1. Strategic Analysis of a Tech Giant
Evan Hallward
B00561684
Mgmt 4001 - Strategy Formulation
Capstone Project
Professor Lorn Sheehan
Teaching Assistant Max Werner
November 14th
, 2013
I hereby certify that I am the author of this document and that any assistance I received in its
preparation is fully acknowledged and disclosed in the document. I have also cited all sources from
which I obtained data, ideas, or words that are copied directly or paraphrased in the document. Sources
are properly credited according to accepted standards for professional publications. I also certify that
this paper was prepared by me for this purpose.

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Table of Contents
Introduction ..................................................................................................................................................2
Corporate Leadership ...............................................................................................................................2
Company Direction ...................................................................................................................................3
Vision.....................................................................................................................................................3
Mission..................................................................................................................................................3
Objectives..............................................................................................................................................4
External Analysis ...........................................................................................................................................4
STEEP Analysis...........................................................................................................................................4
Socio-cultural ........................................................................................................................................5
Technology............................................................................................................................................5
Economic...............................................................................................................................................6
Environmental.......................................................................................................................................6
Political-Legal........................................................................................................................................6
Porter’s Five Forces Analysis.....................................................................................................................7
Future Orientation....................................................................................................................................7
Opportunities and Threats........................................................................................................................8
Internal..........................................................................................................................................................9
Resource-Based Value Analysis.................................................................................................................9
Value Chain Analysis ...............................................................................................................................11
Primary................................................................................................................................................11
Secondary............................................................................................................................................12
Strengths and Weaknesses.....................................................................................................................12
SWOT Analysis Compiled ............................................................................................................................14
Generic Strategies.......................................................................................................................................14
Discussion and Analysis...............................................................................................................................15
Recommendations......................................................................................................................................17
Conclusion...............................................................................................................................................19
References ..................................................................................................................................................20
Appendix .....................................................................................................................................................23

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Introduction
BlackBerry, with its fluctuating and interesting past, is an ideal company for study due to its
strategic diversity over its lifespan. From its highpoint of the early 2000s into its degradation over the
past 5 years, BlackBerry (formerly Research in Motion) has good examples of both successful and then
detrimental business strategies (Google Finance, 2013). One interesting point of this study will be its
ongoing volatile nature. Until recently BlackBerry was for sale, with ongoing discussions regarding
bidding and possible acquirers (“BlackBerry not a strategic fit…”, 2013). A turn in events has been
BlackBerry abandoning a sales agreement, believing it to be a dead venture. Now seeking $1 billion in
extra funding, it will be interesting to see the outcome of these dealings (“BlackBerry sale on hold…”,
2013). Studying what reasoning or change in events lead to the company’s fall from fame may reveal
ways the company can strategically reposition itself to rebuild.
BlackBerry describes itself as “a global leader in wireless innovation, [which] revolutionized the
mobile industry with the introduction of the BlackBerry solution in 1999” (BlackBerry, 2013, “Company
homepage”). While this self-disclosed company image is very powerful, one can’t help be notice they
are still focusing on the ‘BlackBerry solution’ from the turn of the millennium. The first BlackBerry
product was in fact a simple ‘two way pager’ with a simple keyboard and communication method
(BlackBerry, 213, “History of the BlackBerry”). This differed from normal one way pagers which didn’t
have any reciprocating communication ability (meaning people needed to seek out a telephone to
return a message). BlackBerry’s first true and profound product, which is also what began its rise to
prominence and success, came out in 2003. This original BlackBerry had a traditional BlackBerry
QWERTY keyboard and gave all-in-one communication functionalities between texting, e-mails, and
basic web surfing (BlackBerry, 2013, “History of the BlackBerry”). While this original ‘smartphone’
(which compared to today’s standards is as basic as a cellular device gets) was ground breaking for the
busy, need-to-be reached professionals, it would soon spread to become a trendy and reliable product
for the technology-dependent millennial demographic. From its humble and rather uniquely positioned
headquarters of Waterloo, Canada, BlackBerry became a cornerstone to the expanding ‘smartphone’
market and cutting edge devices. While this would be their general strategy for the remainder of their
most successful years, there is a mix of elements which many analysts agree upon that lead to the
eventual fall in profits, sales, and success. These elements and other discussions will be more extensively
outlined in the strategic analysis of this report.
Corporate Leadership
Another key aspect to understanding the past of BlackBerry and its current state is its
leadership. Research in Motion (RIM) was founded by Mike Lazaridis and Jim Balsillie in 1984 (“ Jim
Basillie gets 5-year…”, 2013). While the company churned out small products and ideas over the years, it
wasn’t really until the release of the BlackBerry in 2003 that RIM gained international notoriety. Basillie
and Lazaridis would use a mixture of media coverage, innovative products, and niche market focus, to
drive sales and solidify BlackBerry’s position as a global leader in smartphone technology. While their
combined efforts help grow BlackBerry towards a very profitable and stable position, some analysts
argued that their complacency and indecision aided the company’s demise as well. Their lack of
innovation and the consistent falling profits under their prevue led to both of their departures from the
company in early 2012 (“ Jim Basillie gets 5-year…”, 2013). The board appointed Thorstein Heins as CEO
to aide in the restructuring and repairing of Research in Motion. The company name ‘Research in
Motion’ was dropped altogether in February 2013 as the company officially rebranded to BlackBerry and
relisted as BBRY on the NASDAQ exchange and as BB on the TSX exchange (BlackBerry, 2013, “Company
homepage”). This is just one example of BlackBerry’s attempted new strategy which I will go into further
detail on later in this report. As we’ve discussed in class, it is usually in some way the current

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leadership’s fault or inaction which causes a company to lose profitability and to fall apart. We further
discussed that it is common, in an attempt to turn the ‘sinking ship’ effect of a company around, for the
Board of Directors to decide on bringing in new talent and to reshuffle the leadership of the company.
This is clearly exemplified in Thornstein Heins replacing both, past-CEOs Jim Basillie and Mike Lazaridis at
the helm of RIM/BlackBerry. While Heins has tried at length to revive the BlackBerry name and product
line, it can be argued that he was not able to turn the company around fast enough to salvage and
reproduce the success the company once had. Whether it was by his own inadequate strategizing or
that he was simply given a doomed-to-fail project, Heins hasn’t been able to save BlackBerry as
investors and Board members would have hoped. Thornstein Heins has since been replaced by John S.
Chen as BlackBerry’s most executive officer (“BlackBerry sale on hold…”, 2013). Heins decided his time
at BlackBerry had come to an end and he no longer was interested in leading the company. As
BlackBerry itself goes through a company transition, it was again time for the leadership to change as
well.
Company Direction
BlackBerry, as previously mentioned, was nearing being sold, but has now gone in the direction
of a refinancing plan. While they have attempted to maintain their corporate vision, mission, and
strategic objectives, due to the uncertainty of BlackBerry’s future, it can be argued and I would have to
agree through my own research, that the company’s longer-term goals or vision is are jaded or
unsustainable. This may be due to the current organizational culture of ‘waiting and see’ as starting any
big projects to shape the company at this point may seem somewhat futile or cannot be sufficiently
funded.
Vision
As we discussed in class, a strategic vision addresses the future direction of the company as well
as changes in the company’s product, market, or technology to improve its current and future position.
While BlackBerry began to try and play catch-up with current smartphone technology with the release
of their full-touchscreen Z10 and ‘extended screen’ Q10, these products were met with lukewarm
reception and lackluster sales due to their lack of truly innovative functions as well as some technical
issues (Kaiser, 2013). The Z30 is BlackBerry’s newest and most innovative product, having been released
throughout October 2013 (Hardy, 2013). While this phone boasts more ‘up-to-par’ technology, there is
generally a pessimistic feel on how the phone will help the company’s future. BlackBerry is continuing to
try and level itself with other industry leaders, such as Apple’s iPhones and Google’s Android devices,
yet this is a challenge that the company may not have the resources or time to truly achieve. While
trying to ‘meet standards’ is not a sustainable vision for the troubled company, it is a short term vision
BlackBerry can concentrate on with the hopes of stabilizing its business and market share.
Mission
BlackBerry, in the midst of its restructuring and sale, has not released an official mission
statement for 2013. One strategic analyst did put together an unofficial statement for this year, which I
think captures many aspects of what BlackBerry’s current mission is (Strategic Management Insight,
2013). BlackBerry is concentrating on its hardware, software, and services with regards to its mobile
communications product lines. This denotes the fact that while BlackBerry is still trying to rollout new
phones or services, none of it is truly ground breaking. They are using very low risk innovation as the
company can no longer fund or support costly or risky new products or services. I believe BlackBerry is
most concerned with their ability to simply stop the downward trend they’ve found themselves on.
Being able to stabilize the company, reduce and reverse market share erosion, and mitigate financial
losses are at the top of BlackBerry’s priority list for the near future, sale or funding aside. When

