Can BlackBerry Bounce Back?

Conducting a SWOT to
Guide Strategy

For the most optimal reading experience we recommend using our website. A
free-to-view version of this content is available here, which includes an easy to
navigate and search entry, and may also include videos, embedded datasets,
downloadable datasets, interactive questions, audio content and downloadable
tables and resources.

Author: David C. Kimball

Pub. Date: 2017
Product: Sage Business Cases
DOI: https://doi.org/10.4135/9781473996564
Keywords: five forces, SWOT analysis, cell phones, porters, market share, substitute product, patents
Disciplines: Business & Management, Leadership, Strategic Management, Leadership Development,
Corporate Strategy, Porter's Five Forces
Access Date: September 14, 2023
Publishing Company: SAGE Publications: SAGE Business Cases Originals
City: London
Online ISBN: 9781473996564

© 2017 SAGE Publications: SAGE Business Cases Originals All Rights Reserved.
Sage Sage Business Cases
© David C. Kimball 2017

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom dis-
cussion or self-study, and is not meant to illustrate either effective or ineffective management styles.
Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educa-
tional, or personal use only within your university, and cannot be forwarded outside the university or
used for other commercial purposes.

The case studies on SAGE Business Cases are designed and optimized for online learning. Please re-
fer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides,
or other resources that may be included.

This content may only be distributed for use within GALGOTIA'S UNIVERSITY.

2023 Sage Publications, Inc. All Rights Reserved

Abstract

Corporate strategy should be based on the ongoing analyses of the internal and external situation fac-
ing an organization. A SWOT analysis is a commonly used assessment tool that can inform strategic
decisions. This case uses the situation at BlackBerry Limited (formerly known as RIM) to highlight how
to perform a comprehensive SWOT analysis and use the results to make strategic decisions to keep
abreast of changing industry factors. Several questions are addressed in the case: What is required to
conduct a productive SWOT? How can SWOT data be used to direct strategy? These questions are
answered in the context of BlackBerry’s experience, as BlackBerry employee, Jamal Obu, compiles a
SWOT and analyzes it to guide strategic planning and help the company regain its market share.

Case

Learning Outcomes

By the end of this case study, each student should be able to:

1. Apply Porter’s Five Force Model to better understand the external forces that affect a company’s

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 2 of 10
Sage Sage Business Cases
© David C. Kimball 2017

strategy.
2. Recognize the importance of reviewing the internal strengths and weaknesses and external opportu-
nities and threats that affect an organization.
3. Learn to use the SWOT as an assessment tool to develop future strategies for an organization.

The Case

Jamal Obu had been working at BlackBerry Limited for five years as a marketing analyst when he was asked
to conduct a strategic environmental assessment for BlackBerry by the vice president of Marketing. Although
BlackBerry once enjoyed the bulk of the mobile phone market, by 2015 BlackBerry was struggling. The com-
petitive advantage that BlackBerry enjoyed was due in large part to their small phone with little buttons that
looked like blackberries. However, Apple and Samsung developed cell phones with touchscreens and digital
keyboards that made the BlackBerry cell phones appear ancient.

Jamal’s boss wanted a strategic environmental assessment in order to guide the company in their strategic
planning. BlackBerry was caught completely off-guard by the rise of Apple’s iPhone and they needed to de-
vise a strategic plan to recapture market share. Jamal and his fellow workers were going to need to develop
a vision for the future of the company if they expected to compete. Jamal decided to use a SWOT (Strengths,
Weaknesses, Opportunities, and Threats) as a framework to evaluate BlackBerry’s situation because he knew
that format would allow him to organize the quantitative and qualitative data necessary to help him under-
stand the external and internal factors at play.

Jamal had learned about SWOTs in his MBA and knew the assessment tool was created by Albert Humphrey,
who led a research project at Stanford University in the 1960s and 1970s using data from many top compa-
nies. Humphrey’s goal was to identify why corporate planning failed. He identified areas of strategic impor-
tance that he called SOFT: “What is good in the present is Satisfactory, good in the future is an Opportunity;
bad in the present is a Fault, and bad in the future is a Threat” (Humphrey, 2005). “F” was subsequently
changed to “W” to better reflect the weaknesses that existed within the company. The elements of the first
SWOT were published in 1965 in Business Policy, Text and Cases by Learned, Christensen, Andrews and
Guth (Morrison, 2016). That text became the most popular textbook in the academic study of strategic man-
agement, and Jamal knew from completing strategic cases from that book that a properly conducted SWOT
could lead to finding new opportunities (such as entering a new industry) that matched the strengths of their
Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy
Page 3 of 10
Sage Sage Business Cases
© David C. Kimball 2017

organization. He knew that SWOTs were valuable tools that could be used to stay abreast of changing indus-
try factors. As such, Jamal knew that such an assessment could help inform BlackBerry’s strategic planning,
but he was unsure what direction his SWOT might lead the company in their current dire situation.

