Stopping RIM's downfall. A repositioning of the Blackberry brand


Term Paper, 2012

24 Pages, Grade: 1,0


Excerpt

Contents

II List of Tables

1 Introduction

2 Analysis of the brand
2.1 Ideology
2.2 Capability
2.3 Consumer
2.4 Environment
2.5 S.W.O.T. Analysis
2.6 Current Positioning

3 Strategic future positioning options

4 Implementation Strategies
4.1 Internal Brand Management
4.2 New Product Development
4.3 Corporate Social Responsibility
4.4 Marketing Communications Mix

5 Conclusion

III Appendix: Mintel 2012: Brand research

IV References

List of Tables

Table 1: Brand commitment

Table 2: Brand diversity

Table 3: Brand diversity

Table 4: Mobile Phones Company Shares 2006 -2010

Table 5: S.W.O.T. Analysis

Table 6: Different repositioning options

Table 7: Suitability of positioning idea

Table 8: Transformation Grid

1 Introduction

“R.I.P. RIM” (Lyons, 2012)

“The company's brightest days might be behind it.” (Lyons, 2012)

“Aging grandpa in the wireless business” (Kagan, 2011)

“Aggressively Driving Down the Road to Nowhere” (Gongloff, 2011)

These are just a few of the many discouraging headlines the newly-elected CEO of Research in Motion (RIM), Thorsten Heins, has to cope with these days.

RIM is a Canadian based company, founded in 1984, designing, manufacturing and marketing wireless solutions for the global mobile communications market (Datamonitor, 2012). Once, the company’s key brand “Blackberry” was the most desirable and successful smartphone brand within the B2B market (Reisinger, 2011). When entering the B2C market, however, the company has failed to live up to the ever-growing expectations of the end-consumers by offering an outdated operating system and very little applications (Houpt, 2011).

In the last few years, the market shade of RIM has continued to decrease and the low revenues have pushed its stock to a new seven-year low (Kagan, 2011), raising questions about the company’s ability to survive against its relentless competitors such as Apple’s iPhone or Google’s Android who have clearly taken over the leadership of the smartphone market (Burrows and Miller, 2012).

Without a significant management and strategy change, Blackberry will not be able to regain old power and to lose its current image of being untrendy and out-of-date (Lyons, 2012).

Having examined in detail the causes of Blackberry’s downfall of popularity, this report aims to show opportunities for RIM to increase market share again by adopting and implementing a different positioning strategy.

2 Analysis of the brand

In the following, the brand “Blackberry” will be analysed by using Edward’s and Day’s passion point model looking at the two internal factors that influence a brand, its ideology and capability, as well as at the two external factors, the consumer and the environment (Edwards and Day, 2005).

2.1 Ideology

In 1984, Michael Lazaridis and Douglas Fregin set up RIM in Waterloo, Ontario, Canada to become the first wireless data technology developer in North America. One year after its IPO on the Toronto Stock Exchange in 1998, RIM launched its flagship brand “Blackberry” offering, for the first time, wireless e-mail solutions. From 2004 to 2008, RIM has expanded its business to Europe, Asia-Pacific, Africa and Latin America continuously introducing new devices that allow people all over the world to be connected (Datamonitor, 2012).

In its Code of Business Standards and Principles, RIM states its success has derived from participating in an ethical culture, committing to social and environmental responsibility, upholding an integrative performance and from acting with honesty and transparency for its shareholders. These values shall be upheld at all times and contribute to a positive perception of the company’s brand “Blackberry” in all its relevant primary markets, that is the IT market, the end-users as well as business decision-makers (Research in Motion Limited, 2012a; Research in Motion Limited, 2012b).

The Blackberry brand shall respond to the consumer’s desire for private and professional success. Hence, it promises “reliable, best-in-class mobile connectivity [to] live large and achieve more.” Furthermore, the brand’s personality is described as “alert and well-informed”, “confident” and “approachable”. In order to stay competitive, RIM’s business strategy includes extending technology leadership, expanding the reach of the global Blackberry platform and regaining market leadership (Research in Motion Limited, 2007).

