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Industry Analysis

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1. Regarding industry analysis
Competitive Forces
Industry analysis is an important aspect to understanding RIM’s strategy. Porter’s five forces can be used to identify the sources of competition in a particular industry. At first, RIM was a leader in producing smartphones to the business class, but many companies realized that there was a large market potential for phones that can integrate functions ranging from email to social networking. The threat of new entrants was highest. Once Apple introduced the IPhone, the target market for RIM started drifting away from the Blackberry models since the IPhone had become the latest and greatest innovation. Many other companies started moving into the smartphone market and were slowly taking away from the market share of Blackberry. The threat of new entrants was still relatively low during the first few years following 2007, but a few firms in related industries had the proprietary knowledge and the capital required to successfully enter the smartphone market. Also, new brands lacked the reputation needed to succeed in the smartphone industry. The threat of substitute products was considered low since everyone feels that they need a cell phone to live their daily lives. In fact, substitute products such as the home phones and beepers are now obsolete. Some people tried to claim that substitute products are high, but differentiated products are not substitutes since they are within the same industry. The bargaining power of suppliers started to increase since the suppliers do not have to contend with any substitute products. The bargaining power of buyers was high to the extent that consumers face low switching costs since they are willing to pay higher prices for the latest technology. A large concentration of buyers relative to suppliers existed, which increased buyer power. On the other hand, buyers were...

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