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Research in Motion: Managing Explosives Growth

Explore how Research in Motion (RIM) managed its explosive growth, investing in R&D and exploring new markets to stay ahead in the fast-paced mobile communications industry. Analyze the impact of the decisions made in 2008 and discover recommendations for sustained success.

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Research in Motion: Managing Explosives Growth

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  1. Research in Motion:Managing Explosives Growth Donny Marthen Sitompul – 1306356412Jonas Mario Hajadi – 1306356785 Pamela Indrajati Suryoputro – 1306420163 StevanusSendy - 1306420415

  2. RIM: Research in Motion Ltd. • Founded in 1984 and based in Waterloo, Ontario, Canada. • Founded by Mike Lazaridis • The first Blackberry device came to market in 1999. • Since then, RIM has consistently introduced many new and innovative products and services that are used by business and consumers around the world. • R&D believed to be the heart and soul for the company’s success

  3. Industry Overview • High competition • Fast paced • Driven by engineering innovations • Evaluated by technological advances

  4. Case background • Timeline – January 2008 • David Yach as CTO for Software at RIM • Meeting with Mike Lazaridis to discuss R&D plans • Current model of organic growth was not keeping pace and engineers were strained • Double edged sword

  5. RIM Growth # of R&D Employees Year 2000 Year 2008 200 persons 2100 persons Annual Revenue Year 2003 Year 2008 $306.7 millions $6009.4 millions Blackberry Subscriber Account Base Year 2003 Year 2008 0.5 millions 14 millions

  6. Competitive R&D Spend in 2007

  7. It is Important for RIM to Grow its Pool of Software Developers • Mike Lazaridis: • “If you really want to build something sustainable and innovative you have to invest in R&D.” • Continue innovation in a rapidly changing technology • Competing Platforms • Given the rapid advances in the mobile communications industry, no technological platform had become the industry standard. In light of the dynamic market situations, RIM needed to ensure that its investment in R&D kept up with the pace of change in the industry. • Keep up with the competition • Investors Expectation • Investment analysts often looked to the number of R&D spending as a percentage of total sales to gauge the sustainability of revenue growth. • R&D expenses as a key indicator of future revenue potential • R&D expenses were seen as a proxy for new product or service development.

  8. Managing Explosive Growth • Do what we do now, only more of it • Focus on home market (Waterloo) • Recruiting strategy • Grow and Expand Existing Geographies • Establish R&D operations beyond Waterloo • Increase Acquisitions • Purchase or collaborate with other companies • Portal to new markets • Go Global • Expand to new areas

  9. The Pro and Cons of the Different Options

  10. What does RIM value most? • Security - keeping secure coding • Innovation • Sustainable Growth • Risk Management • Mutual Consideration of short-term/long-term profitability • Increasing market share

  11. Recommendation & Action Plan Do What We Do Now, Only More of It • Focus on the roots of R&D, the workers • Establish a pool of international workers • Establish recruiting/scouting groups • Increase advertisement for job seekers • Give incentives to employees • Have annual competitions for students • Support neighboring universities • Keep geographical intimacy Increase Acquisitions • Acquiring new technology • Portal to new markets • Ease of acquiring potential collaborators • Analyze various industries to seek new opportunities • Work close with R&D to prevent off course motion • Focus on strategic organization, risk of investment

  12. The Impact of Decision Made in 2008 to Existing Performance of Blackberry

  13. Recommendations as Consultant • Focus on software and services, i.e. mobile video conference feature on its messaging app, BBM Meetings, New Blackberry Application World – more friendly and innovative interface. • Create more partnership with mobile application developer to enrich the Blackberry Application World • In addition to recruitment from the university, do more professional hire to grab more experienced R&D • Not be dependent on handsets that made the company famous but rather rely on sales of software. • Sideline the playbook – reduce the priority • Open blackberry owned retail stores around the world – increase brand image globally and marketing purpose • Continue acquiring talented firms into RIM’s portfolioand working together with 3rd parties to develop better products

  14. Focus on corporate and government where security, high productivity, and a tactile keyboard are more valued. • Work with Apple’s iOS and Google’s Android operating systems. • Partner with more smartphone vendors like what they did recently with Samsung for stronger Android security. • Go after business users in industries such as banking, healthcare, government, insurance, who relies on their device to do their jobs. (Apple are seen more as an entertainment device rather than a tool)

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