied by competitors but RIM has the security reputation required

to assure customers.

Disadvantages

1) Adoption of the new payment method may be slow

2) The attraction of the value added product will be copied by the competitors

3) If the partnership fails, RIM will be damaged

IMPLEMENTATION AND PLAN OF ACTION

Chosen Solution: Alliance and Developing a New Use

Summary

While all of the proposed marketing strategies would serve RIM well, Visionary

Marketing Group believes that the ‘strategic alliance and developing a new use (alternative #3)

would have the most significant results relative to costs.

Visionary Marketing Group suggests a partnering with an established service supplier

specializing in mobile payment methods. AirCharge is such a company and already has a

relationship with RIM. The implementation of this strategy would begin immediately and could

have the BlackBerry Airwave available within a year. The creation of a wireless and contactless

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payment built into the smartphone would enable consumers to pay for products and services

without carrying a credit card or cash.

Implementation process

Visionary Marketing Group believes the diffusion of innovation on this product would be

rapid. The concept development, product development, and market testing have been done by

competitors and complementary companies. The combination of BlackBerry’s security

reputation, communications ability, and new convenience would make this next RIM product

an indispensible ‘must have’ for everyone.

Step 1- Payment Transfer

The technology to transmit payment information already exists and is available to merchants as

a BlackBerry App (appworld).

Step 2- Prepare phone

The technology to imbed credit card info in a cell phone already exists. Reverse engineering

could be used to identify the technology required (reghardware).

Step 3- Form an alliance

The BlackBerry name is associated with the security of information. If RIM could partner with

an equally reputable credit payment supplier such as Aircharge , both companies would benefit.

Customers would embrace this new technology quickly when two trusted company’s become

partners.

Step 4-Offer product in North America

Launching the product in North America with a high profile ad campaign focusing on

BlackBerry’s security features would appeal to the ‘careful’ consumer. Launching the product

with an ad campaign focusing on carefree and all in one feature would appeal to the

‘fun’ consumer.

Step 5- Offer product to the world

Once the product is established and accepted in North America, RIM could launch the product

globally.

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Appendix 1

Figure 1.1

Source: http://www.gartner.com/it/page.jsp?id=910112

Appendix (continued)

51%

11%

5%

33%

Worldwide Smartphone market share in 4Q07

Nokia

RIM

Apple

Others

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Figure 1.2

Source: http://www.gartner.com/it/page.jsp?id=910112

Figure 1.3

Source: http://www.gartner.com/it/page.jsp?id=1126812

Appendix (continued)

41%

19%

11%

29%

Worldwide Smartphone market share in 4Q08

Nokia

RIM

Apple

Others

47%

17%

3%

33%

Worldwide Smartphone market share in 2Q08

Nokia

RIM

Apple

Others

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Figure 1.4

Source: http://www.gartner.com/it/page.jsp?id=1126812

Figure 1.5

Source:

http://weblogs.baltimoresun.com/business/appleaday/blog/2009/02/smartphone_sales_in_us_up_68_

p.html

45%

18%

13%

24%

Worldwide Smartphone market share in 2Q09

Nokia

RIM

Apple

Others

53%

24%

10%

7%6%

US Smartphone market share in Jan to July 08

RIM

Apple

Palm

Samsung

Motorola

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Appendix (continued)

Figure 1.6

Source: http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-

statistics-1276.php

24%

22%

15%

12%

8%

7%

5%4% 3%

Total general purpose card outstandings in 2008 ($972.73 billion)

Chase

Bank of American

Citi

American Express

Capital One

Discover

Wells Fargo

HSBC

U.S. Bank

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Appendix (continued)

Figure 1.7

Impact of the Innovation Continuum

Cash payment style is the traditional payment method style but debit and credit card payment

style has become more and more common. MasterCard then come up with a unqiue payment

style called MasterCard Paypass. MasterCard Paypass is an easy way for consumers to buy

goods without swiping and signing a card. (From Textpage page 268)

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Appendix (continued)

Figure 1.8

Generational Cohort and Comparison

Blackberry’s demographic is between generation X and Y. Generation X and Y believes in killer

life and lifestyle. They are able to multitask and they are familiar with technology.(From

Textbook page 90, 92)

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Appendix (continued)

Figure 1.8

Product Life Cycle and Characteristics

Most Blackberry products such as Blackberry Curve, Blackberry Pearl and Blackberry Bold are in

their Growth and Maturity stage. Based on wired.com report, Blackberry Storm is currently in

its Introduction stage and there are 1 million units sold within 2 months. Consumer’s ability to

adopt new products are stronger and time needed is shorter.(From Textbook page 283)

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Figure 1.9

Full SWOT Analysis for Apple

Strengths

- Extensive product line(itunes, apps, music, movies)

- Great customer experience, care and satisfaction

- All in one gadget(levelling app, accounting app, calculating app, etc)

- Apple is a very successful company. The Company posted record revenue of $10.17 billion

and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results

compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted

share, in the year-ago quarter. Gross margin was 34.7 percent, equal to the year-ago quarter.

