PESTEL analysis of BlackBerry

RESEARCH IN MOTION LIMITED-BLACKBERRY

Research in motion limited was founded in the year 1984 by Mr.
Michael Lazaridis, the company's President and Co-Chief Executive
Officer, and Mr. Douglas Fregin (RIM-2009). The company then grew
in to one of the leading designer and manufacturer of wireless
solutions, the company product portfolios include the blackberry
wireless solution and other software and hardware solutions. The
major markets of the company include North America, Europe and
Asia Pacific (RIM-2008). RIM generates most of its revenues through
the blackberry wireless device with various features which provides
a user friendly interface. Although the company has been growing
since its inception. In early 1990s the company was focussed on
developing wireless data technology but by far the significant year
for the company was 1999 when it introduces the blackberry
solutions and in following years it has launched many advanced
models of blackberry solutions in partnership with various service
providers which includes Yahoo, AOL, MTN, Qtel etc.(RIM-2008).The
company has recorded a revenue of US$14.935 million in the
financial year 2010 which is an increase of 35% compared to FY
2009 with USA alone accounting for 57% of the revenue. The
devices accounted for 81% of the revenue followed by service
(14.4%), software (1.7%) and other (2.8%). (RIM -2010). Although
the company is doing very well financially, it is not immune the
pressure of external forces and following section highlights some of
the external forces impact on RIM.
PESTEL ANALYSIS
The pestel analysis provides an insight in to the factors which will
affect the industry which in turn will also affect the companies that
operate within the industry (Johnson et al 2008).
Political
The fairly friendly political climate in North America especially in
USA has helped the smart phone industry especially RIM to flourish
as the recent survey by Nielsen pointed out that the users of smart
phones will overtake feature phone users by 2011(Nielsen wire
2010) . The actual challenge for RIM has been in countries like
China, India and UAE where the countries have raised concerns over
the security feature the blackberry provides to users as it becomes
hard to monitor for the government authorities (BBC 2010). RIM has
also been scrutinised in countries like Saudi Arabia, Indonesia,
Kuwait, and Egypt for the above mentioned reason (Guardian 2010).
Another major political concern is that some of the European
countries like UK, Germany etc have imposed strict regulations with
respect to hygiene and safety standards for manufacturers which
may impact the operations of RIM as faces pressure from the usage
of toxic contents, energy usage and recycling( Farrar.j 2009)
Economic

 The economic factors plays a key role in the smart phone

industry as the demand is fairly elastic and it is mostly based on
consumer income but the recent economic downturn has had an
impact as people are not willing to spend on a product unless the
price is right and it offers the promised values but the smart phone
industry is expected to grow at fairly steady pace and the
developing economies of India, China, Latin America provides a
platform for RIM (economic times 2009). Since the sales of
blackberry are made throughout the world the exchange rates will
also have an impact on RIM as the fluctuation in exchange rates can
suddenly make blackberry competitive - or prohibitively expensive.
The exchange rate fluctuation can have a profound on blackberry
especially in price sensitive markets like India and China. RIM has
stock options in various countries and exchange rates directly affect
the realized return on an investment portfolio with overseas
holdings(RIM 2009)
Social
Social factors such as education, lifestyle, income levels have
great impact on the demand patterns and also the cultural aspects
have an consequence on seasonal sales as well for example in a
country like USA sales of blackberry and other electronic
equipments seems to be fairly high during the period of November
to December, the holiday season (Jaroslovsky.R 2010) and another
huge socio cultural factor which have an impact on RIM is the ever
increasing usage of blackberry by anti social elements which will
have an impact on the brand image of the company and its product
because the consumer markets in religiously sensitive countries
may visualise the product as integral part of anti social elements
operations and business markets may decline to use the product
since strict regulations of the government following the usage of
products by anti social elements will hamper the products
performance.
Technological
The technological factor has a huge impact on the industry as a
whole and in particular RIMs product, as the customer base of the
product demands fairly new and robust features in the products.
Technological advances over the past decade like 3G technology has
had a he impact on RIM, also the ever increasing competition in the
market is competing on the software offerings of the product. The
blackberry smart phones as such are highly adaptable to
technological changes as it can be used with various advanced
services like HSPA/UMTS (high-speed packet access/ universal
mobile telecommunications system), GSM/GPRS/EDGE (global
system
for
mobile
communications/general
packet
radio
services/enhanced data rates for global evolution),CDMA/Ev-DO
(code division multiple access/evolution-data optimized), and iDEN
(integrated digital enhanced network) (RIM 2009)
Environment

 The environmental aspect also has a huge impact on the

industry as the manufacturers must comply with various
environmental standards and RIM over the years have ensured that
the standards of manufacturing are fairly ecofriendly and any
mishap could potentially tarnish the image of the company in the
consumer market, thus environmental factors like product recycling,
energy usage, wastage developed during manufacturing may also
affect the company(BBC 2008)
Legal
The major legal issues that are affecting the RIM are mentioned
in the one of the previous section under political factors .The
companies services are fairly secure and it becomes hard to
monitor, so regulatory bodies of countries like UAE, India etc are
considering to ban the services, this could have an huge impact in
its operations (BBC 2010), also RIM is facing various legal battles
with companies like visto, motorola etc have had implications on the
company. RIM is facing one from Minerva Industries, which filed two
complaints in 2007 and 2008 against RIM alleging that infringement
of its patent. In December 2008, MSTG filed a patent infringement
lawsuit against the company (BBC 2008). In March 2010, the PACid
Group filed a lawsuit against RIM and 30 other defendants alleging
infringement of patents (BBC 2010). The impending law suits will
also incur in expensive settlements, all these legal issues will have a
huge impact on the companys performance.
Thus these are the major macro factors which affect the industry
and these in turn drive the micro factors which are explained in the
following section.

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