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BlackBerry's Decline: Lessons in Management

BlackBerry was once a dominant smartphone maker but failed to adapt to changing market trends dominated by touchscreen devices from Apple and Android. As competitors focused on larger touchscreens and apps, BlackBerry prioritized its existing keyboard-based design. This strategic failure caused its market share to plummet from peak to just 3% as managers were slow to recognize and respond to shifts in consumer preferences. While Apple and Samsung innovated, BlackBerry remained rigid in its approach. The company's decline serves as a lesson that managers must be agile and responsive to changes in technology and customer demands to remain competitive.

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Samrat Ahmed
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0% found this document useful (0 votes)
120 views7 pages

BlackBerry's Decline: Lessons in Management

BlackBerry was once a dominant smartphone maker but failed to adapt to changing market trends dominated by touchscreen devices from Apple and Android. As competitors focused on larger touchscreens and apps, BlackBerry prioritized its existing keyboard-based design. This strategic failure caused its market share to plummet from peak to just 3% as managers were slow to recognize and respond to shifts in consumer preferences. While Apple and Samsung innovated, BlackBerry remained rigid in its approach. The company's decline serves as a lesson that managers must be agile and responsive to changes in technology and customer demands to remain competitive.

Uploaded by

Samrat Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

A

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Submission to
Prof. Dr. Mohammad s Badruddozza Mia
School of business and Economics
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United International

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Submitted by
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Md. Morsalin Ahmed
ID: 111 172 107
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Course: MGT4356
Sec: A

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United International University

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Date of Submission: 8 September, 2021
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BLACKBERRY MOTION
Introduction
BlackBerry, a line of smartphones and tablets, was a crushing achievement in 1998. They
changed the game in the mobile industry by offering a gadget with an arched keyboard. Their
encryption even into the mid-2000s was top notch however they weren't considering user
experience.
Only a couple of years after the fact the whole portable industry started to focusing on bigger
touchscreen displays, while BlackBerry was more worried about ensuring what it previously had.
Neglecting to adjust to changes, in 2017 the CEO John Chen declared that BlackBerry was out
the smartphone manufacturing business and that the organization has built a new strategy.
"Under this strategy, we are focusing in on software development, including security and
applications."
This was the fatal mistake of Blackberry. While Samsung and Apple were frantically entering
the market of smartphones and consolidating a big market share in it, Blackberry failed to do
so. Major transitions such as these or lack of them, as it happens in Blackberry, have to be
driven by senior leaders of an organization’s executive management.
The organization intends to end all inner equipment improvement and will re-appropriate that
function to partners. "This permits us to decrease capital prerequisites and upgrade return on
invested capital," adds John Chen.
Background of Blackberry
Blackberry was once the greatest smartphone producer fallen to the rear of the smartphone pack
(with 3% of the market presently) competing Apple iPhone and Google Android operating
systems have turned into the top heads of the market. Blackberry’s has gone start to finish.
Furthermore, how a tech giant fails to improve as per client needs and develop as the wide range
of various giants have done as such far?
Rather than thinking of the latest technologies, it chose to rethink its items. This didn't assist
them with arriving at the top once more. The corporate chiefs neglected to stay aware of time and
Blackberry began to suffocate. Blackberry stalled out into their operating system (RIM) and as
new arrangements and options entered the market and their faithful clients developed as well.
BlackBerry's piece of the pie crested in a winding lower in the course of the most recent couple
of years. What was the deal? Apple and Samsung occurred. They changed the game for
BlackBerry. Customers saw the new advancements that these brands offered, for example,
associating with virtual articles through a touchscreen that was something that BlackBerry didn't
offer. Notwithstanding, these weren't the solitary drivers for the BlackBerry's defeat. Supervisors
didn't approach in a serious way that the market was evolving. BlackBerry's authority never
accepting Apple's iPhone as a genuine danger to business. Basically, not until it was past the
point of no return.
What is clear is the accomplishment of organizations like Samsung and Apple. Those sense the
chance on the lookout and take the principal mover’s advantage in it. The choices must be made
right off the bat in the pattern of progress, and it is administrators’ obligation to have the option
to react to worldwide variations of business sectors and convey this change. As market change so
quick and constantly, pioneers ought to gain from others slip-ups and advance to the requests of
commercial center as opposed to be a casualty of this.
Changing the game for BlackBerry
As it is well-know so far, there is no general solution for the challenges that organizations face
with coping with these changes. The environment is global and always changing and
managers have to be open minded in order to keep up with them.
As stated by Craig Hanson, General Partner, Next World Capital [1] - “Blackberry’s decline is
worth studying. Here’s a company whose name was synonymous with ‘smartphone’ early on.
It had a commanding share and owned the corporate market. Corporations led device buying.
But that corporate hegemony was also its demise. It relied on selling to corporate IT buyers
and locking them up with long-term contracts and server-based solutions. It fell behind on
innovation, kept its app ecosystem closed and proprietary, and failed to recognize the rise of
consumer-driven IT buying. Now it finds itself struggling to hang on to some respectable
share in a corporate market it largely created.”
Blackberry is a good example of defective management. Lack of strategy, the outages, and
delays on providing more attractive options were their biggest failure.
Evaluation
Nowadays it’s clear that a successful company must have the ability to follow change, be
flexible and adaptive. Re-organize their strategy to align with the new market necessities and
therefore costumers need. As Fukuyama introduced an adaptive organization, is stated as ‘The
adaptive organization can evaluate a changing external environment and modify its own
internal procedures in response’. That being said, the survival of organizations undergoes
spotting costumer needs before others competitors, realize new trends. Thus, quickly and
effectively steer towards these new opportunities and take leverage of organizations resources
and competencies to do so.
BlackBerry blinded by its own success and unable to replicate it, failed in follow the trends.
New rivals redefined the market and they responded with a string of devices that were late to
market, missed the mark with consumers, and opened dangerous fault lines across the
organization.
Conclusion
Crisis is a time-critical task, high-uncertainty and with high risk. BlackBerry is clearly in a
situation of crisis, as we can see at figure 1, presented below. The unexpected developments in
the market weren’t followed by the company in the right time and now it’s no longer able of
dealing with these. The problem was that managers didn’t pay much attention to the new
competitors and their strength. They could have made something of a turnaround but it’s
starting to look that is too late to shape the costumer’s idea about the brand
Managers failed in react quickly and make quick decisions. They had a lot of fixed values and
processes were standardized which led to tunnel thinking. This probably was the reason
behind their late arrival in following the trends. Theirs businesses orientation was possibly too
focused on stability and just a part in change. Organizations should strive for equilibrium but
often this llimits the ability of sensing and dealing with dynamic environments effectively.