2.2 Capability

RIM’s primary revenue stream is generated by its core brand “Blackberry” compromising wireless handsets, software and service (Research in Motion Limited, 2012c). The product portfolio is made up of the Blackberry PlayBook tablet, of the five smartphones lines “Bold”, “Storm”, “Torch”, “Curve” and “Pearl”, of different Blackberry accessories as well as of the Blackberry App World and Messenger. In addition, RIM offers its own operating systems and other services such as non-warranty repairs (Research in Motion Limited, 2012d).

However, it is argued that the smartphone portfolio has failed to adapt to modern standards with four of the five lines having QWERTY keyboards instead of touch screens and the operating systems being less developed than the ones of its main competitors (Siebes, 2010).

Nevertheless, over the last 10 years, RIM has created value and a distinctive advantage through high quality R&D (Datamonitor, 2011). As a former innovator in wireless email solutions, they were able to build assets such as licenses and patents linked to data security, wireless transmission of data and, what they are best known for, their push email service. Hence, it can be stated that Blackberry was the number one quality business phone offering the best functionality, security and reliability (Lion and Green, 2006). Today, Blackberry has lost most of its glory, especially in the fast-growing B2C market (Lyons, 2012). However, the brand enjoys high recognition and is still the leader in the enterprise market – with over 90% of the Fortune 500 companies using Blackberry solution. The distribution network is also very well-developed; Blackberry devices are offered in 175 countries through more than 595 operators (Datamonitor, 2011).

But increased competition and spending on R&D has had a negative impact on profit margins and whereas the cost of sales has increased over 8% from 2007 to 2010, the average selling price per unit has dropped from $370 to $311 from 2009 to 2010 (Peers, 2010). Furthermore, RIM lacks the interactive abilities, diverse revenue streams and huge capital that, for instance, Apple and Google have and even recently, RIM’s major source of highly skilled and educated workforce, the University of Waterloo, has been discovered by its competitors who now start taking away qualified potential employees – thereby weakening RIM’s positioning as a high quality R&D company (Lion and Green, 2006).

2.3 Consumer

UK consumers have become addicted to smartphones – this is the key finding of the 2011 Ofcom Communications Market report (Ofcom, 2011).

Its research revealed that 27% of adults and 47% of teenagers now own a smartphone; half of them admitting to be “highly addicted” to them. Especially teenagers are neglecting traditional leisure activities in favour of their smartphone. The rapid growth in the use of smartphones is drastically changing people’s social behaviour. 81% always keep their mobile switched on and 65% even use it while socialising with others (Ofcom, 2011).

It is interesting to see to what extent consumers increasingly identify themselves through their smartphone brand. Blackberry, Apple or Android? This question is not only about best quality, functionality or other rational decision criteria; it is also a question of lifestyle and emotional values attached to each brand (McKinsey&Company, 2011). Today, consumers aged 18-24 are more likely to own an Android device, 25-34 year olds stick to an iPhone and consumers over 35 are more likely to own a BlackBerry (Mintel, 2011). Unlike many Apple or Android users interested in trendiness or a great variety of applications, Blackberry users traditionally search for practical usage, steadiness and reliability (Mintel, 2012).

The following tables show the results of a survey by Mintel on brand image and usage conducted in November 2011 among 2021 UK internet users aged over 16.

illustration not visible in this excerpt

Table 1: Brand commitment (Source: GMI/Mintel, 2011)

The survey revealed the relatively low commitment of UK consumers to the Blackberry brand as opposed to its main competitors – only 21% state they are truly committed to it and only 14% would prefer Blackberry over other brands, which is the lowest result of all.

Nevertheless, UK consumers consider Blackberry to be the most outstanding brand and, besides Apple, they find it most diverse as the following table concerning brand diversity shows.

illustration not visible in this excerpt

Table 2: Brand diversity (Source: GMI/Mintel, 2011)

[...]

Excerpt out of 24 pages

Details

Title
Stopping RIM's downfall. A repositioning of the Blackberry brand
College
Oxford Brookes University
Course
Product & Brand Management
Grade
1,0
Author
Year
2012
Pages
24
Catalog Number
V273847
ISBN (eBook)
9783656659266
ISBN (Book)
9783656692669
File size
778 KB
Language
English
Tags
Blackberry, RIM, branding, repositioning, smartphones, strategy, brand management
Quote paper
B.A. Jennifer Kint (Author), 2012, Stopping RIM's downfall. A repositioning of the Blackberry brand, Munich, GRIN Verlag, https://www.grin.com/document/273847

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