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FORE SCHOOL OF MANAGEMENT

Project Report: Research in Motion


Strategy Management: FMG20C Group 8
Rishi Kalantri 201128 201141 201151 201168 201171 201173 Samriddh Nagpal Shefali Gupta Udit Bubna Vaibhav Aggarwal Veeneet Jain

Major Project report submitted in partial fulfillment of PGDM 2011-13 focusing on the field of Strategy Management on Research in Motion, and their flagship brand Blackberry.

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Executive Summary
This project report titled Research in Motion, is concerned with the analysis of the issues being faced by the organisation Research in Motion, in the competitive environment in which it is operating. This report also contrasts the earlier and the current position of R.I.M. and analyses its environment and its strategy it has adopted in the recent times. The objectives of the study are (i) To understand the competitive environment in which R.I.M. is operating. (ii) To identify and describe the market scenario and the issues being faced by R.I.M. (iii) To analyse the organisation with respect to its Strengths, Weakness, its opportunities and the threats it faces, (iv) To understand the Political, Social, Environmental and Legal aspects of the organisation with respect to its environment, (v) To provide an insight of the various forces the organisation is facing from its competitors, or substitutes. (vi) To give an insight to the financial position of the organisation and provide a trend analysis based on the same, (vii) To provide possible solutions to R.I.M. and give suggestions for the implementing the solutions. This study is divided into 4 chapters which give an insight to the strategies outlined by R.I.M. and provide possible alternative solutions to R.I.M. based on the analysis. The data has been collected from the annual reports of the organisation. Many different tools were used by the researchers to analyse the strategies adopted by R.I.M. and also to understand how the dynamic environment of the organisation has been changing over the years. These tools namely: SWOT analysis, PEST analysis and Porters 5 forces model gives a detailed insight to the above. Financial analysis has also been performed based on the data and companys financial health has been analysed. The major findings of the study are (i) R.I.M. didnt take the changing environment into consideration and they stuck with their propriety systems without upgrading to compete with its competitors. (ii) R.I.M. had huge inventory due to low sales of its blackberry handsets which affected their bottom line. (iiii) R.I.M. was losing its market share at a rapid pace and hence had to have a huge invest in R&D which reduced their operating revenues. (iv) R.I.M. has been working in developing its Blackberry 10 operating systems which it hopes will give a competitive edge over its competitors.

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Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. I CHAPTER 1: INTRODUCTION......................................................................................................................... 1 COMPANY PROFILE ................................................................................................................................................. 3 PRODUCT & SERVICE DETAILS ................................................................................................................................... 6 COMPETITOR PROFILE.............................................................................................................................................. 6 CHAPTER2: ISSUES: IDENTIFICATION & DETAILED DESCRIPTION .................................................................... 8 MARKET SCENARIO ................................................................................................................................................. 8 ISSUES FACED BY RIM .............................................................................................................................................. 8 CHAPTER 3: ANALYSIS OF ISSUES ................................................................................................................ 10 SWOT ANALYSIS .................................................................................................................................................. 10 PEST ANALYSIS OF RESEARCH IN MOTION................................................................................................................. 11 PORTERS FIVE FORCES MODEL: RIM INDUSTRY ......................................................................................................... 12 Industry Statistics: ....................................................................................................................................... 14 FINANCIAL STATEMENT ANALYSIS............................................................................................................................. 16 RATIO ANALYSIS ................................................................................................................................................... 18 CHAPTER 4: POSSIBLE SOLUTIONS .............................................................................................................. 21 ALTERNATIVE 1 .................................................................................................................................................... 21 ALTERNATIVE 2 .................................................................................................................................................... 21 ALTERNATIVE 3 .................................................................................................................................................... 22 RECOMMENDATIONS ............................................................................................................................................. 22 REFERENCES.................................................................................................................................................. I

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Table of Figures
FIGURE 1: BLACKBERRY ARCHITECTURE ............................................................................................................................ 4 FIGURE 2: BLACKBERRY ENTERPRISE SERVER ..................................................................................................................... 5 FIGURE 3: PRODUCT & SERVICE PORTFOLIO ..................................................................................................................... 6 FIGURE 4: SWOT ANALYSIS ........................................................................................................................................ 10 FIGURE 5: PORTERS FIVE FORCES MODEL....................................................................................................................... 12 FIGURE 6: MOBILE OPERATING SYSTEM MARKET SHARE GRAPH ........................................................................................ 15 FIGURE 7: SMARTPHONE MARKET SHARE GRAPH ............................................................................................................ 16 FIGURE 8: FINANCIAL ANALYSIS .................................................................................................................................... 17 FIGURE 9: INVENTORY ................................................................................................................................................ 18

