In today's era technological companies have created a niche on the market. Unlike other conventional firms, these companies are operating in another way. Since technology is given much importance in today's era, the business that my group member and I made a decision to research is, Research in Motion (RIM). In 1984 Mike Lazaridis and Douglas Fregin founded Research in Action and have been operating since (Insightory, 2009). The key reason why this specific company was chosen is basically because within the last few years it is continuing to grow at an instant rate and presently they will be the fastest growing company in the world. The business of RIM targets manufacturing, developing, and marketing their cellular ways of the global cellular market. RIM provided alternatives for the products and services such as; mobile phone, email, text messages, and Internet (Insightory, 2009). The success and efficiency of the company has been profoundly on a rise. One of the products launched by RIM was the device and solution of BlackBerry. The merchandise and services offered by BlackBerry is a handheld product with improved software and tools.
The management strategies and system utilized by RIM have been effective over time. The business has used and carried out the goals from the Balanced Scorecard in order to ensure efficiency. By bringing out products such as, BlackBerry, RIM has revolutionized the cellular world in terms of how individuals talk and interact virtually. With with smart systems and wireless solutions, the business has made certain its success since it has company's goals that cater its employees as well as, customers. In combining the needs and wishes of the consumers and employees the success of the company is shown in their financial assertions.
The financial assertions are the main documents for businesses and companies all over the world. They tell us the essence of a company concerning how well it does and the particular worth of a firm is. RIM has very interesting figures if we look into the financial statements (income statement and balance sheet). Income declaration, which is also called a revenue and loss declaration, shows the income from business procedures, and expenditures of operating the business enterprise over a period of time. This information is crucial for the managers in the business as they can see through the performance of the organization. Not only professionals but stakeholders and traders can gain a whole lot of information from this statement and determine accordingly as to how the organization is functioning.
We now will be looking at the income statement for RIM and you will be assessing it for days gone by five years as to how it has performed. The very first thing that looks on the income declaration is the total revenue or sales of the company. There was a rise in sales to about 53 percent from the entire year 2005 to 2006 for RIM which is doubling its sales amount in a period of a time. If we see one of its rival companies Apple INC, that they had an increase to about 39 percent. We cannot complete any judgments yet about both of these companies as a lot of things still have to be taken into account. Another fiscal season 06/07 tell us that there was an increase of sales by 47 percent for RIM, demonstrating a slight drop of 6 percent in sales expansion when compared with the year before. The breakthrough for RIM emerged the following calendar year of 07/08. This is actually the year when the business required of to an entire new level and found sales significantly at a blistering pace. The sales were $3037(value in a huge number) in 2007 set alongside the year 2008 that was $6009(value in thousands and thousands). This shows a rise of an astounding 98 percent in sales. Almost dual its sales set alongside the previous season. Companies would treasure such moments if there is an increase of such kind. Apple Inc on the other hand possessed around 35 percent upsurge in its sales volume level. Clearly exhibiting that RIM keeps growing at a rapid pace and gaining market talk about on the market. It taken care of its sales to some extent from the year 08/09 to a rise of around 84 percent. Although 14 percent drop of sales compared to the previous time (07/08) it is still a massive increase yet again for RIM. Apple Inc on the other palm had around 12 percent increase in it sales (08/09). This evidently suggests that RIM swiftly took of in the market for the last year or two when compared with its competitors. Financial measures check out a lot of things under consideration and not the total income. We now move to the price tag on goods sold which is basically the cost incurred in the development of goods and services sold. This is one of the key components as companies want to keep this cost as low as possible to be able to have a greater gross earnings. In a very company like RIM the price tag on goods sold is varying around 44 to 53 percent of the full total revenue. Almost you can say half of the income being deducted from the price tag on goods sold. The ultimate calendar year of 08/09 was at his highest to around 53 percent of the income. It has been pretty steady for the past five years for RIM in expense of good sold team. Alternatively RIM's competitor Apple Inc has an average varying 63 percent to 70 percent of cost of goods sold to its revenue. This gives RIM an advantage over its rival firm. The next matter this is the gross profit, which in turn is not the final profit for a company as there need to be deductions made on the bills the business has incurred. As RIM is a company where it must offer in technology and new innovations, research and development is one of the primary bills. Although Apple Inc has spend more in research and development that will not imply it's superior or even more productive. These bills are matched with the gross income and in turn deducted giving the worthiness of net gain. Net income or net earnings states the companies turn a profit made when all deductions took place. This value is one of the most significant in terms of evaluating the performance of companies. The worthiness of net revenue will be studied into consideration and likened in ratio examination. As that's where we get a picture in conditions of the performance of the company as to how well it does on the market also to its challengers. If we check out the past five many years of net income attained by RIM it implies that in the entire year 07/08 it acquired the most increase in terms of online profit. There was a rise of 105 percent which is incredible. Alternatively its competition Apple Inc possessed an increase of only about 38 percent in the same season. This shows RIM enhancing its business businesses and efficiency for an immense scope. As net profit is the last entrance in the income statement we now move onto the total amount sheet.
