Summary of Executive and Abstract
The purpose of this report involved an analysis of the BlackBerry business strategy. Therefore, research presented what led to the failure of the beleaguered smartphone manufacturer and its attempts to turnaround the dying brand. BlackBerry was once the dominant player in the smartphone market globally. As such, it is a perfect example of demonstrating aspects of corporate strategies that work and do not work in different business environments.
The research methodology involved a systematic review of available cases obtained from popular magazines and newspapers that covered BlackBerry business strategy, failure, and turnaround efforts. Hence, the data used for the study were purely secondary data. The report used several articles from these publications to present various aspects of corporate strategy.
The critical findings of the research demonstrate how BlackBerry leadership failed to assess, evaluate, and determine the prevailing business environment. Consequently, the co-CEOs constantly dismissed competitive products as toys while remained trapped in the belief that their products and corporate strategy were superior because they had conquered the corporate world. Meanwhile, there was no evidence to confirm their belief in the rapidly changing tech landscape and consumer preference. Evidently, managers engaged in desperate attempts to catch up with competitors when it was too late for BlackBerry. Today, the company turnaround strategy is an ongoing conversation because it has simply refused to go bankrupt. Fundamentally, executives have noted that failures that emanate from poor business strategy do not have simple solutions. Hence, recommendations for a turnaround strategy are numerous and diverse. Ultimately, it is the senior executives’ decisions that would transform the company by understanding the complex interplay between internal factors, external factors, and leadership.
The limitations associated with the study are mainly related to the literature used. While secondary data were collected, they were not obtained from the scientific literature. Instead, articles about the company published in popular magazines and newspapers were used. As such, there were possibilities of authors’ bias in views. Moreover, it was equally difficult to get personal opinions of former CEOs of BlackBerry in any publications.
The research offers practical implications for current CEOs by demonstrating how corporate strategies driven by actions or inactions of managers can lead to failure and decline. Hence, these are valuable insights for avoiding similar drawbacks. As such, the research is important for understanding corporate strategy drawbacks, failures, and turnaround efforts.
In conclusion, internal factors, external factors, and leadership influence corporate strategy and failure. In addition, turnaround requires multiple strategies.
In this report, an analysis of the BlackBerry business strategy is conducted. BlackBerry was once considered the leader of the smartphone market. Today, however, the company has found itself assessing different strategic options to recover from its failure. Business strategy failure is a phenomenon that many corporations face throughout various stages of their growth. Most failed businesses have attracted attention followed by critical analyses to determine factors responsible for failure. In fact, business failure can occur in mature firms, start-ups, strategies, management, risk, and change management among others.
On this note, business strategy failure is, therefore, an inherent component of business management (Pretorius, 2008). While numerous corporate strategic failures have been witnessed, the case of Kodak and the most recent one, BlackBerry offer strategic decision-making dilemmas. Hence, they raise critical questions regarding missed opportunities and corporate blunders among some of the pioneers of innovative products. These companies, Kodak and BlackBerry, have been forced to rethink their corporate strategies for technologies that they invented and introduced to consumers. As such, strategic business failures have been responsible for prolonged declines among these firms (Mui, 2012).
Business strategy failure, it appears, is indeed an aspect of business management. Hence, effective theoretical concepts or frameworks can assist entrepreneurs in understanding business decline and failures associated with poor strategies. Evaluating strategy failure in business remains a critical challenge due to a lack of sufficient theoretical frameworks perhaps because previous research generally focused on predicting failures rather than understanding them. In addition, it is difficult to define and measure business failure or decline based on strategies. However, a critical assessment of studies seems to reveal failure across different disciplines. While failure is not restricted to any discipline, business strategy failure remains vital for organizations. One must also appreciate that failure has multiple approaches, leading to diverse frameworks of analysis (Pretorius, 2008).
This report presents the failure or decline of BlackBerry. Hence, it explores broad aspects related to the past and present status of the firm. From such a perspective, BlackBerry has often soared somewhere between extreme success and extreme failure or decline continuum. While success was important, it is notable consequences of failure or decline, which have critical and fascinating effects on the business strategy adopted by the company across its life cycle.
Objectives of the Research
This research has two main objectives. First, it strives to evaluate with an interpretative view on the business strategies that led to the failure or decline of BlackBerry. All fragmented views on business strategy failure of the company will be assessed. Hence, the research will consolidate and strengthen business strategy practices adopted by the company to reflect its failed strategy. This approach will ensure that business strategy failure is understood from diverse perspectives, leading to improved comprehension.
Second, the research attempts to assess the current business strategy adopted by the company and touted as the key to reviving a dying brand.
To this end, the research offers a systematic review that assesses the noted failure or decline variables in past practices of the company into tangible domains. It also evaluates major strategy findings by concentrating on important contributions of various authors and their perspectives.
