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An analysis of the tech giant’s fall from glory
Presented by:Neha Randhawa I Rajitharan Rajanthiran I Jason Repovs I Amit Lath
BEGIN
END
OVERVIEW & HISTORY
I
GENERIC STRATEGY
II
INFORMALNETWORKS
IV
FORMAL STRUCTURE
III
BEHAVIOURAL
CONTROLS
V
SUMMARY &RECOMMENDATIONS
VII
THE TOP
MANAGEMENT
TEAM
VI
WHERE ARETHEY NOW?
VIII
1984
1997-1999
2002-2005
2007
2010-2011
2012
2013
RIM Founded
2002-Voice Calling 2003-First Blackberry
with color screen 2005-4 million
subscribers
2010-Buys QNX 2011-Playbook
Launch, Service Interruptions, Job cuts
RIM name changed to Blackberry
John Chen appointed CEO
1997-RIM goes public 1998- First Blackberry 1999- High Demand
for Blackberry. RIM listed in NASDAQ
Most valuable company in Canada
12 million subscribers
Co CEOs Step down
BB10 launch delayed
Layoffs continue
Industry
Telecommunications &
Wireless Devices
Differentiation Strategy
Product Features and Performance
Low Data Usage (Data compression)
Security
Reliability
Prestige
Target Market
B2B Sales
Geography
HQ in Waterloo, Canada
Sales offices around the world
Research in Motion
Strategy as a
Plan: RIM
Strategy as a
Process: Apple
Rational
Planning
Respond to
internal &
external forces
“Corporate
needs”(INTENDED STRATEGY)
BYOD &
Consumer
wants(EMERGENT STRATEGY)
INTENDED STRATEGY
FUELED BY FOCUS ON…
NOT REALIZED
REALIZED STRATEGY
“Mistakes and opposition are inevitable.
What is not inevitable is passivity, not
trying, not seeking to accomplish things
… What is not fine is paralysis or inaction,
which arise because we have little skill in
overcoming the opposition that inevitably
accompanies change, and little interest
in doing so …” (Pfeffer, 1992)
•Leader in smart phone hardware and software.Vision/Mission
•Worldwide smartphone share=9.6%Smartphone Market Share
•ROIC: 28.11% ROA: 23.4% ROE: 28.3%ROIC, ROA, ROE
•Revenue grew 47% to over US$3.04 billion.Revenue
•Profit of US$631.6 millionProfit
Company ROA
(%)
ROE (%) ROI (%) EBITDA
(%)
Quick
Ratio
Current
Ratio
Total
Debt to
Equity
Blackberry 23.45 28.26 35.99 32.44 2.93 3.51 0
Apple Inc. 16.48 28.6 36.07 19.49 2.09 2.36 N/A
Nokia 23.93 53.89 56.37 16.11 1.23 1.54 0.09
Samsung 8.49 15.31 14.25 0 0.82 1.41 0.28
Co-CEOs
R&D Marketing Operations Finance HR
Dimensions of structure Aligned with Strategy?
Complexity (high)
Formalization (med)
Centralization (high)
FUNCTIONAL STRUCTURE
Innovation was desperately needed, but…
…the company simply wasn’t well-positioned to
respond to the threat.
Centralization & Complexity
Creativity & Innovation
Trust Networks
• Mike Lazaridis: trusted by engineers within the company
Advice Networks
• No significant issues evident
Communication Networks
• Very fragmented
• Lazaridislearned of iPhone release while exercising on his treadmill
Rules
• Formal rules aligned with strategy (managing wild ducks)
Rewards
• Backdated stock options rewarded the wrong behaviour – status quo instead of pushing forward
Culture
• “Don’t challenge the big guys”… career limiting move
• Perpetuated through hiring practices
• Norms didn’t support risk-taking
Sources of power: Possessed them?
Formal authority
Expertise
Centrality in information flow
Being liked
Reciprocity
Control over scarce resources
Risk-aversion
Co-CEO structure
› Domain-specific expertise led to
fragmentation in opinions and
communication
› Lead to slow (no?) recognition of changes in
the external environment, hindered
adaptation and response… slow
implementation
› Missed opportunities
Set direction
Design organization (structure & processes)
Instill a culture of excellence and
ethical behaviour
Effective Strategic
Leadership?
Create a vision
Mobilize commitment
Institutionalize change
Transformational
Leadership?Situational Leadership?No evidence
Issues with the top management team
Cultural norms sabotaged innovation
Incentives rewarded the wrong
behaviour
NET RESULT: A lack of responsiveness when
it was most needed in the organization
Eliminate the Co-CEO structure› Critical to achieving communication flow
Redefine target market
Refresh company vision/mission
Build new norms:› Accountability
› Voicing of opinions
› Iterative feedback loops
› Customer-driven innovation (look externally as well as internally)
› Support risk-taking
Alignment of incentives and controls
One CEO
Posted a profit the past quarter
Moved to divisional structure
Mass layoffs
Focus on enterprise customers
› Return to core competency
› New vision & strategy
› Moving away from “the middle”
•Maintain market leadership in enterprise mobilityVision/Mission
•Worldwide smartphone share=1.9%Smartphone Market Share
•ROIC: -6.61% ROA: -4.80% ROE: -6.61%ROIC, ROA, ROE
•US$11.073 billionRevenue
•Profit of $646 millionProfit
Company ROA
%
ROE % ROI % EBITDA
%
Quick
Ratio
Current
Ratio
Total
Debt to
Equity
Blackberry -4.82 -6.62 -12.66 1.94 1.53 2.06 N/A
Apple Inc. 19.39 30.72 37.98 32.43 1.4 1.68 0.14
Nokia -2.23 -8.47 3.88 4.39 1.29 1.46 1.03
Samsung 15.09 22.8 25.58 16.78 1.61 2.16 0.08