Essay on Porter 5 Forces Analysis of Blackberry

1028 Words Jun 30th, 2014 5 Pages
Bargaining Power of SUPPLIERS: Moderate/
- There are plenty of hardware component manufacturers for cellphones but BlackBerry’s operating system is complicated therefore it limits the number of software developers that will work with them.
- This problem was most recently seen when BlackBerry struggled to get native applications for the launch of the Z10.
- The Bargaining Power of Suppliers for Blackberry has increased, due to Blackberry’s eroding market share. Firms who dominate the mobile communications industry, such as Apple and Samsung, have relatively higher bargaining power, because their larger product orders account for more of the suppliers business.

Bargaining Power of BUYERS: High/Moderately High/
- Large
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The short product life cycle in this industry requires competitors to continuously evolve. This continual innovation is difficult for new entrants to achieve. Also, existing products, such as Apple’s iPhone, have built brand loyalty and associated switching costs for consumers, which pose as barriers to entry for new competitors.
- The smartphone industry is very capital intensive due to high research and development (R&D) costs and expensive manufacturing facilities. This raises the barrier of entry and makes it difficult for small companies to enter. Many of the firms that compete in this industry have existing long-term contractual relationships with mobile carriers and benefit from their significant brand equity. These companies also have a great deal of knowledge and experience through economies of learning, which gives them a major cost advantage over smaller entrants. New entrants will have difficulty getting carriers to adopt their phones because many carriers are already in profitable deals with the large mobile phone manufacturers.
- Difficult to enter: Smartphone production involves many patents and proprietary knowledge. Even established companies are embroiled in legal battles over patent issues.
- Difficult to enter: New entrants lack popular brands, which are important to sales.

Threat of SUBSTITUTES: High/High
- The Threat of Substitutes is high, since mobile product-life cycles are short. For example, Motorola is currently
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