Blackberry’s Downfall

I wrote a blog post in August of 2007 in which I discussed how Blackberry was leading the market in smart phone sales. Smartphone_chart At the time, I was a proud Blackberry owner, the iPhone had recently been introduced and the smart phone market was still in its infancy. A few years later, the iPhone took the lead and began to dominate the market. Blackberry’s failure has been the subject of many case studies and several articles have been written about what they could have done differently to maintain their market share.

I decided to switch to the iPhone in 2008. I had several reasons for switching and among them was the iPhone’s strong differentiation among all the other phones in the field. I liked that it offered me new ways of being productive in a well made and highly innovative product.

In this recent article in HBR Blogs entitled “Blackberry Forgot to manage the Ecosystem” the author makes what I think is a compelling argument on why Blackberry failed.

The story of Blackberry underlines a new truth about the competitive landscape we live in: success or failure isn’t a function of a good product or service, or a well-run, cost effective company with a sound capital structure. It also requires an effective strategy to manage your ecosystem.

This was Blackberry’s failure. The company had become complacent about its remarkably loyal customers and didn’t recognize the threat posed by rival ecosystems. Like many established firms before it, Blackberry blew the opportunity to become a nodal player and leverage the energies of its complementors, in the way that Apple does with its apps.

Of course whenever a business fails to deliver, hindsight is always filled with clarity. but one thing we can all agree on is that complacency kills businesses. Strategic alternatives have to be explored continuously in order to succeed in highly competitive environment.

(#31WriteNow day 19)


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