MARKET SHARE - LESSONS FROM RIM

Will RIM Become RIP?

Lessons from Blackberry

Big drama is playing out in the smartphone market as the once dominant  Research in Motion (now Blackberry) woke up late for an important business meeting. The company that was the leader in the mobile communications market has found itself struggling for relevance, maybe even survival.

For folks responsible for running businesses of any size, important lessons can be learned from studying Blackberry. The main observable is that an organization should continue to sharpen and strengthen its core element. In Blackberry's case that element was innovation. A company founded on innovation must continue to innovate to survive. A company founded on service must continue to raise an already high bar in terms of performance in front of its customers. Blackberry let years pass without noticeable changes in product features. Then, once Apple invented the iPhone, who sprung into action to follow? Google and Samsung were certainly did. Where was Blackberry? If you are to be an innovative company, you must continue to innovate.

Another point to watch is the shifting in market share and the impact on Blackberry of its declining marketability.
It's so much easier to sell product through distribution and retail channels if you're one one of the biggest suppliers. Economies of scale in manufacturing help keep costs down, and that matters. But more importantly is the difficulty in displacing an established product in order to gain saleability, or "shelf space". Being competitive or being good isn't usually enough to shoe horn a product into the market, especially in trendy markets like technology or fashion. Usually you need to have magnet like attractiveness in order to convince a market to turn away from an established option. The strong get stronger and the weak get weaker until changes in the balance through innovation or an external factor upend the market. As market share slips, there is a critical level below which a company can't survive.

Blackberry has recently begun to fight back with the introduction of their new Z-10 model. Perhaps recognizing they can't go toe-to-toe with Apple or Samsung, they're examining other feature sets and price points in order to go around rather than through the competition.

Keep an eye out and take notes. A brave man learns from his own mistakes. A wise man learns from others'.

Posted by Peter on 3/29/2013 11:02:21 AM