Understanding a Classical Market Place Phenomenon Through Operational Benchmarking.

  1. Apple Vs Blackberry

    In the initial phase, Blackberry was a standard executive gadget for sending and receiving emails, with its very convenient keypad and later it turned out to be a communication cum email gizmo. It was almost unimaginable to contemplate a device that could beat Blackberry in a niche market in the early 2000s. The launch of the tangible iPhone (surge of Samsung and several other mobile handsets) changed the scenario. The analysis beginning 2009 and subsequent years depicts that Apple and other devices (principally from South Korea) gradually and steadily grabbed the market share from Blackberry when it was starting to peak. The American company outnumbered its Canadian counterpart and surged ahead with humongous sales and profits.


    The signs of Blackberry's loss of dominance in the market became evident in the FY 2012 when the company witnessed a downward spiral in its sales revenue as well as in the number of units sold globally. For Apple, the momentum of growth continued, albeit at a sluggish pace. The key differentiator was the ability of Apple to maintain the average sales price realized for the iPhone, it registered a modest growth of 7% during the period 2009 to 2015. On the other hand, Blackberry saw a decline of approx. 40% in the same cycle.

    A common practice in a free and open market is that a losing entity lowers the unit price, in order to attract customers, but eventually fails to stem the decline in volumes sold. This further impacts its financial position and on many occasions bring it closer to bankruptcy and eventually to extinction.

    Lowering volumes diminish the ability to maintain economies of scale - pushing the struggling corporation to face a two-front war: shrinking market share, unit prices, and a potentially higher unit cost.

    Are there any early warning signals?
    Potentially- Blackberry's unit price decline was preceded by the weakening of its volumes. Its unit price fell by approx. 6% and 8% in FY 2010 and 2011. This did not stem the fall in volume and despite steeper price declines thereafter, the sales volume continued to fall further.

Read More:- Why a combined operational and financial benchmarking needed?

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