blackberry turnaround analysis and factor to be considered for implementing different strategies for the success of blackberry.

1. Capstone
Presentation
Submitted By:
Abhishek Gupta (01)
Abhishek Mehrotra (03)
Devanshu Gupta (19)
Giteshwari (23)
Toushi Godra (92)
BlackBerry Turnaround Strategy

2. Industry Analysis
• Main factors influencing the Smartphone industry in 2013:
i. Relationships between platform leaders and hardware manufacturers.
ii. Market demand and carrier support.
iii. The decisions of a number of major players with regard to key
transitions or major trends.
• Google control over Anroid OS.
• Fall down of Nokia Smartphone's sales.
• Indian Mobile Market.

3. Intensity of Rivalry
•Product attributes like features and
design can be quickly imitate or
encounter with better quality or
advance specification, like camera,
touch screen resolution, processor
and storage, connectivity and even
software bundle
Bargaining Power of Supplier
•Majority of Hardware used to produce
a smart-phone is same, like ARM
architecture processor, same storage and
gorilla glass screen
•Relative concentration fall into
competitive as equal many buyer to
supplier
Threat of Substitute
•Tablet is likely to substitute smart-phone as
it share similar interface, functionality and
apps
•Cross price elasticity is high, maily from
featured phone. Consumer may only need a
featured phone with basic call and text.
Bargaining Power of Buyer
•Consumers have a lot of choice
available in the market
•Switching cost is low
•Many suppliers are providing
varied features and apps
•Many buyer to suppliers increases
the bargaining power
Threat of New Entrants
•The fixed cost of R&D on software and
hardware
•Loyalty for patents and other intellectual
property rights
•Need for good talent and manpower
•High initial investment is required
Porter’s 5 forces
for Smartphone
Industry

4. Change in Global Smartphone’s
Market Share from 2009-12

5. Countries Smartphone’s Shipments
(in millions) and Market share

6. Company Analysis
•BlackBerry Limited, formerly Research In Motion Limited,
incorporated on March 7, 1984, is a designer, manufacturer and
marketer of wireless solutions for the worldwide mobile
communications market.
•Company's primary revenue is generated by the BlackBerry
wireless solution, consists of smart phones and tablets, service
and software.
•BlackBerry pioneered Push Email.
•BlackBerry’s Product Portfolio.
•BlackBerry co-CEOs Jim Balsillie and Mike Lazaridis was
replaced by Thorsten Heins in January 2012.

7. SWOT Analysis of BlackBerry
Strength
• Strong relationship with
more than 650 carriers
around the globe
• More than 72 million loyal
customer base
• Core Competency in
security encryption feature
• QWERTY keyboard ease
the typing experience
• It is a preferred enterprise
phone with 14 mn+
customers
Weakness
• Slow response rate to
competitors
• Outdated OS 7 phone with
poor interface and usability,
still present in the market
• Lack of apps when
compared to Android and
Windows
• Lacks clear positioning
• Took too long to introduce
OS 10
• High price of OS 10 phone

8. SWOT Analysis of BlackBerry
(Contd..)
Opportunity
• Smart-phone market
growing at a rate of 41.7%
annually
• Strong growth of mobile
advertising market
• Better competence of OS 10
when compared to other
leading mobile OS
• Overwhelming acceptance
of BB 10 in India, Canada,
UK and Indonesia
Threat
• Competition from market
leader that has already
achieved economies of scale
• Challenges from Nokia which
after being acquired by
Microsoft can come up with
strong differentiated products
• Rapid technological changes
• Stiff competition may quickly
burn retained cash in hand of
blackberry

12. Analysis
• Both the Smartphones as well as tablets fall under Dog quadrant of
BCG matrix. “Dog” quadrant has a typical investment stance
or “Harvest/Exit”.
• In reality though, it will not make sense to divest or exit businesses
rapidly in this quadrant beacuse they will have low value and will
distract management during the sale process.
• Frequently their weak competitive position leaves them incapable of
being “harvested” either – if investment is reduced they may disappear
very quickly.
• Rather they could be set up to operate with minimal resource drain on
the rest of the portfolio, as the best people and all discretionary
resources are diverted to more attractive businesses.

13. Objective of the Study
• Blackberry’s smart phone market share declined by more than
33 % and the company is losing its core so the objective of our
project is to frame a turnaround strategy for blackberry which
would help it to recover and get back at its position.
Outcomes Expected
•Acknowledging the loopholes in the strategy placed by blackberry for its
smart phones
•Reasons for its failure
•The appropriate strategy that should have been framed by the company
•How the ill-effects of the strategy placed can be mitigated so the company
would be able to recover and then frame a suitable & turnaround strategy.

14. Marketing Issues with BlackBerry
• Blackberry lost its original image as a Smartphone producer
• Diverting attention and resources to Playbook
• Failure to produce new smart phones for almost an year
• Company found it difficult to position their product when
iPhone and Android started dominating the market
• Failure to produce and promote new apps

15. Strategies to Turnaround
• Success of BBM can be used to brand Blackberry products
• Focusing on its original image; business communications for
business people.
• Going with the strategies implemented by John Chen.
Retaining him for a long time.
• Moving towards Emerging markets.
• Marketing the “Security Features”.

16. • The revenue of the company had slipped by
26% approx.
• The company has increased its R&D budget by
56% .
• Company had suffered operating losses in
2013.
• Company is also receiving net losses for 2013.
P&L and Ratio Analysis
Financial Issues with BlackBerry

17. Balance Sheet
• Blackberry is a debt free company .
• Intangible assets had increased by 160% from
2010-2013 .
• Fixed assets had declined by 12.36%.

18. Ratio Analysis
Profitability Ratios 2013 2012 2011 2010
Gross profit margin (%) -31 35 44 44
Net profit margin (%) -5.83 6.32 17.13 16.43
Return on Equity (%) -6.83 11.52 38.16 32.32
Return on total Assets (%) -4.90 8.48 26.50 24.07
EPS in ($) -1.23 2.2 6.36 4.35
Liquidity Ratios 2013 2012 2011 2010
Current ratio 2.06 2.09 2.06 2.39
Quick Ratio 1.88 1.78 1.89 2.12
Cash Ratio 0.77 0.52 0.58 0.79
Activity Ratios 2013 2012 2011 2010
Inventory turnover 18.36 17.94 32.21 22.65
Fixed assets turnover 4.62 6.74 7.95 7.64
Total assets turnover 0.84 1.34 1.55 1.46

19. RAISING $1 BN
• Firstly to be bought at $ 4.7 bn by Fairfax
Financials.
• Prem Watsa’s Fairfax Financial, which holds a 10 per
cent stake.
• Abandoned $4.7bn rescue bid as it turned to a $1bn
fundraising plan.
• Will raise $1bn in convertible bonds.

20. PLAN OF THE COMPANY

21. HR issues in Blackberry
•Dual CEO structure
•Heavy layoffs.
•De-motivation among employees
•Inefficient employees.
•Growth hampered.

22. Strategies to Turnaround
•Reassure the people of their value to the
organization.
• Employee security.
• Step up.
• Compensation & Rewards.