Professional Documents
Culture Documents
[Name of Release]
Document Version: 0.1
April 15, 2009
Writing format: 1.5 line spacing, 12 pint Times New Roman, 1-inch margin
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Page 1 of 50
Table of Contents
1
EXECUTIVE SUMMARY..................................................................................................................................4
1.1
HEADING 2..............................................................................................................................................4
1.1.1
EXTERNAL ANALYSIS.....................................................................................................................................5
2.1
HEADING 2..............................................................................................................................................5
2.1.1
3.1
BUSINESS DEFINITION/MISSION/VISION........................................................................................6
3.2
MANAGEMENT STYLE.........................................................................................................................6
3.3
3.5
3.3.1
ORGANIZATIONAL STRUCTURE.........................................................................................7
3.3.2
ORGANIZATIONAL CONTROLS...........................................................................................8
3.3.3
ORGANIZATIONAL VALUES.................................................................................................8
CORPORATE LEVEL................................................................................................................9
3.4.2
BUSINESS LEVEL..................................................................................................................12
3.4.3
FINANCIAL ANALYSIS.......................................................................................................................23
3.5.1
3.5.2
VALUATION OF RIM.............................................................................................................25
3.5.3
SCENARIO ANALYSES.........................................................................................................26
HEADING 2............................................................................................................................................28
4.1.1
HEADING 2............................................................................................................................................29
5.1.1
HEADING 3.............................................................................................................................29
CONCLUSIONS................................................................................................................................................30
6.1
HEADING 2............................................................................................................................................30
6.1.1
HEADING 3.............................................................................................................................28
RECOMMENDATIONS...................................................................................................................................29
5.1
HEADING 3...............................................................................................................................5
INTERNAL ANALYSIS......................................................................................................................................6
3.4
HEADING 3...............................................................................................................................4
HEADING 3.............................................................................................................................30
APPENDIX........................................................................................................................................................31
7.1
7.2
7.3
BCG MATRIX........................................................................................................................................33
7.4
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7.5
7.6
VRIO ANALYSIS...................................................................................................................................36
7.7
ENDNOTES.......................................................................................................................................................47
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1 Executive Summary
1.1
Heading 2
1.1.1 Heading 3
1.1.1.1 Heading 4
Page 4 of 50
2 External Analysis
2.1
Heading 2
2.1.1 Heading 3
2.1.1.1 Heading 4
Page 5 of 50
3 Internal Analysis
3.1
Business Definition/Mission/Vision
Research In Motion, Ltd., (RIM), headquartered in Waterloo, Ontario (Canada) is a leading
designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile
communications market. RIM targets both enterprise and consumer market. RIMs product
portfolio includes BlackBerry wireless solution, the RIM Wireless Handheld product line,
software development tools, Radio-modem, and other hardware and software. (RIM Website).
RIM is the number one smartphone vendor in North America. The success of BlackBerry
products and services is driven by passionate employees, outstanding partnerships, distinctive
technological expertise, a commitment to quality and a culture that embraces innovation,
customer service and operational excellence (RIM annual report, 2009). The company strongly
believes in innovation and creative thinking, and recognizes the importance of providing an
environment that inspires people to realize their full potential. 'Always On, Always Connected'
computing and communications solutions is RIM's longstanding vision. (RIM Website)
3.2
Management Style
From Business Weeks interview with RIMs founder Mike Lazaridis, RIMs success forces
are successful R&D culture and a decade of sustainable innovation. Mr. Lazarids said in the
interview, If you build the right culture and invest in the right facilities and you encourage and
motivate and inspire both young and seasoned people and put them all in the right environment
then it really performs for you. It's what I call sustainable innovation.1
Newly hired employees attend weekly vision meetings; the company also has brainstorming
leadership committees on everything from technology to research and development,
manufacturing to the user interface of the product. The committee opens to all employees as long
as they have the capability.
The whole company uses the product! So they actually test new ideas within the company.
This is a clever way to make RIM very competitive. Because of the way the devices are built
they can update the software and test a new feature right away, the test within the whole
company becomes very efficient. As Canada's largest employer of cooperative education
students, RIM has a wide cross-section of people, from the very young to the very experienced,
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who are testing these ideas. Decisions get made very quickly in the company and they get made
in very collaborative ways, and they get made with accurate information.
3.3
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BlackBerry smartphones, software and services. RIMs primary revenue stream is generated by
the BlackBerry wireless solution.
3.3.2 Organizational Controls
RIM welcomes and encourages innovation and creative thinking in the company. RIM
recognizes the importance of providing an environment that inspires people to realize their full
potential. Working in RIM can be inspiring, challenging and deeply rewarding. The incentive
program is available to all permanent employees and is based on parameters relating to
performance, which includes innovation and creativity brought forth. RIM provides FREE
BlackBerry device to all employees while they are employed with the company. (RIM Website)
RIM heavily relies on its intellectual property, the company records all employee actions in
the interest of maintaining control over intellectual property2. All employees are aware of this
control and understand that their information is transparent and in visibility, if they want to make
private conversations, they will bring in personal devices.
