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Competitive Analysis

By Amy Martin,2014-05-16 23:52
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Competitive Analysis

    Case Study #1

BlackBerry’s Rise in Brand Power

    The Dueling Marketing Strategies of RIM versus Apple

    Presented by Team Mpyreon:

    Natasha Gowda

    Courtney Szabo

    Ying Ying Choi

    Chris Hauk

    Geoff Salt

    MKTG 1102

    Set 1J

ATTN: Professor Anne-Marie Webb Hughes

    Submission Date: October 19, 2009

    Table of Contents

    Problem Identification…………….………………………………………………Page 3 Case Findings……………………………………………………………………….3 to 5

    a) Facts…………………………………………………………………………...3

    b) Research………………………………………………………………………4

    c) Assumptions…………………………………………………………………..5 SWOT Analysis………………………………………………………………………….5 Alternatives………………………………………………………………………....6 to 7 Solution and Plan of Action…………………………………………………….………8 Application of Course Concepts……………………………………………Appendix A References……………………………………………………………………………….11

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    Problem Identification

    In order to retain and grow smartphone market share, how can Research in

    Motion adapt its product strategies to control the next generation of their consumer target

    market segments, while strengthening their enterprise markets?

    Case Findings a) Facts

    Research in Motion (RIM) pioneered the development of the smartphone market

    in 1998 with the BlackBerry, positioned in government and enterprise target markets.

    Recognized as the „all-in-one‟ portable wireless communication device, BlackBerry has

    gained a competitive edge with its wide portfolio of smartphone products: BlackBerry

    Curve, Pearl, Tour and Bold series. As Blackberry enters the maturity phase, RIM can‟t

    rely on the sales of current enterprise segments to retain market shares. Therefore in 2008,

    the BlackBerry Storm series was introduced to cater to the mainstream consumer

    segments. However, the Storm resulted in low customer satisfaction rates and the Storm2

    was launched as an improvement in October 2009. Notably, RIM is the fastest growing

    company in the world with 14 million BlackBerry users in over 135 countries (case

    reference). The company‟s revenue reached a value of $11, 065 million between 2005-09

    where 92% is generated outside North America. In FY2009, the company‟s revenue grew by 84.1% over 2008 (Datamonitor, 2009). RIM has grown by expanding into foreign

    markets where it held 18.7 percent of the global smartphone market share in 2009

    (Toronto Star, 2009). Strong financials attract investors and allow RIM to grow with

    introduction of new products and solutions. However, RIM faces a threat to its global

    share and revenue as various competitors enter the market and launch new products.

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b) Research

    The smartphone market is forecasted to rise 19% throughout years 2009 to 2011.

    Although mobile phone sales decreased by 9% in early 2009, the smartphone movement

    increased by 13% despite the economic crisis (Datamonitor, 2009). Smartphone

    consumers have proved that they value entertainment and multi-media applications in

    their mobile devices. These trends present an opportunity for RIM to grow their product

    lines by focusing more on mainstream consumer needs.

    Competitive Analysis: Globally, RIM holds 20% of the smartphone market share.

    Although this is a rather substantial portion of the available market, RIM faces threats

    from close smartphone competitors and is constantly rivaling to stay on top. Smartphone

    competitors consist of: High Tech Computer (HTC), Apple, Nokia, Google‟s Android,

    Samsung and Palm. Apple‟s smartphone net sales for the fiscal year end September 2008

    was $11.8 billion. In 2009, research shows that Apple smartphones seized 13.3% of the

    global market share as their 3GB iPhone is growing in popularity selling for $199 with a

    service contract (Datamonitor, 2009; Toronto Star, 2009). Additionally, the iPhone

    provides a competitive advantage, as the device is able to run upwards of 85,000

    applications providing higher utility for customers. Likewise, Nokia dominates the global

    smartphone share at 40% threatening North American market shares (Abkowitz, 2009).

    Target Market: The demographics of the current Blackberry target market is composed

    of mid to upper class buyers aged 30-55 in the professional, executive and industrial

    segments. The mainstream consumer market is a target for acquiring new customers

    where RIM will penetrate this segment by incorporating changes in consumer

    expectations. RIM can offer smartphone products with additional multimedia components

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    to suit consumers‟ interactive lifestyle. To continue long-term growth, RIM will target the next generational cohort, “Tweens”, who are adept to technology, social media and

    have considerable influence on their parent‟s consumer behavior (Grewal, 2009). c) Assumptions-The following assumptions are based on a forecasted increase in

    competition, response to changing consumer needs, and market trends:

    ? The BlackBerry is entering the maturity phase in the product life cycle

    ? RIM will continue to expand their product lines and services to grow

    ? RIM will continue to expand into foreign markets and build partnerships

    ? An increased number of competitors will enter the smartphone market

    ? There will be an increased demand for smartphones in the coming years

    ? Consumer expectations of smartphone devices will change

    ? The average selling price of mobile communication devices will decline

    ? RIM will continue to partner up with software developers and add applications

    SWOT: Research in Motion

     RIM Strengths Weaknesses

    Internal -Comprehensive offering and portfolio -Dependence on few customers

    -Growing brand image and brand loyalty in the business and government

    -Strong financial performance segments

    -Strong research and development -Issues with product supply

     Opportunities Threats

External -Expanding portfolio of offerings and -Declining average selling price

    applications -Increased competition in

    -Positive outlook for Smartphones smartphone segment

    -Fastest growing company in the world -Involvement in legal issues

     (Datamonitor, 2009) Purpose: The analysis of the company SWOT outlines opportunities where RIM can grow their

    global smartphone market share and resist against external threats, by utilizing its company

    strengths and improving upon its weaknesses.