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Table of Exhibits
EXHIBIT 1: BALANCE SHEET ............................................................................................................................................ I EXHIBIT 2: PROFIT & LOSS STATEMENTS ......................................................................................................................... III EXHIBIT 3: CASH FLOW STATEMENT ............................................................................................................................... IV EXHIBIT 4: RATIO CALCULATION ..................................................................................................................................... V

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Chapter 1: Introduction
Research in Motion Limited (RIM) is a Canadian telecommunication and wireless equipment company best known as the developer of the BlackBerry smartphone and was founded by Mike Lazaridis in 1984. RIM is headquartered in Waterloo, Ontario, Canada. It is considered as the leader in introducing the wireless innovations in its product portfolio. All these products and services help the people around the globe to stay connected to the people and content that matter most throughout their day. It is one of those players that make their own operating systems as well as the hardware devices. Unlike many others who are in either of the one domain. This actually gives them an advantage over many others. Current Chief Executive Officer (CEO) at Research in Motion is Thorsten Heins, and he is leading them to new product line with Blackberry 10 operating systems. Industry Background World telecom industry is an uprising industry, proceeding towards a goal of achieving two third of the world's telecom connections. Over the past few years information and communications technology has changed in a dramatic manner and as a result of that world telecom industry is going to be a booming industry. Substantial economic growth and mounting population enable the rapid growth of this industry. Telecommunication industry has been revolutionized with the introduction of wireless communication technology. A number of companies are taking on the advantage of these by coming up with the variety of offerings. The world's effective capacity to exchange information through two-way telecommunication networks grew from 281 petabytes of (optimally compressed) information in 1986, to 471 petabytes in 1993, to 2.2 (optimally compressed) exabytes in 2000, and to 65 (optimally compressed) exabytes in 2007. And in numerical terms, service revenue of the global telecommunications industry was estimated to be $1.7 trillion in 2008, and is expected to touch $2.7 trillion by 2013. Telecommunications has weathered the downturn and subsequent economic uncertainty and volatility relatively well compared to many other sectors. Looking ahead to future structural trends in the sector, players in Europe and other developed markets are likely to benefit from Page | 1

some easing of the regulations on mobile termination rates, while landline is set to see the pace of its structural decline low down. More generally, the outlook is positive as smartphone growth opens doors to new opportunities in the sector. But still there exist a lot of risks in the telecom industry that severely affect the operations of any global company such as Blackberry. Risks in telecom industry Compliance threats originating in politics, law, regulation or corporate governance Operational threats impacting the processes, systems, people and overall value chain of a business Strategic threats related to customers, competitors and investors Financial threats stemming from volatility in the markets and in the real economy

Popularity of BlackBerry Initially the blackberry positioned itself into the market as a corporate product that is used by the more and more sophisticated professionals to remain in contact with the contents like mails and web browsing etc.Its true customers werent its users but the people who run corporate information-technology departments were the major users of these most sophisticated software. This was probably because BlackBerry gave them two of the most crucial services components: reliability and security. But over the time period, there has been a growing popularity of smart phones in the marketplace and young generation are also migrating towards these devices. The striking difference in the usage pattern of these professionals and youngster are the purposes for which these people prefer them.

Web browsing Networking Applications Messaging

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In this regard the blackberry has done pretty well done job. Blackberries are versatile and not just meant for corporate people, which is that People are just realizing now. They enhance the connectivity between the people with things like blackberry messenger which has grown extremely popular among young. So it has actually created a market for its own that constitutes the people who value being connected to world. But, over the time period it got stuck in the intense competition by companies like Apple. They didnt change with the time and couldnt realize the competition coming from the software like Android. They were made for business people and lack of this consumerism had proved disastrous for them. They couldnt keep a track with the changing consumer perceptions. The popularity of others kept increasing and RIMs market share fell. Even the things like a touch screen phone went unrecognized by blackberry.

Company Profile
Research In Motion (RIM) is a leader in the worldwide mobile communications market and the company behind the award-winning Blackberry solution. The innovative and awardwinning BlackBerry product line includes best-in-class smartphones, as well as software for both enterprises and small businesses. The integration of BlackBerry smartphones and software provides mobile access to email, applications and more. It also allows virtual real-time communication, so you can stay in touch and up-to-date with the people and things that matter most. Blackberry Blackberry is a wireless handheld device introduced in 1999 by the Canadian company Research in Motion (RIM); it delivers information over the wireless data networks of mobile phone service companies.

