Task 2

Internal Audit
I shall perform a marketing audit on Blackberry; this involves both an internal and external examination of the company. A marketing audit can be used to identify both the strengths and weaknesses of a business and how it is affecting their ability to meet their overall aims and objectives. An internal audit is broken down into 5 main categories, these include:

Resources- The resources of a business can include their Technical resources, financial resource, their organisational structure as well as their managerial skills
Research in Motion has created value for its customers through R&D for the last 10 years, and they have as a result used their R&D as a distinctive advantage. As an innovator in wireless email solutions in the late 90’s they were able to establish assets such as licenses and patents related to data security, wireless transmission of data, and what they are known best for; their push email service. By securing these licences and patents it has given Blackberry an edge in the market with the features it offers, and allowed them to establish a target market which was business people and professionals, before moving into the general market.
The major stakeholders of the company are two of the founding members, who currently serve as Co-CEOs of the firm. RIM performs well financially on a consistent basis, with revenue figures reaching $4.2 billion in 2011, although this is down 15% from the previous quarter. In the USA RIM owns 40% of the smart phone market, however their blackberry products are weaker internationally than their rivals Nokia.

to IDC | | Top five mobile phone manufacturers, by 2010 global sales according to Strategy Analytics | Rank | Vendor | Unit shipments | Market share | Annual sales growth | | Rank | Vendor | Unit shipments | Market share | | 1 | Nokia | 453.0 million | 32.6% | 4.9% | | 1 | Nokia | 453.0 million | 33.3% | | 2 | Samsung | 280.2 million | 20.2% | 23.3% | | 2 | Samsung | 280.2 million | 20.6% | | 3 | LG | 116.7 million | 8.4% | -1.0% | | 3 | LG | 116.7 million | 8.6% | | 4 | ZTE | 51.8 million | 3.7% | 94.0% | | 4 | RIM | 48.8 million | 3.6% | | 5 | RIM | 48.8 million | 3.5% | 41.4% | | 5 | Apple | 47.5 million | 3.5% | | | Others | 437.7 million | 31.5% | 31.2% | | | Others | 413.8 million | 30.4% | | | | | | | | | | | | |

Limiting Factors- These are factors that may affect a business’ performance within their market, there are many reason why a business may be limited in what they can achieve and normally falls under financial restrictions or areas that the business
Fortunately for RIM their blackberry are popular and generate large revenue annually so they are not restricted financially. Instead the Blackberry line is limited by the technological features it offers as a smart phone. Blackberry originally grew rapidly in the market as they were introducing new technology, but as there is an increasing development of technology offered through phones, Blackberry is failing to keep up with the features their competitors are offering with their phones.
An example of this is the limited range of phone applications that Blackberry offers compared to Apple and other smart phones. This table shows the difference in APPs bought in 2010. APP downloads for 2010 | App store | | Apple | Blackberry | Ovi (Nokia) | Android | Number of apps | | 300,000 | 18,000 | 130,000 | 25,000 | Price change | All apps | -12 | -24 | +1 | -29 | | Top 100 apps | -19 | -24 | -9 | -61 | Source: The Distimo report (January 2011) | via: mobiThinking |

This is having a major impact as App developers are not aiming to provide Blackberry with Apps instead they are providing them for their competitors which will majorly effect Blackberry’s appeal to the consumer. This is highlighted in this article from techworld.com:
App developers are rapidly losing interest in RIM’s BlackBerry platform and setting their sights on the new big three, Apple, Android and Windows 7, a survey has found.
The 2,160 respondents to the latest Appcelerator/IDC survey show that Apple and Google’s Android are still the top platforms, but within that predictable picture some interesting points emerge.
Ninety-one percent of developers described themselves as “very interested” in the iPhone, 88 percent in the iPad, and 83 percent in Android as a whole. The BlackBerry has now sunk to 21 percent interest levels, well behind possible future giant Windows Phone 7 on 38 percent, which appears to have been buoyed by Microsoft’s deal with handset maker Nokia and the arrival of the Lumia Smartphone.
(techworld.com)
RMI should try and eliminate this limiting factor and develop an application platform that appeals to App producers, by doing this they will increase the appeal of their products and remain competitive within the market by offering the same features as their competitors.