The overriding aim is, therefore, to demonstrate business strategy failure or decline by showing specific practices, decisions, their associations with failure or decline, and the context and procedures involved and executed by the company’s decision-makers. Hence, BlackBerry business strategy failure and attempts to revive the dying brand are presented beyond a descriptive approach, but from an analytical perspective.
Statement of Research Problem – Problem identification
BlackBerry was once the global leader of the smartphone market. However, the company made some poor strategic business decisions that led to its decline and failure in the smartphone market in less than a decade. BlackBerry smartphones once dominated the corporate world, government offices, and others. In fact, tens of millions of users helped to push the company’s products into new heights. However, everything went wrong for BlackBerry when it was at the peak. Today, the company has been assessing different strategic options, including outright selling to shareholders or any other interested parties. It is observed that BlackBerry could have made multiple strategic mistakes during its operations and strategic decision-making that culminated in a sustained decline and failure, and now it is at the bottom of the smartphone market. Moreover, the company has not recovered from its failures and perhaps is losing. It appears then the company cannot continue anymore but fighting on while seeking an exit route because of a failed business strategy.
The Rational of the Strategic Analysis and Theoretical Framework
Organizations have thrived. Others have succeeded. However, over the years, far more many companies have failed or declined than have thrived. Yet, in most instances, scholars and professionals have been so fixated on organizational success rather than failure (Mellahi & Wilkinson, 2010). Organizational failure has not taken the center stage, and it is generally regarded as less important or, at best, a component of studies focusing on organizational success. Failure is a part of existence. In the US, for instance, about ten percent of companies fail every year, with over 10,000 firms facing complete closure each week (Mellahi & Wilkinson, 2010). Yet, cause of organizational failure remain poorly explored and understood.
In the recent past, however, many studies have emerged about organizational failures (Ulwick, 1999). These studies have been prompted by multiple cases of high profile organizational failures in the global arena. For instance, failures associated with financial accounting frauds and creative accounting practices, such as Enron; failures caused by accidents, such as the BP oil spill; financial crisis involving the case of too big to fail financial institutions; and other high-level cases of corporate failures and others have brought organizational failure into the limelight. As such, past well-documented instances of failure can now provide robust frameworks from which one can explore organizational failure related to various factors. While there is notable increment in organizational failure research, much of the research is still highly fragmented. That is, various scholars have explored the subject from different perspectives across different fields. For instance, research questions have been developed on diverse theoretical concepts supported with different methodological approaches, which definitely lead to varied conclusions. That is, there are different scholars from various fields assessing the same subject, but present different results on causes of organizational failures, organizational failure management, and possible means of averting it. Thus, some scholars have argued that research on organizational is highly fragmented and perhaps reflects failure itself because it is not well articulated in organizational research (Mellahi & Wilkinson, 2010).
Even from strategic management and organizational research, Mellahi and Wilkinson (2010) have insisted that much of the available evidence shows that the field is expanding, but without necessarily maturing. That is, scholars assessing strategic management failures are yet to define their boundaries. In addition, they have not developed or reached a consensus on a specific overarching theoretical concept to guide research, bring about order into the current isolated studies and provide clear future study frameworks. Given this fragmentation in organizational strategic failure, scholars have therefore tended to present their cases after one another, but they do not necessarily address each other. As such, the field of organizational failure or decline research remains highly fragmented and rarely advances.
Nevertheless, Mellahi and Wilkinson (2010), Pretorius (2008), and Ulwick (1999) have shown that some theoretical concepts can be adopted to advance strategic organizational failure research and promote meaningful discourse in the field. In addition, another challenge emanates from the precise definition of organizational failure. It is the basis of a good study to offer concrete definition of a given subject. One must note that the term ‘failure’ alludes to different meanings within the public and academic field, and this outcome can be observed simply by assessing various academic works. Mellahi and Wilkinson (2010) have noted that academics deploy various terms such as, “discontinuance, organizational death, exit, bankruptcy, retrenchment, and setbacks” (p. 2) to reflect organizational failures. On this note and by improving on past definitions, it is presented that an organizational failure reflects deteriorated abilities to compete because of actual or expected performance below a critical minimum level that jeopardizes organizational viability and existence.
Possible signs of organizational decline or failure are evident in market share deterioration, constantly low or negative profits, and declining vital resources, including financial, human, technological, and eventually absolute loss of legitimacy. Some of these signs are now evident at BlackBerry.