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Figure 1: Blackberry Architecture

BlackBerry Enterprise Server BlackBerry enterprise server software is the link between BlackBerry smartphones, enterprise applications and wireless networks that extends communications and corporate data to your mobile users. With Blackberry Enterprise Server software, your employees can access their Microsoft Exchange, IBM Lotus Domino or Novell GroupWise email on-the-go on a BlackBerry smartphone. Theyll also have access to calendar, contacts, tasks, notes, instant messaging, web-based and enterprise applications.

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Figure 2: Blackberry Enterprise Server

RIMs Blue Ocean Strategy RIM's BlackBerry launch was a Blue Ocean strategic move because the company not only created technology innovation but also created superior buyer value innovation as well. Breaking away from traditional cell phone and pager competition, Blackberry offered a new type of wireless handheld solution for companies. It created a new market space focused on delivering secure company email access to roaming employees. Blackberries facilitated employees to send and receive emails practically anywhere and anytime without physical presence in the office. So companies that adopted Blackberries saved time and money. Also, there was no need to install remote client software because RIM offered a turnkey, centralized enterprise server and software solution. Since Blackberries were easy to use and had simple user interfaces and a limited number of contextualized options to choose from, companies also saved training and support costs. Most importantly, the Blackberry created a highly secure offering for companies because all emails and their contents could be protected behind their corporate firewalls. If a single Page | 5

device was lost or stolen, the company could easily disable it from its central control server. Finally through Blackberry and blue ocean strategy, RIM entered a niche market.

Product & Service Details


Product lines of RIM can be divided into two categories: Product These include the tangible goods produced by the company and sold into the market like tablets, smartphones as well as the accessories to protect them. Services The Blackberry Service Offering provides connectivity between an Exchange mailbox and the wireless Blackberry device, providing the ability to send and receive messages instantly, open and review attachments, views our calendar or access contact information.

Offerings

Product

Services

Accessories

Smartphones

Tablets

Blackberry OS

App world and Messenger

Figure 3: Product & Service Portfolio

Competitor Profile
There used to be a time when Blackberry was the leader in the smart phones market and development of the software for hand-held devices. But recently a lot of competition has come in this segment with the existing strong players as well as new players getting a foothold. RIM faces competition basically from two main kinds: Page | 6

One who make their devices themselves Other who build on OS to be used by above kind of companies

The biggest competitor for RIM owned Blackberry is Apple,they make their own devices as well as OS. They manufacture both Smart phones as well as well selling iPads. So in pure domain of RIM, Apple poses the biggest threat. And the other competitors include: In the category of smart phones 1. Nokia 2. Samsung 3. LG Above companies make their own devices. As per the service offerings are considered; there are the companies that rely on their OS for some other companies. 4. Microsoft with their Windows Phone 7 5. Google with their Android operating system. BlackBerry has struggled to compete against Android and Apple and its market share has plunged in recent years, leading to speculation that it will be unable to survive as an independent business Googles android version has posed a major threat to blackberry as it has the tie-ups with the various brands like Samsung, Sony Ericsson, Motorola, HTC etc. this gives Google a wide base and has actually reduced the price at which these devices are available.

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Chapter2: Issues: Identification & Detailed Description


Market Scenario
Smartphone market around the world has been stormed by the presence of huge brand organizations and their new innovative products. Companies such as Google, Apple have their flagship products with Apples iPhone and Googles Android Mobile/ Tablet operating system. These products have developed a cult image resulting in a brand following like no other product in the market. Established companies like Nokia, Blackberry have lost out on the increasing market because of not collaborating with these organizations. Core competence of Blackberry has been the innovative product offerings that it could provide its consumers coupled with secure data transmission in order to be the most preferred option for enterprise data transmission.

Issues faced by RIM


RIM has been facing many issues in the competitive environment it is operating in. These issues are discussed in detail. They are as follows: 1. Competition from other manufacturers RIM is facing stiff competition from Google Inc Software Android & Apple Inc iPhone. The reason being lack of innovation, weak marketing strategies & RIMs shifting of focus from Business Phone to Consumer Phone. Blackberry smartphones of Research in Motion failed to compete with flamboyant, userfriendly and customer oriented smartphones from Apple and other competitors run on Googles Android operating system. 2. Reliability of RIM Servers Frequent outages in RIM server has been a concern for the company and also Blackberry users are having doubts about the reliability of the Server. 3. Service offering by Blackberry Blackberry Service of Security and Reliability to deliver encrypted mails which were highly appreciated by business executives are now being offered by other Smart Phones like iPhone, HTC and Samsung.

