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Eco 607 Grp Presentation II

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Eco 607 Grp Presentation II

  1. 1. National University October 19, 2014
  2. 2.  Blackberry Limited, formally known as Research in Motion.  Understanding the economics of business and associated business risks.  How business react to demand is essential.
  3. 3.  According to Forbes (2010) “We expect Apple’s market share to overtake that of RIM by 2011, and for Apple and RIM to have 11% and 8% market share.  In 2013 RIM was stated as having 1.5% of the market share and recently it was stated that “BlackBerry’s global smartphone market share is now barely a blip on the radar.”(BGR 2013).  What Economics and managerial decisions occurred from 2010 to present that caused RIM to loose so much ground?
  4. 4.  Understanding demand shift is very important.  Being able to respond is even more critical to remain profitable.  Blackberry’s consumers.  The ease of information.  This set the stage.
  5. 5. Demand (Continue)  Stock price and consumer confidence.  What sets price?  Blackberry’s stock prices falls.
  6. 6. Financial Ramification 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Blackberry Stock Price ($1.00) ($0.50) $0.00 $0.50 $1.00 $1.50 $2.00 3/1/2011 6/1/2011 9/1/2011 12/1/2011 3/1/2012 6/1/2012 9/1/2012 12/1/2012 3/1/2013 6/1/2013 9/1/2013 12/1/2013 3/1/2014 6/1/2014 9/1/2014 EPS
  7. 7. Samsung, 35% Apple, 14% Microsoft, 4% Blackberry, 1.50% Current Market Share $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 3/1/2011 6/1/2011 9/1/2011 12/1/2011 3/1/2012 6/1/2012 9/1/2012 12/1/2012 3/1/2013 6/1/2013 9/1/2013 12/1/2013 3/1/2014 6/1/2014 9/1/2014 Revs (Billions)
  8. 8.  Substitution is a significant threat to smartphone manufacturers.  What characterizes the market?  Technological innovation.  The Evidence.
  9. 9.  Cross-elasticity is also high for smartphones.  The primary competitor  Choosing a smartphone.
  10. 10. Managerial economics is very important especially in the world of mobile devices.  Blackberry’s consumer and enterprise marketing apparently fought over strategy.  The executives did not realize how the shift in demand to smartphones would affect their business.  The introduction of the iPhone would create a strong demand for fun over function which Blackberry had done very well.
  11. 11. Identifying Risks and how they relate to demand is essential, which resulted in Blackberry’s initial issues with remaining relevant in the marketplace. This became apparent for Blackberry with the introduction of smart phones, specifically the iPhone. As a result Blackberry is no longer a consideration in this market space.

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