Distinctive Competences- Distinctive competence of a firm refers to a set of activities or capabilities that a company is able to perform better than its competitors and which gives it an advantage over them. Distinctive competence can lie in different area such as technology, marketing activities, or management capability.
Blackberry have developed a wide range of devices over the years with their distinctive competences being their offer a push email service which allows the user of their products to send emails on the move with guaranteed safety through encryption, allowing business people and professionals to conduct business wherever they are. This is one of the main reasons the US Government have a good relationship with Blackberry, using 50000 of their devices on a daily basis.
Blackberry also decided that they needed a distinctive competence for the general market which is why they introduced Blackberry messenger or BBM. This is an instant messaging service that allows Blackberry users to communicate instantly with each other at no cost.

Portfolio Analysis- This is where a business analyses their product portfolio and decides where resources need to be used in order to increase their share of particular markets or analyze the market growth.
Blackberry has a wide range of products which has a share of 16% in an ever growing market, it is important for them to continuously upgrade products to keep up with the developments of technology and to ensure they do not lose their share of the market to any of their competitors.
A good way of assessing a product portfolio is to use the Boston Matrix. This allows a company to identify the products which are performing well or ones that aren’t performing. Here is a diagram of the Boston Matrix

The Boston Matrix for Blackberry
Cash Cows: High Market Share / Low Market Growth
Here, the product is well-established, so it's easier to get attention and exploit new opportunities. However it's only worth expending a certain amount of effort, as the market isn't growing, and your opportunities are limited.
For Blackberry this would be the Blackberry Storm range, immediately established as a favourite smart phone due to its touch screen features, as well as sliding handset and flash camera, since 2008 is currently the second favourite model from Blackberry.
Stars: High Market Share / High Market Growth
Here you're well-established, and growth is exciting! There should be some strong opportunities here, and you should work hard to realise them.
The Blackberry curve range has been around since 2007 and the continual development of the product has allowed it to remain as the most popular Blackberry sold. It appeals to many consumers as it is considered to be a mid-priced smart phone compared to other models in the market. Problem Child: Low Market Share / High Market Growth these are the opportunities no one knows what to do with. They aren't generating much revenue right now because you don't have a large market share. But, they are in high growth markets so the potential to make money is there.
Problem Childs might become Stars and eventual Cash Cows, but they could just as easily absorb effort with little return. These opportunities need serious thought as to whether increased investment is warranted.
Currently this is the Blackberry tablet, released earlier this year it is having to compete in a rapid growing market with a wide range of competitors, the product has the ability to do well, possibly through more advertising or in store demos, the product has a lot to compete with as Apple have established themselves as market leader for tablet products.
Dogs: Low Market Share / Low Market Growth
In these areas, market presence is weak, so it's going to take a lot of hard work to get noticed. You won't enjoy the scale economies of the larger players, so it's going to be difficult to make a profit. And because market growth is low, it's going to take a lot of hard work to improve the situation.
The Blackberry Pearl range would most represent this; it is the least popular although it has the same features as other Blackberry phones. The only difference is the design which has a standard keypad instead of a QWERTY keyboard and is also smaller. The sales of this range don’t compare to the sales or the other ranges and would suggest that the design of the Blackberry handsets has a major influence on consumer decision making.

Product Life Cycle
Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning. The stages through which individual products develop over time are commonly known as the Product Life Cycle.

All of Blackberry products go through the product life cycle, each stage of the life cycle has is a different step for establishing the product within the market, the stages are:
Introduction- At this stage the market size and growth is slight. Financial resources have been put into research and development as well as the marketing of the product, trying to test it in the market and launching the product. New products must be monitored carefully, if no signs of growth happen after being introduced into the market, it may be better to remove the product.
The Growth Stage- At this stage there is rapid growth in sales and profits. Profits arise due to an increase in output and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Promotional resources are normally invested in products that are in the Growth Stage.
The Maturity Stage-In this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.
Decline Stage-In this stage the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. Care should be taken to control the amount of stocks of the product at this stage, production should be at a minimum and stock in storage should be low. Depending on whether the product remains profitable, a company may decide to end the product.

This diagram shows an extra stage to the life cycle called an extension strategy. Once a product has reached the decline stage the business can decide to end the product or try and carry out an extension strategy. An extension strategy is where the business tries to improve the product in some way in order to extend the time it is on the market. This is very common with Blackberry, when one of their products start to decline in the market they asses it and try and add features or try and modify the design in order to appeal to the market again. This is why Blackberry has multiple models within their ranges; they are the same phone with modifications. Due to this some of Blackberry customers are loyal to specific ranges and not just to the Blackberry brand.

The Value Chain- Value chain analysis describes the activities within and around an organisation, and relates them to an analysis of the competitive strength of the organisation. Therefore, it evaluates which value each particular activity adds to the organisations products or services. It is made up of two main components which are inbound and outbound logistics. Inbound logistics are made up of the processes taken with the product within the business. Outbound logistics is the process that the product takes in order to get to the customer and the different channels it takes.