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discussing mission statements in class, we spoke about what the boundaries are that the company
currently has, be it geographical or customer base, and how a mission statement conveys the ‘who,
what, and why.’ BlackBerry, while lacking a true mission statement, is trying to promise its customers
that they are still focusing on their most reliable and well-known products and services. They want to do
this to show that the company is not dead yet. The company wants to demonstrate they can still bring
the most modern and up to date BlackBerries which perform the things their customers need most.
While this is inhibited greatly by competition, lack of BlackBerry apps, and faulty technology, it is the
promise the company is striving to maintain in its dire state.
Objectives
In keeping with its vision and interpreted mission, BlackBerry must strive to stay afloat and
continue to provide the quality its customers once expected and continue to want. One of the most
recent ‘wins’ that BlackBerry has experienced was when it released its BBM service to iPhone and
Android. BBM (the well-known abbreviation for BlackBerry Messenger) was a service reserved solely for
those loyal customers who still owned and used a BlackBerry. This messaging app came automatically
with every BlackBerry and was an alternative (that came at no extra cost) to text messaging or e-mailing.
BlackBerry recently released the software, for free, for both Android devices and iPhones. This allowed
for any number of customers, that may or may not have at one point owned and utilized a BlackBerry, to
return to the service on their new smartphone devices. Both the Android version and iPhone version are
the most downloaded free app in their respective stores (the
Google Play Store and the Apple App Store respectively). The
apps have even surpassed 20 million downloads (Schwartz,
2013). The true reasoning behind this move may be
interpreted in many different ways, though ultimately it is a
move on BlackBerry’s part to reinforce its livelihood as well
as to get past and new customers thinking about their
company, services, and products. On top of the BBM rollout,
BlackBerry, under Thorston Heins’ direction, committed to
releasing new products which could compete with current
smartphone technology. While this objective has been roughly achieved, and is continued through the
release of the Z30, it is unclear of BlackBerry’s ability to truly and competitively achieve this strategic
objective. With the sale/refunding talks, it is evident that there are a great number of people, with
financial influence, that do not want to see the company die. BlackBerry’s ultimate objective is to
reshape or structure as needed to return to a stronger position. Once stabilized, the company can
concentrate on how to regain their market share and be a key player in the smartphone market once
again.
External Analysis
STEEP Analysis
To scan the external environment of BlackBerry, I decided to apply the STEEP analytical criteria. I
have analyzed the social-cultural, technological, economic, environmental, and political-legal
environmental elements which affect BlackBerry and how it conducts business. Appendix A1 has a point-
form version of my analysis on BlackBerry’s external environment. I have chosen to expand on the most
important aspects of each element, with supporting data, below.

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Socio-cultural
BlackBerry’s socio-cultural situation is probably its most problematic. The cellphone industry is a
very fast paced and splintered business, with trends and favoritism constantly shifting. BlackBerry was
once a reliable and preferred brand for those who wanted a dependable, functional cellphone. Now,
Apple’s iPhone and Samsung’s Galaxy brands hold the largest market share (mobiThinking, 2013).
Interestingly enough, while BlackBerry’s global market share stands just under a meager 5%, usage in
Canada is still around 20% (Hardy, 2013). While this figure is dropping, there is a point to be made about
Canada’s bolstered national pride over having its very own, nationally renowned cellphone brand and
not wanting to see it go. Dominating the Canadian cellphone market is Android with 43%, followed by
Apple at 35% (Hardy, 2013). While BlackBerry usage is decreasing each year, BlackBerry may have its
best chance at keeping a foothold in Canada. As consumers’ focus has shifted to buying an ‘all-in-one’
smartphone, BlackBerry has simply not been able to keep up to this demand and quickly lost popularity
as the go-to phone of choice. While the newer devices offer more of what consumers are asking for, the
Z10 and Q10 still fail in comparison to current popular smartphones, one blaring flaw being the lack of
app support.
Technology
Where iPhones and various Android devices enjoy app stores which supply countless software
options and entertainment, as well as inherently claiming a long-list of smartphone features, BlackBerry
has lagged behind in both categories. The GlobalPost wrote that things started to go badly for
BlackBerry when “there was no Blackberry store… and the race to keep up was quickly lost by slow
rollouts, bugs in new products, and unresponsive management” (Skrzycki, 2013). The first iPhone came
out in June of 2007, with many Android-powered phone variations soon to follow suite. This heralded in
the reign of powerful, multi-faceted full-touchscreen smartphones; gone were the days dominated by
flip & single piece devices, physical keyboards, as well as T9 texting (The iPhone Wiki, 2013). Yet, the
BlackBerry Z10, the first full-touchscreen in BlackBerry’s product line, was only to be released in January
of 2013 (BlackBerry, 2013, “History of the BlackBerry”). BlackBerry was not able to keep up with the
technological trends and changes in the cellphone market which greatly diminished their relevancy and
ability to compete. BlackBerry’s BBM and Enterprise Services are two unique offerings from the
company which do help to differentiate it from competition. As previously mentioned BBM is a
messaging software that, until recently, was reserved solely for BlackBerry devices. Through the widely
successful launch of this service for iPhones and Android devices, BlackBerry has given a bit more life to
its corporate software sector. BlackBerry’s Enterprise Services (BES) system is targeted at medium-to-
large businesses, giving them the ability to manage the mobile devices of their employees (BlackBery,
2013, “Company homepage”). As with BBM, BlackBerry has extended this service to allow for a company
to monitor not only BlackBerry devices, but also iPhones and Android phones. The main purpose of BES
is to enhance firm security and protect valuable information which passes through an individual’s mobile
device. It also helps to separate personal life from business life on a single device, saving individual
employees from having to carry two mobile phones around with them.
BlackBerry is somewhat unique in the market in that they ship their own devices, running their
own phone operating system. The widely successful Apple iPhone does this as well, with each iPhone
shipped running Apple’s iOS. Where Apple has been able to integrate their iOS with their other products
(MacBooks, iPads, iPods, etc.), the BlackBerry 10 operating system does not have much cross-device
overlap or depth. The BlackBerry Playbook (a discontinued product) also runs a version of BlackBerry 10,
and can interact with the phones, but the functionality is limited (BlackBerry, 2013, “Company
homepage”). BlackBerry 10, while sporting some new features, isn’t heralded as an overly innovative or
differentiable phone operating system, which newer versions of iOS and Android have been. While it is