Special cautions are for pre-release beta devices, since employees test and use pre-release
beta devices, the company asks employees to keep the devices out of sight when they go off
campus to avoid people taking photos of the new technology. If the device is lost, the company
will wipe off the device immediately. RIMs employees are very cooperative and understand
their obligations as beta tester.
To support corporate governess, RIMs Code of Ethics sets forth specific policies to guide
Board of directors, officers, and employee in the performance of their duties. The company
maintains a culture of ethical standards and commitment to compliance, and provides a work
environment that encourages employees to raise compliance concerns to the attention of
management, address them promptly.
3.3.3 Organizational Values
At Research in Motion, the main cultural values are seriousness, technical competence, and
intensity.3 Other corporate cultures are young, fast-paced development environment, casual,
informal. The values support the kind of commitment and technical innovation that have allowed
RIM to revolutionize e-mail communications. To support this kind of culture, the company is
situated across Davis Computer Research Centre at the University of Waterloo, one of the most
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respected computer-science schools in North America4. With a continual flow of interns and new
employees from the university, the company constantly refreshes its social network with
knowledgeable and energetic people. The companys name derives from Mr. Mike Lazaridiss
belief that research and engineering excellence would drive the company's growth, and Motion.
(Rapid Motion)
RIM provides an environment that support healthy lifestyle through Healthy@RIM program.
RIM has been named as Canadas most Admired Corporate Culture in 20065. From RIMs
website, Our people work hard, inspire each other and celebrate success. We meet the
challenges of a competitive, evolving marketplace by remaining true to the values that underline
our corporate culture. If you have a passion for excellence, a drive to achieve, and the desire to
work with others who share it, you belong at RIM.
3.4
13%
2%
3%
Smartphones
Service
Software
Other
82%
Page 9 of 50
RIM generates smartphone revenues primarily from device sales to carriers. In fiscal 2009,
smartphone sales represented 82.1% of total company revenues. BlackBerry smartphones are
available from hundreds of carries and indirect channels, through a range of distribution partners
and operated in a variety of carrier network types. RIM has traditionally been focusing toward
the enterprise market. More recently the company has introduced consumer oriented
smartphones and it has made significant inroads into the consumer market, and RIM is
positioning itself to take a larger share of the consumer market. In fiscal 2009, RIM launched
global BlackBerry brand campaign, and BlackBerry ranked at number 51 on the Millward Brown
Top 100 Most Powerful Brands list.(RIM Annual Report, 2009). RIM introduced three new
platforms in fiscal 2009, the Bold (3GQWERTY), the Storm (3G touch screen), and the Pearl
Flip. The Bold is targeting enterprise customers and the high end of the consumer market, the
Storm will attract both enterprise and consumer markets and the Pearl Flip will be largely sold to
the consumer market. The Curve (introduced in fiscal 2008) which has seen strong adoption in
the enterprise market, also widely penetrated into the consumer market as its price declines. RIM
has launched As of FQ309, 55% of RIMs customer base was enterprise and the remainder
consumer6.
BlackBerry service is provided through a combination of RIMs NOC (Network Operating
Center) and the wireless networks of RIMs carrier partners. Unlike other handset vendors, RIM
operates its own network operations center, or NOC, which allows it to collect a monthly fee
averaging ~$5-6 per subscriber7. In fiscal 2009, RIMs BlackBerry subscriber account base is
approximately 25 million; the company generates service revenues by charging a monthly
infrastructure access fee to a carrier or reseller, the carrier bills the end customer. The service
revenue accounts for 12.7% of the total company revenue in fiscal 2009.
RIMs software business accounted for 2.3% of revenues in fiscal 2009. BlackBerry wireless
solution comes with software that can be installed at the corporate server level and on personal
computers. The company charge software license fee and upgrade fees from enterprise software.
Consumer software is included in hardware purchase, or at purchase from a carrier or RIM
website. Software business also includes BlackBerry technical support and software maintenance
program.
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smartphone devices with advanced features to appeal broader consumer base in the world. Thus
RIMs BlackBerry wireless solution business is a Star. (Appendix 7.3)
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WordToGo,
PowerPointToGo, BrickBreaker and WordMole. The Bold also offers new or updated
applications for BlackBerry Messenger, WHERE GPS, and Mobi4Biz.
To be competitive in the mobile phone market, RIM is using its value drivers with its resources
and capabilities to modify its business strategy to meet the goal of its corporate strategy in
following areas:
-Expand product portfolio with new smartphones models and include support for emerging
network technologies
-Develop further enhancements to our software and services platform to grow our customer base
in existing and new markets
-Grow and strengthen relationships with our carrier and distribution partner across the globe
-Enhance the BlackBerry user experience further by working closely with our partner to develop
compelling mobile applications
-Leverage and expand outsourcing partnerships and increase outsourcing volumes for
manufacturing
-Attract, hire and retain the best available talent to maintain RIMs market leading position
World to increase its value proposition among smartphone users. Blackberry Storm is RIMs first
product with touch screen feature.