Inbound Logistics
Operations: The raw materials and goods obtained are manufactured into the final product. Value is added to the product at this stage as it moves through the production line.
Blackberry products were originally developed and manufactured in Canada but as they have grown in stature, they have outsourced their manufacturing to both Mexico and Hungary; this has increased their production rate allowing RIM too meets the demand for their products.
Outbound logistics: Once the products have been manufactured they are ready to be distributed to distribution centres, wholesalers, retailers or customers. Blackberry’s main distribution centres are phone shops such as O2, Carphone warehouse, Vodafone etc. As well as selling them through their own website.
Marketing and Sales: Marketing must make sure that the product is targeted towards the correct customer group. The marketing mix is used to establish an effective strategy; any competitive advantage is clearly communicated to the target group by the use of the promotional mix.
Originally the Blackberry product was marketed towards business people and professionals but has been developed with different forms of technology like web access, social networking sites so it now appeals to all people that have mobile phones, allowing them to maximise their levels of sales.
Services: After the product has been sold what support services does the organisation have to offer. This may come in the form of after sales training, guarantees and warranties.
Blackberry offers a wide range of support to their users; they offer support for their customers for the technical side of their product, as well as general customer support for enquiries etc. Warranties are also offered with all Blackberry phones.
The support activities assist the primary activities in helping the organisation achieve its competitive advantage. They include: Procurement: This department must source raw materials for the organisation and obtain the best price for doing so. For the price they must obtain the best possible quality
Technology development: The use of technology to obtain a competitive advantage within the organisation. This is very important in today’s technological driven environment. Technology can be used in production to reduce cost thus add value, or in research and development to develop new products, or via the use of the internet so customers have access to online facilities.
Blackberry is continually trying to develop new technology for their products in order to keep up with the development of their competitors products. They offer all the current breakthroughs in technology through their handsets and tablet and there is a continual improvement on the handsets they offer and that is why there is continually new product lines being introduced i.e. Blackberry Bold, Blackberry Gold, Blackberry Torch etc
Human resource management: The organisation will have to recruit, train and develop the correct people for the organisation if they are to succeed in their objectives. Staff will have to be motivated and paid the ‘market rate’ if they are to stay with the organisation and add value to it over their duration of employment. Within the service sector e.g. airlines it is the ‘staff’ who may offer the competitive advantage that is needed within the field.
Firm infrastructure: Every organisation needs to ensure that their finances, legal structure and management structure works efficiently and helps drive the organisation forward.
The infrastructure of Blackberry is strong with the original founder of RIM Mike Lazaridis still in charge of the company, their finances have continuously grown since the development of their Blackberry line with profits of $4.2 billion last year, In 2009 Fortune Magazine named them the fastest growing company with an 84% profit increase over 3 years.

TASK THREE
An external audit
An external audit evaluates the opportunities and threats that are linked with a business and its micro and macro environment. The micro environment includes areas that have a direct impact on the business’ strategy but can be controlled and a marketing mix can be developed by assessing these areas, these include customers, competitors, suppliers, intermediaries and publics.
Customers – Organisations survive on the basis of meeting “customer needs and wants” and providing benefits for their customers. Failure to do so will result in a failed business strategy.
Blackberry aim to provide their customers with up to date technology through their mobile phones ensuring they keep up with the continual change of consumer demands, by ensuring they provide the new technology and don’t get left behind by their competitors they are able to maintain their customer base and also look to gain new customers through the features they provide in their products.
Competitors – It is important for a business to be aware of how their competitors are operating within the market to ensure they don’t gain a competitive edge, by identifying how competitors react to changes in customer trends, it allows you to maximise the impact of your response. It is also important to identify a differentiation in product features to try and persuade consumers to purchase the products you offer instead of other businesses.
Blackberry has many different competitors within their market, including Apple. Apple are seen as innovators in the technological market and it is important that Blackberry continually monitor any trends that Apple may be setting to ensure that they can develop their own way of meeting that trend. The market that Blackberry operates in is highly competitive and consumers are easily swayed to a particular product if it has a feature which they desire. The technology offered within the Smartphone industry is very similar due to all companies reacting to the same customer trends.
Suppliers – A supplier is a business or individual that supplies a business with products or services that enable a business to manufacture a final product which can be sold to the consumer.
Blackberry products are made up of many different components including the handset, LEDs, screens etc. These are sourced from different suppliers from around the world and brought together in their 3 manufacturing sites. As Blackberry is worldwide brand it is important that the suppliers they use provide high quality components for their products to ensure they continue to be reliable.
Intermediaries – This includes the businesses which distribute products whether it is wholesale, retail or by distribution firms.
Blackberry use intermediaries such as phone suppliers like Carphone warehouse, O2, Vodafone etc. This allows them to target markets all around the world instead of waiting on customers to come and use their website. By using these companies as distribution channels it is ensuring that their brand name and products and continually seen by consumers and in turn increasing the chances of them selling.
Publics – A public is any group that has an actual or potential interest or impact on an organisation’s ability to achieve its objectives. There are many types of public, including Financial Public (banks & stockholders) Media public (newspapers, TV, Radio etc) Government Public and General public.
It is important that Blackberry take each publics into account when performing their actions as if there is negativity for one public section it may have a negative effect on the company as a whole.
The macro environment refers to all the external influences on a business, which they tend to not have control over. The best way to analyse these external factors is a PEST analysis. This includes Political, Economic, Social and Technological factors.
Political – Politics is something that has a major effect on how a business operates as it sets the rules and regulations that a business has to follow. Each country has its own rules and regulations, this needs to be considered by companies that operate all over the world.
The fairly friendly political climate in North America especially in USA has helped the smart phone industry especially RIM to flourish as the recent survey by Nielsen pointed out that the users of smart phones will overtake feature phone users by2011(Nielsen wire 2010). In countries like China, India and UAE RIM and Blackberry have been faced with difficulties as government authorities have raised concerns over the security features Blackberry offers and how they are unable to monitor their users. According to the Guardian in 2010 this is also a concern for Saudi Arabia, Indonesia, Kuwait and Egypt where technology is continually monitored.