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an advantage to be able to design your phone OS to your devices, all within the company, BlackBerry
has not been able to create a unique enough offering. The faulty phones and bland BlackBerry 10
operating system have not done much to aid the company’s brand equity. With their phone production
falling far behind in the past few years, BlackBerry’s software and service may still have some life and
reliability to it.
Economic
As seen through the successes of both the highly priced iPhones & Android devices, consumers
are willing to pay a premium price if it means getting a reliable, durable, and long-living smartphone.
While the high-end smartphones gain the most media attention and are the most advertised, there is
still a large market for producing lower end smartphones to sell at very low prices, as well as in countries
where the average consumer has less to spend on luxury items like a cellphone. The two biggest
cellphone markets and users in the world are in fact China & India, followed thirdly by the United States
(mobiThinking, 2013). In India for instance, which is regarded as an emerging economy as well as
technological developer, roughly half of the population lives in poverty or a very low-income living
standard (Shrinivasan, 2010). BlackBerry’s Q5 product is an example of a cheaper, durable product
targeted at these lesser fortunate cellphone users. Apple has recently launched their iPhone 5c, which is
a lower end iPhone targeting at the lower-income demographic. This trend in trying to gain more market
share by selling lower-end products might help BlackBerry in part, yet the true profit comes from
producing and selling the higher priced-smartphones.
Environmental
There is very little publicity over the environmental impact of the cellphone industry. It has yet
to be completely seen, or at the very least extensively published and protested, how cellphone
production and disposal impacts the environment. No cellphone company has yet to be burdened or
targeted with a lawsuit or legal repercussions stemming from their production. As cellphones have been
known to last years, even decades in some extreme cases, there is no reason that an obsolete device
cannot be recycled, either for parts or given intact to another individual. Some telecom companies have
started phone buyback or hand-in programs. The Rogers Trade-up Program is an example of one of
these initiatives (Rogers, 2013). By giving in your old phone to a Rogers outlet, you will gain a credit
towards a new device or your account bill. Another movement has been towards innovative cellphone
concepts which reduce the waste of the cellphone industry. Phone Bloks is an example of one of these
‘green’ initiatives which may have an impact on how future generations perceive the mobile industry
(Sempers, 2013). There is currently no huge demand to reduce the environmental impact of the
cellphone industry.
BlackBerry in particular is a part of the Electronic Industry Citizenship Coalition (EICC)
(BlackBerry, 2013, “Supply chain”). The EICC is a coalition of companies committed to upholding
acceptable supplier codes of conduct, which range from worker hours to proper mineral extraction and
emission levels. BlackBerry currently compiles and reports accumulated carbon emissions from their
supplier’s operations (BlackBerry, 2013, “Supply chain”). This initiative is aimed at helping BlackBerry
work with suppliers to help reduce the environmental impact of the entire operation chain. Initiatives
like these, although not popularly known, demonstrate BlackBerry’s corporate social responsibility,
which in turn can help to build strong brand equity. Showing care for the environment is one area where
BlackBerry is very transparent and honest about.
Political-Legal
While corporate competition acts will deny mega-corporations like Samsung and Apple to
merge, BlackBerry’s current state would allow it to be absorbed by one of the bigger companies like

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Google (which hadn’t been ruled out as a possible acquirer) (“Blackberry not a strategic fit…”, 2013). The
cellphone industry is fairly regulated by government bodies and committees, ensuring a certain degree
of fairness. While this cannot directly help BlackBerry, as no injustice has been committed in their
downfall, there is a certain amount of support and hope that BlackBerry can return to the market to
maintain a fair, competitive industry.
On a larger scale, a recent global movement affecting the cellphone industry is the notion of
mobile security. While information gathering is usually done in the ‘cloud’, that is when information is
being transferred between devices; software can be created that is capable of entering onto your
cellphone and extracting all relevant data. While it is uncertain as to how many consumers truly have
mobile security concerns, it can be agreed upon that when buying a new device, an inherent degree of
faith is given to the producer’s ability to secure and protect any data stored on the phone. Moving
forward, cellphone companies may be held in higher responsibility for how secure data stored on their
phones need be.
Porter’s Five Forces Analysis
Appendix A2 is the Porter’s Five Forces analysis sheet which I completed for BlackBerry. This
analysis shows very unfavourable odds for BlackBerry as there are already a number of stronger
competitors (Apple, Samsung, Google, etc.) in the cellphone industry. With all these different phone
producers there is a very high level of substitutability as device functionality and processing powers are
all very similar, as well the looks of phones can at times be indistinguishable. Crowd-sourcing websites
like Kickstarter and Indiegogo make it easier than ever for entrepreneurs to bring a new, innovative idea
to the market and have it funded. This makes the risk for entrants very high as cellphones are a very
popular and inventive product. The buyer power and supplier power are both relatively low, with a bit
more of an emphasis on buyers. Raw materials, like plastic casings or designs, are indistinguishable and
easy to ascertain. While some metals may be harder to find, and end up being more expensive,
cellphones are not being built with any rare or scarce material due to their need to be massively
produced. As previously discussed, there is a very large market for cell phone users that is still growing.
For example, smartphone activation and use grew 6% in Canada last year (Hardy, 2013). While the
buyers will determine what devices or physical design is favourable, the cellphone producers will still
take chances or push the boundaries of what consumers are willing to purchase. One very good
examples of this is Samsung’s Galaxy Mega, which boasts a 6.3” screen (Samsung, 2013). While it isn’t
obvious that a need for a screen that large is present in the marketplace, due to its financial stability and
brand equity, Samsung was able to produce and sell this monstrosity of a device. Buyers will pick and say
which phone they will buy, but the biggest phone producers will still be able to direct or decide on what
sort of new devices they will offer.
Future Orientation
BlackBerry must concern itself most predominantly with its technology, but almost equally as
important with the socio-cultural aspect of its business. The company must be wary of the economics of
its business, focusing on the lower-end phone market, but working its way back into the higher-end,
more profitable smartphone sector.
With fixes and restructuring of its technology and products, BlackBerry may be able to turn its
situation around. While Heins may have attempted to turn this around with the introduction of the new
BlackBerry 10 operating system and BlackBerry Z10, Q10, and most recent Z30, the biggest issue with
these products and software have been timing and dependability. Moving forward, BlackBerry must
begin to reproduce the fully-functional and dependable devices it once had. Whether through a fresh
engineering team or more rigorous product testing, new products should be hitting the shelves and

