Business Studies

Describe a historical situation where a failure to assess and correctly interpret the external environment resulted in a business’ failure. What elements of the external environment were missed? How might the company have corrected this oversight? Cite any sources used to support your answer.

ANSWER

The Fall of Blackberry

At the height of its fame and being a multibillion industry, Blackberry, at its prime, can be described as the Apple of today. The company immensely enjoyed massive success, and as of June 19, 2008, its stock closing price was $ 147.55 (Muthukumar et al., 2017). However, over the years, with increased competition and other startup companies performing better, the company’s current stock price is $ 4.7. This catastrophic downfall was largely attributed to the company’s lack of analyzing the external market, especially its lack of understanding competition from the market. For instance, Blackberry failed to venture into new lands at the height of its success as they watched Android and Apple front developing and quickly gaining more consumers. The company preferred to keep the prevailing culture and chose not to embrace change. The company had the means and financial advantage of adopting an Android system mobile phone technology. In addition, Blackberry refused to change its BBM hardware and venture into cross-platform relations with applications like Whatsapp, losing the opportunity to be part of the $19 billion Whatsapp worth (Muthukumar et al., 2017).

However, the company might have corrected this oversight in several ways. For instance, the marketing team headed by Deepak Parakh at the time should have been vigilant in analyzing the external market (Muthukumar et al., 2017). The company should have looked at the consumers’ response regarding the introduction of Android and integrate the same concept into their system. Another way the oversight would have been corrected is humbling themselves into integrating with new promising applications like Whatsapp. The company believed they were powerful enough to withstand any new upcoming competition. The culture of the company should have been corrected through either the appointment/reshuffling of new head departments to bring fresh perspectives in regards to the analysis of the external environment.

References

Muthukumar, R., Ramakrishnan, L., & Krishnamacharyulu, C. S. G. (2017). Turnaround of BlackBerry. Journal of Management Cases, 4.