Balance sheet lists the investments the company has and liabilities what the company owes to others. It's basically the net value of the firm as to how much is its value. The best liquid advantage would be cash and it is one of the very most critical ones. As profitable companies making earnings can walk out business as a result of reason of failing to have enough cash. This creates insolvency. It is very important for the management of the company that they take this in contention seriously. Cash is reducing and then in turn increasing the year after for RIM. There's been very little stability as if we compare the year 05/06 there is a decrease in cash for the business but the time 06/07 there is a rise in cash. As approaching to another year (07/08) there was an increase in cash greatly by 67 percent, and then a reduction in the ultimate year of 08/09. This property needs to be monitored effectively, if not, then your consequences are very dramatic. Property herb and equipment in the last five years has grown quickly. In 2005 the worthiness for this was around $210(value in a huge number) when compared with $1334(value in large numbers) in '09 2009. This shows a very lasting increase. Now coming to the liabilities section we can easily see the accumulated retained earnings were in deficit in the entire year 2006 but RIM retrieved well pursuing up the next year eradicating the deficit and increasing its maintained profits the most in the year 07/08. As we now have compared the company which consists of financial statements we have now come to the main diagnosis and performance of the business by using financial ratios.
We first check out the prospect of growth ratio. Experiencing a five yr average for sales there has been an increase of almost 80 percent for RIM when compared with the Apple Inc which is around 34 percent. Clearly RIM dominating here in terms of progress in sales for the past five season average. We move to the success ratios, gross margin ratio which is gross income over sales. It's basically the difference between your earnings and cost of the creation. The gross margin percentage for RIM for the average five years is around 50 percent when compared with Apple Inc which is around 33 percent. RIM has hook edge here as looking at to Apple. When there is a decrease in this proportion then this means that there exists stiff competition and a rise in the price of purchases. The prices decline as well. Alternatively when there is an increase in this ratio the company obviously could have a competitive benefit over its competitors so the selling prices increase eventually. RIM has a competitive benefits over Apple Inc here then. Moving on to another ratio which is vital in inspecting the performance of the company in its financial perspective would be go back on capital used. A proportion that suggests the efficiency and profitability of an company's capital purchases. (Investopedia, 2009)
Calculated as: EBIT( cash flow before interest and duty)
RIM's come back on capital hired (ROCE) for the average five year is just about 30 percent which is way better then its competitor Apple Inc which is 21 percent. Yet again RIM gaining an advantage here over its rival firm. These ratios are incredibly important in conditions of studying the performance of the company in financial perspective.
Now we will look into an important profitability percentage which is online profit margin. "The profit margin tells you how much profit a business makes for each and every $1 it generates in income or sales. Income vary by industry, but everything else being equal, the higher a company's profit margin compared to its competitors, the better. ``
Net Income after Fees · Revenue = Net Income Margin
RIM's average world wide web profit margin proportion is around 18. 7 percent. More than double if compared to its industry which is just about 8 percent. If we compare RIM's world wide web profit margin to its rival firm Apple it is ahead in this division as well by the marginal 5 percent. Being before a competitor just shows the management efficiency and success of RIM which is doing great when compared with its rival businesses.