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getting to the consumers without out-of-the-box glitches and malfunctions. This can renew the faith
consumers once had in BlackBerry and begin to rebuild its mid-2000s image on the marketplace. While
the new phones BlackBerry has churned out are aesthetically pleasing, and keep up with today’s phone
trends, they are nothing new or ground breaking. Add the fact that they have a very limited app store
(BlackBerry App World), they do not have any edge over an iPhone or Android device. BlackBerry needs
to start thinking one step ahead of the market. Whether it be wearable tech (such as Google Glasses) or
a newly envisioned smartphone design, something unseen will be what puts BlackBerry back on the map
(Google, 2013). Although currently the company does not have the resources for such endeavours,
perhaps with a more secure financing stream, BlackBerry can invest more in itself and its capabilities to
try and shape the future of the cellphone industry.
BlackBerry, while focusing on how to break back into the high-end smartphone market, can still
focus on the economics of the smartphone industry. While the most profit will come from high-end,
costly smartphone sales, there is still opportunity in keeping products available to the lower-end market
segment. With emerging markets like China and India, each with substantial rates of low-income
households and poverty, there is definitely still a market for cheaper phones. While there will always be
a large amount of market fragmentation from the large number of competitors around the globe,
BlackBerry’s brand equity has not completely disintegrated in these markets. Nearly 46% of BlackBerry’s
profits came from overseas (i.e. Europe, Middle East, and Arica) in early 2013 (Fontevecchia, 2013). By
focusing on improving BlackBerry’s technology, the company will also see a huge uptick on their socio-
cultural image. With the dependable, easy-to-use products BlackBerry once had, old and new customers
alike will be drawn back to the company and it can re-establish its popularity once again. BlackBerry can
then go on to incorporate the new, reliable technologies in their lower-end market segment and
attempt to re-establish some of the profitability from these markets.
Opportunities and Threats
BlackBerry’s biggest threat is what its future structure may be, from what the ownership is like
to what direction the company is taken in. From being disbanded for its intellectual property, to being
reinvigorated and funded to re-enter the market, there is a number of possible outcomes for the
company. Interestingly, Motorola was in a very similar situation as BlackBerry when it was wholly
acquired by Google (Google, 2013, “Facts about Google’s acquisition…”). Google, a previous frontrunner
for BlackBerry’s acquisition, kept Motorola up and running, eventually producing their newest flagship
smartphone the Moto X (Motorola, 2013, “Moto X”). If BlackBerry were to stay in operation as a phone
producing company, it would continue to faceoff and combat competitors like Apple and Samsung for
smartphone market share. BlackBerry would need some drastic strategic management to manoeuver
the ever-changing and competitive cellphone industry. The most fundamental threat for BlackBerry is
the possibility that the company goes bankrupt and closes. While its huge cash stockpile works against
the chance of bankruptcy, there are only so many billion dollar losses any company can suffer before it
decides to cut losses and exit the industry. While the acquisition or extra funding will also work to save
BlackBerry, there is a still a notable amount of risk around not being able to secure a lucrative enough
deal. With many smaller investors already starting to exit the company due to the stock’s diminishing
value, there may only be a few of the bigger players, Fairfax as the front running example, left over to
help and redirect the company (“BlackBerry sale on hold…”, 2013).
BlackBerry’s threats may also be its opportunities. Lacking solidarity, funding, and any real
marketplace crutch, BlackBerry’s acquisition or renewed partnership with a majority stakeholder may be
exactly what is needed to get back in the game and back on track. A new stream of funding to better
their current products as well as strive to bring something new to the market may be detrimental to

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BlackBerry’s revival. BlackBerry must also be studying the market for any new, accessible opportunities
it can exploit or jump on. One such opportunity may be the simple fact that the market would enjoy an
alternative to iPhones and Android devices. This has been a point of contention in the development of
BlackBerry’s demise and sale. While many customers are unwilling to spend money on a faulty
BlackBerry device just to see the company stay afloat, there is still an unspoken want to have that 3rd
competitive alternative in the cellphone industry. While BlackBerry hasn’t been able to successfully
fulfill this spot, that isn’t to say it cannot in the near future.
Internal
Resource-Based Value Analysis
While BlackBerry’s future may be bleak, it isn’t to say it’s a hollowed out company. Troy
Crandall, a research analyst at MacDougall, MacDougall & MacTier inc. in Montreal, states that the two
biggest assets BlackBerry has going for it are its cash stockpile and its patents (Gollom, 2013). While its
technology and innovative ideas and products still hold a lot of sway, it can be argued they are also the
reason BlackBerry is in so much trouble.
Having posted an operational loss of $965 million in their second quarter, 2013, BlackBerry’s
financials are its most difficult and burdening aspect (as reported in BlackBerry’s Second Quarter Fiscal
report). Appendix B1 is the consolidated cash flow statement for BlackBerry at August 31, 2013. As
reported, while there are a lot of losses across the board in cash flow, BlackBerry still ends with about
$2.6 billion in cash and cash equivalents. While this is down about $5 billion from the previous quarter,
it is still a notable sum of money. Due to its lack of any large sum of debt, having this large cash pile is a
very attractive aspect of BlackBerry for potential buyers or funders. This also gives the company a fair bit
of security, as this cash pile can be fallen back upon in hard times (as it recently has).
Appendix B2 shows BlackBerry’ consolidated balance sheet for the period ending August 31,
2013. Their plant, property, and equipment is valued at about $2.1 billion, with $941 million in inventory
at the time of reporting. While they’ve continually tried to move their new products and boost sales, the
new BlackBerry devices have not been selling as quickly as they would have hoped. This may in part be
due to their fairly mediocre advertising budget and campaigns. BlackBerry posted, in their operations
statement found under appendix B3, an expenditure of $527 million for marketing as well as for
administration and sales. Comparatively, in the same quarter that BlackBerry is reporting for, Samsung
spent an astonishing $12.7 billion on marketing and advertising (Yarow, 2013). While it may be unfair to
compare BlackBerry to Samsung, this amount of spending on marketing and advertising may soon
become the norm in what it truly takes to excel and take a large portion control over the mobile phone
industry which Samsung as in part been able to do (Yarow, 2013). BlackBerry’s inability to sell their
products may also be due to the negative press and social stigma around the many glitches some
consumers experience with their phones, as well as the lack of app support. BlackBerry has not
mentioned anything towards selling their PPE for extra cash. This is primarily due to the fact that
BlackBerry does not need crucially need the extra cash. The costs and time incurred for selling their
facilities and having to relocate somewhere else would probably only be further detrimental to the
company’s operations and overall wellbeing.
To better their finances, BlackBerry has decided to focus on human capital cutbacks. In March
2013, BlackBerry posted to their company website that they had around 12,700 employees (BlackBerry,
2013, “Company homepage”). Unsurprisingly, this number has not been adjusted following BlackBerry’s
announcement over the summer that they would be letting go about 4,500 employees (Gollom, 2013).

