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Blackberry

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Submitted By jacky222
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Due to the competitive market, there are many alternatives for Blackberry. This can get even more competitive when companies use price skimming, which is selecting a price so that they can get the most from certain buyers. The price of a Blackberry Z10 when it just came out was around $600-700. The price of an iPhone 5S when it just came out was around $750. Due to the cross price elasticity of demand, the rate of response for one item will either go up or down due to the price change of another good. If the iPhone drops $150, apple lovers might ditch their blackberries and not mind the price because of all the negativity surrounding Blackberry. Because they are substitutes, consumers will purchase more of one product when its substitutes price increases and vice versa, but this isn’t the case with Blackberry because of its downward spiral. Blackberry’s search for strategic alternatives did not help them. The company has been in a volatile state for far too long now. Even though Blackberry spent $33 million on marketing; Samsung, Android, Apple, and other phone companies have dominated the market. (Olson 2013). Blackberry’s market share on March 22, 2013 when the Z10 came out was down to 5.9% from more than 50% in previous years. With their famous “giving you tools, not toys” line they haven’t managed much success. As of August 2013, $ 1,509,000 was spent on research and development (NASDAQ 2013). Revenue was approximately $1.6 billion for the second quarter of fiscal 2014, which is down 49% compared to the $3.1 billion in the previous quarter. Price elasticity is getting so large that it is knocking Blackberry out because of the limited demand for it. In order to catch back up, the president and CEO of Blackberry, Thorsten Heins, claims that they will focus on targeted markets in order to establish a more efficient and focused company. There are many substitutes

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