Other ratios on the financial condition of the company are very important as well. This shows if the business has enough to pay for its liabilities. We have been talking about the quick ratio.
RIM's quick ratio is 2. 1, which suggests that this has enough to pay for its liabilities. Any other thing more when compared to a one is known as to be satisfactory. So RIM has maintained this very efficiently. Apple Inc is not significantly behind as its quick ratio is just about 1. 9. Not much of a notable difference but again RIM getting the slightest of gain. This ratio is essential as it establishes whether the organization is able to convert its most liquid property in order to meet the current liabilities.
The financial assertions for RIM seem to be to be in excellent condition as it is the most effective growing company on the globe presently. For days gone by three years there's been 77 percent go up in the profits, 84 percent increase in revenue and a complete come back of 45 percent. These are staggering quantities which any company would wish to have. As we have described of the quadrants of the total amount scorecard we now will move on to the next one which is the client or market aspect. (Mobile Burn off, 2009)
Research in Movement is the quickest growing company in the world.
Research in Motion is a company that provides products to customers all over the world. The main goal of the professionals is to increase income and have a more substantial market talk about by client satisfaction. A number of the important options of performance are development of new development and products, customer satisfaction of products, and buying related products.
The need for RIM introducing new products and technology which satisfies the changing needs of customers is very vital to the success of the business. It really is an important indicator to gauge the performance of customers on the market because the company can get a sense that customers are content with the merchandise when they re-purchase products. Professionals find that it is very useful and important to build up products in line with the rapid change in the environment. There are plenty of competitors in the market, which are able to enhance and integrate their products to fascinate customers. Research in Movement, which introduced Blackberry to customers, allowed entrepreneurs to interact with their data from companies at a secure and safe way. I-phone launched by Apple. Inc, posed a risk to Blackberry`s market show, and was able to draw out customers and market electricity from RIM. Getting a frequent development in products and advancement will increase customer satisfaction, thus leading customers to return to get more products, that will eventually become profitable for the company. Development of product and creativity are an important way of measuring performance, in relevance to customer`s perspective.
As competition remains to go up in the communication world, Research in Movement launched its new product Blackberry Curve 8520. This new product launched by RIM boosts the multi-media features provided by Blackberry. ``It provides mobile users the simple usage of email, messaging (IM, SMS, MMS) and popular communal networking sites including Facebook and MySpace. `` (Marketwire, 2009) This new smart-phone also includes the newly impressive track-pad for simple navigation, and also includes multimedia secrets for users. By introducing this new product RIM was able to continue its dominance in the market, by appealing to more customers to its products and the keeping existing customers to continue purchasing their products. RIM could add new features in the Blackberry Curve 8520, which is an upgrade to Blackberry Curve 8900. RIM can overcome extreme changes that are occurring in the surroundings and continue steadily to expand customers from season to year. ``38% of the company's subscriber foundation are individuals or other non-enterprise users. `` (Creativity and Innovation Driving Business, 2009) Research in Movement has had the opportunity to increase its line of products to extensive range of customers, from business users to people that use their mobile frequently. This implies that RIM is adapting to the rapid change in the technological environment where customers feel they need to be connected with their friends and family whether it's business related or being able to communicate in general.
(Creativeness and Innovation Travelling Business, 2009)
By looking as of this graph, RIM has increased its revenue because of immediate advancement of products. Research in Movement Ltd. is one of the top 20 Innovators. (Imagination and Innovation Travelling Business, 2009)
Another important performance measure for Research in Movement is customer satisfaction of products. Professionals have to ensure that their product, such as the Blackberry smartphone is presenting customers a good end result for their money being spent on the product. The quantity of working costs RIM puts into its products needs to be done efficiently and effectively, to get revenue, and ensure client satisfaction. If the customers are not content with the products, then there is no point investing in marketing products. Among the main reasons why company fails at satisfying the customers is due to having less knowledge of customer frame of mind and behaviour. The goal of any firm or company is to meet up with the needs of its customers, the revenue and profits that require to be made for the company to reach your goals in the foreseeable future depends on customers` behavior and their satisfaction towards the products. Customer satisfaction for products actions how well Research in Action is concentrating on customers in the demanding environment.
