Since releasing its first handheld device in 1999, BlackBerry has seen its share of ups and downs. These once-ubiquitous smartphones offered a revolutionary new way for users to make phone calls and access text messages, emails, browsing, and more.
By 2006, BlackBerry devices had become so popular that Webster’s dictionary named the term “crackberry” the “New Word of the Year.” President Barack Obama’s obsession with his BlackBerry became well-known both during and after his presidential campaign.
BlackBerry reached its peak popularity in 2012, with 80 million subscribers worldwide; however, by then, competing devices such as the Apple iPhone and Samsung Galaxy had gained the upper hand in the market, a development that has only solidified since then.
Over the past few years, BlackBerry has been bleeding profits, leading many industry professionals to speculate whether the company was doomed. However, with some radical changes and a recent upheaval in leadership, BlackBerry is beginning to make headlines again as the possible “comeback kid” of 2014.
Businesses facing similar crises may wonder: What has BlackBerry been doing to overcome such a disaster?
The Anatomy of a Company Comeback
Recovering from a loss of profits or reputation can be extremely difficult, but it is possible. To stage a major comeback, companies must employ various strategies to accomplish the following ends:
- Increase investor confidence. When sales slump and profits plummet, investors often flee. To keep their ships afloat, companies must reestablish trust with investors by proving they are capable of bouncing back from market setbacks.
- Grab a target audience’s attention. Multitudes of brands exist to grab the attention of consumers once their competitors have lost it. Companies that have fallen out of favor with their audiences – for whatever reason – must never become guilty of the worst marketing crime: being boring. When it comes to the comeback, the bigger and bolder, the better.
- Fill a void. When brands are looking to regain lost ground (and customers), they need to prove they can fill a need competitors either aren’t filling, or that they aren’t filling well enough.
How BlackBerry is Turning Things Around
Since early June, BlackBerry’s stock earnings have increased 45 percent, reflecting a major turnaround from its seemingly endless plummet. Sales continue to fall, but are already beginning to post modest profits that will continue to grow as they develop their new business model and focus. Current projections predict they will achieve profitability gain by 2016.
Characteristics that set the “new BlackBerry” apart from the “old BlackBerry” include:
- Competent and charismatic leadership. In November 2013, BlackBerry brought in John Chen, a reputed “fixer” of troubled corporations, to serve as the new CEO. Chen quickly got to work restoring company morale and put a stop to practices that might lose more money. His confidence, pragmatism, and track record of success have helped create positive buzz around the brand while establishing new strategies to take the business in a new direction.
- Adapting to changing realities. A few years ago, BlackBerry was the leader in mobile devices, which earned them that notorious “CrackBerry” moniker. When the tech giants Apple and Samsung moved in with competitive products, BlackBerry failed to keep up.
However, as part of its reemergence, the company has been focusing on initiatives such as Project Ion, which aims to connect more devices as part of the shift toward the trend known as the Internet of Things. Also in development is its new BBM messaging app, a further indicator that BlackBerry is focusing more on software than hardware.
Although BlackBerry continues to create products (like the soon-to-be-released Passport), these devices are geared toward “enterprise users” rather than the typical consumer:
- Capitalizing on industry growth. Healthcare represents an enormous industry, having generated over $1.6 billion in the United States alone in 2013. In a savvy business move, BlackBerry recently decided to purchase a minority stake in NantHealth, an Indian health care firm, and focus on their healthcare services platform, which facilitates connectivity between devices in medical facilities.
Focusing on a sector that will only continue to grow is a smart move on BlackBerry’s part, especially as hospitals and medical offices across the world continue to incorporate big data into their operations and record management systems.
- Reinventing business models when necessary. As part of its reinvention, BlackBerry found that a B2B rather than B2C approach proved most profitable. Rather than clinging to the idea of BlackBerry as a consumer products company, they embraced the change and are reaping the rewards.
Lessons Companies Can Learn from BlackBerry’s Reemergence
From emerging startups to established companies in crisis, business owners can glean several lessons from the BlackBerry comeback:
Lesson #1. Partner with likeminded organizations. In a recent deal with Amazon, BlackBerry agreed to allow those using its latest operating system to purchase Android applications from the Amazon app store beginning in the fall of 2014. The agreement benefits both companies, increasing Amazon subscribers and decreasing consumer-facing expenses for BlackBerry.
When it comes to business partnerships, consider what you can offer to another company that they may not be able to do as well or as cost-effectively as you can, as well as vice versa. When companies work together to raise one another’s visibility and profits, everyone wins.
Lesson #3. Go lean. When a business is bleeding money, spending more on product that may not turn a profit is a great way to run out of cash quickly. Chen’s cost-cutting approach eliminated much of the company’s high-cost manufacturing expenses so they could pour more of their resources into services and software.
Whether your company offers products, services, or a mix or both, take stock of which ones bring the highest ROI and decide whether one or more of your business areas are dragging down your bottom line. By cutting off the diseased branches, you allow the rest of the business to flourish and grow.
Lesson #3. Adapt or die. When companies face big problems, it often takes big changes to turn them around. BlackBerry is still going because the company recognized the changes that were happening in the tech industry (and within the company itself) and took the necessary measures to remain relevant.
When it comes to staying alive in the business world, companies must stay nimble. Markets and consumer demand change constantly, and successful brands keep pace with these changes, however subtly or drastically they have to adapt.
Time will tell whether BlackBerry’s bold strategies will reposition them as a leader in the tech industry. However, their recent reversal of fortunes should serve as a lesson to any company looking to reinvent itself.
How does your company adapt to changing market and consumer demands?
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