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With 5,100 people or 40% of total workforce in R&D, RIM has a ver y high ratio of employees
dedicated in advance research and product development areas. RIMs spending in R&D in fiscal 2009
- Manufacturing
RIM has a total of 242,000 sqft of manufacturing facilit y in Waterloo, Ontario with
approximately 1,900 personnel or 16% of the workforce involved in manufacturing and production. To
support increasing demands, RIM continues to scale its manufacturing capacity by expanding its own
manufacturing facility, upgrading production and test equipment, as well as adding new sourcing partners
globally.
- Customer Service
RIM has approximately 1,500 dedicated technical and support staff at five customer support
facilities around the world, providing 24-hours, 7-days a week per week. As part of the effort to
improve customer service and meet the needs of increasing customer base, RIM opened the fifth
customer care facility in Irving, Texas. RIM also continued to grow other customer care centers
to include multilingual training programs such as, French, Italian, German, Spanish, Simplified
Chinese, Japanese and Brazilian Portuguese.
Resources and Capabilities
- Top Management Team
RIM believes key factors that contribute to its success are the strong quality and skills of the senior
management team and other personnel. By bringing together highly qualified management team with
extensive experience that encompass both management and engineering skills, RIM is able to meet
challenges and excel in highly competitive smartphone industry. compe Four out of six top management
personnel has Master Degree in Business Administration with operation or engineering background.
- R&D
RIM has strong R&D team with expertise in RF Engineering, Analog RF, Digital ASIC,
Audio, Display, Intelligent Antennas, Power Management, Firmware, Software Tools, Testing
Software and Product Design. With such strong talents in R&D team, RIM is able to integrate all
the complex components into an efficient board layout design and customize its core proprietary
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hardware designs to address new applications, network protocol and transmission frequencies to
support multi wireless protocols.
- Network Effect
Blackberry is recognized as one of the premier smartphone brands. Historically RIM has strong
presence in North America and Europe, and continues to broaden strategic alliances with
enterprise, SW application companies, telecommunication carriers and distributors to expand
globally, particularly in Latin America and Asia. Up to day, RIM has partnership with 475
carriers and distribution channels in over 160 countries and deployed over 150,000 Blackberry
Enterprise Servers.
- Customer Service
RIMs organizational practice is dedicated to product innovation, operation excellence and
customer satisfaction. In fiscal 2009, RIM launched four new initiatives including the
BlackBerry Certification Program for its partners to enhance their knowledge of BlackBerry
hardware and software; BlackBerry Support Community Forums, a self-service discussion
forum to bring together device users and IT administrators; BlackBerry Expert Support Center
(BESC) to provide on-line technical support for accounts that have technical support contracts
with RIM; and BlackBerry Answers which acts as both a mobile and desktop self-serve Q&A
center. RIM has five customer service centers worldwide with multilingual support.
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Value Chain
VRIO Analysis
RIM has a number of resources it can exploit, to gain a competitive advantage. These
resources are described and analyzed in Exhibit xx. Basically, RIMs resources in this VRIO
analysis can be classified into busines, marketing, operational and technical resources.
Some of the resources stem from the fact that RIM was the first mover in the smartphone
market, and therefore has significant resources and capabilities due to its experience in this field,
its established relationships with carriers and distributers, and corporate customers, as well as its
large customer base. RIMs brand is also a valuable and leveragable resource which helps RIM
sell to both business and prosumer users. RIMs Blackberry system is recognized as one of the
most secure smartphone systems in the industry. RIMs The Blackberry Enterprise Server
software which RIM developed not only provides RIM with a competitive advantage because it
is tailored specifically for Blackberries, but is a source of revenue for RIM too, with the persubscriber licensing fees RIM charges to corporate customers.
Finally, other resources that RIM has include proximity of its headquarters to the Davis
Computer Research Center, providing RIM with a steady stream of interns as well as access to
renowned academic faculty and research, and RIMs company culture which encourages hard
work, innovation and creativeness.
An analysis of RIMs 4Ps: Product, Pricing, Placement and Promotion
This section analyzes the 4Ps of RIM: Product, Pricing, Placement and Promotion
Product
As the original Smartphone manufacturer, RIMs Blackberry products have a long history.
The Blackberry has evolved from being a simple, monochrome push e-mail
client,
to a
sophisticated device with touchscreen and Wi-Fi (please refer exhibit xx). Among the major
product improvements at each major model release are:
Model
5000/6000 series
7000 series
Page 17 of 50
effectiveness of major business functions such as e-mail (by using a full QWERTY keyboard),
while products for the mainstream user focused on more personal applications such as having a
full touchscreen, and having a better camera and MP3 playback capabilities. From a competitive
timeline perspective, the Blackberry series major technological advancements shown in the table
above, have generally been in-line with competitive smartphones.