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4. Web Usage Charges Web Usage Charges for RIM is substantially high in India as compared to other Smart Phones. Blackberry user have to pay Rs. 300 to 400 for web usage and Messenger per/month whereas Samsung, I-Phone & other Smart Phone users can avail this service for Rs.100 only. 5. Application Development The major issue with RIM is development of its applications where Android has been very successful. As a result the R&D department at RIM needs to introspect and come out with breakthrough applications. 6. Third-party apps BlackBerry smartphones also remains behind iPhones or phones supporting Android platform when it comes to running third-party apps. Appworld of blackberry phones is not much of a success as compared to other smartphone applications. 7. Playbook with under rated package RIM also ruined its efforts to produce a tablet in order to compete with Apple's iPad, Samsungs galaxy tab etc. PlayBook received undesirable reviews because it was launched without an email package and the popular messaging service of Research in Motion the BlackBerry Messenger. 8. Declining Market Share The above mentioned issues are evident from the fact that RIM market share have declined since 2009 & its Web Usage came down by 25% since last year. 9. Huge Inventory The most disturbing aspect of RIM's present situation is the unsold inventory of Blackberrys and Playbooks it has sitting in warehouses somewhere around the globe.Last year it sold its playbook on half the prices just to sell off its inventories. According to Bloomberg, the total value of those devices is about $1 billion,with little hope of moving the lot; RIM may take a $1 billion write-down on the value of the dust-gathering hardware. That will have a serious impact on the company's financials.

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Chapter 3: Analysis of Issues


SWOT Analysis

Strengths
One of the most secure & trusted Business Class MobileE-Mail Service. Source Code is a techinal asset which is highly protected & copyright protected. Strong Reserach & Development

Unable to understand changin market environment Failing to attract Applications Developers Lacking a vision for its future Excess reliance over its secure messaging service as a product selling feature

Weaknesses

Oppotunities
Expanding Portfolio Offerings Understanding customer requirements from successful product of other companies and developing market ready products Growing Telecommunications Industry in Developing & Under Developed Countries

Threats
Development of newer Instant Messaging Application like Whatsapp Increasing Competition from Apple & Samsung Secure messaging now available with other mobile email clients as well Services like ChatOn from established player like Samsung threatens BBM

Figure 4: SWOT Analysis

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PEST Analysis of Research In Motion


Political In India and some other countries, the governments have raised concerns over the security features provided by blackberry as they cannot be monitored. In India, RIM has been asked to share the encryption details used for Blackberry services. Economic The on-going global economic slowdown has had a significant impact on the sales of the overall mobile industry. RIM shipped 7.8 million BlackBerry smartphones in the previous quarter, only about half of the more than 14 million it shipped two quarters ago. The exports have also gone down and hence the company is expecting to have operating loss in the current quarter as well. Social Smartphones are increasingly becoming a part of the lifestyle of young adults. The level of income, education, has improved and todays generation is more tech-savvy. India has been the fastest growing smartphone market in the world. Technological RIM has virtually been the inventor of mobile email. However, now every second Smartphone in the country runs on an android platform. In the recent past, RIM has lost significant market share to Apples iPhone, Android phones etc. Its best hope for staging a comeback rests on the development of next-generation Blackberry 10 phones.

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Porters FIVE Forces Model: RIM Industry

Figure 5: Porters Five Forces Model

Porter 5 Forces are done to understand the Industry Attractiveness of the Smartphone Industry Threats of Entry- LOW Huge Capital Requirements: High Manufacturing Cost & high R&D cost. There is a Constant push to manufacture new and innovative products. Economies of Scale: Fixed Cost is high so Economies of Scale has to be achieved to increase profit margins. Government Regulations: Telecommunications Industry is highly regulated & involves tedious policies & procedures. Distribution Channel: In most of the countries, smart phones are sold through mobile operators and hence they exert more bargaining power. Alliance with mobile operators is an essential factor for product success in smart phones segment.