Identifying Internal Factors with SWOT

To prepare for his SWOT, Jamal set out to gather internal information regarding BlackBerry’s strengths and
weaknesses. Jamal knew that separate SWOTs could be brought together from areas such as marketing,
finance, operations, research and development, and customer service to develop a single unified SWOT for
the entire company. Jamal called upon various departments to offer SWOT analyses because he wanted to
collaborate in order to pull together more detailed information. He reminded each department to be honest in
their assessment of their part of the company.

Each department offered information about their inner workings. The marketing department brought Jamal
a SWOT that analyzed product sales, pricing, advertising, and distribution. The finance department brought
Jamal the fiscal results from different products and areas of the company. The research and development de-
partment reported on patents and product development. The operations department brought statistics on how
much fixed and operating capacity BlackBerry was utilizing, and the customer service department reported
on customer satisfaction levels with the company’s products and services.

Strengths

When Jamal analyzed the departmental SWOTs he was able to identify several of BlackBerry’s strengths.
BlackBerry was once the most respected name in the mobile communications industry, and the brand con-
tinued to be very well known. The brand remained well liked by its supporters and still retained some popu-
larity in its local market of Canada. According to Barker (2011), “Throughout early decades of the twenty-first
century, the BlackBerry was synonymous with business connectivity. Its strong support for email, messaging,
global roaming, and mobile document editing made it the best in class among the other fledgling smartphone
platforms.” Add in the fact that BlackBerry was a “cute” phone with the little blackberry-shaped buttons, and
BlackBerry had an easy time marketing their product.

BlackBerry had 595 million dollars in revenue in 2004, and revenues rose to a high of almost 20 billion dollars

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 4 of 10
Sage Sage Business Cases
© David C. Kimball 2017

in 2011. Unfortunately, revenue decreased to 2.1 billion dollars by 2016. BlackBerry’s net income also peaked
in 2011 at 3.4 billion dollars. By 2016, their net income was a loss of 200 million dollars. Unfortunately, like
many strengths at BlackBerry, their financial strength weakened as strong competitors such as Apple entered
the cell phone market. Despite this reduction in financial strength, Blackberry remains a billion dollar company
trusted by business people to provide secure, cellular phone service.

BlackBerry’s major strength continues to lie in the 44,000 extremely valuable patents they own. According
to Decker (2015), “Their security patents are desired by many companies within the mobile communications
industry. Their patents are mostly related to security and basic wireless technologies. The company has a
combination of older patents on the basic functioning of a mobile phone, as well as newer ones on security
and on consumer-friendly features such as predictive typing on a keyboard.”

Weaknesses

When Jamal analyzed the SWOTs, he saw that BlackBerry had significant weaknesses according to all of
the departments. Marketing and finance both reported that BlackBerry subscribers dropped from 85 million
subscribers in 2013 to 46 million in 2014. This number is expected to drop further in 2015 and 2016. The
BlackBerry QWERTY physical keyboard used to be the envy of the industry, but BlackBerry’s operations de-
partment reported that the small blackberry-button keyboard they were so proficient at manufacturing was
being replaced by touchscreen and virtual keyboards. Consumers had clearly switched their preference from
small physical keyboard buttons to the touchscreen and virtual keyboards used in Android and Apple phones.
This shift meant operations had the fixed capacity to build more mobile phones than they could sell.

Marketing and finance also noted another weakness that BlackBerry had experienced: the lack of any real,
recent success in marketing their new smartphones and tablets. The marketing department reported to Jamal
that BlackBerry reached their high point in sales revenue in 2011. Since that time, the marketing department
had experienced trouble marketing and selling their Playbook tablets (even though they were well designed)
in the face of stiff competition from other tablets, such as the Apple iPad. They also reported difficulty in mar-
keting and selling the PRIV in 2015. The PRIV, a secured smartphone powered by Android failed to gain
market traction.

Another weakness cited by BlackBerry operations occurred in October of 2011. At that time, BlackBerry (then

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 5 of 10
Sage Sage Business Cases
© David C. Kimball 2017

known as RIM) experienced a glitch in their software that created an email outage that started in Europe and
spread to the United States. Although the outage only lasted a few days, it was surprising since the company
prided itself on their secure networks (Ulanoff, 2011).