On the software aspect, all Blackberry smartphones operate using the Blackberry
operating system. This is a double-edged sword: on one hand, developing their own operating
system allowed RIM to customize it only for the Blackberry, increasing the efficiency in terms of
operating system and hardware interfacing. On the downside, it also caused Blackberry to lag
behind others in terms of 3rd-party applications, since Microsoft Windows Mobile and Symbian
were more popular with 3rd party developers.
Another important aspect of RIMs products is the Blackberry Enterprise Server software.
This is the server-side software that enabled Blackberrys push email technology by pushing email to Blackberry smartphones. The customers for this server software are mainly corporate
entities. RIM charges customers for the software and it is part of RIMs methods of revenue
generation.
Pricing
Blackberrys pricing strategy generally reflects a company that knows it can charge a
little more for its products because of its brand name, yet not too much more, since Smartphone
customers have almost no loyalty to brands.
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The following table shows Blackberrys undiscounted retail price, as well as discounted
prices provided by wireless service providers, which locks the purchaser into a 2-year service
contract with the wireless service providers. In the United States, the a big portion of cellphones
are bought through wireless service providers, and even if they are bought at retail stores, a
wireless service provider is usually involved this will be explained more in the placement
section.
Blackberry Model
Bold
Storm
Curve
$499
$499
$499
$199
Not
available
Not
available
$169
$119
$249
$149
$249
$179
Service Provider
Price with 2-year
contract
Verizon
AT&T
T-Mobile
Not
available
$399
Not
available
Pearl
Price not
available
The table shows that undiscounted price of a Blackberry is around $500. Wireless service
providers offer the phone at a much lower price, with a service contract. As shown in the external
analysis section, this price is many of the other smartphones available, such as the iPhone and
Motorola. It is, however, more expensive than the smartphones offered by Nokia who specializes
in price leadership.
Like the other players in the Smartphone industry, RIMs pricing strategy reflects a
waterfall strategy, where a certain product becomes cheaper over time, whereas newer products
fill the position of the high-priced product. For example, the 7000 series model Blackberry was
sold around $500 (undiscounted) when it first came out, but over the years the price has dropped
significantly. Now, it sells for a very cheap price, while the newer Bold and Storm models have
taken flagship status and the $500 price tag. This means that RIM, just like other smartphone
manufacturers, have to constantly update their product portfolio with newer breakthrough
products, in order to give customers a reason to pay the top price of around $500 for a
smartphone, since customers expect the price for any one smartphon to drop over time.
Placement (Channel)
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The Blackberry is currently not sold directly by RIM. In other words, RIMs corporate
website does not allow customers to purchase directly from RIM. In addition, RIM generally
does not have brick-and-mortar shops that sell their Blackberry smartphones. Instead, RIM sells
Blackberries through online and traditional retailers, as well as wireless service providers.
In some cases, online and traditional retailers, such as Amazon.com or Best Buys, will
partner with wireless service providers, to sell Blackberry smartphones. For example, when a
user shops for a BlackBerry Bold on Amazon.com, the user is given the choice to buy it at a
discounted price of $149, with a 2-year service contract provided by AT&T wireless (see exhibit
xx). Wireless service providers also sell Blackberry smartphones, so at first glance this looks like
a case of channel conflict.
However, if we analyze deeper, we find that channel conflict is minimized, because:: The
retailers goal is to sell Blackberry Smartphones, since that is how the retailers get their revenue.
The wireless service providers goal is mainly to sell their services, and they are able to do so
because they partner with the retailers to provide wireless service to the customers who bought
the blackberry smartphone. Wireless service providers get much more revenue per customer,
from service fees, rather than the Blackberry smartphone hardware itself. In fact, many times,
wireless service providers will subsidize the customer on the smartphone, in order to get their
business as a service customer. This is evident by the many smartphones that are offered free by
wireless service providers.
Promotion
The majority of the Blackberrys promotion actually comes from not from RIM itself, but
also from its service provider partners and fans, who had spread the word on upcoming and
current Blackberry products virally. In fact it was noted by a 3 rd party (rimarkable.com) blog that
it was difficult to obtain the contact information for RIMs own advertising department for
Blackberry.
First, lets discuss Blackberrys promotions coming from RIM itself. There is not much
public advertising directly from RIM. On the Blackberry.com website, as of May 2009, the two
main Blackberry smartphones shown prominently are the Blackberry Bold and Blackberry
Storm. These two are RIMs flagship products today and are being heavily promoted by RIM.
