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Failure to Forecast
Forecasting and budgeting are important components of public financial management as they impact the operations of public sector agencies or organizations. Forecasting also has a significant impact on public service delivery as it relates to realistically possible futures. Public service agencies and business organizations have experienced challenges brought by poor forecasting or the failure to forecast. The failure to forecast has essentially implied that these organizations failed to plan and prepare for change. There have been several cases and examples of companies that failed to forecast and prepare for change. This paper examines the case of one company that failed to forecast and its impact. The evaluation also includes a discussion regarding forecasting methods that could have assisted the company to thwart the negative situation encountered.
Adversity faced by Blackberry
According to McIntyre, Hess & Weigley (2013), one of the companies that have experienced challenges brought by a failure to forecast is Blackberry. The company, formerly known as Research in Motion, was founded by Mike Lazaridis and Jim Balsillie in 1984. Under the co-leadership of the two founders, Blackberry pioneered the smartphone revolution and become the giant of the smartphone business (Silcoff, Mcnish & Ladurantaye, 2013). As a pioneer in the smartphone market, success nearly came naturally for Blackberry until 2008. The smartphone market experienced tremendous growth and profitability resulting in the entrants of competitors like Apple Inc.
The adversity faced by Blackberry during this period is competition from consumer-facing rivals. Apple’s iPhone in early 2007 represented a major competition for Blackberry in an increasingly competitive, growing smartphone market. As competition increased in this market, Blackberry needed to develop strategies and business approaches that enhanced its competitiveness and maintained its position as a market leader. In addition, the company faced an era of strategic confusion during the post-iPhone period. This period was characterized by a shift by smartphone users as they seemingly preferred more usage in different packages. Smartphone users increasingly shifted their focus to software applications instead of using devices that were based solely on hardware. Apple and Android systems responded to this shift by using newer software platforms and standards that facilitated the development of friendlier user interfaces (Silcoff, Mcnish & Ladurantaye, 2013). This proved very difficult for Blackberry, which remained relatively stuck in its conventional model. As a result, the firm experienced intense competition from consumer-facing rivals, which affected its business model, strategies, and operations.
Impact of Failing to Plan for Change
Blackberry was a market leader in the smartphone industry as it transformed business in this sector. While the firm experienced tremendous profitability and success in the early years of its operations, it experienced intense competition from rivals who utilized new software platforms and standards. The company failed to plan for change at a time when...…business strategies and product development initiatives at the company. For instance, using the trend analysis method, the firm would have identified and prepared from the shift by smartphone users. This would have played a critical role in maintaining its relevance and profitability in this market.
Recommendations
Based on the insights from market research and trend analyses, Blackberry could have avoided the negative situation through several recommendations. First, the firm should have invested in understanding the evolving smartphone industry. Through this, Blackberry would have been better positioned to understand the needs and interests of present and potential customers in this market. Secondly, the company should have adopted a forward-thinking approach to product development initiatives. Forward-thinking would have ensured the firm is adequately prepared for realistic possible futures in the smartphone industry. Third, Blackberry should have adopted business models and strategies that are aligned with customers’ needs.
In conclusion, forecasting is an important component in the long-term successful operations of organizations in the private and public sectors. Blackberry is an example of a company that has experienced challenges due to failing to plan for change or forecast. While it was a market leader in the smartphone industry, Blackberry’s fortunes dwindled due to its failure to plan for the future and anticipated changes. The company could have benefited from using market research analysis and trend analysis to prepare for realistically possible futures in the rapidly evolving smartphone industry.…
References
Adhikary, S. (n.d.). Techniques and Methods of Business Forecasting. Retrieved August 3, 2020, from https://www.economicsdiscussion.net/business-forecasting/techniques-and-methods-of-business-forecasting/31478#:~:text=(i)%20Business%20Barometers%20Method%20(,Trend%20Projection%20ii.
Hicks, J. (2012, February 21). Research, No Motion: How Blackberry CEOs Lost An Empire. Retrieved August 3, 2020, from https://www.theverge.com/2012/2/21/2789676/rim-blackberry-mike-lazaridis-jim-balsillie-lost-empire
McIntyre, D.A., Hess, A.E.M. & Weigley, S. (2013, February 10). Eight Founders Who Ruined Their Companies. USA Today. Retrieved August 3, 2020, from https://www.usatoday.com/story/money/business/2013/02/09/founders-ruin-companies/1905921/
Silcoff, S., Mcnish, J. & Ladurantaye, S. (2013, September 27). How Blackberry Blew It: The Inside Story. The Globe and Mail. Retrieved August 3, 2020, from https://www.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/
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