Ravi Gupta Ambup2mba09035

8/8/2019 Ravi Gupta Ambup2mba09035

1/17

1

AMRITA SCHOOL OF BUSINESS

BLACKBERRY SERVING

GLOBALLY

INTERNATIONAL BUSINESS

BY

Ravi Kumar Gupta

AMBUP2MBA09035


2/17

2

Declaration

I, Ravi Kumar Gupta, second year MBA student of Amrita School of Business,Amritapuri campus, hereby declare that the report titled, Blackberry ServingGlobally, has been done by me during the month of September 2010.

I hereby declare that this report has not been submitted, fully or partially for the awardof any other degree, diploma, title or recognition earlier.

Name: Ravi Kumar GuptaDate: 18th September 2010Place: Amritapuri, Kollam


3/17


4/17

4

Contents

Introduction 5Scope of the report 5

Smartphones and its business implications 5Blackberry a need of the hour 6Research In Motion RIM 7

Growth Strategy 10Porter five force model 11Semi Globalization- CAGE Model 13

Blackberry in India 14

Conclusion 15Appendix A 16

Bibliography 17

Word count 2964


5/17

5

INTRODUCTION

The case deals with the Research In Motion, a Canadian telecommunication MNC well

known for its innovative smartphone Blackberry. It tells us about the communicationrevolution and its business implications. Report also talks about How Research In

Motion (RIM) dealt with competitors through different strategies and describes about

the constraints with the help of CAGE model suggested by Prof. Pankaj Ghemawat.

SCOPE OF THE REPORT

This report provides a clear picture about the Research In Motion (RIM), a Canadian

telecommunication and wireless device manufacturer, its global business, competition,patents, patent litigations and other security issues with different Governmentsincluding India. At the same time it doesnt cover all the influencing aspects of thebusinesses run by Research in Motion.

WIRELESS MESSAGING AND ITS BUSINESS IMPLICATION

Wireless is the one of the hottest markets and is expected to continue to grow as

support for new services keeps growing. The cellular phone market is a classic example

of how a small market limited to frequent travelers has grown so much in the last 5

years to appeal to almost the entire population. The driv ing forces behind it is thetechnology and how far it has come, the industry standards that are in place, and the

affordability of the services. Most cellular providers now support some form of text

messaging

Wireless LANs that allow people to carry their laptops and get wireless Internet access

at conventions, conferences, airports and coffee shops (e.g. Starbucks) is another

example of the popularity of wireless products. Wireless WANs connect buildings

through wireless devices and save organizations money on network extensions.

Another aspect of the Wireless Market was reinforced by the huge market of Personal

Digital Assistants ( PDAs) that have become so popular for many people especially with

the application support they received over the last few years.

Wireless Consumers have been demanding more functionality as they have become

accustomed to relying on their services.


6/17

6

The advantages of Wireless products are obvious: convenience, Less restrictive (no

cables), anywhere and everywhere Internet support for Wireless products has

contributed to their attractiveness with services for web banking and up-to-the-minute

news updates powered by Wireless services (based on WAP and other standards) for

handheld devices.

Business Intelligence Benefits

The Research In Motion provides many Business Intelligence benefits for corporateworld:

Quickly access sales, product and organizational data in any database Access Key Performance Indicators (KPI) while on the go Remove the requirement to be near a desktop to view critical data Support decision-making with automatic alerts and automatically refreshed data Provide at-a-glance performance monitoring for accelerated action and decision

making

Reduced administrative work in updating the master database Expedited processes enables more rapid billing Greater employee morale and more communication between mobile and office

employees.

In a testimonial one client from Saudi Arabia writes:BlackBerry has become the norm for our organization now. Brian Tower, Director ofInformation Technology, OrthoRehab

BLACKBERRY SOLUTIONS- NEED OF THE HOUR

The BlackBerry solution allows you to enhance your Business Intelligence (BI)

program with access and prioritization of critical data from just about anywhere.

BlackBerry push technology can improve and accelerate decision-making, with

constantly updated data.

When RIM introduced their Blackberry pager, it seemed like a simple enough idea, but

its popularity spread like wild fire. The product appealed to innovators who were so

reliant on e-mail and wanted to be connected at all times. The portability of the small

device packed with many wireless options and a cute keyboard made addicts out of

thousands of users.