(see exhibit xx)
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Page 21 of 50
References:
http://en.wikipedia.org/wiki/List_of_BlackBerry_Models#Monochrome_Javabased_models_.285000_and_6000_series.29
http://crackberry.com/verizon-taking-blackberry-storm-advertising-seriously
http://crackberry.com/verizon-buy-one-get-one-starts-tomorrow
http://www.rimarkable.com/rim-is-advertising-the-blackberry-everywhere
Page 22 of 50
3.5
Financial Analysis
Figure 3.2 shows the incomes statement trends. RIM has achieved exceptional growth in
revenue from last five years, with five year average of 81%. Despite the highly competitive
smartphone market and the global economic recession, RIM still continues the robust sales
performance in fiscal 2009, with revenue up 84% year-over-year. Benefit from the industry shift
to smartphone, RIMs sales momentum mainly attributed to the increased number BlackBerry
smartphone sold, the BlackBerry subscriber base increased to 26 million users in fiscal 2009, up
from 14 million from previous year, which is driven by strong demand from new customers and
upgrades from loyal customer base. RIM occupies 50% of the enterprise smartphone market in
the world and held 50% smartphone market in North America. RIM has grabbed significant
share from the consumer market after the company released Perl, Bold, and Storm in 2008. The
strong revenue growth of the company coupled with improving operational and net profit will
support its growth and expansion.
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The company is able to maintain very healthy GAAP gross profit margin at average of 52%,
this is because lower commodity and components cost and the company is able to maintain the
relatively low cost. But, gross margin dropped to 46% in fiscal 2009. This is because the higher
cost associated with the newly introduced feature-rich smartphones.
Net SG&A is growing because of RIMs increased sales and marketing efforts in the
consumer segment. SG&A as a percent of sales has a downward trend, it is primarily because
RIM sells smartphones through network operators instead of direct sales, and this strategy drives
down the relative SG&A costs. R&D expenses have maintained a steady percentage of sales,
since the company believes in innovation and continually invest in R&D.
Balance Sheet Trend
Figure 3.3 shows the balance sheet trend. RIM maintains strong balance sheet with $2
billion in cash and no debt at the end of fiscal 2009. Receivables are increasing steadily in fiscal
2008 and 2009, this is because RIM let network operators to stock the devices without paying
upfront fees. RIM heavily depends on a number of major operators and channel to distribute
BlackBerry products (RIM annual report, fiscal 2009). Inventory level has been kept at pretty
low level; this is because the high demand for smartphone from carriers, and the carrier are
carrying the inventories. RIM has very low level of long time debt in the past five years, this is
because the company has generated enough operating cashes, so its capital structure is less
leveraged, this also indicates the company is financially conservative.
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Page 25 of 50
but the growth will gradually decline as the increasing competition in smartphone market and
the trend of smartphone is becoming commodity.
3.5.3 Scenario Analyses
We conduct following four scenario analysis to estimate the impact of different strategic
decisions and economic conditions impact on RIMs financial positions.
Scenario 1- Without strategic move
iPhone is the pioneer in introducing touch screen phone and launching application stores to
enhance user experience, and the impact is tangible with iPhones sales growth of 104% year
over year. RIM released its first touch phone, Storm, in 2008 to directly compete with iPhone.
But, without opening application store and services, RIM will definitely fail to market Storm to
the high end smartphone market, which will result in lower ASP prices and much slower growth
in the consumer base. But, we think the growth rate in 2009 will be slightly higher than industry
average, due to RIMs stronger position in enterprise market, and the large subscriber bases
introduced in 2008. So we estimated the growth rate is 20% in 2009, with estimated price/share
of $48 and valuation of $27 billion. The SG&A will slightly decline because of the less
marketing and administration efforts in the consumer segment. The valuation detail is listed in
Appendix 7.x.