In this case, minor drawbacks do not constitute organizational failure and, therefore, they are not regarded as failures. Additionally, by considering this definition, some corporations withdraw or discontinue their operations in a market. In most instances, they do not reflect aspects of failure. For instance, one can assess cases in which firms disband or end operations in economically viable regions to create more resources for other aspirations that are more promising and lucrative, such as the case of Barclays leaving Africa operations. This act does not constitute an obvious organizational failure because it is a deliberate strategic move.
From this definition, organizational failure is characterized by one major incident, or cumulative series of cases, emanating from acts or inactions of organizational agents, such as senior executives and managers among others, that could challenge the existence and legitimacy of a firm and has the potential to render its activities impossible to execute, resulting in failed outcomes. That is, organizational locus of control that is responsible for failure emanates internally, although there are elements of external forces attributed to failure, but consequences are largely attributed to actions, inactions, or negligent of senior decision-makers and strategic thinkers. This may include failure to acknowledge changing business landscape or innovate, for instance. In addition, mass retrenchment as a reaction to poor performance could result in poorly motivated workforce where only few employees are left to execute various strategies and run operations or result in high rates of attrition as qualified employees leave a firm.
Strategic failure research in organizations
It is observed that organizational research failure has started to gain recognition in the mainstream field of strategic management and related research. Notably, studies on organizational failure have concentrated predominantly on factors responsible for organizational failure, organizational learning from failure and organizational learning during failure.
This research goes further beyond analyzing factors responsible for failure to present possible new techniques a dying organization can apply to recover from a declining position.
From a broader perspective, academics have noted that causes of organizational failure are linked to both internal and external factors (Mellahi & Wilkinson, 2010; Pretorius, 2008; Ulwick, 1999). Further, external factors responsible for failure have been grouped into two major areas. These include slow changes in the business landscape and abrupt changes in the business landscape. Gradual changes in the business landscape usually emanate from interaction of multiple small factors causing change in business practices. If an organization fails to identify these factors early enough and deal with them sufficiently, then these gradual change factors will eventually threaten the existence of an organization and set it toward failure or decline.
Chaos theory has been widely applied to study organizational strategy failures and related consequences (Alshammari, Pavlovic, & AL Qaied, 2016). The theory provides a powerful framework from which strategy failure in an organization can be explored. Chaos theory is generally applied to assess the non-linear, incremental, and multidirectional association between small change events that could occur in the edges outside a firm’s warning sphere and possible interactions of these factors, which have disparate impacts on an organization. It is observed that all firms functions in complex business landscapes. The complex nature of the business environment does not spare even organizations that have demonstrated long-term stability and the ability to diversify. That is, all firms, irrespective of their sizes, at all times, operate at the edge of failure and any minor phenomenon could possibly escalate into a larger event that could lead to failure (Mellahi & Wilkinson, 2010).
Therefore, chaos theory offers a framework through which researchers can comprehend dynamic changes in organizations and various complex associations among organizational actors (Alshammari et al., 2016). Thus, the intricate, dynamic aspects, which show both randomness and fundamental order and other attributes of organizations, can be studied.
It has been observed that gradual shifts in the business landscape have abilities to cause significant failures in companies. Notably, some failures in companies emanate from small, normally rapid, events or a series of events in companies or in the environments in which companies operate. By considering their insignificance, such minor events or a combination of minor events often go unnoticed by senior executives and other strategic thinkers. These events are intractable, and even if they are noticed, most executives tend to dismiss them as inconsequential, unexplainable events. These events would however associate non-linearly with other factors in an organization and over time, they would cause severe damage to a firm.
This view alludes, implicitly, that senior executives cannot predict failure, and they are therefore helpless in controlling causes of organizational failures. Given the chaotic domain, complexity, uncertainty, and intrinsically unpredictable occurrences that could be responsible for failure, it is generally difficult for managers to forecast accurately and reliably the time and extent of organizational failures (Mellahi & Wilkinson, 2010). Moreover, based on chaos theory, failure is not a function of continuum event, but rather an abrupt change, which in most cases is discrete. As such, there is no significant noticeable shock in the business landscape or observable internal cause, which could be responsible for organizational failure. Rather, organizational failures emanate from minor events, which are usually triggered by some internal or external forces. Failures are then caused by a series of events over a prolonged time.
On the other hand, the abrupt transformations process presents an unexpected event or a situation (or a range of events or conditions), which could be responsible for heightened disintegration of an organization. This process reflects situations or events, which do not develop slowly, for instance, take several years. Instead, they take place within relatively short time, which leaves decision-makers with limited time to assess, make, and implement strategic decisions. Rapid changes are noted in radical technological transformations that completely transmute the competitive landscape of a given industry. Economic crises and other notable radical political evolutions are examples of abrupt transformations.