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While this personnel rollback is happening in phases, with hundreds of employees being let go in waves,
this is one of the more publicized ‘failures’ for BlackBerry. This goes hand-in-hand with BlackBerry’s
stock price, which has been gradually declining, with a few spikes and drops, since the beginning of
summer 2013 (Google Finance, 2013). BlackBerry’s human capital may be its least attractive asset as we
can imagine there is very low morale and sense of job security. The employees of BlackBerry must be
worried as to what may be the next phase for the company, as it could mean their career if the wrong
path is followed.
BlackBerry has recently taken their services in a new direction by separating them from their
physical products. While in the past, BlackBerry had always focused on combining their phones with
their services, the move to BBM for Android devices and iPhones demonstrated a new technological and
resourceful direction. BlackBerry showed that their software can be successful and popular without it
needing to depend on their phones. This shows investors, acquirers, as well as the public that there may
be more to BlackBerry than simple faulty phones. To a lesser degree, BlackBerry’s Enterprise Service has
also had a slight uptick in usage and reliance. BES is also available for Android and iPhone, once again
diversifying BlackBerry’s software from their phones. By differentiating BBM and BES from BlackBerry’s
phones, the company may have heightened expectations for BlackBerry’s software and service sector,
shifting a bit of the onus away from product development and sales. BBM, which in itself holds a lot of
brand equity, could be the tipping point needed in rebuilding BlackBerry’s reputation as not only a
dependable brand, but something utilized and talked about in modern culture. From my personal
experience alone, I’ve seen a lot of my at-one-time BlackBerry using friends download and start using
BBM as a shift back to their old habits. They are doing all of this on their new Android/iPhone devices.
BBM aside, BlackBerry is not being kept to the same standards and expectations that it once enjoyed.
While the company’s reputation may not be what attracts potential buyers, its long history can still be
built upon when restructuring or directing the company to future successes.
BlackBerry is also unique in having their own BlackBerry 10 operating system coming
preinstalled on their phones. Some of their slightly older devices are also eligible for the upgrade,
meaning that any BlackBerry phone from the near past can still have the most updated phone operating
system. Producing both their own phones and phone OS (operating system) allows Blackberry to tailor
production and releases to their own vision or timeline. Of the top 5 cellphone producers worldwide, 3
habitually run Android on their phones (Huawei, Samsung, LG), with the others being Apple’s iPhone or
loyal to the Windows Mobile operating system (Lenovo) (Bea, 2013). This means that while they hold a
large market share and produce phones by the millions, companies like Huawei and Samsung still
depend largely on Google’s Android. While this saves the companies a lot of money from OS
development, upkeep, and improvement, there is still a large amount of reliance. These companies must
also match their phones performance or capabilities to the requirements of the Android OS, which is
ultimately set by Google. BlackBerry does not rely on any other big corporation to produce their OS. The
biggest problem with BlackBerry’s OS, which in large part is due to the lack of use and glitches, is that
many app-developing companies and groups do not make ‘BlackBerry version’ of apps. This is most likely
due to the fact that these companies do not see the benefit or long-term payoff of having a BlackBerry
version, as they do with iPhone or Android versions.
The other aspect previously mentioned asset that will attract buyers or investors is BlackBerry’s
patents. Crandall points out that “BlackBerry also has patents, but those are difficult to value” (Gollom,
2013). It can easily be said that throughout BlackBerry’s long history in phone design, they’ve picked up
and patented a number of unique ideas and concepts. While this may have been one of their core
competencies at one time, their slow down to an almost full stop in innovation lost them that title. The
one core competency that BlackBerry has still retained would be their software development and

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reliability. While their phones and products have lost a lot of their value and recognition, resulting in
subpar sales, BBM and other similar services are continuing on a steady path. Whether to keep a part of
BlackBerry’s engineering and development team, or go in a new direction with a fresh team will be a
very important decision towards restructuring the company in the near future. With new management,
funding, or direction, BlackBerry’s patents can be revitalized or refocused on newer products that the
company many not have otherwise thought to pursue. While BlackBerry’s cash balance is its most
attractive attribute, its product patents and software will still be very appealing to a visionary with the
ability to reapply or direct the company.
Value Chain Analysis
Primary
BlackBerry is very committed to having a secure and low-risk supply chain for its operations.
Using a social and environmental responsibility (SER) evaluation, BlackBerry studies various suppliers on
their risk level and will prioritize and arrange them accordingly (BlackBerry, 2013, “Supply chain”). This is
followed by be detailed self-assessments by each supplier, which will ultimately show BlackBerry their
commitment and compatibility. BlackBerry conducts these studies and assessments annually. Being a
socially responsible company, BlackBerry is strictly against interacting and doing business with suppliers
that utilize slave or child labour (BlackBerry, 2013, “Supply chain”). By using on-site audits, BlackBerry
checks whether their suppliers are up to their code of conduct and standards, as well as report their
harmful emission levels. BlackBerry has taken a firm stance against the use of minerals which were
mined and extracted through exploitative means in high conflict parts of the globe, most notably from
the Democratic Republic of Congo (BlackBerry, 2013, “Supply chain”).
BlackBerry acknowledges that they have “operations [that] reach many parts of the globe and a
diverse range of communities”, meaning they must be wary of different working norms and tradition
(BlackBerry, 2013, “Supply chain”). BlackBerry’s Supplier Diversity Program was launched in 2012 and is
aimed at strengthening ties with global suppliers for mutual business growth and expansion (BlackBerry,
2013, “Supply chain”). By focusing on suppliers which continue to consistently meet contractual
agreements, BlackBerry hopes to grow these businesses so they are capable of supplying a larger
portion of materials or components.
BlackBerry devices, in their various forms, are sold globally. As previously mentioned, BlackBerry
posted a near $1 billion dollar loss in their last fiscal quarter. While they had sales slightly above $1.5
billion, this was not enough to sustain their operations and cost of goods sold (Appendix B3). Also
previously discussed, BlackBerry’s sales force and marketing expenditures are far below average. While
the mindboggling high standard Samsung has set may not be considered ‘industry standard’ just yet, it
does go to show what amount of spending is needed to truly dominate cellphone marketing. Through
my own personal observations, BlackBerry had a very strong social media campaign leading up to the
release of the Z10 and Q10 earlier in 2013. The campaign may have left a minimal resounding effect on
me, but as soon as the subpar sales began to be posted by BlackBerry so too did the advertisements
online begin to disappear.
BlackBerry’s reliability had been untarnished until the release of their newest line of phones.
Upon the release of their new phone operating system, BlackBerry 10 (a fairly mediocre revamp of the
devices’ operating system) being shipped with the Z10, BlackBerry’s image quickly began to slip. One
unique deal BlackBerry offered was the ability to trade in older BlackBerry devices to get a discount
towards one of the newer phones (Ladage, 2013). While this may have helped drive sales in the short
term, as problems with the devices became more rampant and publicized, these sorts of offers were

