Do you think its a strategic mistake by Blackberry to reduce their pricing , change their positioning away from their core customers to younger generation which has moved on to smartphones via apple , samsung or mango ...
Do you think Blackberry will survive or will it be their downfall
Well, I take it as a strategic move by Blackberry to reduce the prices and trying to change the major target segment.
Slightly long explanation for the same, kindly bear with it.
Mystery Behind Price Changes - A brief
Companies might increase or reduce the price of their products, and often a common man tries to see merely its implications. But, it is much more than this. More than the mere price change, what is more important is how any organization accomplishes this change.
Putting in simpler words, it depends more on the implementation of the strategic move to change price. And this is what guides the end result of any changes introduced between 2 companies which come up with a same change. This includes timing of the change, positioning the change in customer's mind and predicting the competitor's reaction as well.
Some companies try to cut their own costs, and offer either the increased value at same price or the same value at lower price to customer. This provides the customers an irresistible proposition generally and result in increase in sales. However, attention needs to be paid to profitable growth for the company despite the price changes.
Why did Research In Motion decide to reduce the price ? The reduction in price change began in US market first, followed by Canada and then in other markets. This was done to cater to the falling sales of RIM in these markets and through the price change, an attempt was made to get hold of the minds of the customers once again and improve the bottom line of the company.
I read in one of the articles that for RIM, it is not just about staying ahead in apps or fancy hardware, but it is about being cost effective. And this is the complementary vision with which their drive to reduce the cost was initiated.
Where everyone is seeing it as a bad move or a move that has not helped RIM much, if we analyze the comprehensive global market of RIM, the move has witnessed a positive momentum for their bottomline.
According to one of the latest reports ( IDC ) , RIM has displaced Motorola recently and entered the top 5 list of world's phonemakers. It is also the number 1 smartphone seller in US. However, this has come at the cost of lesser average selling price of Blackberry when its competitors like Apple etc. have seen their average selling price going up.
This all has happened in upper segment of the market. Simultaneously, RIM sees a huge potential in lower end customers where its lowest range is currently targeting at. This is the market which will lead to making smartphone as a device that connects friends, internet and world at broader level and at much higher scale. This coupled with lowered prices and increased features will act as a catalyst for this entire phenomenon.
Future of the strategic moveIt is too early to predict the affect of this move and probably, the actual affect can only be analyzed and discussed more after the results of few more quarters are out for RIM as well as its other competitors.
It is surely going to be interesting to watch it

and then come back here and post!
As far as formulation of business strategy is concerned, i feel that the move is fine as of now and no such changes are required.

PS: A blog post coming on this soon :)
Cheers!
** MBA is hyped but post MBA life is over hyped **