7/17

7

In today's fast-paced business environment, mobile executives and decision makersmust make quick decisions. Being unable to access information in the field makes itdifficult to remain responsive and limits your decision-making.

Target Market

To continue long-term growth

RIM offers smartphone products with additional multimedia components to suitconsumers interactive lifestyle. RIM also targets the next generational cohort,Tweens, who are adept to technology, social media and have considerableinfluence on their parents consumer behavior.

The demographics of the current Blackberry target market is composed of mid toupper class buyers aged 30-55 in the professional, executive and industrialsegments.

Students pursuing any professional course, they need to be connected withfriends, faculties and business world.

RESEARCH IN MOTION (RIM) LTD

Research In Motion Limited is a Canadian telecommunication and wireless device

company best known as the developer of the Blackberry smartphone. RIM is

headquartered in Waterloo, Ontario, Canada. It was founded by Mike Lazaridise. RIMis listed on the Nasdaq Stock Market (Nasdaq: RIMM) and the Toronto Stock Exchange

(TSX: RIM).

Businesses of RIM can be categorized into four divisions: devices, service, software, and

others. The BlackBerry devices allow users to be connected to time sensitive materials.

History of innovations

Prior to the manufacture of the BlackBerry, RIM worked with RAM Mobile Data and

Ericsson to turn the Ericsson-developed Mobitex wireless data network into a two-waypaging and wireless e-mail network, hence released the Inter@ctive pager 950 in August

2000. About the size of a bar of soap, this device competed against the SkyTel two-way

paging network developed by Motorola.

In order to continue their success RIM holds both tangible and intangible (through a

combination of patent, copyright and trade secret protection as well as through


8/17

8

contractual arrangements) resources that are important to their capability to provide

quality products to their consumers.

Milestones

Today Research In Motion holds a subscriber base of more than 50 million. 1Largest in the world.

In October 2008, RIM was named one of "Canada's Top 100 Employers" byMediacorp Canada Inc., and was featured in Maclean's newsmagazine.2

On 18 August 2009, Fortune Magazine named RIM as the fastest growingcompany in the world with a growth of 84% in profits over three years despite

the recession.3

1www.rim.com/investors/pdf/40_F_FINAL.pdfRetrieved March 17, 2010

2http://www.eluta.ca/top-employer-rim

3http://www.financialpost.com/news-sectors/story.html?id=1902993


9/17

9

Blackberry-Edge over others4

BlackBerry is a smartphone exhibiting multi functionalities developed and designed by

Research In Motion (RIM) since 1996. After having a look on the different features ofBlackberry device it seems endless. BlackBerry is primarily known for its ability to send

and receive (push) Internet e-mail wherever mobile network service coverage is present,

or through Wi-Fi connectivity. This includes

Mobile email with auto-text, auto-correct, text prediction, support for manylanguages, keyboard shortcuts, text emoticons, push

email, push Facebook and Myspace notifications, push

Ebay notifications.

Instant messaging with BlackBerry Messenger, GoogleMessenger, ICQ, Windows Live Messenger and Yahoo

Messenger.

BlackBerry functions as a personal digital assistant withaddress book, calendar and to-do list capabilities.

It functions as a portable media player with support formusic and video playback and camera picture and

video capabilities.

It also helps to encrypt and sign mail messages based ondigital certificates so that nobody can encroach the data.

We can view attachments (not available previously) inMS Word, Excel, PowerPoint, and PDF formats with selective options (whole

document, table of contents, particular sections).

Patents and litigations

There has been a rigorous battle among different players in wireless instrument

manufacturers for the ownership right, patent and licensing. See appendix A

4http://en.wikipedia.org/wiki/BlackBerry. Retrieved on 18/09/2010.


10/17

10

GROWTH STRATEGY5

After seeing the huge potential in the smartphone market and being unable to cater the

whole market RIM is trying to get a hold through Blackberry chip. RIM has announced

they are working on producing Blackberry on a chip to be used in third party products.

This will enable device manufacturers to make small devices powered by the

Blackberry chip.

Research in Motion (RIM) is a high technology firm that is experiencing explosive sales

growth. Although 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 on R&D).

In the very dynamic mobile telecommunications industry, investment analysts often

look to a firm's commitment to R&D as a signal that product sales growth will be

sustainable.

The strategy they are using includes

Doing what they are doing now Building on their existing and satellite R&D locations Growing through acquisition Going global.