Page 26 of 50
manufacturing, we estimate SG&A and COGS will go up. The detail of the valuation is listed in
Appendix 7.x
Page 27 of 50
Heading 2
4.1.1 Heading 3
4.1.1.1 Heading 4
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5 Recommendations
5.1
Heading 2
5.1.1 Heading 3
5.1.1.1 Heading 4
Page 29 of 50
6 Conclusions
6.1
Heading 2
6.1.1 Heading 3
6.1.1.1 Heading 4
Page 30 of 50
7 Appendix
7.1
Board of
Directors
Jim Balsillie
Mike Lazaridis
Chairman and
Co-CEO
President and
Co-CEO
David Werezak
VP
Enterprise
Business Unit
Mark Guibert
Don Morrison
VP
COO
Corporate
Marketing,
Sales, Finance
Blackberry
Wireless
Solutions
Larry Conlee
COO
Engineering and
Manufacturing
Robin Bienfait
CIO
Blackberry
Operations and
Corporate IT
Brian Bidulka
Chief
Accounting
Officer and
Corp
Controller
Page 31 of 50
7.2
Page 32 of 50
7.3
BCG Matrix
Page 33 of 50
7.4
7.5
Page 34 of 50
RIM Blackberry
Phone
80
Weighted score
Score (1-10)
10
Feature Specs
480
80
Bold
Weighted score
10 3.25 in
Score (1-10)
10
Feature Specs
Screen Size
Weighted score
BlackBerry
Pearl Flip
Score (0-10)
weighting
Brand
Feature Specs
Feature
(1-10)
BlackBerry
Storm
10
80
70 2.4 in
50 3.5 in
90
Screen resolution
9 360
81 240 x 320
54 480 x 320
72
9 6 hours
81 4 hours
45 4.5 hours
54
8 15 days
72 14 days
64 13.5 dasy
48
Internal memory
7 1 GB
63 128 MB
7 1 GB
63
3G
6 Yes
54 N/A
0 Yes
54
Bluetooth
4 Yes
36 Yes
36 Yes
36
Internet Browser
4 Yes
36 Yes
36 Yes
36
4 Yes
36 Yes
36 Yes
36
Wi-Fi
4 No
0 Yes
36 Yes
36
GPS
3 Yes
27 Maps
21 Yes
27
Touchscreen
9 Yes
81 N/A
0 N/A
7 3.2 MP
63 2.0 MP
49 2.0 MP
49
Weight
8 5.5 oz
40 3.6 oz
72 4.8 oz
56
820
586
Normalized score
737
0.899
100
0.715
Total
Page 35 of 50
7.6
VRIO Analysis
Page 36 of 50
Model
Specialty
Early Java-based
"Quark"
65XX
67XX
Screen
Network
Notes
5790
5810
5820
6210
integrated phone
6220
integrated phone
6230
6280
integrated phone
6510
medium monochrome
iDEN
6710
large monochrome
integrated phone
6720
large monochrome
integrated phone
6750
large monochrome
Model
Screen
Network
Notes
7210
integrated phone
7220
integrated phone
integrated phone
7230
medium 240x160
pixel colour
72XX
7250
7270
7280
integrated phone
7290
7510
75XX
7520
7730
77XX
7750
7780
medium 240x160
iDEN
pixel colour
speakerphone,
integrated phone
Page 37 of 50
Table 3: Blackberry 7000 Series with Semi-Full keyboard using predictive wording technology
Family
Model
Screen
Network
Notes
Carriers
7100t
7105t
850/900/1800/1900 MHz
GSM/GPRS
7100r
"Charm"
7100v
large
240x260
colour
7100g[2]
O2
(UK),
(Ireland)
7100x
7130
7100i
iDEN
7130e
7130c
7130g
7130v
large
240x260
colour
850/900/1800/1900 MHz
GSM/GPRS/EDGE
O2
O2
Vodafone
Page 38 of 50
850/900/1800/1900 MHz
GSM/GPRS/EDGE
850/900/1800/1900 MHz
GSM/GPRS/EDGE
trackball interface, 2 MP
camera,
speakerphone,
Bluetooth,
external
Vodafone, O2 (UK), O2 (Ireland) & TmicroSDHC (to 8GB with
Mobile.
handheld
code
4.5),
polyphonic ringtones, media
player, GPS
850/900/1800/1900 MHz
GSM/GPRS/EDGE
trackball interface, 2 MP
camera,
speakerphone,
Bluetooth,
external
O2 (UK) and AT&T Mobility & TmicroSDHC (to 8GB with
Mobile (USA).
handheld
code
4.5),
polyphonic ringtones, media
player, Wi-Fi
800/1900 CDMA/EVDO
Internal Display:
240 x 320 pixels
(1/4 VGA) 65K
850/900/1800/1900 MHz
8220 Pearl Flip colours. External
GSM/GPRS/EDGE
Display: 128 x
160 pixel 65K
colours
trackball interface, 2 MP
camera,
speakerphone,
Bluetooth,
external
O2 (UK) & T-Mobile (USA), Tim Italy,
microSDHC (up to 16GB),
Telus Mobility & Rogers Wireless
polyphonic ringtones, media
(Canada).
player, "Clamshell" form
factor, 128MB flash memory
Wi-Fi
8100
8110
240x260
with
65K colours
8120
Pearl"
8130
Internal Display:
trackball interface, 2 MP
240 x 320 pixels
camera,
speakerphone,
(1/4 VGA) 65K 800/1900 MHz CDMA2000 Bluetooth,
external
8230 Pearl Flip colours. External [1xRTT] networks
MHz microSDHC (up to 16GB), Verizon (USA).
Display: 128 x 1xRTT/EVDO
polyphonic ringtones, media
160 pixel 65K
player, "Clamshell" form
colours
factor, 128MB flash memory
Page 39 of 50
8310
"Curve"
"Bold"
8320
"Storm"
(a.k.a.
Thunder)
8330
Trackball
interface,
2.0
Megapixel
camera,
Speakerphone,
Bluetooth,
internal microSDHC (to 8GB
with handheld code 4.5),
Polyphonic Ringtones, Media
Player, GPS.
