2. Agenda
RIM Business Definition
Current Situation
Issue Analysis
New Business Definition
Balanced Score Card
Recommended Initiatives
Implementation Plan
3. Current Business Definition
Founded 1984
1999 - Launches BlackBerry service
Q2-2011 – surpassed 70 million subscribers
2010 Revenue/ Net Income: $14.9 billion / $3.46
billion
Strength lies in offering end-to-end solution
through push email on BlackBerry Enterprise
Server
Historically RIM focused on the enterprise market with a focus on security
Business Definition Serving Enterprise and Prosumer Market
Customers Governments/Offices/Corporations and Professionals
Offerings Secure Platform for Mobile Communication
Major Markets North America and Western Europe
Delivered via Wireless Carriers
4. RIM's Current Situation
o Declined Operating Performance
o Failed to attract consumer's attention
o Lost market shares
o Faced innovation and technology challenges
o “Falling knife” - Stock Market Performance
RIMs market share is depleting fast with stiff competition
New Subscribers/Quarter
turned down
New Subscribers added per unit sold
Continue to drop
Device Gross Margin Gets
Thinner
5. RIM’s Major Issues: SOF-IE
SOF-IE
Framework for
RIM
Strategy Operations Finance
Internal • Ineffective
Governance and
Reduced Confidence
in RIM’s Management
Team
• Rigid Organizational
Structure
• Confused Strategy
Leading to Major Slip
at the Enterprise
• Operational Glitches
with Software Delays
and BlackBerry Service
Outages
• Human Resource
Challenges
• Lack of Processes to
Ensure Alignment of
Requirements with
Product Development
• Declining
Profitability
• Deteriorating Sales
Growth
• Increasing
Operating Costs
External • Rapid Loss of market
Share in North
America
• Ineffective Business
Alliances &
Ecosystem
• Falling Behind
Industry Trend &
Innovations
• Lack of Developer
Support for BlackBerry
Platform Growth
• Adverse Impact on
BlackBerry Brand Due
to Service Outages and
Ineffective Government
Relations
• Over-dependence
on a Few
Customers
• Deteriorating
Investor Trust
RIMs strategic issues are in high alert zone
6. Critical Issues
o Ineffective governance & unsustainable
business model
o Lack of ecosystem and falling behind
Industry Innovation curve
o Declining Operational Effectiveness and
Human resource challenges
RIM should give immediate attention towards its critical issues
Revenue Per BB device sold
7. Declining Cash Position
o Current ratio declined from 3.51
in 2007 to 2.06 in 2011
o Cash ratio declined from 1.81 in
2007 to 0.58 in 2011
o Current assets declined by 1.5
B from prior quarter
Current Rate of Cash Burn (15%) Coupled with Fast Declining Growth
will Completely Deplete RIM’s Cash Reserves in ~ 6.5 Years!
RIMs cash position is poor compared to its competitors
8. New Business Definition
o Nature of Marketplace has changed - Consumer market as important as Enterprise
o In both segments, it is not only radio any more - content is the king
o Necessary to build on security prowess and develop social communication
platform, complete with active app-based ecosystem
o Major non-US markets have huge potential, scope to penetrate these markets,
paying at respective price points
RIM should focus on enterprise as well as retail customers
Business Definition Servicing Enterprise & Consumer market
Customers Government/Offices/Corporations and Consumers
Offering Secure and Social Platform for Mobile Communication
Major Markets Asia-Pacific, Latin America, EMEA and North America
Delivered Via Wireless carriers, Phone Distributors, BlackBerry Stores
9. "Customer Intimacy" "Product & Services Leadership" "Operational Excellence"
Customer Perspective
Process Perspective
Learning and growth
Perspective
Financial Perspective
Strategy Map Research In Motion
Increase
Shareholder Value
Productivity
Strategy
Revenue Growth
Stratregy
Create Value from
New Products and
Services
Increase
Enterprise Market
Share
Manage Cash for
Stratregic
Investment
Reduce
Operating Costs
Establish
Strongholds in
Emerging Markets
Retain Customers
Improving User
Experience
Diversify
Customer base
Innovative
Products &
Solutions
Comprehensive
App Store
Reliable and
funcational BB
Serviice
On-time Product
launches
International
Expansion
Strategic Alliance
and Eosystem
Customer
Satisfaction
Retain
Developers
Sustaining R&D
Process
Business &
Technology
Innovation
Performance
Management
Customer Oriented
Solution Process
Ecosystem
Development Process
Project & Quality
Management
Effective Cost
Management