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discontinued to focus on the company’s direction and possible correctional tactics. The BBM and BES
services have done fairly well individually. While the BBM service acts more to improve the company’s
brand equity and stay relevant, the Enterprise Service is actually bringing in a portion of revenue for the
company. One proposed revenue breakdown shows that about 73% of revenue comes from hardware
sales, with services accounting for a notable 24%, and smaller, low priced software (apps) accounting for
the final 3% (wikinvest, 2013).
Secondary
BlackBerry has lost the ability to procure any new patents or technologies due to their financial
downward trend. While during the peak of their success, the company was able to absorb new start-ups
or invest in innovative ideas, they have surely lost this ability. It may still be possible, with new financial
structuring and security, for BlackBerry to research acquisitions which may greatly improve the
company’s future and stability. There is currently a very stagnant culture in BlackBerry around
technological development. Having been playing catch-up for the past few years, BlackBerry has not
been able to make any huge strides or innovative ideas that truly impact the market. Going back to
funding and instability, BlackBerry does not have the capacity to truly invest and produce a new concept
device that may be able to help the company. It is the mega-corporations like Google and Samsung that
are able to invest in new innovative projects, like Google Glass or Samsung’s recently released ‘smart
watch.’
BlackBerry’s human resource has also taken a very big hit in the wake of its financial losses and
product failure. Being in the process of cutting about a third of its workforce, BlackBerry has focused on
firing employees to try and cut costs. This cut in numbers is anything but temporary. BlackBerry will not
be able to rehire or increase employment numbers until they are certain of their financial standing, and
that the employees are necessary towards improving or expanding profitable operations. While
Waterloo, Canada is very sad to see one of their cornerstone employers dwindle down its numbers,
there are employees around the globe being released from the company as well. This will obviously give
rise to a lot of job insecurity within BlackBerry, with some employees deciding it may be easier and safer
to simply leave the company now and seek a better opportunity in a similar company. One such
employee, in a very recent turn in events, is aforementioned CEO Thornstein Heins. Heins has decided to
leave BlackBerry ahead of its possible sale or restructuring, leaving the reins to interim CEO John Chen,
accompanied with another new director, Prem Watsa (“BlackBerry sale on hold…”, 2013). This is a very
good example of the current feel among both the leadership and employees at BlackBerry during this
period of uncertainty. Prem Watsa in particular, CEO of Fairfax which holds a large stake in BlackBerry
and is a long-time supporter of the company, has decided to take a more involved and hands-on role in
the company for the time being (“BlackBerry sale on hold…”, 2013). Watsa, as head of Fairfax, is also
playing a large role in the company’s possible acquisition or financial aid package (“BlackBerry sale on
hold…”, 2013).
Strengths and Weaknesses
Acquirers will be scrutinizing the company’s weaknesses very critically, as well as the strengths
that would attract them to purchase the company. BlackBerry’s biggest weakness currently has to be its
gradually declining market share, topped with multi-million dollar financial losses, as well as their lack of
innovation. BlackBerry’s biggest strength would be the recent popularity of its software and services.
BlackBerry can also bank on the fact that they ship their own operating system on their own devices.
With a very lackluster income statement, BlackBerry is in a financially weak position. Its recent
losses have been highly publicized and scrutinized, leading many investors and costumers to truly doubt
the company’s ability to save itself. While $2.6 billion is no small amount of cash, it is unclear as to how

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the company can best utilize and invest this cash in itself without continuing the financial drain. Being
that this number dropped $1 billion to cover losses, it is understandable that management may be
trepidation about actually using the amount. While the push to bring out new smartphones to match
competitors may have seemed like the most sensible and necessary step in BlackBerry’s plan, the fact
that demand was lukewarm for the phones and that the devices were very unreliable and glitchy just
further hindered the company’s comeback. BlackBerry still has a number of devices on the market, but
they aren’t selling as quickly as hoped and may be seen as excess inventory to many.
BlackBerry has the recently popularized BBM and BES in its services portfolio, which are working
to improve the company’s brand equity. While these products will only be able to take the company so
far, or at least sustain some positive emotion, they are definitely a strength at this time. BlackBerry’s list
of patents and other intellectual property is also very appealing to any possible acquirers. With proper
funding and direction, these patents can be a good source of innovation and a legal asset. That is to say
that in a ‘sale’ scenario, BlackBerry will have a higher valuation due to their patents list. Unique to
BlackBerry, and which still counts as a strength, is that BlackBerry phones carry their own operating
system. BlackBerry 10, the most recent version of their operating system, comes automatically installed
on all of the new devices (after the release of the Z10) as well as being compatible with slightly older,
but still eligible devices. This is a strength in that it gives BlackBerry reign over the two sides of their
products, the software and hardware. BlackBerry can tailor devices to their BlackBerry 10 operation
system (or subsequent versions), with all its unique and new functions, as well as having the operating
system organically work best on their own phones.

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SWOT Analysis Compiled
SWOT Analysis for BlackBerry Ltd.
Strengths
- Large cash pile
- Long list of valuable patents
- BBM popularity
- Increased BES use
- Historically strong brand equity & image
Weaknesses
- Large financial losses
- Faulty, new product line
- Subpar sales of new devices
- Degrading market share
- Uncertainty of future
ownership/structure
- Low employee job security
Core Competencies
- BlackBerry Messaging service still very popular and functional
- Still capable of producing new devices, however slightly faulty or ‘on-par’
Opportunities
- New ownership/company structure
- Financial ‘care package’ can be used to
stabilize company
- Increased capability to innovate and
create new, functional products
Threats
- Uncertainty of acquisition or extra
funding
- Bankruptcy
- High volatility of cellphone industry
Key Industry Pressures
- Must perform at same level as competitors (i.e. Apple, Samsung, Google, etc.)
- Very splintered market share
- Reliable and innovative phones as front runners
- High level of R&D and marketing expenditure necessary to standout and succeed
Generic Strategies
Two generic strategies can be found in BlackBerry’s product line. One applies to the lower-end
phones they produce for emerging markets, being an example of focused low-cost strategy, with the
other being a broad differentiation strategy for the company’s higher-end smartphones. The problem
with both strategies has been BlackBerry’s inability to truly innovate and stand out as smartphone
providers.
The BlackBerry Q5 was a new device realised in 2013 under BlackBerry 10’s phone lineup. The
Q5, unlike the similarly named Q10, was lower-costing and produced with cheaper materials
(BlackBerry, 2013, “History of the BlackBerry”). This phone was released to appeal to people wanting to
spend less on a phone or those with less income to spend on electronics. The Q5, like its higher end
phone family, was met with “underwhelming reviews and sales figures anecdotally that fell short of
expectations” (“BlackBerry Q5 launches…”, 2013). While lower costs can appeal to a different market
demographic, BlackBerry may have ignored what actual buyer interest was for a lower end phone with
fewer features. There were already a number of cheaper phones on the market which BlackBerry wasn’t
differentiating itself from in any real manner. While trying to compete with these other competitively
priced phones as well as appealing to low switching costs for buyers, BlackBerry’s Q5 did not make a big
enough splash or gain enough market share to truly aide the company. This low-cost strategy failed due

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to the high competitiveness of the cellphone industry, at any cost-level, as well the breadth of devices
on the market.
Any smartphone producer should realize that while cost plays a huge role in how well a phone
will sell, the features and innovative functions of each device is what really pulls in consumers and the
media. To take Samsung’s marketing campaign for example, it was focused more directly on all the new
ways their smartphone can improve your life and the way you interact with your mobile. Pricing was
never a pivotal point for Samsung’s advertising, even though the phone itself can cost around $600
without a cellphone plan. While many service providers (i.e. Telus, Rogers, Bell, etc.) will give you a huge
rebate on your phone if you sign a contract for a certain period of time, this again is never a huge driving
force for what makes a cellphone hugely successful. What BlackBerry has again failed to do is
differentiate their products in a very competitive industry where this is key to survival. The broad
differentiation strategy, which is common among high-end smartphone producers, is necessary to stand
out in this diluted market, but is a very hard strategy to truly succeed at. While little cool features like
BlackBerry Hub (a listing-feature on BlackBerry 10 devices which compiles all messages into one place)
or Shift Mode (a multiple-snapshot camera mode which allows for quick photo tweaks) are unique to
Blackberry devices, these are not features which draw buyers towards their devices. Where the iPhone
has the cross-platform connectivity with other Apple products as well as it’s easy to understand
interface and where Android is a customizable and easily-developed-for phone operating system,
BlackBerry does not offer anything similarly new or attractive.
One aspect that BlackBerry has retained and is still core to most of its product line is its physical
keyboard. As a cornerstone to most BlackBerry devices, one of the company’s many trademark features,
is having the little QWERTY keyboard as the bottom half of each phone (aside from their full-screen
touchscreen). While this is a very attractive feature to those who dislike the on-screen keyboards that
almost all touchscreen smartphones now have, there has been an
all-around shift away from having to have a physical keyboard. I
recently spoke with a woman who had an Android-powered
smartphone. Her phone had a slide-out QWERTY keyboard that can
be used for messaging. I noted that this was an interesting feature,
but she was quick to point out that she barely used it and preferred
to simply text using the on-screen keyboard. I think this anecdote
sums up the general feel for the average smartphone consumer.
The need for physical keyboard was at one time enjoyed, but is now
seen as a distinct preference or perk, as many buyers have become
accustomed to typing on-screen.
BlackBerry’s strategic mix has not been able to set it ahead of its competitors in the
marketplace. While there may be a niche market for cheaper devices, following a low-cost provider
strategy, BlackBerry has not been able to price competitively enough to undercut and force out similar
products and establish itself as a market dominator. Comparatively, the high end smartphone market is
about being able to out differentiate the competition and have unique, reliable products consumers are
drawn to. BlackBerry’s broad differentiation strategy has not been able to produce the depth and true
uniqueness the company needed to continue to strive and now needs to rethink how to proceed.
Discussion and Analysis
BlackBerry’s decision to abandon a sales deal and simply pursue new funding will change the
company’s future strategy formulation. The recently appointed CEO John Chen, working with
Figure 1 - The BlackBerry Q5 (left) and Q10 (right)