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Encryption Keys: Recently Research In Motion had to divulge secret information about the encryption keys used to decrypt messages and emails on its blackberry system. This information was given to the Indian Government, because of governments inability to track messages on its servers and fear of the same being used as a communication device by terrorists for the same reason. This also lead to setting up of a separate server for India by the company which is different from its global strategy of routing messages through central server, this was done due to compulsions set by Indian government. Supplier Power - Moderate Software Provider: There are so many open sources mobile phone operating system providers like Android, Microsoft that options are plenty & hence the bargaining power of Software Providers are moderate. Hardware Provider: There are too many suppliers for hardware components (Qualcomm, TI & Intel) and hence the bargaining power of hardware providers is also moderate. Buyer Power: HIGH Large choices of Smart Phones with no or very little differentiation Elastic Demand:Demand is highly sensitive to economy. If the prices of the Mobile Phones are increased then the buyer will shift to the other manufacturer. Less Asymmetric Information: Buyers are aware of all the information before buying of a Mobile Phone. Low Switching Costs: Mobile Phones generally have low switching costs, this also depends upon the country & mobile phones service provider. Availability of Substitutes - MODERATE Smart Phones do variety of functions, so any product that specializes in one of the functions can be termed as Substitute. Some major substitute of Smart phones can be PDAs, Notebooks, I-Pad & Tablet etc. Due to intense competition new devices and technology are being consistently launched to secure the market position. As a result consumers are left with wider choice for Smart Phones. Page | 13

Competition - HIGH There is an intense rivalry between the existing players like Nokia, Samsung, Apple& HTC. There is not much differentiation in the product features of Smart phonesso manufactures differentiate their products in terms of applications and services offered. There is also competition on the basis of pricing of the Smart Phones as every Company wants to give maximum features at lowest possible cost. Exit Barriers are low for manufacturers that have shorter value chain rather than those having longer value chains. Those companies who are involved in every aspect of Smart Phone Manufacturing finds it difficult to exit the market rather than those companies who are involved in one or two aspect of value chain. Industry Statistics: IDC said that 144.9 million Smart Phones were sold worldwide in Q1 2012. Total sales in 2011 were 491.4 million units. Gartner estimates sales of Smart Phones in the same period to be around 144.4 million. Estimated total sales across 2011 were 472 million or 31% of Mobile Communication device sales. This compares with figures for 2010 from the same company of 297 millions Smart Phones or 19% of the 1.6 billion mobile phones sold that year. So year on year Smart Phones sale rose by 58%. Sales Prediction The Financial Times cites a JPMorgan prediction that 657 million Smart Phones will leave stores in 2012. IDC expect 2012 Smart Phones sales to reach 686 million & predict it will rise to 982 million in 2015. IMS research expects Smart phones to reach 1 billion in annual sales in 2016. Morgan Stanley Research estimates sales of Smart Phones will exceed those of PCs in 2012.

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Smart Phones Operating System Manufacturers International Data Corporation came out with the market share of Mobile Phones Operating Systems for the 1st quarter of 2012.

2.30% 6.80%

Operating System Share


2.20% 0.30%
Android IOS Symbian

6.40%

23%

59%

RIM Linux Windows Others

Figure 6: Mobile Operating System Market Share Graph

Source: IDC Worldwide Mobile Phone Tracker, May 24, 2012

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Market Share of Smart Phone Manufacturers The pie chart shows the Market Share of Major Smartphone Manufacturers in the 1st quarter of 2012.

Smartphones Market Share


27% 6.70% 8.20% 4.80% 24.20% 29.10% Samsung Apple Nokia HTC RIM Others

Figure 7: Smartphone Market Share Graph

Source: IDC Worldwide Mobile Phone Tracker, May 24, 2012

Financial Statement Analysis


Year-on-year (2011-2012), Research In Motion Limited has seen revenues fall from $19.9B to $18.4B. Decline in Revenues along with an increase in the cost of goods sold expense has led to a reduction in the bottom line from $3.4B to $1.2B. Research In Motion Limited uses little or no debt in its capital structure and may have less financial risk than the industry aggregate. Accounts Receivable is typical for the industry, with 70.61 days worth of sales outstanding. Research In Motion Limited is among the least efficient in its industry at managing inventories, with 25.77 days of its Cost of Goods Sold tied up in Inventories.

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Expenses

Incomes

Figure 8: Financial Analysis

Looking at the above trend RIM has been trying desperately to increase its sales, but their strategy of innovating new products and services has led to increase in their expenses. Compared to 2008 their expenses have gone up 4-5 times. Due to the fact that they are not able to sell their hardware to consumers and are not able to increase or maintain their market share, their income levels have dipped significantly. In 2012 especially there is an operating loss in Q2.