5http://www.cata.ca/files/PDF/Resource_Centres/hightech/reports/studies/quebec-RIM.pdf


11/17

11

Market and customer base

The mainstream consumer market is a target for acquiring new customers where RIMwill penetrate this segment by incorporating changes in consumer expectations.

RIM is operating in 135 countries with the help of more than 12000 employees andrevenue in fiscal 2010 was $14.96 billion. Research in Motion accounted for the largest

proportion of subscribers at 39.3%, down 1.3%. Apple was second on 23.8% (down

1.3%), with Google third on 17 %. Microsoft and Palm completed the top five with

respective market shares of 11.8 % (down 2.2%) and 4.9% (no change).

PORTERS FIVE FORCES MODEL6

Customers- Because of the profile of the target customer, which is an early adaptor, this

market is relatively price in-elastic. The change in the price of the product does not

cause a significant change in the demand of the product. We saw several cases in which

the client preferred the latest and more expensive model. Thus the market has a high

6http://www.cata.ca/files/PDF/Resource_Centres/hightech/reports/studies/quebec-RIM.pdf browsed at

18/09/2010 on 6:20 AM


12/17

12

level of influence on the customer and the customer has a much lower influence on the

market (basically the influence is by some customers requiring additional features)

Suppliers-There are almost no suppliers to RIM for this market, since they design,

manufacture and program all their devices. Thus the level of influence of the suppliers

and on the suppliers is minimal.

Substitutes- Substitute products such as cell phone and PDAs have a medium

influence on this market, mostly in the form of functionality. If a phone has a new

functionality, chances are the handheld device will catch up and get similar

functionality designed into it. However, this market has a larger influence on these

substitute products. More and more, the functionality of the hand held devices is

starting to appear on cell phone for example

New Entrants-Several new entrants are appearing (including Microsoft as of late withSmartphone). Handspring has produced Treo - a product with striking similarities to

some BlackBerry features (RIM sued HandSpring over patent violations). This fact

proves that the new entrants do have an influence over the hand-held market. Analysts

did not react much to these threats (as opposed to concerns about RIMs earnings)

indicating that this influence is medium in impact and not strong. However, just like

substitutes, the hand-held market has a major influence on the new entrants, who keep

trying to provide the same functionality and more at a lower price. The threat from big

players could be problematic as they can afford to lose money to capture market share.

SEMI GLOBALIZATION

Globalization is not so easy as it seems on papers. There are numerous factors affecting

the business in any country. Semi globalization is new term coined by Prof. Pankaj

Ghemawat, a renowned economist and professor at Harvard University. He pointed

out many areas where firms have to struggle a lot in going global. These factors can be

categorized in CAGE model.


13/17

13

CAGE Model7

The CAGE framework of distance presented here considers four attributes:

Cultural distance- (religious beliefs, race, social norms, and language)- RIM is trying to

bridge this gap by providing the OS in multiple languages but still local players haveadvantage of understanding the customer better. For ex. Recently, a mobile named

Ilkone conceived in middle east has been launched in Malaysia to target Muslim

religion. The mobile instrument has lot of features like automatic direction towards

Mecca, timings for prayers and rituals of Quran etc. So every company cant incorporate

all the features.

Administrative or political distance- Policies in USA may not be same as in Sri lanka or

in India. Security and legal issues may be different for different countries. RIM is facing

tremendous problem from Government side. Saudi Arabia has banned the service in its

country and India is forcing them to set up their server in India.

Geographic distance -The physical distance between the two countries, the size of the

target country, access to waterways and the ocean, internal topography, and

transportation and communications infrastructures. Example- RIM has its server in

Canada so USA can easily access the server but India cant do that. So India is forcing

RIM to setup the server in india.

Economic distance- Disparities in the two countries wealth and variations in the cost

and quality of financial and other resources. In the case of RIM there is huge gap in percapita income in different countries. USA contributes more than 50% of their revenue,

but same time growing economies like India, China and Brazil etc are lucrative market

for them.

STATUS IN INDIA

Market size

India is one of the fastest growing country with GDP growth rate of 8.3% is lucrative

market of any company like RIM. Currently India has customer base of about 1.1

million.

7 http://www.ghemawat.org/publications.html browsed at 17/09/2010, 6:44 PM


14/17

14

Security Issues

India has put radar on all internet based communication service providers including

Research In Motion's (RIM) BlackBerry services, Skype and Google. The decision stems

from India's concerns that terrorists will use encrypted communications to co-ordinate

attacks similar to those in Mumbai in 2008. Indian authorities insist law enforcement

agencies should be able to access any communication through the telecom networks.