Research in Action Ltd. has had the opportunity to penetrate the marketplace by having progressive products, which includes led to client satisfaction. RIM is the highest positioned overall in customer satisfaction among business wireless smart-phone users. (Marketing-Vox, 2009) RIM has had the opportunity to efficiently gain revenue by innovating products according to customer needs. This has made Blackberry one of the finest products made by Research in Action. Having satisfied customers is very essential to business for future sales and profitability for the business. Satisfied customers usually repurchase the same make of product, thus also leads customers to recommend the same product to more people. Since customers are highly satisfied by the products of RIM, they are most likely to recommend the merchandise to more folks, thus resulting in increased sales overall. Blackberry still poses a threat from many leading rivals such as Apple`s I-phone and the recent start of Yahoo`s Android driven devices.
Having customers buy related products is also a good way of measuring performance; it shows how well the business invents different products to keep customers from going to competition. Customers` frame of mind and behaviour changes swiftly in the technical environment, customers can react in various ways that could be beneficial to the company or could leave the company in significant losses. One of the key goals for Research in Motion Ltd. is to acquire customers for an extended period of time, to allow them to keep spending money on products. Having a wide range of products will give customers more options to buy products and make them dedicated to the business.
Research in Movement has a multitude of products that customers can choose from; this consists of telephones from being the most business oriented to multimedia established. Blackberry has began devices with the touch screen, RIM launched Surprise2 one of the latest devices to battle competition with Apple`s I-Phone. RIM faces tough competition with its competitors, but it is doing a good job to stay up-to-date on its latest devices, and offering clients various products to be competitive in the challenging marketplaces. Blackberry customers are incredibly loyal with their products and usually try wide selection of products. A recently available survey shows that current Blackberry users will choose the new RIM models than the customers of other manufacturers. RIM also offers a significant probable to eliminate customers from other manufacturers, such as Motorola, Samsung and Palm. (PR reports, 2009)
As we have now check out business operations of Research in Action, this aspect is the internal procedure for how managers have the ability to run the business enterprise, able to come up with strategies for customers, and the, set requirements for companies' specific goals in obtaining a mission. The internal process of a company is basically the center of the business. All the primary decisions and tactical planning is carried out from within the organizations` top managers. Research in Action concentrates its business towards product development and manufacturing.
Research in Movement has had the opportunity to uphold the worthiness with their customers by product development. The business has had the opportunity to unveiling products according to customer needs and market demand. RIM `s main emphasis has been to develop products which would continue to meet the needs of people of various age ranges. Research in Action`s most infamous product the Blackberry has used different forms of communication and given people the power to receive and send information of all sorts. RIM could come out with client-based software that allows users to access their email off their companies; the impact on e-mail users has been significant. This creativity has given authorities officials, business executives, and other pros to change the way they conduct business.
Product development is a very important aspect of RIM`s business process. Jim Balsillie, the Co-CEO of Research in Action mentioned ``It was the right time for all of us to do that because the offering and the marketplace opportunity and the worthiness proposition and the uniqueness stood on its own merit`` (Insightory, 2009) RIM was essentially in a position to develop Blackberry with the option of presenting users to e-mail with one another, just at that time when there is a technological boom. Many people had started to access the internet, and businesses were moving to web-based. RIM could move its proper plan of product development, to a more consumer based. The business added new request like the MP3 player, built in camera, multimedia function secrets, and other third party applications for various consumer needs. Research in Motion has been able to collaborate and merge with other small companies that focus on application founded software, to enhance the client experience. ``Open up Content material and RIM intend to incorporate Livelink and BlackBerry features so that mobile Livelink users may collaborate dynamically of their organizations and throughout their source chain communities. `` (Research in Action Limited, 2009)
Research in Movement has had the opportunity to increase its market talk about in the cellular phone industry, by discovering various trends in the product. This is an essential process to the success of any business. The company has to continue innovating its` existing products to keep customers interested and satisfied with the product. Therefore leads to better satisfaction, and creates a positive future for the company.