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BlackBerry’s board of directors, decided to raise $1 billion in new funding to help the company (Perkins,
2013). The money will be raised by targeting the higher stake investors already invested in BlackBerry.
Fairfax alone has pledged $250 million to this cause, with the group already owning 10% of BlackBerry
(Perkins, 2013). The other $750 million will come from financial and investment groups or funds, all
hoping to save BlackBerry. The announcement to abandon a ‘sell’ scenario comes weeks after possible
acquirer-talks and meetings, all aimed at BlackBerry being wholly bought out and taken private. This
new change in direction, while still not cementing a large amount of certainty as to the company’s
future, still has the possibility to turn the company around.
The $1 billion care package can be directed at starting new projects which may be able to carry
the phone producer towards a more stable future. While this amount coincides with the money lost in
their most recent quarter, BlackBerry still has a large cash pile without the care package. Being able to
fall back on their current cash pile, BlackBerry can direct the new money towards more innovative and
well-engineered products and software, as well as to restructuring the company to ensure better future
profits. While the ‘sale’ option may have held more strategic capabilities and wider spread company
restructuring, the $1 billion in funding gives BlackBerry some breathing room to focus on their products
and future as opposed to constantly pleasing investors.
Without any sort of financial aid, BlackBerry would not have the time or capital to safe itself.
BlackBerry products were not selling enough to support the company which coincided with diminishing
market share. It would have taken a true miracle, or at the very least a drastic company redirection, for
BlackBerry to have avoided bankruptcy or dissolution. Being sold and taken private would have given
the new ownership the discretion to refocus the company and strategize on which direction to pursue.
This new billion dollar care package will give BlackBerry some much needed resources and internal,
investable capital. The best decision would be to put the funds towards stronger product development
and testing, with the hopes of being able to produce a new device that truly competes with today’s
smartphone standards. The improper use or ineffective partitioning of the financial aid may further
detriment the company. The groups putting this money forward may finally decide BlackBerry is a futile
endeavour and pull any future or currently planned funding. Another $1 billion loss may be all it takes
for BlackBerry to truly fall apart.
Ideally, BlackBerry could be the ‘third-competitor’ in the smartphone market. Where Apple’s
iPhone or Samsung’s Android-powered Galaxy line are among the highest selling smartphones,
BlackBerry has gradually slipped in sales, down to only having minimal global market share. Being able
to compete with these firms, having a global market share of anywhere between 25 to 33%, would
demonstrate BlackBerry’s ability survive in this highly competitive industry. While this isn’t an easily
pursued opportunity, setting their goals on regaining market share and getting a competitive edge over
Android devices and the iPhone gives BlackBerry the necessary and decisive direction to strive for. Their
market share aside, BlackBerry should be seeking to diminish losses and secure their financial standing.
By cutting costs and finding a way to improve sales, BlackBerry can increase their ability to reinvest in
the company. The $1 billion will be a very big part of regaining a financial foothold, but without proper
structuring, it can be aimlessly spent and lost. A healthy balance sheet will be crucial to BlackBerry’s
future.
In trying to re-establish their market presence, stop their downward trend of market share, and
keep up with current smartphones, BlackBerry has enacted a product-orientated and innovation
strategy. By revamping their cellphone’s operating system, as well as simultaneously releasing a number
of new devices, BlackBerry sought to demonstrate their ability to keep up with current trends, and
retain and grow their customer base. While their current product line and OS have not made the impact

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the company has hoped, BlackBerry can still invest in fixing the outstanding issues. Appealing to app
developers will also play a crucial strategic role going forward. By implementing better testing measures
and spending adequate time on producing new phones, BlackBerry can ensure their releases are more
dependable and less problematic. Staying ahead of the smartphone industry is difficult, but by focusing
on what is next, or ways that BlackBerry can truly stand out from its competitors, will give the company
the necessary competitive advantage to regain market share.
As previously discussed, the company is targeting their employee base to try and save costs. By
cutting a third of their workforce, the company is hoping to reduce costs enough to offset poor sales.
Another area of cost-cutting BlackBerry could look into is its service sector (as no evident cuts have been
announced here). While it may not be clear at this point which internal software has the highest cost-to-
benefit trade off, this could be something worth internally valuing and focusing on when re-evaluating
company costs. While it would lose the advantage of producing its own OS and devices, BlackBerry can
look into cutting its most costly software development, its OS. By investing less into their OS, BlackBerry
may be able to reduce development costs and expenditures to a more favorable level. Outsourcing the
OS to a 3rd
party (e.g. Firefox Mobile, Ubuntu, etc.) or converting to an Android powered company will
allow BlackBerry to save costs and development time. This can allow more resources to be allocated to
their devices and phone production. BlackBerry may also be interested in cutting their phone
development. Instead of having numerous phone models competing not only with other companies’
products, but also with each other, BlackBerry can look into focusing on one sole model. With a single
‘BlackBerry Phone’ to design, outfit, and produce, BlackBerry can cut overall costs by allocating all
resources to the creation and manufacturing of a single phone. By refining this phone, making it more
reliable and innovative, BlackBerry can re-enter the market in force. This will lead to higher demand for
BlackBerry devices, regardless of the phone operating system used.
Recommendations
BlackBerry, a once influential and dominant cellphone maker, has lost much of its market share
and brand equity. This has been due to its recent history of faulty technology and lack of innovation.
With a lot of uncertainty about company financing and ownership, it is unclear which direction
BlackBerry will be heading in the coming months and years. My recommendations are based on what
can be done in the very near future, with the expectation that the $1 billion in financing is acquired and
fully implemented into the company.
The first thing that BlackBerry must concentrate on is its product line. By targeting inadequate
engineering or testing, the company must identify why their devices are being delivered to customers
with very large technological flaws. Some of these flaws render core functions (i.e. camera use, text
messaging, etc.) temporarily incapacitated, making the cellphone generally useless in the eyes of some
customers. These flaws must be studied and fixed before anything else can be worked upon. As
mentioned, focusing on one ‘all-encompassing’ smartphone would help with the company’s direction.
While they’ve begun to differentiate from their QWERTY-keyboard phones with full-touchscreen
phones, BlackBerry must commit to having more innovative and functional devices with no physical
keyboard. Thinking of ways to keep aspects, or the ‘thought’, of the physical keyboard may please some
of the older BlackBerry customers, but ultimately the phones will need to be some form of full-
touchscreen device to stack up against current smartphones. Playing with sizing, materials, colours,
feedback, and cross-device communication (i.e. integration with computers, smart watches, etc.) will
help BlackBerry create a single, unique device.