The major claim advanced by individuals who argue that organizational failure is mainly a function of internal factors assert that failure is an outcome of manager’s incompetency in handling external threats and other erroneous actions that facilitate the decline of an organization (Mellahi & Wilkinson, 2010; Finkelstein, 2005). In this case, managers may adopt actions, which only serve their interests. Hence, they are responsible for strategy failures of organizations. From numerous case studies evaluated by Finkelstein (2005), the author found that senior executives misunderstood “the competitive business landscape, fell into the trap of believing in their own strategy in the absence of confirming evidence, and sometimes engaged in desperate decisions to try to remedy fundamental problems that could be so easily resolved” (p. 19).
When senior executives or managers encounter adverse situations, such as a risk of failure, their actions can differ based on two major categories, which include commission and omission. Actions reflect the extent to which senior executives are informed of the risk, either consciously or not, and they are taking the necessary steps to handle it effectively. Omission denotes the extent to which executives may intuitionally divert from and vigorously look for alternatives to advance the status quo. Available evidence suggests that executives may categorize and describe the same risk status differently (Mellahi & Wilkinson, 2010). While some managers may have abilities to identify and handle even minor threats, others may simply fail to identify them.
In addition, executives usually assess and classify risks differently. As such, they also differ on how they handle the noted situation and signs of failures. Largely, executives are most likely to take initiatives to resolve a situation when they understand it. Conversely, from a threat rigidity effect theory, when executives exposed to “threat, either internal or external, they tend to respond conservatively, adhering to previously learned solutions rather than responding innovatively” (Muurlink, Wilkinson, Peetz, & Townsend, 2012, p. S74). That is, managers who encounter confusing and risky situations tend to adopt rigid behaviors previously learned and, as a result, they fail to address the problem objectively by assessing the causes of a given challenge and then create innovative solutions to resolve the threat. Instead, they still cling to old learned habits and rely heavily on cognitive simplification procedures, including common practices and generally reliable approaches irrespective of their effectiveness (Staw, Sandelands, & Dutton, 1981).
In other words, most failed corporations have simply failed to change their responses when faced with changes in the business landscape. In most instances, the reality of changes in the business environment cannot be simply dismissed, specifically when the essential organizational revenues and profits are under threat. Nevertheless, even when executives have noted that the business landscapes have changed and strive to adjust their organizations to match such realities, multiple factors often limit the extent to which they can facilitate changes. Within an organization, there are organizational cultures that have developed over time. As such, they are deeply rooted, and they perhaps limit the extent to which an organization can exploit new opportunities and embrace change to adapt to new business landscapes. In addition, when changes are noted in the business environment and a culture change is necessary, the current practices create a state of apathy in an organization and prevent any meaningful readjustments for the new realities (Mellahi & Wilkinson, 2010). Thus, meaningful change becomes impossible.
Further, people within an organization also play critical roles. Specifically, ‘omission bias’ is often reported when executives are involved in decision-making as they face a risk of failure situation. Omission bias reflects the practice of choosing a possibly more harmful omission over a possibly less harmful one. When people face risk and uncertainty situations, they tend to believe that an action during these moments are irrational compared to inaction. That is, acts are considered worse compared to omission. Hence, it looks more important to maintain the status quo when faced with uncertainty and risky situations (Mellahi & Wilkinson, 2010). Moreover, people who face uncertainty situations may opt for inaction and the current state of affairs rather than alternatives for change because of the unknown benefits of change.
Research Method and Design
The research method chosen for this would advance the understanding of business strategy failure. Hence, secondary data were reviewed to ascertain the extent to which business strategy failure was responsible for the status of BlackBerry. A review of available literature on failure could be limited because firms tend not to discuss about their failed business strategies as they disappear forever. While they may discuss some aspects of their practices, explanations provided are meant to appease shareholders and other stakeholders. Hence, they are characterized by self-reporting bias.
It is imperative to note that the case study – BlackBerry – is relatively recent. Hence, specific scientific resources from reputable databases, such as Ebsco, Emerald Insight, and others may not be readily available. Consequently, reputable journals found in popular press, such as Forbes, Business Insider, the Global and Mail, PC Advisor, and Information Week were considered.
The key search words adopted for the study were BlackBerry business strategy alongside failure, failed strategy, dying brand and turnaround. Only keywords were applied in the search. It is imperative to note that most available publications presented different accounts of the case and, therefore, other search terms, such as decline, crisis, and survival were considered. Hence, only articles related to BlackBerry business strategy failure issues were selected for further analysis.
Afterwards, every selected article was reviewed for major concepts. These major concepts were identified and grouped into specific domains related to business strategy failure and then later analyzed independently to get clear insights on contributions of various authors.