Another problem that RIM has had to face is in Europe where concerns of health and safety over usage of toxic content in the making of their phones as well as energy usage. Although these are only concerns and being investigated it may well result in RIM having to make changes in their products to enable them to continue in these markets around the world. This highlight the effect politics can have on a business and its operations.

Economic – Economics is very much to do with money, it includes the rates of inflation, interest rates and GDP. It is essential for a business to assess the economic environment of potential markets, this will allow them to establish whether it would be beneficial for them to operate in the market and if so, plan their activities and approach

The economic factors plays a key role in the smart phone industry as the demand is fairly elastic and it is mostly based on consumer income but the recent economic downturn has had an impact as people are not willing to spend on a product unless the price is right and it offers the promised values but the smart phone industry is expected to grow at fairly steady pace and the developing economies of India, China, Latin America provides a platform for RIM. Since the sales of blackberry are made throughout the world the exchange rates will also have an impact on RIM as the fluctuation in exchange rates can suddenly make blackberry competitive - or prohibitively expensive. The exchange rate fluctuation can have a profound on blackberry especially in price sensitive markets like India and China.
Due to the increasing popularity of new technological developments it is unlikely that the economy is going to have much of an effect on the purchasing of smart phones, everyone needs a mobile and the popularity of Smartphone’s is too high for consumers to ignore. Blackberry should be more concerned with remaining competitive in the market and find ways to increase their market share.
Social – This is where the population of the country is considered, it is important to be aware of cultural differences, religious beliefs, average age and also to investigate attitudes to particular trends.
Social factors such as education, lifestyle, income levels have great impact on the demand patterns and also the cultural aspects have an consequence on seasonal sales as well for example in a country like USA sales of blackberry and other electronic equipments seems to be fairly high during the period of November to December. By identifying societies with particular spending trends and target age ranges Blackberry will be able to target these in order to maximize their sales. Identifying cultures that do not have a major interest in technology is also important as Blackberry don’t want to penetrate a market that they are not going to achieve sales.

Technological – Technology is extremely important in the business world as it is the key to many of their processes. Business’ need to ensure they are using technology to the best of their ability to ensure they reach their markets through different technical outlets and maximise their impact in different environments.

