Blackberry Performance Analysis

1494 Words 6 Pages
1. Introduction

1.1. Overview
The objective of this report is to examine and explain the causes of poor performance discovered in the 2014 BlackBerry annual report, newspaper and articles. The report starts off with a brief overview of the latest BlackBerry’s poor performance. Then it lists and evaluates the several poor performance shown in relation to the macro and micro business environment issues and the internal organisational factors. Subsequently, it will investigate what BlackBerry could do to successfully undergo this struggle.

1.2. Blackberry
Founded in 1984 and based in Canada, BlackBerry is a world-wide leader in mobile communications that transformed the mobile industry with the introduction of the BlackBerry solution in 1999.
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This meant that the struggle in the hardware business directly influenced the revenue level. Blackberry still managed to maintain a net profit of $1164 million in 2012. However from 2013, they started to make a loss and in 2014, they made a loss of $(5873) million.

(Figure 3)

BlackBerry’s market share in both 2012 and 2013 is extremely minor compared to its rivals such as Android and iOS. Additionally, BlackBerry’s smartphone market share has fallen outstandingly from 4.5% in 2012 to 1.9% in 2013, which is definitely a devastating news for them. BlackBerry’s market share is low and even decreased because its rivals like Android and iOS took their potential customers.

2.1.2. BBM
Smartphone market isn’t the only area BlackBerry experienced a negative impact from competitors. BlackBerry also focused on BBM and had expectations to a certain degree, as the revenue in the hardware sector has decreased significantly. On October 29, 2013, BlackBerry reported that BBM had over 80 million monthly users. Moreover, to enlarge its capitalization of BBM, BlackBerry has offered it as a free app on both iOS and Android, as an attempt to make sure that existing and potential customers don’t migrate towards competitor
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However, its market share is significantly low. The primary reason is because of low brand identity. “Brand names help consumers identify the source of a product, and signal specific attributes and key benefits of the product to the consumer.” (Kotler and Keller, 2009) Brand names can also “impact the way consumers perceive a specific product, and may cause consumers to form positive impressions or images.” (Keller, 1993) For instance, Apple 's iPhone models are typically retailed at a higher price than BlackBerry 's handsets. BlackBerry Z30 16GB unlocked phone is sold for $499, while a 16GB Apple iPhone 5s costs $649. However, more consumers are willing to pay a higher price and purchase Apple device over a BlackBerry. This is because “brand loyalty is considered as an asset and consumers are ready to pay more than usual for a brand,” (Wernerfelt, 1991) which explains the customer’s purchasing behaviour. It proves that BlackBerry has a weaker brand value compared to their competitors, which is directly linked to customer base and

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