Free «Strategic Leadership Plan» UK Essay Sample
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Strategic planning is a method by which a company achieves its objectives and goals and gains a competitive edge over the competitors. To be successful in business, an organization has to come up with a strategic plan that will be used by the leaders to guide them on how to act, and what to prioritize over a given period. A good strategic leadership plan should take into account the organizational skills, stakeholders, the needs of the customers and the business environment. It acts as a guide to efficient use of resources with an aim of getting the additional resources required. Blackberry is a giant mobile phone manufacturer with its headquarters being located in Ontario, Canada, and it used to be successful in the past years (Boal & Hooijberg, 2001).
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In the year 2010, the company reached its highest market penetration of 43% in America. It led and sparked the smart phone revolution. The corporation was hit by the rise of Android, iPhone and touch screens ran on by its competitors as the demand for its iconic phones went down. The effect of this decline in revenue and sales caused employment layoffs and the top management leadership was shaken up (Boal & Hooijberg, 2001). There have been a lot of downsizing and rebranding attempts as Blackberry Company makes an effort to make a turnaround plan to see if it will yield results and finally return the corporation to profitability. This essay defines the current organizational challenge, describes the current financial standing of the organization and how the challenges have impacted the firm’s profitability, sustainability, and growth and determines the strategy for addressing the organizational challenge.
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Current Organizational Challenge
Blackberry Company has been facing strong competition from other mobile phone manufacturers such as Nokia, Samsung and Motorola. From 1999, when the corporation released a series of its mobile email gadgets, its profitability levels were high as the firm was reputed as the dominant player in the market due to its technology and business models. Its devices made the consumers to manage the email traffic in an efficient and secure manner. The organizational challenge came with the arrival of the iPhone in 2007, and the first Android smart phone released in 2008. This unleashed a rapid rate of innovation in mobile phones that the company was not ready for (Freedman & Tregoe, 2003). The management of the corporation knew that the iPhone concept was more technologically powered and was superior to its own devices but dismissed the idea. The company partnered with Verizon Wireless to launch its first touch screen gadget (Blackberry Storm) but it did not pick in the market as expected because its underlying technology was inferior to that of iPhone and due to its late release. The sales were low and consumers did not like the device (Elenkov, Judge, & Wright, 2005).
The current challenge is that the company has had unsteady transition into the current mobile phone technology which is now having a brisk growth. The management of the firm has relied on the loyal corporate organizations and the government and this has made it not realize the need to change its existing business model to adjust to the customer needs and the modern technology in the mobile space (Boal & Hooijberg, 2001). The leadership has failed in the duty of foresight that allows one to review a strategy in the light of profound technological transformation. Instead, they viewed the alteration with myopia and complacency. The management has been reluctant to take the responsibility of projecting the possible future repercussions of strategic action or inaction in a complicated environment full of uncertainty (Elenkov et al., 2005). The other organizational challenge is the failure to actively question the strategic direction of the company and the customer needs and feedback. The corporation has been faced with a problem of rebranding given the strict requirements for the Blackberry mobile applications and its complex operating system compared to the simpler interfaces of its competitors’ products. The clients have been requesting for inclusion of some features in the Blackberry phones but the company has not been in a position to heed to the customers’ feedback making it lose many of them to competitors. The corporation faces a challenge of adapting its internal outlook to the current market realities remaining instable in the market as the competitors continue to gain momentum (Freedman & Tregoe, 2003).
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The Current Financial Standing of the Organization and Impact of the Challenges on Profitability, Sustainability, and Growth
The company is still facing financial difficulties when compared to its competitors such as HTC in the personal mobile phones consumption market. In 2014, the corporation used $553 million to cover its operating expenses making the reserves drop to $2.7 billion. For the four years, the company has lost six billion US dollars in total and its revenue declined to $3.3 billion in the fiscal year 2012. In the year 2013, Blackberry reported a loss of $965 million following a failure in the launch and sale of its touch-screen smart phone Blackberry Z10. The worst moment came in 2014, when its share in the United States Market fell to three percent. In 2015, the company made a profit of $1.2 billion which was an increase of forty percent as compared to 2014. Economic crisis has been the greatest threat as it has shifted demand to the left due to inflation, reduced purchasing power and redundancy (Boal & Hooijberg, 2001).
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The challenges that the company has been going through have had a negative impact on its profits, level of growth and sustainability. The market share has gone down drastically as the consumers have been moving to the competitors for the more technologically savvy mobile devices. The growth of the company has stagnated with the market price for its shares going down. The sustainability of the corporation is still questionable as its sales are low compared to the competitors probably because its devices’ functions are not very competitive (Elenkov et al., 2005). The target market has been a problem as it gives priority to the corporate businesses, which is a model not fitting the company’s current situation and pressures from the competition. The challenge has also affected its marketing communication. Many of the consumers do not know the company slogan which implies that the marketing strategies being used are questionable. In the past, the corporation depended on the brand loyalty of its customers which has now changed due to the challenges. The company needs to re-strategize and to rebrand in order to grow again in the light of tough economic times and decreased market share. The firm’s revenue is growing at a snail’s pace compared to the last decade. The company has had leadership changes as a result of its bad performance. This has led the corporation to a series of management crises, which, in turn, have led to slackened growth due to poor strategic leadership plan (Boal & Hooijberg, 2001).
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Strategy for Addressing the Organizational Challenge
Blackberry is still relevant in the mobile market but changes in the external and internal environment are required for the organization to take effective strategic planning steps for future growth. The first strategy is to embrace innovation because in the information technology field products’ design changes and consumers make purchases from a functional perspective. The company has insisted on maintaining its products’ distinctive features but support is required from consistent innovation to maintain the tempo of the rapidly changing technology and consumer demand (Boal & Hooijberg, 2001). The market communication strategies also need to be addressed as the current promotional strategy is not appealing to consumers. Integrated market communication is needed and should combine advertisement, selling and public relationships. The promotional strategy should be cost effective in that it is not extravagant and highlights on return on investment. The promotion should be extended to newer markets such as Asia and Africa to capture a large market share (Freedman & Tregoe, 2003). The promotional approach should be adjusted to suit the consumers while, at the same time, conveying the core message as per the business strategy. The company needs to move to a new operating unit structure as a way of maintaining a greater focus on software since it creates an effective model for the business by supporting the transformation objectives. Lastly, the corporation needs to expand its range of products to sustain growth in the future. The company can move to other related products such as mobile accessories and electronics (Elenkov et al., 2005).
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The strategic leadership plan is an important component of an organization. It gives the focus and points out when it is necessary to change or restructure a product or a strategy. Blackberry Company failed to realize the need to change its strategy and adjust to the changing market needs and consumer demands (Boal & Hooijberg, 2001). Lack of an innovative process to manage change also led to the current organizational challenges faced by the corporation. These facts emphasize the significance of reviewing strategic plans in the light of rapidly changing environment, especially for information technology industry. To regain its market share, the company should embrace clear strategies for innovation and new products development to suit the needs of the consumers and the market. The power of promotional strategies cannot be undermined and there is a need for the corporation to change its message when advertising its products. Good strategic leadership plan is the only avenue that the company can use to turn to profitability and sustained growth.