Porter 5 Forces Analysis of Blackberry
Bargaining Power of SUPPLIERS: Moderate/
- There are plenty of hardware component manufacturers for cellphones but BlackBerry’s operating system is complicated therefore it limits the number of software developers that will work with them.
- This problem was most recently seen when BlackBerry struggled to get native applications for the launch of the Z10.
- The Bargaining Power of Suppliers for Blackberry has increased, due to Blackberry’s eroding market share. Firms who dominate the mobile communications industry, such as Apple and Samsung, have relatively higher bargaining power, because their larger product orders account for more of the suppliers business.
Bargaining Power of BUYERS: High/Moderately High/
- Large numbers of competitors with simpler products (not very much differentiation between products)
- Switching cost are low-moderate depending on contract
- Bargaining power of buyers is moderately high as carriers, such as Telus or Verizon, tend to buy in massive volume to provide for their subscriber base. If demand for a product declines, such as it did for Blackberry, these vendors enjoy tremendous leverage in buying power. These highly competitive environments offer consumers more options and thus the ability to demand greater price concessions. Although there are governmental barriers to competition amongst carriers in the Canadian market, consumers still have the ability to choose their favorite products and this is reflected in the orders an individual telecom carrier books with suppliers, such as Blackberry.
Threat of new ENTRANTS: Low/Moderate/Low/Low
- Very expensive to enter market ( R&D cost)
- Difficult to negotiate with distribution channels
- Large brand loyalty for existing products
- Economies of scale
- Large Rivalry
- A new entrant that is able to produce a well-differentiated and innovative product can steal market share from existing competitors. However, the high capital requirements
- There are plenty of hardware component manufacturers for cellphones but BlackBerry’s operating system is complicated therefore it limits the number of software developers that will work with them.
- This problem was most recently seen when BlackBerry struggled to get native applications for the launch of the Z10.
- The Bargaining Power of Suppliers for Blackberry has increased, due to Blackberry’s eroding market share. Firms who dominate the mobile communications industry, such as Apple and Samsung, have relatively higher bargaining power, because their larger product orders account for more of the suppliers business.
Bargaining Power of BUYERS: High/Moderately High/
- Large numbers of competitors with simpler products (not very much differentiation between products)
- Switching cost are low-moderate depending on contract
- Bargaining power of buyers is moderately high as carriers, such as Telus or Verizon, tend to buy in massive volume to provide for their subscriber base. If demand for a product declines, such as it did for Blackberry, these vendors enjoy tremendous leverage in buying power. These highly competitive environments offer consumers more options and thus the ability to demand greater price concessions. Although there are governmental barriers to competition amongst carriers in the Canadian market, consumers still have the ability to choose their favorite products and this is reflected in the orders an individual telecom carrier books with suppliers, such as Blackberry.
Threat of new ENTRANTS: Low/Moderate/Low/Low
- Very expensive to enter market ( R&D cost)
- Difficult to negotiate with distribution channels
- Large brand loyalty for existing products
- Economies of scale
- Large Rivalry
- A new entrant that is able to produce a well-differentiated and innovative product can steal market share from existing competitors. However, the high capital requirements