The government is demanding that all service providers should set up local servers to

enable intelligence agencies to monitor e-mail and chat conversations.

In India, two services from RIM, the BlackBerry messenger service and the BlackBerry

enterprise service are under intense government gaze, While the government has so far

been able to intercept and monitor voice-calls, SMSs, and emails on BlackBerry phones.

However, this time the issue is not limited to India. Countries like Saudi Arabia, The

United Arab Emirates (UAE) and even China have raised similar issues with RIM. In

fact, both the UAE and Saudi Arabia have already banned BlackBerry services.

RIM, on its part, claims the issue lies with the nature of the internet itself and not

BlackBerry. Speaking to the Wall Street Journal, Michael Lazaridis, co-founder and co-

CEO of RIM, said: This is about the internet, every-thing on the internet is encrypted.

This is not a BlackBerry-only issue.

If they can't deal with the internet, they should shut it off. But we are going to continue

to work with them to make sure they understand the reality of the Internet. A lot ofthese people don't have PhDs, and they don't have a degree in computer science.

The BlackBerry operator had earlier said it would provide the IP address of the

enterprise server, located in the customers premise, as well as the PIN and the

international mobile equipment identity number of each BlackBerry phone to enable

security agencies access the data in a readable format. RIM also offered metadata and

relevant information to security agencies, which will enable them in lawful interception.

According to media reports, metadata generally refers to data about data. It provides

information about a certain items content such as how large the picture is, the colour

depth, image resolution, when the image was created, and other data.


15/17

15

Current status

India has asked RIM to set up a BlackBerry server in India as it has done in Saudi

Arabia for full interception of data. Government of India has given time to set up their

servers in India latest by November, 2010.

With a user base of nearly 1.1 million and growing, RIM surely want to end the

controversy amicably and get on with business.

CONCLUSION

For any research and development company, it is important to have the best knowledge

to produce products such as the BlackBerry. The Companys success is largely

dependent on its continuing ability to identify, attract, develop, motivate and retainskilled employees (Annual Information Form, 2008). With approximately 12,000

employees there has to be key players to ensure that they are continuously motivating

and retaining these skilled employees. This ensures that their knowledge and abilities

are used to create value for the company when developing new products.

Innovation is the key to any technological company, and same theory applies in the case

of RIM. They are engaged in the development of integrated hardware, software and

services that support multiple wireless network standards. RIM provides platforms

and solutions for seamless access to time-sensitive information including email, phone,

SMS messaging, Internet and intranet-based applications.

In spite of the recession, RIM was able to grow by more than 20% in year 2009. It

became possible because of their market diversification in different countries. So slow

down in US market was mitigated by growth in India and China.


16/17

16

Appendix A

Patents and litigations faced by RIM Ltd.

On September 16, 2002, Research In Motion was awarded a patent pertaining to

keyboard design on hand-held e-mail devices. Upon receiving the patent, it proceededto sue Handspring over its Treo device. Handspring eventually agreed to license RIM's

patent and avoid further litigation in November of the same year.

On July 17, 2003, while still embroiled in litigation with NTP and Good Technology,

RIM filed suit against Xerox in the U.S. District of Hartford, Connecticut. The suit was

filed in response to discussions about patents held by Xerox that might affect RIM's

business, and also asks that patents held by Xerox be invalidated.[20]

On May 1, 2006, RIM was sued by Visto for infringement of four patents.

On January 22, 2010, Motorola requested that all BlackBerry smartphones be banned

from being imported into the United States for infringing upon five of Motorola's

patents. Their patents for "early-stage innovations", including UI, power management

and WiFi, are in question.


17/17

17

BIBLIOGRAPHY

Photo credit:http://www.google.co.in/images

http://www.ghemawat.org/publications.html browsed at 17/09/2010, 6:44 PM

http://timesofindia.indiatimes.com/5688285.cms.htm , 15-09-10, 9.16 pm

http://theviewspaper.net/ 15-09-10, 9.09 PM

http://indiacurrentaffairs.org/blackberryin india/, , 15-09-10, 9.12 PM

Ravi Gupta Ambup2mba09035

Documents

Transcript of Ravi Gupta Ambup2mba09035