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Figure 9: Inventory

RIM has tried to develop new operating system for their BlackBerry handsets, and they have stocked up on the new handsets together with the older operating system handsets. This has led to inventory pile up and the inventory has gone up two folds y-o-y. This is not a good sign for the company since they are not able to sell their new range of products and are sitting on a huge pile of inventory that is bringing their operating revenue down and it has a huge impact on the income statement. Since they are not able to increase their top line together with more level of inventory it is affecting their bottom line.

Ratio Analysis
Inventory Turnover Ratio
2010-2011 2011-2012

Particulars

Inventory Turnover Ratio

17.34

14.39

Days Inventory Outstanding

21.04 days

25.35 days

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Debtor Turnover Ratio


2010-2011 2011-2012

Particulars

Debtor Turnover Ratio

6.08

5.25

Days Sales Outstanding

60.02 days

69.46 days

Creditor Turnover Ratio


2010-2011 2011-2012

Particulars

Creditor Turnover Ratio

15.31

15.02

Days Payable Outstanding

23.82 days

24.28 days

Net Operating Cycle Net Operating Cycle = Days Inventory Outstanding + Days Sales Outstanding + Days Payables Outstanding

Particulars

2010-2011

2011-2012

Net Operating Cycle

57.24 days

70.53 days

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Since the operating cycle for the company is increasing over the time period, it reinforces their losing competitive advantage in the market place. It shows that it is taking more time now to convert the raw materials into finished goods and for longer time money is stuck into unsold inventory. Since the closest competition of RIM is Apple, we can compare it with the operating cycle of Apple. Its cycle time period is 44 days. This shows an enhanced advantage over RIM as it can sell its inventory much earlier. So, we can say that RIM needs to do much about this by bringing down the time period for which its inventory is stuck and reducing this time period. Also, it will help in increasing the cash flows, hence sustain in the competitive environment.

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Chapter 4: Possible Solutions


In order to survive in the future, Research in Motion has to make sure, that it leaves no stone unturned in its future efforts because there will be no chances to turning back to improve on mistakes and it would also be a do-or-die situation for the companies top management. We believe there are possible two solutions available to the organization:

Alternative 1
Since the organization has invested more than its worth in the research & development efforts to develop a new range of software operating system for their products, they continue with their efforts. Create an all out marketing effort to bring people back to Blackberry. Hope that the effort pays out for the company. Pros of continuing with current efforts

It could result in one of the biggest effort by which an organization is able to reclaim its brand. There is a kind of products that consumers now prefer, and understanding this, blackberry can create products that strike balance with its enterprise users and other users.

Cons of continuing with current efforts Any failure to deliver from this point for the organization would lead to an unavoidable failure at organization and almost certainly lead to closure of organization/ bankruptcy.

Alternative 2
If the organization does not have confidence over the success of product or service that are being developed and believes that there are chances of an unwanted failure of the newly developed products of the company which will very certainly lead to an unforeseen tumble to the organization stock value and may even end up in bankruptcy of Research in Motion. In Page | 21

this case company should already take stock of the situation and take advantage of current value of company.

It can sale the stocks while they still can redeem considerable value. Generate funds by selling fixed assets and properties. Sell intellectual property i.e. Blackberry services which were the reasons of the rise of blackberry brand as it provides the most secure email and messaging platform.

Alternative 3
Consider selling handset business, Research in Motion can think of selling its handset business to focus on providing blackberry enterprise services across all platforms and create a core competency of providing secure email and messenger (chat) services to its client. In this situation it will be able to focus on providing benefits to its customers without making extensive inroads and investments in hardware category to manufacture phones. This is an essentially important alternative that RIM may look towards considering there have been various organizations which have been trying to capture its handset business. There have been constant speculations on Samsung wanting to buy Blackberry business. IBM might have made an informal bid for RIMs enterprise business. Also split of Research In Motion will result in sell out of organization to companies like Facebook & Amazon who are waiting to strike it big in telecom industry.

Recommendations
The prime reason that customers are still buying Blackberry handsets is because of value and privilege they provide. A blackberry handset has a very good build quality, better than most of competitive brands and provides niche messenger & email services which are secure than usual email applications. Thus RIM should concentrate on keeping these benefits for future products. RIM should also focus on providing extensive services and benefits to markets in which it is getting most benefit. In North American market blackberry sales seems to be negligible while they still are considerable in Europe and Asia. Thus, blackberry is

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focusing on launching Blackberry 10 products first in Europe and Asia, build brand resonance of new technology and then launch in American markets. One of the main reasons that Research in Motion is lagging behind with its blackberry range of smartphones is because of third party applications provided by the competitors. To overcome this RIM must make sure that appropriate changes are made to its scarce and bleak App World so as to increase number of applications available and richness of these applications on blackberry products.