The key business process for Research in Action is not only to build up products, to enhance the globe with an improved experience of cell phones; RIM is also able to produce its products. That is one of the main element aspects of RIM`s business process, they could invent and create the kind of product, they need according with their standards. Blackberry, the merchandise, made Research in Movement known to the whole world. ``BlackBerry is the world's second most popular smartphone platform, recording 21% of worldwide smartphone sales in Q2, 2009. `` (Wikipedia, 2009) RIM was able to turn out with something, that surprised many businessmen and people, using its popular e-mail services, web browsing, and text messaging.
Manufacturing is one of the main element techniques for Research in Movement; RIM is a multinational company, which has started to take over global markets for smartphones. RIM has many production plants outside of Canada, where manufacturing is cheap. RIM`s processing includes many clubs, which includes successfully and effectively processing the products, fixing, and assembling them. Research in Motion uses a cutting-edge technology and equipment at the Waterloo location in Canada. (Research in Movement Limited, 2009)
The next quadrant that people move to is the training and growth aspects of the total amount scorecard. When developing measures for the learning and growth point of view we got to look into few considerations. These are information capital, human being capital and business capital, which are crucial for future long term success and progress for a firm. Human capital involves knowledge of the employee. In the current technology knowledge is a key aspect and even more designed for RIM which is mainly focused on educated workers. As there is certainly tremendous competition for RIM it is key that the employees' posses skills where they can contend then with other companies on the market. Companies have been impacted with technology and RIM is a company which offers in it. So having information (capital) and changing it to knowledge is essential. Then we move to business capital, which is having a confident heart in the firm which will improve the ability to grow the organization.
Learning is key and essential to any company and especially for RIM. Since the ranges of their products are based after technology and invention this quadrant is very critical. ``Training and Development metric includes Learning and Progress Opportunities (percentage of employees who are satisfied with the training and expansion opportunities in the business). `` (Balanced Scorecard Custom made, 2009)
Research in Movement is able to expand its company by recruiting more employees into the business. That is an important aspect for a company to expand, if more employees are chosen, then the company will be able to expand more rapidly and package with the needs of customers proficiently. RIM lately reported, to consider 3, 000 more employees for 2009, taking the total employees at Research in Movement to 15, 000. (Randstad, 2008) Recruiting more employees demonstrates RIM is set to have skilled workers to meet up with the needs of customers, as well as deal with its challengers.
This is one of the actions that a lot of companies take into consideration. RIM would take this solution and implement it within the organization. Training would increase the performance for the current job and development checks the future progress of the work. It's a decisive metric as this causes future technological improvements and newer inventions which RIM continues coming out with. The company's product line, which one of them is a good phone, Blackberry helps to keep arriving with newer and increased features keeping their competitors in mind. RIM managing this metric effectively will lead to great success and we have seen that in the financial point of view of the company.
We can state that RIM is obviously a learning organization as they keep researching, improve expectations internally. There must be a clear distributed vision established by the management as this leads a firm in one establish course. If this is usually to be possible there should be mental models within the firm as well as team learning.
Another key aspect of learning and growth aspect for what we can look at is worker turnover. It really is basically employees going out of or joining the firm. This is a key feature as if the worker turnover is high than it will have on effect on the output levels. There may be various reasons such as staff member not being compensated or discontented with his work or even some other factors like the working conditions or chances of promotion and development are hardly viewed. On the other hand if the worker turnover percentage is low this shows the satisfaction that employees are with their work. It shows steadiness within the business. RIM before couple of years has increased its labor force globally at extraordinary rates. This somewhat demonstrates the staff turnover is relatively low.
Finally we will be covering the last point on learning and expansion perspective and its own metrics. Job satisfaction is when a worker is content with his work and encouraged. This is also one of the key the different parts of learning and progress as if the employees for case are satisfied with their job this will lead to efficiency and development for the firm as well as increase in earnings. So by concentrating on job satisfaction it brings about positive outcomes. We are able to associate such a circumstance for RIM as their earnings before couple of years have increased in extreme pace.
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