The process of identifying major concepts was based on grounded theory to ensure that concrete and structured guidelines were used in the investigation (Hussein, Hirst, Salyers, & Osuji, 2014). Once major concepts became clear, all articles were further reviewed for specific contributions. It was imperative to add more information as new ideas related to strategy and failures were discovered based on the major groups classified according to the ground theory research practice. Business strategy failure at BlackBerry was linked to a decline in performance, poor decision-making between the co-CEOs, crisis, product failure, product launch delays, and others. Hence, the search terms for the research were appropriate because they captured past situations, current situations and less on failure prediction of the company.
It was necessary to have a conceptual framework for concept categorization. Concepts were further confirmed and others were added to expand contributions, which were later reported in a detailed manner. The ground theory approach stresses the importance of concept consistency (Hussein et al., 2014). The analysis of data collected was focused on literature that seemed clear on the business strategy failure to ensure that only relevant data were used to develop reliable research findings.
Analysis of Findings
The results of the study were reported based on various major themes or concepts identified to ensure that thoughts and their related interpretation were consistent. Therefore, the final themes were the actual result of the analysis. For clarification, citations of the literature were provided to capture contributors and their ideas. This ensured that similar concepts were grouped while different ones formed other themes. It was also essential for comparison between themes and sub-themes.
A strategic Failure to Understand the Changing Business Landscape
It is noted that the former co-CEO Mike Lazaridis dismissed the first iPhone as a toy. He never liked its battery life and dismissed the touchscreen because he thought no one would want to type on it while BlackBerry provided complete QWERTY keyboards. While the first iPhone cannot match the current standards, one cannot deny that it completely changed the smartphone business landscape. It provided a large screen, powerful browser, and video and music capabilities – features that were beyond most smartphones by then. In short, BlackBerry failed to notice signs and adapt, at least, not rapid enough to counter external forces in the business landscape (Zeman, 2013).
BlackBerry now joins other failures, such as Kodak and Nokia.
Product development and launch Failure
Broadly speaking, BlackBerry ended up wasting significant resources in its PlayBook. The PlayBook is now considered one of the most notable failures in the tech world after its launch in the fall of 2010 (Zeman, 2013). In addition, BlackBerry 10 Operating System (OS) was characterized with app issues, hardware drawbacks, and failure to upgrade Web surfing and apps (Martin, 2013). These products now represent dead inventories at the company.
BlackBerry was a rare type of tech firm that once had two CEOs – Lazaridis and Balsillie (Silcoff, Jacquie, McNish, & Ladurantaye, 2013). The two CEOs were difficult and unwilling to adapt to market decisions. They made wrong strategic decisions by ignoring Google and Apple and invested resources to build the PlayBook. Moreover, when Thorsten Heins joined as the CEO, he focused on the BlackBerry 10 with disastrous results (Silcoff et al., 2013).
Failure to Acknowledge Changes in the Work Environment
The company never noticed the relevance of bring your own device (BYOD). Initially, the corporate world had successfully ran on BlackBerry Enterprise Server (BES) to manage various BlackBerry Devices. It was an important capable tool, but the executives failed to notice that many more employees were opting for iPhone and Android based smartphones. BlackBerry simply failed to revamp its BES to manage iPhone and Android smartphones until it released BES 10 in 2013 (Zeman, 2013).
Strategy Execution Delay
Blackberry introduced BlackBerry 10, the next generation OS, in 2013 (Zeman, 2013). It later introduced the BB10 enabled gadgets. Of course, by then, major competitors had already introduced multiple generations of their OSs. The January 2013 debut was simply too late and, therefore, it could not compete effectively against other operating systems.
Survival or Turnaround Strategy
For many critics, BlackBerry, besieged smartphone manufacturer was facing imminent bankruptcy because it had proposed several survival strategic options, including putting up itself for sale. However, analysis revealed that BlackBerry has adopted multiple turnaround strategies to revive its fortunes, although it continues to record worse-than-expected returns (Reardon, 2013).
Heins wanted to make the company more efficient, develop improved business processes, prototype and focus on continued product development. Moreover, the new CEO also wanted to enhance communication with shareholders, attract talented designers, and move decisively.
However, Heins failed because he never altered the business strategy. Instead, the CEO focused on old practices advanced by the co-CEOs. He eventually left the company after the disastrous failure of BlackBerry 10. The CEO lacked any software and service strategy to turn around a dying brand (Dignan, 2012).
The change of leadership brought a new CEO, Chen who is known for turning around failed brands. The interim CEO focused on stabilizing losses and protecting its cash while concentrating on specific areas for future growth, which included devices, BlackBerry Messenger (BBM), and QNX and machine-to-machine (Reardon, 2013).
Another strategy involved focusing on strengths. The company identified enterprise. BlackBerry had realized its strength and growth at the enterprise. This segment represents the known audience, and it is where the company built its reputation of secure smartphone. This process involves “re-identifying, re-finding and then re-engaging with the audience” (Di Somma, 2015, p. 1).