RIM needs to improve on its operating systems on which its blackberry smart phones and tablets operate; the company can provide its playbook with android operating system just to stay in the game

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References
RIMs Blackberry Delay Hits Stock, June 28, 2012 http://online.wsj.com/article/SB10001424052702304058404577495013601177508.ht ml# RIM Official Website http://www.rim.com/newsroom/mediaexecutive/index.shtml Research In Motion Annual Reports FY 2009 thru 2012 Leaked RIM roadmap shows the future of BlackBerry http://tech2.in.com/news/blackberry/leaked-rim-roadmap-shows-the-future-ofblackberry/321872 John A Pearce, Richachard B Robinson, AmitaMital, Strategic Management, 12th edition, 2012. Blackwell, Introduction to Strategic Management, 2007. Glass, N. M.,Pro-active management: How to improve your management performance, 1991 Johnson, G., Scholes, K., &Sexty, R. W., Exploring strategic management., Prentice Hall, 1989 RadhaBalamuralikrishna, JohnDugger, SWOT analysis: a management tool for initiating new programs in vocational schools, Journal of Vocational and Technical Education, Volume 12, Number 1, pg 23-31. Jim Downey and Technical Information Service ,Strategic Analysis Tools, 2007. <http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_strategic_analy sis_tools_nov07.pdf.pdf> Prof. Tony Lima, Michael Porters Five Forces Model, 2006 <http://arfuso.weebly.com/uploads/9/9/6/1/996130/porters_5_forces_model.pdf> IBM made "informal approach" for RIM'S enterprise business - report http://tech2.in.com/news/general/ibm-made-informal-approach-for-rims-enterprisebusiness-report/362292 Why Samsung Should Buy Blackberry http://www.afr.com/p/technology/digitallife/why_samsung_should_buy_blackberry_n GQM0VhUFlPB2KGS4tQL9

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Exhibits
Exhibit 1: Balance Sheet
Currency in As of: Millions of US
Assets Cash And Equivalents Short-Term Investments TOTAL CASH AND SHORT TERM INVESTMENTS Accounts Receivable Other Receivables TOTAL RECEIVABLES Inventory Deferred Tax Assets, Current Other Current Assets TOTAL CURRENT ASSETS Gross Property Plant And Equipment Accumulated Depreciation 835.5 682.7 1,551.00 361 1,791.00 330 1,527.00 247 Feb-28 2009 Feb-27 2010 Feb-26 2011 Mar-03 2012

1,518.20

1,912.00

2,121.00

1,774.00

2,112.10 157.7 2,269.80 682.4 183.9 187.3 4,841.60 1,923.10 -588.4

2,594.00 206 2,800.00 660 194 247 5,813.00 2,878.00 -921 1,957.00 151 958 -1,326.00 10,205.00

3,955.00 324 4,279.00 618 229 241 7,488.00 3,899.00 -1,395.00 2,504.00 508 577 -1,798.00 12,875.00

3,062.00 631 3,693.00 1,027.00 197 365 7,056.00 4,780.00 -2,032.00 2,748.00 304 337 -3,286.00 13,731.00

NET PROPERTY PLANT 1,334.60 AND EQUIPMENT Goodw ill 137.6

Long-Term Investments 720.6 Deferred Tax Assets, Long Term Other Intangibles TOTAL ASSETS 0.4 1,066.50 8,101.40

Exhibit 1: Balance Sheet

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LIABILITIES & EQUITY Accounts Payable Accrued Expenses Current Income Taxes Payable Other Current Liabilities, Total Unearned Revenue, Current TOTAL CURRENT LIABILITIES Deferred Tax Liability Non-Current Other Non-Current Liabilities TOTAL LIABILITIES Common Stock Additional Paid In Capital Retained Earnings Treasury Stock 448.3 1,238.60 361.5 -53.8 2,115.40 87.9 24 2,227.20 2,208.20 119.7 3,545.70 -615 1,260.00 96 378 68 2,432.00 141 29 2,602.00 2,372.00 -5,274.00 -94 51 7,603.00 7,603.00 10,205.00 832 1,936.00 179 575 108 3,630.00 276 31 3,937.00 2,359.00 -6,749.00 -160 -10 8,938.00 8,938.00 12,875.00 744 1,695.00 -687 263 3,389.00 232 10 3,631.00 2,446.00 -7,913.00 -299 40 10,100.00 10,100.00 13,731.00