850/900/1800/1900 MHz
GSM/GPRS/EDGE/Wi-Fi
Dual-band
800/1900 MHz
CDMA2000 1X EV-DO networks
T-Mobile (USA),
(Slovakia)
Orange
iDEN, Wi-Fi
8350i
8900
Trackball
interface,
2.0
Megapixel
camera,
Speakerphone,
Bluetooth,
Telus Mobility, Bell Mobility,
internal microSDHC (to 8GB
Alltel,
Sprint,
Verizon
with handheld code 4.5),
Dual-band
800/1900 MHz Polyphonic Ringtones, Media Wireless. US Cellular
CDMA2000 1X EV-DO networks Player, GPS, WiFi, next
generation OS (4.6)
iDEN, Wi-Fi
Trackball interface, 3.2 MP
camera + flash + autofocus,
speakerphone, Bluetooth 2.0,
WiFi 802.11 a/b/g, UMA, Sprint Nextel
GPS, external microSD (to
16GB), 3.5 mm stereo audio
jack
"Curve"
"Bold"
"Storm"
(a.k.a.
Thunder)
9000
CDMA
EV-DO
GSM/GPRS/EDGE
850/900/1800/1900,
HSDPA 2100
9530
Clickable
Touchscreen
interface, 3.2 MP camera, AT&T, Rogers, Turkcell,
Bluetooth,
1GB
Internal Telenor (Pakistan), Airtel
UMTS
Flash, 3.5 mm stereo audio DoCoMo, O2 (UK)
jack, microSD
800/1900,
Page 40 of 50
Page 41 of 50
Picture
3:
The
Blackberry.com
website,
showing
the
Blackberry
Bold
and
Curve.
Page 42 of 50
Page 43 of 50
7.7
Annual Income Statement (All dollar amounts in millions except per share amounts.)
Feb 05
Feb 06
Feb 07
Feb 08
Feb 09
Revenue
Costs of
Goods Sold
1,350.4
2,065.8
3,037.1
6,009.4
11,065.2
(636)
(925)
(1,379)
(2,929)
(5,968)
Gross Profit
Gross Profit
Margin
SG&A
Expense
714.5
1,140.6
1,657.8
3,080.6
5,097.3
52.90%
55.20%
54.60%
51.30%
46.10%
(512.70)
(476.90)
(488.60)
(813.10)
(1,362.30)
(101.00)
(158.00)
(236.00)
(359.00)
(685.00)
66.8
85.9
126.4
177.4
327.9
34.0
419.8
806.8
1,731.2
2,722.1
2.50%
20.30%
26.60%
28.80%
24.60%
37.1
66.2
52.1
79.4
78.3
--
--
--
--
--
71.2
486.1
858.9
1,810.5
2,800.4
-142.2
104.0
227.4
516.7
907.8
213.4
382.1
631.6
1,293.9
1,892.6
--
--
--
--
--
213.4
382.1
631.6
1,293.9
1,892.6
15.80%
18.50%
20.80%
21.50%
17.10%
0.4
0.7
1.1
2.3
3.3
R&D Expense
Depreciation &
Amortization
Operating
Income
Operating
Margin
Nonoperating
Income
Nonoperating
Expenses
Income Before
Taxes
Income Taxes
Net Income
After Taxes
Discontinued
Operations
Total Net
Income
Net Profit
Margin
Diluted EPS
from Total Net
Income ($)
Page 44 of 50
Annual Balance Sheet (All dollar amounts in millions except per share amounts.)
Feb 05
Feb 06
Feb 07
Feb 08
Cash
1,037.8
635.1
987.2
1,605.1
Net
Receivables
391.1
441.9
634.4
1,340.1
Inventories
92.5
134.5
255.9
396.3
Other Current
Assets
22.9
45.0
41.7
135.9
Total Current
Assets
1,544.3
1,256.6
1,919.3
3,477.4
Net Fixed
Assets
210.1
326.3
487.6
706.0
Other
Noncurrent
Assets
Total Assets
Accounts
Payable
Short-Term
Debt
Other Current
Liabilities
Total Current
Liabilities
Long-Term
Debt
Other
Noncurrent
Liabilities
Total Liabilities
Feb 09
1,518.2
2,453.7
682.4
187.3
4,841.6
1,334.7
866.6
2,621.0
729.3
2,312.2
682.1
3,088.9
1,327.9
5,511.2
1,925.1
8,101.4
614.4
257.5
517.9
1,436.8
2,061.5
0.2
0.3
0.3
0.3
--
16.2
21.0
28.5
37.2
53.8
630.8
278.7
546.6
1,474.4
2,115.4
6.5
6.8
6.3
7.3
--
-637.3
27.9
313.4
52.5
605.5
95.9
1,577.6
111.9
2,227.2
Preferred
Stock Equity
Common
Stock Equity
Total Equity
--
--
--
--
--
1,983.7
1,983.7
1,998.8
1,998.8
2,483.5
2,483.5
3,933.6
3,933.6
5,874.1
5,874.1
Shares
Outstanding
(mil.)