Figure 2: The Adaptive Cycle

Figure 1: Source [Link]


graphic-2013-9
In order to explain in greater detail bellow, it will be presented the “The Adaptive Cycle” [1],
which quadrant BlackBerry is currently insert in and what steps should follow to become a
more successful organization.

BlackBerry was in quadrant 1 for a long time, in the


equilibrium situation. The confidence of the
organization that they were able to cope with the threat
from outside was what actually ruin them. External
influences disturbed this equilibrium; the new
innovations that brands such as Apple and Samsung
presented changed the game. At this point, BlackBerry
should have reacted more quickly and efficiently to the
arisen situation. They moved to quadrant 2 where as I
see, still are (blue point in figure 2). They miss the
timing for innovation. Understanding the market and
choose adirection, adding new insights into the current
crisis situation. Once they are confidence that these
options

can actually add value to the solution available at the moment, this step marks the transition
from quadrant 2 to quadrant 3, new combinations. However, it’s not possible to realize all
the options, Blackberry actually need to make a decision. In this process, from the whole
range of possibilities only one will be chosen to be further developed. The moment of
making the choice, which means that there is some hope in the future, is what marks the
transition to quadrant 4, the new equilibrium. In the new equilibrium, the situation achieved
is not the same as the one befor

I believe that the major problem is that BlackBerry managers failed in recognizing the change
in the environment and just never reacted correctively or timely.
Recommendations
Miller (1990) observed that ‘success leads to specialization and exaggeration, to confidence
and complacency to dogma and ritual’ and usually their strength is what lead them to their
downfall. BlackBerry strength has been in enterprise and government with its known security.
The lack of perception within the market that surrounded them and not reacting according to
its needs or changing their path was the key point to its downfall.
Going forward in these moments seems tough however not impossible. Implementing
different senior management, operational changes toward a more maturing position is some of
the changes that need to be made, to drive the company in direction of profitability.
Hereupon, I will present the possibilities that I find interesting for BlackBerry to implement in
order to achieve the transition to quadrant 4 (from the Adaptive cycle).
Gain a new position in the market requires plan and refocus on the end-solution of hardware
and software and services provided by the organization. Also, I believe that they have to take
into consideration that smartphones competitive landscape is constantly changing. The
strategy that relies on long corporate IT relationships should shift into a more easy, flexible
and subscription-based. And then, customers can do whatever they want with the applications,
as it happens with other organizations.
The lesson here, I believe, is that an organization to become successful must have ability to
change, flexible, adaptive and re-strategize aligning their values and products with the ones
standing in the market. In nowadays business environment, survival of organizations such as
BlackBerry goes through spotting costumers need before ‘they do’ or before their competitors
do it. In order to take leverage, they need to shift toward these new opportunities and chances
before the others do it.
References
[1]Tom Taulli, (2013, September,23), Lessonsfrom The Fall of BlackBerry. Forbes,
Volume Number, pages.
[2] Abcouwer, A. W., & Parson, B. G, Sustainable assertiveness – The adaptive cycle of
resilience
Teletalk is a domestic and government owned mobile phone network service
provider in Bangladesh. Teletalk Sim Company of Bangladesh provides network
across the country. Teletalk is one of the key players in telecommunication
industry. Teletalk was started their business in 26 December 2004 but Teletalk Sim
company was launched commercial operation on 31 March [Link] present it is
the fourth largest mobile operator in Bangladesh.

