How having a rigorous understanding of your category can enable you to understand how to respond to new competitive threats.
This blog is part of our series introducing a new approach to build brands that drive change; the Category Growth Agenda. Each week in June we share an example of a brand that has benefited from taking the category view, using that perspective as the basis for successful future growth.
Being the leader of a category is great, but the confidence this brings can sometimes lead to myopia. Blackberry is a great example of this. After years as the go-to smartphone, the iPhone arrived with a genuinely different user interface.
At first, Blackberry’s team were as excited as we were that so much functionality could be packed into a single touch screen device… but they weren’t excited enough to build a direct competitor. In response, Blackberry’s CEO Jim Balsillie said "It’s kind of one more entrant into an already very busy space with lots of choice for consumers ... But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it."
The rest is history. Over the space of a decade, BlackBerry went from having 50% of the market to 1%, losing out not only to the iPhone but to Android.
What’s most interesting is that RIM’s’s demise could have been quite easily avoided. While their phones were the flagbearer of their brand, their revenue was coming largely from its services such as BBM, which only made its way to other smartphones in 2013 (four years after WhatsApp was launched). If RIM had a deep understanding of the category, perhaps WhatsApp would never have grown to become the $19 billion brand bought by Facebook.
Such are the pitfalls of trusting instinct over insight. In lieu of a deep understanding of their audiences, the market dynamics and external forces shaping customer expectations, many brands struggle to understand how to manage disruption when it (often inevitably) happens.
To find out more about how we can help your brand define their own category growth agenda, contact us at firstname.lastname@example.org.