Research In Motion (RIM) was founded by Mike Lazaridis, a graduate learner from the College or university of Waterloo, in 1984. It designs, produces, and markets cordless alternatives for the worldwide mobile marketing communications market, and it is presently one of the world's leading companies in the mobile industry.
RIM's revenue originates from cellular devices, software and services, but handheld sales constitute the majority (73%) of income. Among RIM's most successful innovations, BlackBerry, has recently achieved over $6 billion in earnings. This product combines a unique set of functions such as "push e-mail", Instant Messaging, Brief Subject matter Service, internet, music, camera, video tutorial, radio, organizer, Gps unit, etc. RIM in the beginning targeted busy specialists and organizations such as the US government and large financial institutions, who gravitated towards the BlackBerry due to safety and security of its delivery of e-mail and because it effectively blended other business and Internet services. BlackBerry's success with the business enterprise professional market has since widened to the buyer market since additional features like IM, Text message, and Facebook make the BlackBerry very attractive to the general public, especially more youthful consumers.
The above information demonstrates RIM has a technique based on differentiation and a wide marketplace. They identify themselves based on innovation, quality, and security, and purpose at a wide range in the sense that they concentrate on organizations, government authorities, business specialists, as well as consumers with a variety of product lines.
RIM is experiencing incredible development, both from a income and a subscriber standpoint, and in their competitive, fast-paced, and ever-evolving industry, they have to maintain and effectively control this growth. The main issue facing RIM is that they are unwilling to make significant changes to adjust to the changes in their industry and in the global market which is hindering their expansion potential. This unwillingness to change negatively impacts their R&D progress, their physical extension, and their selecting ability.
Innovation: RIM has a reputation predicated on being technologically progressive. That is especially important in their industry, and the fact that RIM targets it is a strength. A major factor in RIM's development is their R&D, which they concentrate on to enable them to meet customers' needs, enhance the quality with their products, and stay unique available on the market, thus staying regular with their strategy.
First Mover Edge: RIM's early entrance in to the telecommunications market with thrust email and a give attention to security provides them an initial mover edge. It allowed them to fully capture large market show (like the government, large finance institutions, and people generally), establish their brand and build brand popularity, and also gain experience that increase efficiencies.
Competent EMPLOYEES and Management: RIM focuses on selecting the best and brightest, especially designers and technical engineers. They mainly recruit from universities with top anatomist and computer science programs, like Waterloo, and therefore can get the best ability. This competent work force allows RIM to keep up and/or improve the quality of its products and meet the growing needs of these customers.
Culture: RIM's culture is something that packages them aside from many technology firms. They emphasize flexibility, adaptability, collaboration, an agreeable and vibrant environment, and valuing their workers. This culture has resulted in low staff turnover rates. Low turnover means happy employees, which in turn leads to top quality work because people feel appreciated and valued.
Recruitment: RIM's current hiring techniques are creating problems to find enough qualified visitors to retain the services of. They mainly recruit from the College or university of Waterloo and the surrounding area and the employee pool there is bound. They are also desperate for more mature, experience coders and designers in the areas that they operate in.
Limited physical space: Although they want and need many new creators and technical engineers, RIM currently doesn't have the physical space on their behalf. This limits their ability to hire, which limits the quantity of R&D that is being done, leading to a decrease in quality and the competitiveness of the products.
Insufficient R&D Expenditures: Despite an almost doubling of earnings, RIM's R&D expenses in 2007 only rose by 52. 5%, dropping their R&D as a share of sales from 7. 77% in 2006 to 5. 99% in 2007. That is problematic in an industry that is dependent so closely on new, progressive technology.
Local and Historical Target: Since RIM commenced in 1984, management has continued to be adamant about growing organically, following its traditional growth strategy of "sourcing from local skill pools, through employee recommendations and new graduate recruitment, and making selective acquisitions of small technology companies", and keeping yourself focused in Waterloo (including keeping all center work there) (Mazutis, 2008, p. 6). While this has worked in the past, the market gets progressively more competitive and sticking with their current methods is restricting their ability to take care of their development effectively.
Positive View for Smartphones: The demand for smartphones is high, as there's been a shift in the telecommunications industry towards them. Market talk about is likely to reach over 30% in the first 2010s and the number of smartphone users and global shipments have been gradually increasing. This demand means RIM has the chance to increase their customer bottom part and market share.