The company has taken some innovative strategy by assessing its customer psychographics. Now, it understands the business is complex and serious, and BlackBerry must be positioned as a serious firm for the enterprise community to advance security and privacy.
Since the trouble started, BlackBerry has changed its leadership team to reflect the new realities perhaps to advance the brand and contain shareholders and customers. Moreover, since 2013, the company has continued to lay off employees in mass to facilitate a recovery process. More than 4,500 employees have been laid off since then.
BlackBerry now focuses on QNX. The company intends to leverage QNX software business to advance machine-to-machine communication in the automotive industry, and it intends to go beyond this segment.
BlackBerry also signed a contract with Foxconn to design and manage all new BlackBerry devices, but BlackBerry will design software while the latter concentrates on hardware.
The CEO is also focusing on talent acquisition to enhance innovative capabilities of the company.
It then appears that BlackBerry has observed that a single strategy will not save it from a rapid decline or failure. As such, the company has identified specific areas, including leadership, product development, talent acquisition, outsourcing product development, and analysis of consumer psychographics among others to revive its declining brand.
Discussion and Critical Analysis of the Current Company’s Strategy
Just some few years ago, BlackBerry was the leading smartphone manufacturer. BlackBerry had claimed the enterprise, the entire Wall Street and Capitol Hill. All these are now history. Instead, the company has become a case of business strategy failure. From a business perspective, it reflects what occurs when a company fails to innovate in a rapidly changing consumer environment facing evolution at an extremely greater speed. Until 2009, Fortune magazine referred to BlackBerry as the fastest growing tech firm in the world because BlackBerry had recorded earnings growth with more than 84 percent each year (Gustin, 2013). However, failure in business strategy execution led to the decline and failure of the company. The company stock price dropped by more than 90 percent to less than $7 (Gustin, 2013).
From the analysis, it was observed that multiple factors had contributed to the state of the company. BlackBerry made multiple mistakes in its life cycle that eventually led to its current challenges. These challenges were attributed to business strategy failure leading to rapid decline and failure in its smartphone market share. For instance, it was observed that BlackBerry simply failed to acknowledge the changing business landscape. It did not understand why consumers would opt for touchscreen while it offered smartphones with complete QWERTY keyboards.
The company did not strategically respond and adapt fast enough to counter external threats from iPhone. Amidst a changing market, the company’s board of directors did not recognize that two CEOs could not function in the new rapidly changing and competitive landscape. It took BlackBerry so long to notice leadership deficiency. Moreover, when Heins took over as the CEO, he had no strategy, insisted that BlackBerry was innovative, and it would continue with its current strategy. The result was further failure. BlackBerry also failed to notice changes in consumer demands, specifically in corporate world where iPhone was becoming the norm. Its problems were further compounded by the late release of ‘iPhone killer’, which completely was a failed counter strategy.
Both internal and external factors contributed to business strategy failure at the company. As a result, in less than ten years, BlackBerry was now at the bottom of the smartphone market, and it was still losing market share to some unknown brands.
The latest business strategy adopted by BlackBerry generally focuses on recovery. After the rapid decline and almost utter collapse, the company survival techniques are diverse. There are five fundamental steps, which define any turnaround strategy of a company. BlackBerry now appears to have adopted them. While these steps may have slight variations, they reflect major essential practices, which any dying brand can adopt. They include a thorough assessment of the situation; leadership changes; emergency actions, business process restructuring; and finally reverting to profitability (Mellahi & Wilkinson, 2010; Dignan, 2012; Reardon, 2013; Di Somma, 2015). While some approaches may only focus on situation analysis and leadership changes, survival business strategy often focuses on reducing further losses and decline, which the current CEO of the company has already started to facilitate recovery. Another process involves recovery practices.
In major instances, a turnaround environment requires certain strategies, which may include retrenchment and recovery. It can be remembered that BlackBerry had to fire 4,500 employees in the year 2013, and in the recent past (2016), the company laid off additional 200 workers. These actions reflect the severity of the failure at company. Certain strategies must be adopted to guide retrenchment and business recovery. It is required that the company should attain stability before it can focus on a path to recovery.
Retrenchment is considered the primary approach to organizational turnaround after failure or decline (Mellahi & Wilkinson, 2010). On this note, it is argued that irrespective of factors responsible for the decline or severity of the case, the most prompt road to recovery starts with sustained retrenchment of employees, and BlackBerry has been doing just this through mass retrenchment. The case of strategic failure in the company emanated from multiple sources, but recession, if any, played a negligible part. As such, retrenchment was used to achieve other objectives, such as making the firm more efficient and reducing costs associated with overhead.