189.5
186.0
185.9
562.7
566.2
Page 45 of 50
Annual Cash Flow Statement (All dollar amounts in millions except per share amounts.)
Feb 05
Feb 06
Feb 07
Feb 08
Net Operating
Cash Flow
278.0
150.1
735.7
1,576.8
Net Investing
Cash Flow
-878.1
67.3
-364.6
-1,153.9
Net Financing
Cash Flow
54.0
-368.2
-153.7
80.4
Net Change in
Cash
-546.1
-150.8
217.6
507.3
Depreciation &
Amortization
Capital
Expenditures
Cash
Dividends Paid
Free Cash
Flow
Feb 09
1,451.8
-1,823.5
25.4
-348.9
66.8
85.9
126.4
177.4
327.9
-109.4
-178.7
-254.0
-351.9
-833.5
--
--
--
--
--
168.6
-28.6
481.7
1,224.9
618.3
Page 46 of 50
7.8
Cost of Capital
Equity Bata
Risk Free Rate (Rf)
Expected Market Rate RM
Equity Market Risk Premium(Rm-Rf)
Cost of Equity/WACC
Terminal Growth Rate
Shares Outstanding
2.34
3.45%
8.00%
4.55%
14.10%
5.00%
564.9 million shares
Yahoo Finance
10 Year Treasure Bond
Yield(yahoo)
S&P 500 Averate Return
Actual
2/28/2009
84.1%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Actual
2/28/2009
11,065,186
(5,967,888)
5,097,298
(684,702.00)
(1,495,697.00)
2,916,899
(194,803)
2,722,096
78,267
2,800,363
(907,747.0)
1,892,616
1,892,616
Actual
Forecast
2/28/2010
30.0%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Forecast
2/28/2010
14,384,742
(7,758,254)
6,626,487
(890,113)
(1,944,406)
3,791,969
(297,058)
3,494,911
0
101,747
3,596,658
(1,165,869)
2,430,789
2,430,789
Forecast
Forecast
2/28/2011
40.0%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Forecast
2/28/2012
31.3%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Forecast
2/28/2011
Forecast
2/28/2013
22.5%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Forecast
2/28/2012
Forecast
2/28/2014
13.8%
53.9%
6.2%
13.5%
10.2%
0.0%
0.7%
32.4%
Forecast
2/28/2013
20,138,639
(10,861,556)
9,277,082
(1,246,158)
(2,722,169)
5,308,756
(402,965)
4,905,791
0
142,446
5,048,237
(1,636,403)
3,411,834
26,431,963
(14,255,792)
12,176,171
(1,635,582)
(3,572,846)
6,967,742
(543,584)
6,424,159
0
186,960
6,611,119
(2,143,016)
4,468,103
32,379,155
(17,463,346)
14,915,809
(2,003,588)
(4,376,737)
8,535,485
(686,458)
7,849,027
0
229,026
8,078,053
(2,618,528)
5,459,525
3,411,834
4,468,103
5,459,525
Forecast
Forecast
Page 47 of 50
Forecast
2/28/2009
2/28/2010
2/28/2011
2/28/2012
2/28/2013
1,293,523
(1,420,756)
40,338
(86,895)
1,605,107
1,518,212
2,399,008
(1,274,994)
(668,551)
455,464
1,518,212
1,973,676
3,244,812
(2,098,054)
(357,287)
789,470
1,973,676
2,763,146
4,388,263
(2,397,587)
(1,127,193)
863,483
2,763,146
3,626,629
5,556,848
(2,438,491)
(2,302,365)
815,992
3,626,629
4,442,620
Page 48 of 50
8 EndNotes
Page 49 of 50
Source: Business Week, April4, 2008, Interview with RIM founder, Mike Lazaridis,
http://www.businessweek.com/innovate/content/apr2008/id2008044_416784.htm?campaign_id=rss_daily
2
RIM records all employee calls, March 04,2009, interview with RIMs CIO Robin Bienfait interview with ZDNet.com.au
in Sydney, http://www.zdnet.com.au/news/communications/soa/RIM-records-all-employee-calls
3
Managing Change through Networks and Values, M, Johnson-Cramer, S Parise, R. Cross, California Management Review,
Vol 49, NO. 3, Spring 2007, page 103
4
Fast Company, Rapid Motion by Bill Breen posted on 12/29/2007 From Issue 49 |(July 2001),
http://www.fastcompany.com/magazine/49/motion.html?page=0%2C3
5
JP Morgan
JP Morgan, page 4
RIMs secret weapon: Carriers profitability and lower bandwidth consumption. April 3rd, 2009,
tttp://blogs.zdnet.com/BTL/?p=15740