Identifying External Factors with SWOT

After reviewing the SWOTs from the different departments, Jamal conducted research to help him identify
and understand the external forces affecting BlackBerry’s performance. As Porter’s Five Force Model (1998)
predicts, there are at least five major external forces management leaders need to assess: the entry of new
competitors, the potential for substitute products, the strength of their suppliers, the ability of consumers to
switch to competitor products, and the nature of the ring itself where the companies fight for market share.

In the case of BlackBerry, they were an early leader in the cellular phone industry and had faced each of
these external forces since their inception. In the beginning, their high market share allowed them to have
control over their suppliers, since the suppliers did not have many other companies to sell to in the mobile
phone industry. The customers loved the little keyboard and they respected BlackBerry for the high securi-
ty measures associated with their phones. Unfortunately, BlackBerry was vulnerable in regards to substitute
products and the threat of new entrants—they could not block other companies from entering their mobile
phone market. Companies like Samsung and Apple were able to develop their own software to make smart-
phones with larger, well-lit screens, and faster software to make and send emails and text messages, and to
stream video. Within the decade of the 2000s, the BlackBerry went from the coolest product on the planet to
an outdated technology when compared to the Apple and Android lines of smartphones. Jamal understood
this experience in terms of Porter’s (1998) Model of Competitive Advantage: BlackBerry had lost most of their
competitive advantage as it struggled to survive the rivalry in the mobile technology industry. Companies like
Apple had strengthened their position by developing and diversifying (with products such as tablets, laptops,
and watches), which would have been equally good for BlackBerry to have tried as business strategies.

Opportunities

In reviewing the SWOTs from marketing, finance, operations, and research and development, Jamal drew to-

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 6 of 10
Sage Sage Business Cases
© David C. Kimball 2017

gether a list of BlackBerry’s opportunities. He was relieved to see that BlackBerry had several opportunities
that they could take advantage of before it was too late to save the company. The first opportunity BlackBerry
had was to make their products available in different formats—including Android, iOS, and Windows
Phone—which they had been working with since 2013. BlackBerry had started to market their first Android
smartphone, the PRIV, with a slider keyboard and a curved screen. Although BlackBerry was in the position
to sell a business-friendly Android phone with the services needed to make it safe, the PRIV was priced too
high. It was priced at the level of Samsung and Apple phones, and did not do as well as expected. BlackBerry
has an opportunity to offer a lower priced PRIV, which is be expected to do well in emerging markets and
with cost-conscious American consumers. Would the reduction in the PRIV price be enough to capitalize on
BlackBerry’s security strengths and compete against its industry rivals?

Another opportunity for BlackBerry is the potential sale of the company, or parts of it. Cellular phone compa-
nies such as Samsung have been interested in acquiring BlackBerry—especially for their patents. BlackBer-
ry’s high level of security measures still makes it a preferred supplier for government users.

BlackBerry also has an opportunity to be more aggressive in the cell phone market. Under current CEO, John
S. Chen, they purchased Good Technology in September of 2015. BlackBerry acquired Good Technology for
$425 million, giving it one of the better-known names involved in making smartphones work-friendly. Good
Technology is well-known for helping corporations and governments keep tabs on non-BlackBerry platforms,
especially iOS. According to Lopes (2015), the acquisition of Good Technology indicates BlackBerry is mov-
ing towards services to protect phones.

Threats

Jamal applied Porter’s Five Force Model to better understand the external forces affecting BlackBerry’s
business strategy. Porter’s Five Force Model predicted the middle box (the competitive ring) as being the
strongest of the five forces in most industries, and Jamal found this to be true in BlackBerry’s case. BlackBer-
ry is still facing major threats in the cellular phone industry as a result of competitive rivalry. Although once
considered the leader in the cellular industry, BlackBerry has lost its market share and is threatened by the
huge success of companies such as Apple, Samsung, and Google. These companies have been extremely
successful in their entrance and expansion in the cellular phone market and their technology offerings and

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 7 of 10
Sage Sage Business Cases
© David C. Kimball 2017

marketing techniques appeal to a large portion of mobile consumers. As a result of these and other factors,
BlackBerry’s stock price dropped from about $60 a share in 2010 down to about $7 a share in 2016. The
financial market has not been supportive of a turnaround at BlackBerry. BlackBerry will have to work closely
with suppliers to get lower prices (despite their reduced market share) to compete in this market. BlackBerry
also has to be creative and develop interesting marketing techniques and new hi-tech products to attract cus-
tomers.