Integrated Business
Development
Process
Talent
Management
Media &
Government
Relationship
Increase
Marketing
Relationship
Management
Skills
Operational
Management
Skills
Successful Career
Planning
Entrepreneurial
and Innovative
culture
Leadership
Development
Acquire Companies
Right Price
Key
Employee
Retention
Strategic Decision
making
Strategy Map
10. Balanced Score Card
Success Area Measure of Success Target (12 months) Weight
Effective Governance The Board of Directors satisfies Best
Practices outlined by the North
American Corporate Governance
Guidelines
100% Separation of
Board of Directors from
Senior Management
25%
Development of
Ecosystem and
Strategic Alliances
Number of Strategic Alliances in
Emerging Markets
Revenue Generated from Content
Services
Increase by 100%
Double the revenue
25%
Increase Market Share
of Emerging Markets
Market Share in Latin America, Middle
East, Africa, India and China
Among Top 3
smartphone Players
15%
Reduce Development
Cycle Time
Total time elapsed: From initial concept
to time product ready for market
6 Months 13%
Actively Manage the
Product Portfolio for
Superior Innovation
Technology Ranking: Independent
peer review of current technology
capabilities
Among top 3 in high-tier,
mid-tier and low-tier
smartphones
12%
Retention of Key
Employees
Identification and stock ownership for
key employees
100% of Key employees
covered by stock options
10%
11. Initiative 1 - Effective Governance
o Separation of concerns - make executive management separate from
board
o Reduce redundancy in management - such as two CEOs doing same
job
o Evaluate management effectiveness and replace inefficient
management
o Create healthy operating environment through implementation of
reporting and governance systems - monitor key metrics
XXXXX
12. Initiative 2 - Strategic Partnerships
o RIM cannot capture all potential value by only enhancing
its own internal management mechanism
o Strategic partnership is the way to look for complementary
strengths to build a highly competent global ecosystem
o Give customers unrivalled choice and become market
leader
XXXX
13. Initiative 3 - Emerging Market Positioning
o Competitive Product Portfolio for price
sensitive and spec conscious EME markets
o Majority of market share is between $100-
$200 price range
“Land Grab” Strategy in EMEs to take the leading position
o Develop BBM ecosystem
o The value of being social @ work and
outside
o Develop Local Brand and capabilities
14. Initiative 4 – Reducing Development Cycle
o Currently taking too long to bring product concept to
market - often giving competitors an upper hand
o Centralized Product Management necessary - work with
close collaboration with Product Marketing teams
o Bring a new idea to production in less than 6 months -
that's the pace of the industry
o Align product roll-out strategy with business strategy - be
the first to roll out new ideas, or a close second at best
XXXX
15. Initiative 5 - Managing Product Portfolio
• Strive to be at the top of technology ranking in any category - hardware, software,
features, radio communication, security, productivity and lifestyle apps
• Jump into “superphone" bandwagon
o Ultra-fast dual core processors with over a GB of memory
o 128 GB onward flash storage
o Multi-touch screen of over 4.3”
o 12 megapixel camera
o GPS integration
o Support for blazing fast LTE and/or WiMax network
• Provide an easier and faster user experience
o Improved browsing
o Voice-activated searches
o Personal and corporate content management
o Productivity apps
XXXX
16. Initiative 6 - Key Employee Retention
o Key employees are RIM's engine for innovative products
o Offer competitive salary and benefits to retain key
performing employees and avoid brain drain
o Cover all employees with a planned stock options
schedule to lure them to stay at RIM
o Make RIM an attractive workplace as compared to
competitors
XXXX
This graph doesn’t help to show the urgency!Do we have any Cash Flow Graph that shows how long RIM will last if it went on like this? (Was Munaf doing one?)According to Munaf: cash ratio will be almost zero in approximately 6.5 years at the current decline rate of 15% (can he justify it, if asked?)Can we say: “Current Rate of Cash Burn Coupled with Declining Growth will Put RIM on the Verge of Bankruptcy!” ??
No one will be able to read this!
No one will be able to read this!
Not sure how to fix this one!We also need to show how much these initiatives will cost us and how are we going to fund them!