Acquisition Opportunities: The United State governments' depressed economy has led to financial struggles for most small technology companies and even greater competitors. This provides RIM with an chance to acquire these small companies to be able to meet their technology, R&D, and employees needs. If these businesses are international, it might also provide RIM with a way to break into these foreign market segments.
Unsaturated Marketplaces in Growing Countries: While market penetration in america is relatively high (87%), market penetration in places like China and India are relatively low (39% and 21%, respectively). This implies the markets aren't as saturated, so RIM could greatly increase its presence in those regions of the globe.
Competition: Competition in the smartphone industry is increasing and lots of large players (like Yahoo, Apple, and Microsoft) are actively going after RIM's business segment. Many of RIM's competitors also have already founded R&D facilities and bases in places like China, the united kingdom, and India. This increased competition places pressure on RIM to keep its market share and continue being innovative.
Legal and Political Issues: Intellectual property security laws are much less stringent in countries like China and copyright violations, product imitation, software piracy, and administration interference are much more common. Given RIM's adamant characteristics regarding its security, these factors threaten RIM's global enlargement because they could have to sacrifice one of these core values in order to break into these market segments.
Market Saturation: Intense competition in the industry coupled with high market penetration (87%) and low development in the number of clients (9. 5%) in the US means that the US market (where RIM derives 57. 9% of its profits) is actually saturated. This may threaten RIM's profits and growth.
Employee Pool Competition and Limitations: The market for skilled employees in RIM's industry is also getting more and more competitive. Big players like Apple, Google, and Microsoft are hiring many coders and designers, offering powerful recruitment deals, and even targeting RIM's employing pool from the College or university of Waterloo. Also, a lot of RIM's competitors have already setup international hiring systems that permit them to tap into a new employee market.
Recommendation & Implementation
RIM's unwillingness to make significant changes to adjust to their changing industry and competitive environment is, as stated before, restricting their growth potential which is hindering their ability to effectively control the growth these are experiencing. By remaining adamant about keeping all center work in Waterloo and growing "organically" they are simply restraining their R&D (a crucial portion of their business) due to the fact these practices lead to space shortages as well as engineer and developers shortages. To resolve these problems, we recommend that RIM develop its R&D facilities into international countries. This can not only break them out of the limiting, historically focused ways, but it'll solve their R&D costs, space, and hiring problems as well.
RIM currently has a few R&D facilities internationally (in america and Britain) and customer support and sales and marketing operations in places like France, Italy, Hong Kong, and Germany. However, we believe the scope of these procedures, especially R&D, is too small. RIM needs to broaden R&D facilities more aggressively into new and strategically chosen market segments that will meet their complex, human capital, and space requirements. Although expanding within THE UNITED STATES could be an option, the market saturation, development in range of customers, and selecting pool situation aren't favorable, so that it makes more sense to broaden into regions that have more potential in terms of market share, potential employees, and space. Thus, while THE UNITED STATES is currently RIM's main market in terms of revenue show, they need to focus on other marketplaces, like Europe, Asia, and South America for future expansion. Starting in these new marketplaces will be important going forward and definitely will enable RIM to attain its have the customers, employees, and market share they need to stay competitive.
Another potential site for building R&D operations would be China. The marketplace there may be huge as far as clients and potential employees are worried and it is not currently very saturated (only 39%). However, with China, one incurs the key issue of government interference. The Chinese federal government is very controlling, specially when it comes to information and encrypted data, both of which are incredibly important to RIM. Among RIM's distinguishing factors is they are differentiated predicated on security and if indeed they were to go into China, RIM would more than likely have to stop some of this security to appease the government. This might be inconsistent with their strategy, so this route is not beneficial.
The situation in South America and Europe is quite different. There is absolutely no close control of the telecommunications industry and more freedom is given to operators and companies going into the marketplace. This creates a far more favourable environment for RIM since it means they don't have to sacrifice their security to be able to determine themselves on the market. These locations are also favourable because they too have large populations and therefore many potential clients and employees. We therefore advise that RIM go after R&D extension into South America and Europe. As part of this enlargement, we advise that RIM build new partnerships with colleges in the areas that they broaden into.
Within SOUTH USA and Europe, we believe the most favourable locations for RIM to develop into are Brazil and Russia. The ideal locations in these countries will need to meet the standards that RIM outlined for selecting new development locations including having an already proven pool of potential candidates with a mature expertise, having a strong technical university in the region and having an existing platform of technology companies.