Common questions

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Organizations can better align themselves with market trends by fostering a culture of innovation and adaptability. This involves continuously monitoring market changes, leveraging consumer insights, and maintaining flexibility in strategic planning. Building an open platform that encourages third-party development and adjusting business models to meet current consumer preferences are crucial strategies. For BlackBerry, a critical failure was the lack of responsiveness to market changes and the adherence to outdated practices and systems. Learning from these failures, companies should focus on transformational leadership and impactful decision-making during pivotal market shifts .

The 'adaptive cycle' is a conceptual framework for understanding different phases of organizational growth, adaptation, and crisis response. BlackBerry's challenges can be mapped onto this cycle, highlighting its stagnation in early adaptive phases and failure to respond effectively to market changes. Initially, BlackBerry was in the equilibrium phase but did not transition to the new combinations phase in response to external innovations. The cycle suggests that for recovery, BlackBerry needs to enter the phase of reorganization and re-strategize towards market alignment, prioritizing new technologies and adaptive management practices to regain equilibrium—a process it has struggled to achieve given its delayed response to market realities .

BlackBerry's experience offers valuable lessons for leaders managing business model transformations in tech industries. Primarily, it underscores the necessity of anticipating market shifts and consumer behavior changes. Leaders should maintain a focus on adaptability, foster innovation, and encourage a flexible organizational culture that can respond to market dynamics. It is crucial to invest in research and development continuously, explore collaborations, and face competition head-on with strategic foresight. Avoiding overreliance on past successes and being open to disruptive innovations can ensure firms do not fall into complacency, as BlackBerry did .

BlackBerry's strategic mistakes related to its persistent focus on hardware over software innovation. As the industry shifted towards touchscreen smartphones with robust app ecosystems, BlackBerry continued to emphasize its physical keyboard design and secure enterprise solutions. This hardware focus limited their appeal in the increasingly consumer-driven market. Mitigation could have involved pivoting earlier to software development, investing in a more open app platform, and expanding collaboration with third-party developers. This strategic redirection could have enabled BlackBerry to cater to growing consumer preferences and maintain competitive relevance .

BlackBerry's decline was primarily due to its inability to adapt to the rapidly changing smartphone market. Initially successful with its secure and enterprise-focused devices, BlackBerry failed to innovate in response to consumer-driven trends, such as touchscreen technology and app ecosystems, pioneered by Apple and Samsung. The company remained overly reliant on its corporate IT buyer base and was slow to embrace wider consumer demands and innovations. BlackBerry's leadership underestimated the threat posed by competitors like the iPhone and maintained a closed, proprietary system that did not attract a wide developer community .

Senior management plays a critical role in navigating technological shifts, as evidenced by BlackBerry's missteps. Leadership at BlackBerry did not adequately recognize the threat or potential of emerging technologies like touchscreen interfaces and mobile applications. Their failure to act swiftly and adapt strategically to these advancements highlights the importance of proactive management practices in the face of industry evolution. Effective leadership involves recognizing emerging trends, fostering innovation within the organization, and swiftly implementing strategic changes to remain competitive—practices that BlackBerry's management neglected until it was too late .

From BlackBerry's experience, it is evident that balancing innovation and stability is crucial for business sustainability. While stability can provide a solid foundation, overemphasizing it may stifle innovation, as seen with BlackBerry's strict adherence to its established business model and technologies. This balance requires companies to be agile, encouraging continuous innovation alongside robust, stable operations. Businesses should invest in forward-thinking research and be willing to adapt or pivot their strategies in line with technological advances and evolving consumer demands to maintain competitive advantage .

BlackBerry's corporate hegemony, built on long-term contracts with enterprise clients and specialized secure communications, contributed to its downturn by creating a false sense of market security and stifling innovation. This focus on corporate relationships bound BlackBerry to a narrow market segment and isolated it from consumer trends that were increasingly defining the smartphone industry. As consumer-driven decision-making became prominent, particularly with the rise of apps and user-centric design, BlackBerry's inability to pivot away from its entrenched corporate focus meant it struggled to compete with companies that rapidly embraced these market shifts .

BlackBerry's initial success created a barrier to future innovation by leading to organizational complacency and overconfidence in its existing corporate-focused business model. The company's leadership believed their market dominance was secure, relying on long-term contracts and proprietary systems, which deterred new consumer-focused innovations. This complacency resulted in a failure to recognize and adapt to the shift toward consumer-driven IT buying and technological developments such as Apple's introduction of the iPhone and its open app ecosystem. Thus, the success that BlackBerry enjoyed ironically contributed to its resistance to change .

The 'first-mover advantage' refers to the benefits gained by firms that are the first to enter a new market or develop a new technology. Apple's introduction of the iPhone and Samsung's subsequent innovations allowed them to capture significant market share before BlackBerry could respond effectively. These companies capitalized on emerging trends such as touchscreen interfaces and app ecosystems, positioning themselves as leaders in innovation. By establishing a strong presence early, they were able to set standards and build extensive brand loyalty, leaving BlackBerry struggling to regain relevance in a market that had swiftly adopted these new features and devices .

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