Comprehensive Income 0.5 And Other TOTAL COMMON EQUITY TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 5,874.10 5,874.10 8,101.40

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Exhibit 2: Profit & Loss Statements


Currency in Millions As of: of US Dollars
Revenues TOTAL REVENUES Cost Of Goods Sold GROSS PROFIT Feb-28 2009 Feb-27 2010 Feb-26 2011 Mar-03 2012

11,065.00 11,065.00 5,968.00 5,097.00

14,953.00 14,953.00 8,369.00 6,584.00 1,820.00 965 310 3,095.00 3,489.00 28 28 3,517.00 -9 -260 -164 -96 3,266.00 809 2,457.00 2,457.00 2,457.00

19,907.00 19,907.00 11,082.00 8,825.00 2,400.00 1,351.00 438 4,189.00 4,636.00 8 8 4,644.00 -----4,644.00 1,233.00 3,411.00 3,411.00 3,411.00

18,435.00 18,435.00 11,842.00 6,593.00 2,516.00 1,536.00 571 4,623.00 1,970.00 21 21 1,991.00 -125 -355 ---1,511.00 347 1,164.00 1,164.00 1,164.00

Selling General & 1,495.00 Admin Expenses, Total R&D Expenses Depreciation & Amortization, Total OTHER OPERATING EXPENSES, TOTAL OPERATING INCOME 685 195 2,375.00 2,722.00

Interest And Investment 79 Income NET INTEREST EXPENSE 79 EBT, EXCLUDING 2,801.00 UNUSUAL ITEMS Merger & Restructuring -Charges Impairment Of Goodw ill -Other Unusual Items, Total Legal Settlements Other Unusual Items EBT, INCLUDING UNUSUAL ITEMS Income Tax Expense Earnings From Continuing Operations NET INCOME ---2,801.00 908 1,893.00 1,893.00

NET INCOME TO COMMON INCLUDING 1,893.00 EXTRA ITEMS NET INCOME TO COMMON EXCLUDING 1,893.00 EXTRA ITEMS

2,457.00

3,411.00

1,164.00

Exhibit 2: Profit & Loss Statements

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Exhibit 3: Cash Flow Statement


Currency in Millions As of: of US Dollars
NET INCOME Depreciation & Amortization Amortization Of Goodw ill And Intangible DEPRECIATION & AMORTIZATION, TOTAL Asset Writedow n & Restructuring Costs Change In Accounts Receivable Change In Inventories Change In Accounts Payable Change In Unearned Revenues Change In Income Taxes Change In Other Working Capital CASH FROM OPERATIONS Capital Expenditure Cash Acquisitions Sale (Purchase) Of Intangible Assets Investments In Marketable & Equity Securities Feb-28 2009 Feb-27 2010 Feb-26 2011 Mar-03 2012

1,893.00 203 125

2,457.00 345 271

3,411.00 497 430

1,164.00 660 863

328 --937 -296 177 17 -114 384 1,452.00 -834 -48 -688

616 --481 48 167 14 -266 357 3,035.00 -1,009.00 -143 -421

927 --1,352.00 42 216 40 82 476 4,009.00 -1,039.00 -494 -557

1,523.00 355 898 -409 -90 151 -314 -446 2,912.00 -902 -226 -2,217.00

-253

103 -1,470.00 -6 -6 30 -869 2 -843 -6 716

392 -1,698.00 --67 -2,153.00 -1 -2,087.00 16 240

321 -3,024.00 --9 -156 -2 -149 -3 -264

CASH FROM INVESTING -1,823.00 Long Term Debt Repaid -14 TOTAL DEBT REPAID Issuance Of Common Stock Repurchase Of Common Stock Other Financing Activities CASH FROM FINANCING Foreign Exchange Rate Adjustments -14 27 -12 25 -3

NET CHANGE IN CASH -349

Exhibit 3: Cash Flow Statement

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Exhibit 4: Ratio Calculation

Column1 Inventory Turnover Ratio No. of Days in Inventory Debtor Turnover Ratio No. of Days Creditor Turnover ratio No. of Days
Exhibit 4: Ratio Calculation

2011 17.34272 21.04629 6.08033 60.02964 15.31721 23.82941

2012 14.39757 25.3515 5.254382 69.46583 15.02792 24.28813

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