From the above analysis and research findings, one must appreciate that business strategy is an intricate phenomenon. Therefore, some four factors have been assessed to enhance understanding of organizational failure. First, business strategy failure, it appears, is not about inadequacy of either the internal environment or the external environment, but rather it is a function of both external and internal forces, or precisely, business strategy failure reflects misalignment a firm’s practices with the prevailing realities. This outcome is evident at BlackBerry. Second, failure reflects alignment or failure to align an organization with its environments. It therefore becomes a function of strategy – even if put within the context of definition. Third, failure reflects aspects of organizational strategy and, therefore, executives can make strategic decisions to facilitate it or avoid it. Finally, from the analysis, it has been observed that it may be possible to avert organizational failure even after a rapid sustained decline. On this note, it is noted that the real failure of a company actually emanates from its failure to execute a turnaround strategy effectively.
In the case of BlackBerry, the company is still fighting. It would be however a total failure if the company would not be able to implement turnaround strategies effectively.
It is therefore vital to assess and comprehend business strategy decline and failure in organizations. Ultimately, factors related to leadership or management practices, environmental factors (both internal and external), and the manner in which an organization interacts with these variables and specific strategy all are responsible for various events that would culminate to decline or failure at a given moment. Essentially, organizational recovery from various failure related events is thus a function of strategy.
After assessment of BlackBerry failed business strategies, leading to its current position, the company embarked on some fundamental strategies for recovery. As previously observed, most observed strategies have been authored by external analysts. As such, insiders’ views are rarely presented.
From a broader perspective, there are operational and strategic paths for any a declining firm to explore under its turnaround strategies (Mellahi & Wilkinson, 2010). Operational approaches focus on revenue generation, adoption of various cost-cutting measures, asset management, and other related practices (Di Somma, 2015). Conversely, strategic options generally concentrate on adopting new positions and embracing changes. Although the distinction between the two may not be clear in actual practice, these strategies are suitable as turnaround procedures, and they should be reflected in short-term outcomes and other long-term endeavors to influence a firm’s survival.
- If BlackBerry continues with its loss-making streak and is not able to make any profits, then it should focus on assess reduction strategy. In this case, BlackBerry will have to appreciate that it should be a small, lean organization. In fact, it appears the Chen had already recognized this fact when he noted that the company sees BlackBerry Messenger as a startup.
- BlackBerry should be smaller than it used to be while still dominating the smartphone market. This strategy will assist the company to cut operational costs.
- The company will also have to increase its volumes of sales in its familiar markets while prospering from major cost reduction efforts. This implies the status of BlackBerry is serious and, thus, multiple approaches are necessary to reduce the rate of decline.
Beyond a small, lean organization that strives to cut costs and reduce the rate of decline, BlackBerry must also consider other available strategies for turnaround.
- Operational restructuring
- Capital expenditure management
- Equity and debt restructuring
- Managerial restructuring
While some aspects of organizational management, such as financial management, have not been explored in this research because of its design, it is imperative to recognize that BlackBerry must now review all aspects of its operations to find possible areas of weaknesses and then develop specific strategies for change. The above-mentioned factors are directly related to severity of the issue, internal factors, and other industry dynamics that affect operations. In this case, it is recommended that BlackBerry should focus more on vigorously restructuring across various departments. At the same time, the company should focus on growth-oriented practices to avert losses while striving to control impacts of competition. In addition, BlackBerry requires strong product and market reorientation, specifically in the enterprise where it had previously built its reputation of a smartphone firm. Rather than seeking celebrity endorsement of a musician, Alicia Keys as the firm’s ‘global creative director’, the company could have focused on vital marketing strategies.
Instead, it opted to distract itself with ‘useless titles and meaningless jobs while fighting for its survival. Even during the launch of the Z10, BlackBerry had failed to generate the kind of publicity that surrounds any iPhone launch. This showed one major factor – the absence of a marketing strategy, which automatically depicted failure because Heins did not have a strategy at all when he took over as the CEO, but instead chose to ride on failed approaches of the two co-CEOs. Hence, it was a glaring failure attributed to the company’s management or leadership. In other word, there was no effective decision-making at the company. Alternatively, it was a simple case of inaction by senior executives. For higher market share, BlackBerry must recognize that it requires strong distribution channels, perhaps its previous carriers, such as AT&T, brand recognition, low costs, and relatively low costs of operations.
BlackBerry must recognize that the correct identification of a turnaround situation will ultimately influence the success of the chosen strategy.
In addition, it also appears that turnaround strategies are generally influenced by diverse factors, which also influence decisions of senior executives. It noted that the level of strategic reorientation by senior executives largely relies on various aspects they have developed based on the availability resources. Moreover, the relationships between management style and business strategies they opt for are critical for the recovery an organization.