    Alternative Solutions to the Problem

1) Product Development: The current capabilities of the BlackBerry Storm2 will not be

    enough to meet changing consumer expectations in the long run. RIM can grow its North

    American and Global market share by adding a BlackBerry series the to product depth

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    under the breadth of mobile communication devices. The BlackBerry Sky will feature increased multimedia and application capabilities, non-scratch recycled metal, a full LED touch screen in combination Qwerty keypad on the reverse side of the device, and a satellite service option for all customers. The satellite service will offer a greater value and higher utility for customers who want to use their mobile device anywhere in the world.

    Advantages: Adding Blackberry Sky to the Blackberry product line would create and deliver value by satisfying the changing needs of current and new customers in targeted segments. This alternative would sustain growth, as a new product creates incentive for customers to continue purchasing BlackBerry products and provide higher utility with the added features. With a complete product line, BlackBerry will be able to withstand external threats from competitors. The new BlackBerry Sky will induce a sales boost as new products generate a large percent of revenues and dominate over other brands. Disadvantages:

    If RIM fails to satisfy the needs of changing consumer expectations, it will result in a

    loss of revenue and profit. Lack of demand for the Sky may decrease the value of the BlackBerry brand and discourage current and new customers to buy from the BlackBerry product line. Also, competitors may build on the BlackBerry Sky concept and release an improved model to grab market share, if the product fails.

    2) Market Penetration: To grow smartphone market share in the enterprise and

    consumer segments, RIM can increase brand awareness by communicating superior benefits of the BlackBerry brand. To increase brand awareness and intensify distribution

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efforts, RIM can open BlackBerry stores with specialized BlackBerry service, located in

    business centers and suburban areas all over the world; especially, in North America,

    Europe, and Asia. Advantages:

    By improving the marketing mix and opening BlackBerry specialty stores in current markets, RIM will penetrate its markets and grab market share. Adding to the

    place of product distribution, RIM will have another vehicle to intensify communication

    of its BlackBerry products through customer service excellence. Also, BlackBerry

    specialty stores provide added value to its products, by offering convenience and product

    knowledge to current and new customers within targeted markets.

    Disadvantages:

    The cost of additional marketing efforts will not be compensated if additional promotion and place of distribution proves futile. In this case, RIM will lose smartphone

    market shares to competitors who provide innovative products or services with a

    perceived greater value. If the BlackBerry delays new product launches at its new

    specialty stores, customer will not have the incentive to buy from BlackBerry product

    line.

    3) Market Development: The third alternative is for RIM to further penetrate global

    markets by partnering with a mobile carrier services in countries with emerging markets

    to grow smartphone market share (Appendix A).

    Advantages:

    In many developing economies, there is a growing proportion of middle-class households who are beginning to buy technological devices. This presents an opportunity

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for RIM to grab market share and increase revenue. Continuing to partner up and co-

    brand with global carriers enhances various consumer perceptions of product quality and

    adds value to BlackBerry products.

    Disadvantages:

     There is the potential that continuing to co-brand with global carriers may fail for

    RIM; global carrier brands are suited to respective geographic regions and demographics

    in the different cultures, resulting in different customer profiles. Carrier companies may

    change their priorities causing co-branded products to be discontinued. As a result,

    customer relationships and loyalty created with co-branded products would be lost. Lastly,

    venture into foreign markets may be impeded by foreign governmental regulation.

    Solution and Plan Action

    In order to satisfy the needs of the next generation of consumers and grow global smartphone market share, RIM should increase its product depth by adding a new series

    to the Blackberry smartphone product line. The compact BlackBerry Sky will feature

    greater multimedia and application capabilities, non-scratch recycled metal, a full LED

    touch screen in combination Qwerty keypad on the reverse side of the device, and a

    satellite option for all customers. This speedy BlackBerry will satisfy changing consumer

    expectations about what smartphones should provide and once again become the “all in

    one” mobile device.

    Globally, the Sky smartphone phone is targeted at current and prospective consumers, who have an ever changing need for a multi-media device, from web

    browsing to music, movies, gaming and application customization. The product launch of

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BlackBerry Sky will further increase brand value, profitability, and grow North American

    and Global smartphone market shares for RIM.

    Marketing Strategy and Marketing Mix: Product Up until now, RIM has revolutionized mobile communication devices with the

    BlackBerry smartphone. The idea would be to enhance product depth by adding a new

    BlackBerry to the product line by creating a multi-media device to better satisfy

    consumer needs. By enhancing the smartphone features and ultimately redesigning the

    BlackBerry, the product will attract consumers and dominate market share.

    Price The price point will be set by the competitors pricing strategies. For those

    customers that desire the satellite service, an additional charge will be predetermined.

    Place The BlackBerry Sky will be distributed through North American and Global

    service carriers, retail outlets, and through the BlackBerry promotional website.

    Promotion RIM will communicate benefits of the BlackBerry Sky to consumers

    through tailored ad campaigns, internet marketing, viral marketing, social media channels

    and exclusive offers to current and new customers (Appendix A).

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Appendix A

    Application of Course Concepts

    SWOT: Analysis of RIM Strengths, weaknesses, opportunities and threats

    Target Market: By analyzing target markets and incorporating demographics and

    psychographics of target segments, our team was able to better cater to our target markets

    and maintain brand dominance.

    Marketing Mix: Product, price, promotion, and place variables

    Growth Strategies:

    For the three alternatives we utilized:

    - market penetration through brand awareness and place of distribution

    - market development through further globalizing BlackBerry products

    - product development through adding to BlackBerry product depth and brand

    extension by introducing a new product under the BlackBerry brand

    Product Life Cycle: Research has indicated the BlackBerry is in the maturity phase of the

    life cycle and must develop strategies accordingly.

    Brand loyalty: Enhanced when implementing product strategies to exceed customer

    expectations

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