Internal Analysis RIM, one of world leaders in mobile communications market, stepped into the telecommunication industry with its pioneered BlackBerry products. The BlackBerry’s wireless platform and line of handhelds provides remarkable functions with fully integrated e-mail, browser and organizer applications which today made one of the leaders in wireless mobile communication. RIM’s Successful Strategies With worldwide demand for wireless handheld’s, RIM quickly identified the market potentials which saw them launching BlackBerry products with outstanding functions.
Eventually, this lead to their explosive growth with revenue skyrocketing to $6 billion. However, a corporate giant cannot reach such heights without deploying thriving strategies. ` In conclusion, given the present scenario of the market and intense completion, RIM would find it difficult to expand and compete with the existing strategies. Therefore, RIM must significantly increase their R&D expenditure and alter the geographic expansion, human resource management, and acquisition strategies in order to survive in a competitive industry that thrives for innovation.
External Analysis RIM, makers of the very popular BlackBerry, spent almost $360 million in R&D in 2007, this number was low compared to its largest competitors, both in absolute numbers and as a percentage of sales (e. g. Nokia spent $8. 2 billion and Microsoft spent $7. 12 billion on R&D). (Appendix, Fig1, pii). It is therefore vital to clearly define the various aspects of the current competitors and new entrants of the wireless communication industry. The major competitors include Motorola, Nokia, Microsoft, Apple, Palm, Samsung and Sony Ericsson.
The issues below discuss different dimensions on which RIM compete in the market. RIM shows the highest increase in Revenue compared to its competitors from 2006-2007, but its R&D expenditure to sales percentage fell from 7. 77% to 5. 99%. Apple Software: Apple’s new iPhone lead to increased competition for smartphones in the industry by setting up a new standard for applicability and to capture a wider corporate user segment for iPhones, Apple licensed its ActiveSync Direct Push which was a Microsoft technology.
Recruitment: Apple, using its attractive fringe benefits and admirable climate was quickly gobbling up the best of the developers from California’s Silicon Valley. In 2002 it bought a small German company, EMagic that lead to its creation of the well demanded Mac program Garage Band. Geographic Scope of Operations: Oracle and Apple maintains one location to cultivate its innovation process. Most of RIM’s competitors are more centralized and concentrated to a particular location than RIM itself. Motorola
Recruitment: While most of its competitors were busy grabbing up all potential developers in and around the country, Motorola was experiencing layoff of its engineers. Motorola acquired Good Technology for $500 million that lead to development of new user friendly applications. Globalization: Since 1993, Motorola’ R&D have settled in China as part of GSG (Global Software Group and gradually extended from Beijing to other cities. In addition it had invested an estimated US$800 million and recruited 3000 R&D employees. Recently, in 2007 it further expanded to Vietnam and South Korea formulating further plans to dispense out in China.
More decentralized than its major competitors, it’s R&D is dotted across the worldwide in Australia, Singapore, Mexico, Argentina, U. K, Poland, Russia, Italy, Canada and India. Its success story by decentralization include MotoRazr and Moto Q. Notable drawback is its known lacking in smartphone softwares and failure to provide follow-up product therefore compromising with quality. On the contrary, the additional advantage reaped from its globalization is its collaboration with several Indian Institutes of Technology (IIT), Indian Institute of Science (IISC) and Indian Institute of Information Technology (IIIT).
Palm Financial Crisis: Palm was enduring financial crisis like many of RIM’s small and large competitors, allowing it opportunity for premeditated and strategic expansion. Sony Ericsson Recruitment (Talent pool): Going global, Sony Ericsson put up 230 design and engineering vacancies in Sweden, China and United States. Nokia Recruitment: Nokia was trying to attract 375 R&D employees in Finland, United States, India, Germany etc. On the contrary, Microsoft’s recruitment strategy included internship program with tempting benefits like subsidized housing, transportation etc graduates coming from all around the world.
Nokia followed suite for accelerating access to smartphone market by purchase of Intellisync Corporation for $430 million. The sudden growth of 24. 2% in its revenue shows the advantages reaped by acquisition (Appendix, Fig 6, p iv). Also it increased its R&D expenditure to Sales percentage to 10. 20% in 2007 to maintain its innovative competitive advantage. Globalization: Nokia set up research hubs in China, with 40% of its Mobile Phones Business Group handsets made in its Being Product creation Centre.
It consists of two branches with its Core Technology Centre (CTC) in Finland working on core technology breakthroughs while System Research Centre (SRC) located in China, Germany, United Kingdom, U. S. A. Finland and Japan strives to produce more creative and exploratory system research. With 27% of its employees in the R&D department, Nokia proves the importance of innovation for strategic sustainability in the dynamic market. In sync with its many advantages of globalization, it also faced some crucial inconveniences.
From logistical to legal issues, it suffered source code loss, software piracy and product imitations in China and India. Microsoft Software: Microsoft dominated only 12% of the market with its Windows Mobile OS and BlackBerry OS held a meager 11%. It stepped up to refurbish its marketing attempts and provide end-to-end solution for its Windows Mobile enables phones with new user friendly features. Recruitment (Talent pool): Competing for its talent pool for recruitment in University of Waterloo was Microsoft, sending Bill Gates to entice and draw away the best students.
Geographic Scope of Operations: Locating the headquarters and R&D department for the software-centric firms is an apprehensive issue resulting in many of the competitors relocating back to its original site like Microsoft returned to its roots in Redmond, Washington Campus Globalization: Microsoft and Cisco also faced similar problems like Nokia when it also went for globalization. Symbian Software: Nokia, Ericsson, Sony Ericsson, Panasonic, Siemens AG and Samsung came up with jointly owned proprietary Operating System for mobiles that had captured 65% worldwide share with 77. 3 million smartphone shipment in 2007.
Recruitment: Symbian’s creative recruitment in “waves” in London, U. K. was rigorous and lengthy, with “bootcamp” training sessions for orientation and familiarization and resulted in attaining the best talent from all over and also collaborating with various universities in different countries like China, Russia, and India “Symbian Academy” enjoyed a wider pool of talent to choose from, more diversification and better opportunity for selection for R&D an example being the innovative pollution monitor for GPS-enabled smartphone. This imposed a big threat for RIM’s recruitment opportunity when it will go for expansion in Canada and beyond.
Globalization: In August 2007, Symbian started its R&D centre in Beijing, China along with ones in United Kingdom and India. Nokia, Samsung, Sony Ericsson and LG smartphones using Symbian had market share of 68. 7% in China. Google Software: Google collaborated with Android and integrated their OS, middleware and crucial applications with it. This triggered an intense competition for design advantage among these firms from 2007 leading to 2008. The dynamic market for innovation showed that no one company could enjoy its innovation competitive advantage for too long.
Recruitment: Google set up facilities in Waterloo to quickly hire away the best and the brightest from the talent pool of its university. It was also using it lucrative fringe benefits to attract the best in Silicon Valley along with Apple. 2006 witnessed Google’s move to Waterloo, the hub of RIM, by acquiring a small wireless software company in order to capture its talent and intellectual property. Geographic Scope of Operations: Google still retains its Mountain View, California HQ due to its unique youthful and flexible organizational culture which plays a vital role in its success.