Research in Motion: What Lies Ahead?

Abstract:

This case is about RIM, the maker of smartphones for business executives, and the problems it has been facing in the recent past due to the increased competition in the market. The entry of new players like Google and Apple into the smartphone market had made the segment extremely competitive and reduced the market share of RIM. The gadgets made by these new players offered the same level of communication features required by business users as the devices sold by RIM, plus more multimedia features. As a result, more and more consumers had started preferring these devices. Other issues like the lack of good number of apps for its OS and expensive data plans had made companies adopt other smartphones in the place of BlackBerrry devices.

The declining market share made its share price plummet, forcing its co-CEOs to resign. With the start of the tablet era, RIM launched a new tablet called the PlayBook into the market. The tablet was aimed at corporate users who traditionally favored BlackBerry smartphones. However, the tablet failed to impress the market as it did not have all the features that customers were looking for. The failure of the PlayBook further damaged the image of RIM in the market. RIM was pinning its hopes on a new OS for its gadgets called BlackBerry Operating System 10 to revive its fortunes. The new OS was announced in December 2011 but its release was postponed till the second half of 2012. Some analysts opined that by then it would be too late for RIM to recover its market share. This case is meant for MBA/MS students as a part of the Micro Economics/ Managerial Economics/ Business Strategy curriculum.

Issues:

The case has the following objectives

» Understand the problems faced by RIM in the smartphone market and how it can come out of its present troubles and stay relevant in the smartphone market.
» Assess the kind of market in which RIM is operating and how RIM can sustain itself in this market structure.
» Examine whether there was a lack of strategic vision on the part of RIM’s management regarding the operating systems used in its devices and the reasons for customers disregarding the Blackberry as a smartphone device in the competitive market.
» Appreciate the importance of analyzing the strengths and weaknesses of the competitors properly.
» Analyze the strategies that market leaders should follow to counter competition from new entrants into the market (expanding the total market, expanding market share, and defending market share). >

Contents:

Keywords:

Micro Economics; market structure; Perfect Competition; Monopolistic competition; Oligopoly; Monopoly; Cournot competition; Bertrand competition; Stackelberg competition; Contestable Market Theory; Managerial Economics; Business Strategy; Turnaround; Smartphones

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