The current CEO of the company must also understand liabilities and their origins, which will ultimately affect the turnaround strategy adopted. Resource scarcity, leadership, and strategic vs. operational choices are some of the examples of liabilities that managers face.
Contributions of the Study
The major contribution of this research focuses on business strategy failure. Failure emanates from multiple factors, which can be broadly categorized into internal and external factors and executives’ roles in handling them. As previously observed, senior executives misunderstood the competitive business landscape, touted their own strategy without confirming evidence, and occasionally engaged in desperate decisions to change outcomes.
As with other past failed business strategies, such as Kodak, the case of BlackBerry presents an opportunity for business executives and managers to learn from failure – a process that requires assessment of failure, reviewing failure, and managing failure.
Business strategy failure goes beyond failure and explores other factors that could influence it. For instance, leadership, organizational culture, strategy execution, finance management, resource utilization, and change among other variables in the business environment all influence business strategy failure. Hence, business practices and issues that involve business strategy failure are interrelated to show that failure is a function of multiple intricate factors.
Managers should take keen interests in understanding factors that cause and are noted as preconditions for failure. BlackBerry, it seems, ignored all the signs that pointed toward a weak business strategy that could no longer deliver in a changing business landscape. In this regard, one should assess current business strategy, review possible causes of business decline and failure and develop appropriate turnaround strategies.
At the center of all these factors, leadership remains indispensable. The actions or inactions of managers are noted in situation analysis to determine potential causes of decline and failure. The next stage, which focuses on recovery, is influenced by choices made by leaders. Determining signs and possible factors for strategy failure are also influenced by leadership knowledge and perception about threats in the environment. In most instances, these factors will ultimately determine decisions and strategies required for recovery. One should not fail to determine the complex relationship between business strategy failure or decline and other factors that influence outcomes. Availability of resources, both internal and external factors responsible for failure and leadership display complex interrelations that leaders must understand to initiate effective turnaround strategy.
Overall, the research demonstrates how leaders can apply these findings identified in the case of BlackBerry to avert and/or avoid business strategy failure, especially if a company holds a leading position and is a pioneer in developing disruptive technology that would later eliminate it from competitive position. While data used in the analysis are secondary, the research presents valuable insights on strategy and failure because managers associated with failed strategies rarely discuss their experiences, in most instances. Nevertheless, the research offers effective insights on how strategy failure occurs, its influencing variables and turnaround strategies that can be applied to save a dying brand. Hence, this research is vital for managers and researchers who seek more knowledge on corporate drawbacks, declines, mistakes, failures, and turnaround.
One major limitation of this study is that the secondary data used for analysis were not obtained from scientific literature. Instead, they were synthesized from popular business and trade magazines and newspaper articles, which included anecdotal and subjective views of authors. Nevertheless, one must appreciate that it is not usually easy to get a chance for interview with senior executives who presided over failed strategies leading to business decline. For instance, it was reported that Lazaridis declined to discuss any issues related to BlackBerry, but only offered short responses. These publications were therefore important for assessing and understanding BlackBerry business strategy.
In addition, there are theoretical literature on business strategy and failure appears scattered. Hence, one must review multiple sources to determine the most supporting ones. This implies that literature limitation could have influenced concept developments.
Business strategy drives a model chosen by a company. Until the year 2009, BlackBerry had successfully executed its business strategies to lead the global smartphone market. However, everything suddenly changed for the company after the introduction of the iPhone. The events leading to current position of the company are associated with failed business strategy and turnaround strategies to save a dying brand. The analysis reveals an intricate interaction between external factors, internal factors and leadership, leading to the failure of the company. In fact, business strategy is viewed from managers’ actions or inactions. This implies that while these forces exist in a business environment, it is management to determine the cause of action. As such, the role of leadership in business strategy and failure is rather critical. Managers’ abilities to understand threats in the business environment is extremely critical because the results will determine strategies and decision-making processes to avert or control impacts of such threats on an organization.
While bias is common in leadership decisions, they ultimately affect decision implementation and failure assessment and learning. In addition, leaders influence how resources, decision-making processes and stakeholders’ perspective would eventually influence their chosen business strategy. Although BlackBerry business strategy remains an ongoing conversation, the current leadership has realized that multiple strategies are required to turnaround the company by focusing on areas of strengths. In this regard, they must overcome ‘liability of leadership’ initially demonstrated by the past CEOs to save the company from impending bankruptcy. Leadership style and thought patterns of leaders are thus a function of their decision-making capabilities and problem-solving prowess. This implies that the critical role of human element in business strategy formulation, execution, failure mitigation and turnaround cannot be underestimated.
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