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The dysfunctions of BlackBerry’s most recently released phones may be closely tied to the
BlackBerry 10 operating system, though I believe that BlackBerry should continue to pursue their own
phone OS. The company has always shipped their devices with their own in-house OS, and this is
something that customers come to expect. By switching to a lesser 3rd
-party OS, or joining the Android
powered line of phones, BlackBerry may lose the differentiability they are in desperate need of
rebuilding. Better focus and development of the BlackBerry 10 phone operating system may reduce
overall technological flaws or problems in their devices. BlackBerry should consider rebranding their OS,
be it to a version 11 or revamping altogether with a new name and innovative stylistic look.
A very recent example of a company doing this was with Microsoft Windows. Microsoft
launched Windows 8 earlier this year and it was soon met with lukewarm sentiments with many
analysts claiming it had ‘failed’ (Sizemore, 2013). Microsoft quickly acknowledged the flaws and
shortcomings of the computer operating system and began fixing it right away. They set a ‘re-launch’
date for Windows 8.1 which I was lucky enough to receive earlier in October, free of charge. Windows
8.1 addressed the biggest, outstanding flaws of its predecessor and delivered what the customer was
asking for at no extra cost. From personal experience, this has helped repair my faith in Microsoft’s
Windows and I’m a much happier user of this operating system. BlackBerry should pursue a very similar
path with upgrading the BlackBerry 10 OS on older devices for free, and concentrating on how to better
incorporate it with future devices.
One of the most blaring flaws with BlackBerry’s operating system is its lack of application
support. As mentioned earlier, both the Google Play Store (for Android) and the Apple iTunes store
boast thousands of different apps. These apps are downloaded in the millions, encouraging start-ups
and young developers to take a crack at creating unique and popular applications. The BlackBerry App
World has lagged far behind its competitors’ stores. With more app support, and by creating better ties
with app developers, the BlackBerry App World can be more on par with competition. App creation
usually occurs organically. Developers focus on the bestselling phones/operating systems, creating
different versions of their application to work on the various devices. BlackBerry’s lack of apps is in large
part due to its consistently disintegrating market share and faulty technology. App developers do not
see the financial gains to be had by spending time and resources on a ‘BlackBerry’ version for their
software. One proposition I would make to mend this is to focus on the biggest, more popular apps
specifically (or app creators) and promise to ship BlackBerry devices with these apps pre-installed.
Currently, many of the more popular apps (Snapchat, Instagram, Facebook, etc.) are downloaded for
free, with app developers biding their time on capitalizing on their brand or creating revenue streams
elsewhere. BlackBerry can promise a portion of profits, or royalties, to the top 5 most popular app
developers in return for functional ‘BlackBerry’ versions for the BlackBerry App World. This can also be a
selling point for young customers who are interested in having the most popular apps. The ones being
used in their social circle will come pre-installed on their devices, free of charge and without any hassle.
By establishing and strengthening these ties with developers, which will also help to drive sales,
BlackBerry can further increase their market share. With a higher market share, other developers will
naturally be drawn to creating apps for BlackBerry devices, meaning the company won’t need to
concentrate so much on pleasing these 3rd
-party software companies.
The final stage in BlackBerry’s strategy must be to innovate and stay on trend in the smartphone
industry. In such a fragmented and diverse market, BlackBerry has fallen behind in being able to stand
out and has lost much of its significance. Where the keyboard was once a focal point to have on a
cellphone, consumers have easily made the transition to on-screen keyboards for their full-touchscreen
smartphones. The Z10 and Z30 are good enough competitors to current touchscreen phones, but do not
stand out in any way, and it must be noted that the BlackBerry App World still fails in comparison to

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competitors. While fixing their app store will help significantly, as well as having more reliable devices,
BlackBerry must also find ways to stand out. Currently, there is a ‘wearable technology’ trend beginning
with smart watches (tethered to your cellphone) and things like Google Glass appearing on the market.
BlackBerry must find a way to capitalize, in time, with this trend before other companies are able to
dominate the market and force them out. BlackBerry, a historically professional and refined company,
should have no trouble coming up with some form of a smart watch or cuff-like device. While other
companies pursue a digital, square-faced watch with a tiny-touchscreen, BlackBerry could look at
creating an analog styled watch with a circle face and a built in notifications system of some sort. This
innovative capability will depend largely on the amount of funding that is possible for experimental
projects. While fixing the OS and devices themselves will probably be fairly pricey, I foresee a large
amount of the $1 billion financial aid being put to how the company can innovate and stay competitive.
Conclusion
In the end, BlackBerry is in need of restructuring and re-evaluation. Its current business trend
has not been able to compete in the market place, resulting in multi-million dollar financial losses and a
diminishing market share. The current employee cutback may help to release staff that are set in the old
ways of the company. Trying to focus on the necessary employees capable of taking decisive and
necessary action to help the company in its dire state will mean fewer costs for higher output. With
many different assets to work with, be it their hardware or software, BlackBerry can cut the problematic
but keep the essential, expandable company elements. BlackBerry services have seen an uptick in usage,
while their cellphones continue to sit on shelves or breakdown. With new funding, a competitive,
strategic plan, and a do-or-die mentality, BlackBerry can regain their former glory in the cellphone
industry.

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Appendix
A1 – STEEP Analysis Table
STEEEP Element Point-form Analysis
Socio-cultural  Consumer need for reliable, ‘all-in-one’
devices
 Cellphone companies spending huge sums
of money on advertising to increase
exposure
 Certain phones (e.g. Samsung Galaxy,
iPhone) seen as hip or trendy
 Increase in cellphone use
Technology  Cellphones becoming more increasingly
advanced
 Large-touchscreen ‘smartphones’ as most
advanced handset
 Rumoured that cellphone development may
be nearing a plateau
Economic  Markets vary in buying power (geographical
& demographical differentiation)
 ‘Lower end’ more functional and durable
phones favoured in poorer countries
Environmental  Cellphone production has yet to be targeted
for waste or environmental impact
 No clear studies or publicity surrounding
metal extract for phones, nor the cost of
disposing old devices
 Large focus on reusing (second-hand) or
recycling phones
Political-legal  Global focus on technological security
 Safety of data and communications used on
cellphones as emerging struggle

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A2 – Porter’s Five Forces
- New cellphone
concepts & start-ups
- Sites like Kickstarters &
Indiegogo giving
entrepreneurs
crowdsourcing
High threat of new entrants
- Apple, Samsung, etc.
have stronger market
share
- BlackBerry has very
lower budget for
advertising and R&D
High level of rivalry
from competitors
- Very large and growing
market of buyers
- Segmented market
- Different needs and
wants per group
Medium level of
buyer power
- Interchangeable molds
and material suppliers
Low supplier power
- Many similarly modeled phones
- Overlapping device functions
between producers
High level of substitutability

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B1 – BlackBerry Consolidated Statement of Cash Flows for period ending August 31, 2013

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B2 – BlackBerry Consolidated Balance Sheet as at August 31, 2013

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B3 – BlackBerry Consolidated Statement of Operations