The rapid change in technology will be present in the cell phone industry for many years to come, with the
threat of new entrants and substitute products ever present in addition to the competitive rivalry issues. How-
ever, Blackberry should also be aware of employee morale and keeping spirits high. Unfortunately, Blackberry
laid-off 40% of their workforce in 2011, and further employee reductions occurred in 2015. The CEO in 2011,
Mike Lazaridis, was targeted as the man at the BlackBerry helm when the company collapsed (Hicks, 2012).
For BlackBerry to rebound, it is important to put that period of low morale in the past. The telecommunications
industry has new opportunities in the cellular phone and security fields. Keeping spirits high, looking for new
opportunities to form alliances with competitors in their industry, and keeping creativity flowing so new prod-
ucts can be manufactured and marketed is more critical than ever at BlackBerry.

Analyzing a SWOT

In his research and analysis, Jamal came to realize that conducting a SWOT analysis is as much about
the process as it is about what is listed in the strength, weaknesses, opportunities, and threats sections.
For BlackBerry, Jamal focused on the importance of identifying and addressing the significant problems they
faced in their external environment. It was clear that BlackBerry was going to have the address their internal
weaknesses and external threats and develop some future strategies to overcome these problems. Jamal
hoped that his multi-departmental SWOT would help BlackBerry conduct a strategic environmental assess-
ment in order to guide the company in their strategic planning. In his analysis of the current SWOT, Jamal
realized that BlackBerry would need to develop strategies to keep ahead of changing industry factors, but
what strategies would help the company emerge from its downward trend and recapture its market share?
Should Jamal suggest market penetration, market development, diversification in new businesses, forward
integration into the distribution channel, backward integration into the distribution channel, or even divesting

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 8 of 10
Sage Sage Business Cases
© David C. Kimball 2017

certain lines of businesses? Despite the breadth of information he had collected from multiple departments,
Jamal realized multiple SWOTs and analyses would be necessary to guide BlackBerry in the design, imple-
mentation, and refinement of its corporate strategies as it attempted to bounce back from its market decline.

Discussion Questions

1. What is the difference between the SW and OT areas of a SWOT? Why is this difference relevant
and important?
2. Use Jamal’s research to produce a SWOT of BlackBerry to assess its strengths, weaknesses, oppor-
tunities, and threats. The purpose of the SWOT should be to determine strategies for BlackBerry to
use for the next three to five years.
3. What should Jamal propose as a strategy for BlackBerry as a result of the SWOT assessment?
4. Assess Jamal’s research. What additional information would you have included in your research to
augment your SWOT?

Bibliography

Barker, A. (2011, March 24). Blackberry OS: strengths and weaknesses. Retrieved fromhttp://blackberry-
strengths-weaknesses.articles.r-tt.com/

Decker, S. (2015, January 14). BlackBerry’s patent portfolio is wireless trove for acquirer. Retrieved
fromhttp://www.bloomberg.com/news/articles/2015-01-14/BlackBerrys-patent-portfolio-is-wireless-trove-for-
acquirer

Hicks, J. (2012, February 21). Research, no motion: how the BlackBerry CEOs lost an empire. The Verge. Re-
trieved from http://www.theverge.com/2012/2/21/2789676/rim-blackberry-mike-lazaridis-jim-balsillie-lost-em-
pire

Humphrey, A. (2005). SWOT analysis for management consulting. SRI International. Retrieved from
https://www.sri.com/sites/default/files/brochures/dec-05.pdf

Lopez, M. (2015, September 7). BlackBerry acquires good, helps stabilize battered EMM market. Retrieved
from http://www.forbes.com/sites/maribellopez/2015/09/07/BlackBerry-acquires-good-helps-stabilize-bat-

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 9 of 10
Sage Sage Business Cases
© David C. Kimball 2017

tered-emm-market/#422cde5a3bc7

Morrison, M. (2016). SWOT analysis made simple – history, definition, tools, templates & worksheets. Re-
trieved from https://rapidbi.com/swotanalysis/#Background

Porter, M. (1998). Competitive advantage: creating and sustaining superior performance. New York: Free
Press.

Ulanoff, L. (2011, October 14). BlackBerry’s outage caused by huge e-mail backup. Retrieved from
http://www.cnn.com/2011/10/12/tech/mobile/blackberry-outage-email-backup/

Further Reading

Mcgurie, K. (2014). SWOT analysis 34 success secrets: 34 most asked questions on SWOT analysis – what
you need to know. Brisbane: Emereo Publishing.

https://doi.org/10.4135/9781473996564

Can BlackBerry Bounce Back? Conducting a SWOT to Guide Strategy

Page 10 of 10