International sales accounted for 46 percent of the quarter’s revenue.

- Apple sold 2,524,000 Macintosh® computers during the quarter, representing nine percent

unit growth over the year-ago quarter. The Company sold a record 22,727,000 iPods during the

quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone

units sold were 4,363,000, representing 88 percent unit growth over the year-ago quarter.

- has the opportunity to extend new products to them

Weakness

- faulty products – Ipod Nano Screen, Battery life and Battery

Opportunities

- Profit might increase because of pressure from the music industry itself. Many of these

companies make more money from iTunes (i.e. downloadable music files) than from their

original CD sales. Apple has sold about 22 million iPod digital music players and more than 500

million songs though its iTunes music store

Threats

- Substitutions – Microsoft’s Zune, Creative Lab’s Nomad and other digital media devices

- Technologies changes rapidly

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- Global Recession

- Being pressure by music industry, increased price on music download might decrease the

profit pressure on Apple

- illegally downloaded music in the US continues to grow

Figure 2.0

Full SWOT for Nokia

Strengths

- Premium products

- Well-known in Europe and Asia

- E series – desktop like platform(easier to use because it’s similar to a desktop computer)

- Best in class battery life – last longer without charging

- Product extension – Nokia Booklet 3G – up to 12 hours battery life, ultra thin 2cm and built

in 3G wifi

- Nokia and Siemens merged

- Nokia and Microsoft alliance

- Leading in smartphone market share

Weaknesses

- Product design targeted towards mature audience

- Smartphone market share declining because it’s lack of functionality

- Although leading in cellphone market, sales are heavily based on low-end cellphones rather

than smartphones

- Not much complementary – apps, goodies

- E series - Business sector but not as strong or well-known as blackberry

- Not well-known in North America

Opportunities

- Merged of brands - Nokia and Siemens - gain more market shares and demographics

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- Alliance of brands - Nokia and Microsoft - might lead to more product or software

development

Threats

- Global recession

- Although it’s leading in market share currently, competitors like RIM and Apple continued to

gain market share while Nokia is losing market shares

- Trend of cellphone changing – smartphone

- Tariff - import and export taxes

Figure 2.1

Full SWOT for BlackBerry

Strengths

- Strong brand entity

- Extended products lines

- Pioneer in business market

- 14 million people use their products

- fastest growing company in the world

- Dominance in business professionals market

- Strong viral marketing

- Extremely strong in customer’s brand loyalty

- 50% of US Smartphone market in Q1 2009

Weakness

- Product storm is not pioneer in consumer’s market

- Devices are not simple to use

- Life cycle of Blackberry at its maturity stage

- Some products are not consistence with their vision

- Position themselves towards business professionals only

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- Canadian company – may be perceived as conservative company

- Product’s browsing speed is not as fast as iphones

- Lack of customer care

- Complementary services just started, lot of faulty functions

Opportunities

- More competitors lead to more sub segmentations and sub markets

- 92 % of revenue is outside of Canada

Threats

- New products coming from competitors such as Apple, Nokia, sony ericsson and other

smartphone companies

- Global recession

- Some see Blackberry as Crackberry – it’s an addiction and it will damage brand identity

- Trends in consumer market change rapidly

- Technology advances rapidly

Figure 2.2

PEST Analysis

Political

-Companies purchasing zoning permits

-Leasing land

-Trade restrictions

-Internet restrictions

-Medical regulations

Economic

-Recession

-Rise and Fall in household income

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-Fluctuation of Canadian dollar

Social

-Demographics (ie. Age)

-High-tech society trends

Technological

-Transformation from simple cell phone to complex smart phones

-Advancements in social networking

-Innovative models

-Product reliability

-Digital standards

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blackberry.html

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21, 2009, from http://www.gartner.com/it/page.jsp?id=910112

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w_turn

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www.computerworld.com

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www.rim.com

http://appworld.blackberry.com/webstore/content/340

http://www.reghardware.co.uk/2009/03/09/orange_barclays_nfc/