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RIM Timothy R Solichin Research in Motion Strategy Analysis Report

RIM Timothy R Solichin Research in Motion Strategy Analysis Report

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Published by Timothy RS
This is a strategy for Research In Motion to revive Blackberry from market decline
This is a strategy for Research In Motion to revive Blackberry from market decline

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Published by: Timothy RS on Apr 23, 2012
Copyright:Attribution Non-commercial

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05/23/2013

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1
Table of Contents Page #Executive Summary .....................................................................................................2
Porter’s 5 Force Analysis
............................................................................................3
Rivalry................................................................................................................3Threat of Entrants ..............................................................................................3Threat of Substitutes ..........................................................................................4Supplier Power ...................................................................................................4Buyer Power.......................................................................................................5
Hambrick & Fredrickson
s Strategy Diamond .........................................................6
Arenas: Where will we be active? .....................................................................6Vehicles: How will we get there? ......................................................................6Differentiators: How will we win? ....................................................................7Staging: What will be our speed and sequence of moves? ................................7Economic Logic: How will we obtain our returns? ...........................................8
Internal Analysis ..........................................................................................................8
Strengths & Weaknesses ....................................................................................8
 
Competitive Advantages & Sustainability .........................................................8Financial Health .................................................................................................9
Business-Level Analysis .............................................................................................10
Overall Positioning ..........................................................................................10
 
Functional Strategies vs. Positioning Strategies ..............................................11Cooperative and Competitive Dynamics .........................................................11Methods of Entry .............................................................................................12
International Outlook ................................................................................................12Strategic Recommendations ......................................................................................13
U.S. Turnaround Strategy ................................................................................13Sell the Company .............................................................................................16
 
2
Executive Summary
 
What is RIM?
Research in Motion, Limited (RIM) sells mobile data solutions through itsbrand name business BlackBerry. This includes proprietary software built exclusively for its handhelddevices. RIM has three core divisions: hardware device production, software development, andmaintenance of its Business Enterprise Server (BES). The company earns revenue through the sale of its mobile and tablet devices, which are equipped with proprietary software. The company also earnssubscription fees that it receives from mobile carriers.
BlackBerry must continue its presence in high growth foreign markets.
RIM is losing inthe U.S. market, but continues to enjoy high growth overseas. This is due to its low-price, high-volumestrategy that the company employs to compete in the foreign market. The competition outside the U.S.is less rigorous, where some of the main players in the U.S. market have limited presence.
 BlackBerry must keep up with its competition and compete in its strongest area.
BlackBerry devices seem to be lacking in terms of technology and App Store. As the company enteredthe consumer oriented segment, it faces competition from Apple and Google. Apple & Google haveinvested a lot into R&D and in order for RIM to stay competitive, it needs to either license its
competitors’ technology or internally develop them.
Lastly,
BlackBerry’s competitive advantage is in
its network through BBM and its high security system. The company has to leverage these mainfeatures to remain competitive in the smartphone market.
Key Issues
 
Lag in technological advances for both hardware and software
 
Losing market share in the US
 
Failed in tablet market
 
International cutoff of BBM/ collapse of service
 
3
Porter’s 5 Forces Analysis
 Rivalry is low.
The mobile device and data solutions industry is highly concentrated,characterized by a few large competitors and numerous smaller competitors. As a result, the industryrivalry is lessened.
1,2
The growth in this industry has been extremely fast-paced, as Cisco has predictedthat global mobile traffic of data will grow 78% over the next five years.
3
This means that firms cansimply keep up with t
he industry’s growth to keep their 
respective positions and improve theirrevenues.
4
Although there are numerous fixed cost components to this industry: office space,production facilities, and employees; there has been an increasing trend of firms shifting to just-in-timeproduction.
5
This allows smartphone manufacturers to have relatively low inventory and subsequentlylow storage costs, which reduces the pressure to fill capacity.
6
Firms in this industry compete onproduct differentiation, not just price. For instance, Apple wants to be revolutionary in user experienceand friendliness, while Microsoft wants to be extremely functional.
7,8
In addition, there are other areaswhere incumbents can differentiate themselves, including application markets and phone designs.Switching cost in this industry is quite high as people need to learn the different interface.
 
Threat of entrants is low.
The smartphone industry is very capital intensive due to highresearch and development (R&D) costs and expensive manufacturing facilities. This raises the barrierof entry and makes it difficult for small companies to enter. Many of the firms that compete in thisindustry have existing long-term contractual relationships with mobile carriers and benefit from theirsignificant brand equity. These companies also have a great deal of knowledge and experience througheconomies of learning, which gives them a major cost advantage over smaller entrants. New entrantswill have difficulty getting carriers to adopt their phones because many carriers are already in profitabledeals with the large mobile phone manufacturers.
9
In order to achieve scale in this industry, new

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