The location in Russia that best will fit these standards is Moscow. It really is home to both Moscow Point out School and the Moscow Institute of Physics and Technology. They both offer high calibre IT programs, with Moscow Condition University being considered the best clinical and educational establishment in Russia (Knowledge Exchange Institute, 2010). These institutions provide RIM management team selection of up to 40, 000 candidates for jobs (Lomonosov Moscow Talk about University, 2010). This is a huge College or university market, which is on par with Waterloo enrolment. With this large market, Moscow is a excellent location to determine a branch of R&D in Russia alongside heavy recruitment tactics. The barriers to starting a business are similar to that of starting a international business in Canada and Russia is looking for foreign investment to help their economy grow (Legal and Taxes Analysis, 2005; Ogutcu, 2002). Both these factors make Russia a strong choice for RIM to develop its R&D into. Although it's people does not rival that of China, it does provide a market of around 142 million individuals (World Bank or investment company, 2008). Also, the amount of censorship by the government is significantly less than in places like China and India, so RIM can feel secure in maintaining the secrecy of its current Blackberry code. With limited obstacles to entry this job could be executed in the short-run. Yet another advantage of choosing Russia as an R&D bottom part is that due to its better location to China and India (in comparison to Waterloo), RIM will have a less strenuous time tapping into the vast consumer and worker marketplaces in these countries without actually needing to establish facilities there. So overall, using its strong universities, large staff pool, favourable market conditions, and location, Moscow makes a good choice for a new R&D facility.
In Brazil, the location best fitting RIM's conditions is Sao Paulo. The College or university of Sao Paulo enrols over 88, 000 students, with 65% being in undergrads in multiple engineering and information technology programs (University or college of Sao Paulo, 2009). This area could increase RIM's global show in the market place substantially. Developing countries are often at the mercy of the phenomena of 'brain drain' (the theory that skilled and knowledgeable individuals leave the united states and proceed to more financially and professionally attractive countries) so setting up operations in Brazil would lessen this trend in Brazil by keeping Brazilian people in Brazil (Carrington & Detragiache, 1999; Merriam-Webster, 2010). This is good for Brazil also for RIM since it can help create goodwill within the united states and possibly improve their position for the reason that market. The diversification of lifestyle and culture in Brazil may possibly also lead to encouraging new progressive ideas on the existing Blackberry product. By setting up R&D in Brazil RIM would be making a positive dedication to the economy of Brazil. This also supplies the profit to RIM of untapped mobile market of around 194 million people (World Lender, 2009). Censorship can be an concern in Brazil, although not to the magnitude of China or India, but it is still a hurdle that RIM would have to address. Thus, given Brazil's huge populace and potential employees, Sao Paulo would be a sound location for RIM to establish future research and development facilities.
In both of these markets, we advise that RIM apply the R&D enlargement by relocating current professionals and employees to help build the new R&D facilities. These employees will be in charge of transferring the core-competencies and culture of RIM's current functions into these new and enjoyable markets. This is, in our impression, the most effective way and the way that gets the best chances to achieve transferring both their particular culture and their proven methods. Another key to the success of the development will be the ability for RIM to draw in new grads from the aforementioned universities. Possible approaches for bringing in these new grads could involve paid internships, on-campus recruitment, workshops, and the like. Although establishing physical occurrence in both of these markets will be more capital intense than employing employees cross-border, the benefits that they provide in terms of market share and access to potential employees outweighs these costs. Also, based on expected profits and projected net income for 2008 ($6 billion and $1. 3 billion, respectively), it is obvious that RIM has the financial resources necessary to tackle this level of global enlargement.
In order to stay competitive in the industry and effectively maintain their development, RIM needs to take a more aggressive stance on global development. We recommend they do that by creating R&D facilities in Moscow, Russia and Sao Paulo, Brazil and building recruiting relationships with the universities in each city. Both these locations have the populace, the colleges, and the space had a need to solve RIM's problems of inadequate R&D expenditures, workforce shortages, and limited physical space. Choosing to broaden into these locations also solves RIM's main problem to be unwilling to make significant changes to adjust to the environment since it shows commitment to moving beyond their historical methods while still keeping yourself true with their culture, eye-sight, and strategy. In an industry like the telecommunication industry, which is continually changing and very competitive, it is essential a company stays together with your competition and keeps pace with the company's development and our advice will allow RIM to do both.
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