Case Study #1
Presented by Simona Antolak, Lianne Hung, Adrian Ver, Michelle Noble, Meghan Hardy and Dexter Holmes. SLAMM’D Inc.
What product strategies should Research in Motion use to differentiate the Blackberry Storm from the competition to increase sales? Facts relating to the case:
Who: Research in motion, the developers of Blackberry. Mike Lazaridis, Doug Fregin and Mike Barnstijn. When: Sales figures of 2009.
Where: Canadian-based company in the global market.
Why: The sales of Blackberry have not met the competition’s. What:
•Apple has dominance over the consumer market for smart phones. •Other competitions are entering the same market such as Sony, Microsoft, HP, Google Android, and others. Research:
See Appendix A, B and C for information on Storm and its competitors. Blackberry Marketing Budget:
RIM spent $29.8 Million dollars in 2007. In 2008 RIM spent 6% of its revenue ($6,009,395,000) on Research and Development and 14.7% of its revenue on Marketing, Selling and Administration. Target Market:
The target market for the Storm is young professionals from ages 20 to 40. They are business-savvy and technologically-savvy people who require access to their information at their fingertips for their daily activities. Blackberry has recently found that there is potential in the younger market for students that have interest in the capabilities of the product. Although it is not their key focus, they are working to attain a higher market share with this demographic.
•Worldwide leader in cutting-edge technology
•Expanding global consumer base
•Has developed an established brand
•Has a loyal market share Weaknesses:
•Canadian companies are perceived as conservative businesses that cannot venture outside of their borders and are shadowed by our larger by population U.S. neighbour. •Managing the company`s explosive growth
•The overall smart phone market is growing faster than ever. •In 2013, IDC predicts that 20% of the 1.4 billion phones sold will be smart phones. The 7% growth in smart phone sales is a potential market that RIM can tap into. •Their margin is 20%, half of Apples margin at 40%, which gives them the opportunity to increase their margin
•Investors are worried about the company`s growth
•Apple`s market share is increasingly growing (According to the Change Wave Research, as of May Apple had 20% of the enterprise market, up from 6% in one year) •Potential consumers are bound by cell phone contracts that can last two to three years
In order to execute our alternative solutions, it is assumed that the budget that RIM allocates for Research and Development and Marketing activities can be spent. It is also assumed that the budget increased in 2009 from the 2007/2008 budget. Other assumptions that were made based on research and information within the case: - There is an available market of people that are not technologically inclined and would appreciate a more user friendly model with larger numbers and buttons. - Students would find the Storm applicable to their daily student activities. - The key target market for the Blackberry Storm (business market) hasn't been fully penetrated and could have potential to be fully penetrated. Alternative Solutions:
Solution One: Product Development.
“RIM believes one way to continue growing in the crowded U.S. market is to develop targeted products for specific groups of customers.” In order to achieve this goal, the Storm will come out with customized user interfaces to appeal to smaller niche demographics. Since the phone is mainly screen based this leaves a lot of room for customization to the design. Specific groups such as teens, less tech savvy and strictly business would be targeted directly with this solution. For the teen group (age 10-16) the phone will be...