The technological factor has a huge impact on the industry as a whole and in particular RIMs Blackberry product, as the customer base of the product demands fairly new and robust features in the products. Technological advances over the past decade like 3G technology has had a huge impact on RIM; also the ever increasing competition in the market is competing on the software offerings of the product.
The blackberry smart phones as such are highly adaptable to technological changes as it can be used with various advanced services like HSPA/UMTS (high-speed packet access/ universal mobile telecommunications system), GSM/GPRS/EDGE (global system for mobile communications/general packet radio services/enhanced data rates for global evolution),CDMA/Ev-DO (code division multiple access/evolution-data optimized), and iDEN (integrated digital enhanced network) (RIM 2010)
As the success of Blackberry is based solely on their ability to meet technological developments in order to remain competitive, it is important that they do not fall behind to their competitors like Apple and other companies entering the smart phone industry. Blackberry must continually aim to provide their consumers with most up to date technology or risk losing their share in the market.
Blackberry came under scrutiny in October this year, when their services crashes as this Telegraph article explains:
The glitch, which struck at around 11AM, was affecting online services for consumers all over Europe, the Middle East and Africa. All are served by a RIM data centre in Slough.
They have been unable to browse the web or instant messages, or access other internet services such as email.
A RIM spokesman was not immediately available for comment. Users who are served by a corporate server appeared to be unaffected.
On one of its official Twitter feeds, however, T-Mobile UK said: “There is an issue with Blackberry services at present. RIM are investigating this at present."
Batelco, a mobile operator in Bahrain meanwhile said: “Please note the issue with BlackBerry service is effecting (sic) all of Bahrain, and it is dealt with by BlackBerry providers in Canada.”
It is important for a company like Blackberry to eliminate any of these technical glitches as it can seriously affect their brand image, and also affect the opinion of their customers.

TASK FOUR
Carrying out a SWOT analysis is a way to perform an audit. It is not a tool that should be strictly followed but merely used as an indication into the Strengths, Weaknesses, Opportunities and Threats of an organisation .It is seen as a subjective form of analysis. The internal audit focuses on both the strengths and weaknesses of the business where the external audit focuses on the opportunities and threats available

STRENGTHS
Blackberry has established itself as one of the main providers of smart phones in a fast growing market. It has become a well established brand name throughout the world with its products appealing to people of all ages. It has developed a loyal customer base and even provides the US Government with 50000 phones due to their encrypted email feature. Through their heavy investment in Research and Development they have developed many of the features seen on all smart phones, including instant messaging and fast web access. They are seen as a strong company that if they continue to develop technology and new products will be around for the foreseeable future.

Weaknesses
There are a few weaknesses that Blackberry is going to have to address if they wish to remain a popular smart phone supplier. There is a lack of unique Blackberry products on the market with many of the features they offer being similar to that of their competitors, by not having a unique product they are risking their customers being swayed by products offered by their competitors. Another weakness is their lack of smart phone apps, they do not have the App platform that some of their competitors have and therefore are unable to offer the variety that the likes of Apple have to offer. The lifetime of their products may turn out to be a weakness, a lot of the feature on Blackberry’s can be updated so many people may be happier with doing that than buying the new and improved model, this could affect the future sales of their new products. Health risks have always been associated with mobile phones so although this is potentially a threat in the future, currently it is not.

Opportunities
There is a natural opportunity through the growth of the mobile smart phone market, as the popularity increases, people who have not yet purchased a smart phone may be tempted and therefore there will be more consumers looking for a smart phone, although Blackberry will have to provide an incentive for potential buyers to choose their product over the other products on offer. Another opportunity is for Blackberry to emphasise their connection with social networking sites such as Facebook and Twitter, social networking is one of the most popular activities in society today and if Blackberry shows their ability to connect with these, they will appeal to a wider audience. Blackberry Apps are an opportunity, currently Blackberry do not have the best platform for developing Apps but if they were to address this and develop a new platform they will be able to offer more Apps like their competitors Apple and other android phones. Apps are one of the main attractions to smart phones and by developing more of them Blackberry are sure to attract more customers.

Threats
Threats to Blackberry include the introduction of new competitors, as the smart phone industry is in rapid growth there are going to be more competitors in the market; these could threaten Blackberry’s status as one of the top providers and could reduce their share in the market if they do not develop products that are better than their competitors. Technical glitches is a major threat to Blackberry as proven in November when their communications went down leaving their users without email and web access, this caused an up roar and caused a lot of bother for Blackberry customers. People can be very impatient when it comes to technology and if glitches like this happen again it may well put people off the Blackberry brand and have a major impact on their sales. Changes in customers tastes and trends is also a threat, if customers change what they like Blackberry will have to adapt to that and if they do not do this quick enough they may well lose some of their customer base. This highlights the importance of monitoring customer preferences.

Evaluation
Blackberry are currently performing well in their market, unfortunately that market is rapidly growing which means there will be more competition. In order for Blackberry to remain a popular figure in the smart phone industry, they need to continually develop their technology remaining aware of what their competitors are providing. They should maximise their phones technological ability allowing themselves to offer as many features as they can, as currently they fall short against competitors with features such as Apps. As Blackberry have such a strong brand name they will always have a customer base, but it is their responsibility to ensure that they continue to develop their products or risk losing their customers...