SWOT Analysis and Strategic Direction for Blackberry

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Guidance on Blackberry
1. Discuss Blackberry's current strategic situation. To meet this requirement, perform a brief SWOT analysis of Blackberry in order to demonstrate understanding of the company's strategic situation. SWOT, as you may recall, stands for Strengths & Weakness, which are internal to the company, and Opportunities and Threats, which are external in nature, focusing on the company's situation with respect to the external environment.

Situational Analysis of Blackberry
Blackberry is lagging behind in the smartphone platform market share with only 3.6% market share which is far behind the largest player Google's Android with 52.2% market share and the second largest player Apple's iOS with 40.6% market share as reported by comScore for the three months ending October 2013 (comScore, 2013: Dec. 5). Therefore, the company is facing tough competition from the leading players in the market and is losing out on sales and incurring losses (Blackberry, 2013: Dec. 20) as is reflected in its financial statements. Heins has been unable to turnaround the company due to its shift from the core brand features provided by the company leading to dilution of its positioning in consumer's mind and shift of focus away from the enterprise customers (Pepitone, 2013: Nov. 5). The company is now in a situation where they need to find ways on how to deal with competition when the smart phone market is growing at a faster pace.

SWOT Analysis
An internal analysis including Resource-based view Analysis can be conducted to identify the tangible - physical, financial and human resources and intangible resource to arrive at the Strengths and Weaknesses of Blackberry which are as follows:
Strengths
- Blackberry has a strong global enterprise customer base of 80,000 (Blackberry, 2013: Dec. 20).
- Blackberry has a strong patent portfolio with 2033 patents to its credit (Zacks Equity Research, 2014: Jan. 10).
- Despite falling brand value of Blackberry, the brand has its own identity known for its QWERTY keypad and push email services (Schmidt, 2014: Jan. 14).
- Blackberry brand has a stronger brand loyalty among the cost conscious consumers in the emerging markets such as South Africa, Nigeria, Indonesia and Mexico (Mcleod, 2013: Sept. 29).
- Blackberry has stronger profit margins in software and services business which is considered to be its strong area where it has the ability to sell software and services which provide mobile email systems and software that allows the IT manager of companies to tightly control its apps, passwords and other applications on Android based phones and i-phones (Epstein, 2013: Aug. 13).

Weaknesses
- Blackberry has a weak financial position as the company posted a loss of $4.4 billion for the third quarter of fiscal 2014 and the revenue were down by 56% to $1.2 billion as compared to previous year (Blackberry, 2013: Dec. 20).
- Blackberry has a poor Distribution network with no focus on creating consumer experience as in 2012, the company had only a standalone Blackberry store in North America which was located 25 miles northwest of Detroit in U.S which could not create the consumer experience as Apple exclusive store creates where consumers can download applications (Connors, 2012: Apr. 17). The position of Apple has further deteriorated as some carrier distributors such as T-Mobile has decided to stop selling Blackberry due to poor sales (Yeung, 2013: Sept. 26).
- Lacking in customer-focused R&D capabilities as the company could not identify user-friendliness in its smart phones and focus only on technology and not customers led to its decline (Moreno, 2013: Aug. 30).
- Unable to sustain its goodwill as the company had to mark down the value of its goodwill from $340 million to zero (Bloch, 2012: July 29).
- Poor HR policies as compared to other technology giants such as Apple and Google. This is evident from the fact that on glassdoor, an employee review and rating site, Blackberry has an overall company average rating of 3.4 out of 5 and only 56% employees recommend the company to a friend as compared to Apple Inc. whose average rating is 3.9 out of 5 and 81% employees recommend the company to a friend and Google whose average rating is 4.1 out of 5 and whose 90% employees recommend the company to a friend (Glassdoor, 2014: Jan. 29).
- Blackberry has a low Shareholder value as the company's share is being offered at just $9 per share to the investor Fairfax leading to valuation of the company at $4.7 billion as compared to 2008 when the market capitalization of the company was $81.6 billion (Mcleod, 2013: Sept. 29).

The opportunities and threats can be identified conducting an analysis of external environment including politico-legal, socio-cultural, economic, technological and competitive environment to arrive at the opportunities and threats of the company which for Blackberry are as follows:

Opportunities
- There is a strong potential for low cost smart phones worldwide as International Data Corporation (IDC) predicts that there will be a compounded annual growth rate of 18.4% for five years upto 2017 whereas the price is expected to decline by 7.3% in five years (IDC, 2013, Nov. 26) as the smart phone market has already grown by 38.4% in 2013 with shipment of more than one billion smart phones worldwide in the year (IDC, 2014: Jan. 27).
- There is tremendous opportunity for Blackberry among price conscious consumer segment in emerging markets (Mcleod, 2013: Sept. 29).
- BRIC (Brazil, Russia, India and China) nations have a lot of potential for ...