Research in Motion Limited Essay

In early 2002, Chris Wornald, as the director of strategic alliances for RIM, believed the tremendous synergy value offered from the acquisition of Slangsoft and its importance for RIM’s future Asian market. However, after his successful presentation on the deal to senior executives, one piece of archived news on Jerusalem Post got the attention from RIM’s director of legal affairs. The widespread panic and paranoia among Slangsoft employees, unrealized revenue from HP and multiple registrations became a great concern. Thus, Chris Wornald had to accurately measure the benefits RIM would gain from Slangsoft and the risks associated with its operation and corporate culture. Moreover, it is significant to draft a detailed action plan to help RIM capture all the synergy if deal is set. In this case, four categories are detailed analyzed; RIM itself, Slangsoft itself, three alternatives and the detailed plan of action. Research in Motion Limited (RIM) Firm and its products: Research in Motion Limited (RIM), trading as BlackBerry, was â€Å"a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Immediacy, security and ease-of-use were its pillar of competitive strategies. In early 2002, RIM and Hong Kong-based Hutchison Whampoa announced the commercial launch of BlackBerry operating in Hong Kong. To date, RIM’s development tendency focused on expanding the global reach of the BlackBerry solution, especially into the rapidly growing Asian markets where no such solution yet existed. In term of its products (exhibit 1), the best-known and most profitable product was its Blackberry wireless solution, and another 45% of its revenue mix came from RIM wireless handhelds, software development tools and embedded wireless technologies. To date, RIM’s target customer had been focused on enterprises, not individuals. As the pioneer in the filed of wireless data communication, RIM’s products have the great features of â€Å"small size, long battery life, easy-to-use, reasonable pricing, flexible architecture and a data security plan† In order to maintain its leadership, RIM focused on the innovation of two-way wireless technologies and applications, adoption of its platform by wireless network service providers globally, and protect its intellectual property. Throughout the operation, RIM remained responsive to end-user needs and continue to develop and market leading edge hardware and applications. Moreover, in order to extend and develop its capacities, RIM had broadened the strategic alliances and relationship in order to enhance its competitive position. But, to date, the most emergent wireless capacity it needed was support of localized Chinese input and display. Finance From 2000 to 2001 (exhibit 2), RIM’s revenue grew 160% from $85 million to $221 million. RIM has an extremely strong balance sheet after completing a follow-on equity offering in November 2000 that raised $ 590 million. Therefore, RIM has very strong financial assets for financing their growing opportunities. In term of one single item on balance sheet, RIM has $50.8 million liquid asset to finance any small valued opportunities, and the sales of new equity indicates the investors’ confidence towards RIM. People and Culture Mike Lazaridis, RIM’s CO-Chief Executive Officer, was a passionate advocate for the power of basis science to improve and transform the world. With his engineering degree, Lazaridis is responsible for product strategy, research and development, product development and manufacturing. Jim Balsillie with more charismatic and outgoing personality brought his wealth of business knowledge to RIM. With such strong leading executive team, RIM had achieved a great employee growth by department from Fiscal 1999 to 2001. (exhibit 3) Moreover, RIM has a well-developed corporate culture that celebrates achievement, creativity, and risk taking. Employees at RIM were well compensated and motivated by various benefits, at the meanwhile, RIM is also famous for its corporate giving to the communities. Slangsoft Inc. (Slangsoft) Slangsoft, headquartered in Boston, was a small Israel-based company with majority of employees in Jerusalem. It had three main products: a core keyboard mapping engine, 52 language scalable vector fonts and a predictive input engine. Its well-developed Intelligent Text Input and Display (iTID) technology was essential for RIM’s entry into Asian market. Many RIM competitors also desired this technology. Slangsoft has signed licensing deals with nine companies and was in the stage of negotiation with one cellphone company. Arie Mazur, CEO and president of Slangsoft, showed his welcome towards building a closer relationship with RIM. However, former Slangsoft employees had or were considering sue the company for unpaid salaries, and alleged physical and personal abuse. Creditors also claimed their trouble collecting receivables. It also has problem in term of transferred intellectual property and deal issues with HP (one of RIM’s competitors) Three Alternatives There are three main alternatives for RIM at current: acquisition of Slangsoft, acquisition of Slangsoft’s competitors and outsourcing or developing own input and font display technology. Before analyzing the advantages and drawbacks of those three alternatives, we needed to firstly assess RIM’s current performance and the moving direction this year, in three years and ten years, then visualize the business strategy in terms of goals, product market focus, value proposition and core activities, and lastly apply strategic models to position RIM’s needs from the deal. Assessment We used the performance matrix (exhibit 5) to classify RIM’s current position of the business and the direction it targeted towards. In the current market, RIM had very good organizational health and operating performance. Therefore, RIM was in quadrant 1 and the strategy review will be a question of fine-tuning and taking a farther than usual look into the future. This specific direction demonstrated the importance of RIM’s sustainable future operational plan, both in short term and long term. Thus, RIM not only had to enhance its operation in order to maintain its position within a year, but also needed to develop non-existing market in this rapid-paced industry in a short term (3 years) and capture the future market share with developed technology in a long term (10 years) Goals Besides the operational direction goals, RIM had its specific business goals. In terms of hard goals, RIM still wanted to enhance their competitiveness as the leader in the market, at the same time of developing wealth for stakeholders. In terms of soft goals, RIM was willing to create opportunities for employee to advance while benefit society through innovation. Product market focus In this case, RIM’s board of directors had agreed to penetrate the new Asian market with its BlackBerry solution, which contains the new technology of input and font displays. Therefore, firm chose to have a diversification market focus on both product and market. Value proposition In order to gain the most market share in Asia and win against other competitors that are interested at the growing Asia market, RIM presented its value proposition in term of execution such as availability and intensity. To be specific, RIM had to find the way to get the font and display technology as soon as possible. With sales hustle and rapid timing, RIM could gain the leadership position in Asian market and capture most of the growing markets to become sustainable. Core activities RIM’s determination of its core activities was a critical aspect of its strategy since these choices would have a fundamental impact on its market and operations control, cost structure, capacities and flexibility. As demonstrated in this case, RIM was reaching out for a vertical integration in order to maintain the control of font and input technology, while limited its competitors’ abilities of expanding their market share in Asian market. Moreover, there are eight specific tasks RIM set for fiscal 2012. The ones we need to focus on in this specific case are to continue to substantially increase BlackBerry user base, launch new market and maintain the culture. Since the main strategy RIM utilized was strategic alliance (exhibit 4), it became more obvious that RIM would continue its acquisition on small technologies. Acquiring Slangsoft or its competitors or outsourcing/developing own? After assessing RIM’s performance and position, it was defined that RIM took great consideration on maintaining its leading position and kept innovating and gaining new market shares. Specifically, by looking carefully at the business strategy components, it was even clearer that RIM is unable to wait for Slangsoft’s competitors (Zi and Tegic) to get rid of the lawsuits. Also Slangsoft’s iTID platform had better functionality, performance and architecture compared to all four of competitors. Therefore, Chris’s decision on quickly moving on to due diligence and negotiate an acceptable offers is a wise for RIM in the short term. After gaining the market share in the large Asian market, developing own text input and font technology might be an optimal solution, but it is not short-term solution. Therefore, in order to win Asian market place with a possible past pace and save time for other sustainability plans, RIM should acquire Slangsoft as soon as possible. However, the specific requests and changes can be made through due diligence, as indicated in the plan of action.