Blackboard Inc. Marketing Plan: Academic Suite Strategy

Company Overview and Background

Blackboard Inc. is a software company focused on delivering high-quality products that satisfy a wide array of customers. Their products and services mainly target students, teachers, and universities, and are designed to facilitate the e-learning process. Aside from online learning, Blackboard products are also used for online purchases and other e-commerce operations. However, this marketing plan is focused on the learning features of the Blackboard products, represented by the Blackboard Academic Suite.

In order to analyze this particular product, emphasis must first be placed on the current features and characteristics of the overall company, including its vision, objectives, core competencies, human resources, and financial highlights. The external environment must also be analyzed to identify the company's competitive, social, political, technological, and economic contexts, as well as its current and potential customers. Internal strengths and weaknesses must likewise be examined alongside the environment's opportunities and threats.

Further emphasis will be placed on the product itself through a detailed description of its unique features, functionality, pricing, and the associated promotion and distribution strategies. Once these elements are understood, past financial highlights will be discussed, followed by projections for the future. In order to successfully market the Blackboard Academic Suite, the company must maintain a skilled marketing department capable of designing and implementing the stated strategies, which will be evaluated and controlled by Blackboard management.

Blackboard Inc. was founded in 1997 in Washington, D.C. It operates in the electronics and software industry and went public in 2004 (NASDAQ: BBBB). Given that it is a relatively new public company, Blackboard is committed to the highest quality of financial and accounting reporting, promoting integrity and high ethical standards. The key figures within the company are Chairman Matthew Pittinsky, President and CEO Michael L. Chasen, Chief Financial Officer Michael Beach, and Chief Legal Officer Matthew Small.

Blackboard Inc. currently produces and markets six software applications grouped into two suites: the Blackboard Academic Suite and the Blackboard Commerce Suite. The Blackboard Academic Suite includes three applications: the Blackboard Learning System, the Blackboard Community System, and the Blackboard Content System. The Blackboard Commerce Suite comprises the Blackboard Transaction System, the Blackboard Community System, and Blackboard One.

The company's customers include colleges, universities, schools, other educational providers, textbook publishers, and student-focused merchants. On February 28, 2006, Blackboard acquired WebCT. By December 31, 2006, the company had acquired more than 4,700 licenses of five software applications in two suites and served approximately 3,400 clients in roughly 70 countries.

Customers of the e-learning and e-commerce systems manufactured by Blackboard can choose between installing the application on their own servers or having it hosted on Blackboard's servers. As of December 31, 2006, approximately 87% of Blackboard's installations were locally hosted by clients, and approximately 13% were hosted by the company.

Despite its relatively short existence, the company has been marked by legal confrontations with other software companies. In all, Blackboard manufactures software applications that support the e-learning process and sells its products worldwide, currently operating in over 70 countries. In 2006, the company employed a total of 765 people. Financial highlights for fiscal year 2006 included:

• Revenue: $183.06 million
• Gross Profit: $128.38 million
• Operating Income: –$11.83 million

Strategic Focus: Mission, Vision, and Goals

Mission and Vision

Blackboard Inc.'s mission is to enable educational innovations everywhere by connecting people and technology.

Blackboard's vision statement reads: "Our role is to improve the educational experience with Internet-enabled technology that connects students, faculty, researchers and the community in a growing network of education environments dedicated to better communication, commerce, collaboration and content. Blackboard's large and diverse community of practice supports, enhances and extends our offerings every day, all over the world. The Internet offers great potential for education and the educational experience. While our role as the platform is important, communities of practice make the best solutions. The value of the network is connectedness. Each Blackboard client makes every other Blackboard client's solution more valuable as a result of that connection."

Goals

Blackboard Inc. maintains financial, strategic, and individual goals. The financial component is based on total revenues (30%), pre-tax earnings (40%), and contract value plus non-ratable deferred revenue (30%). Contract value is an estimate of annualized recurring ratable revenues under existing client contracts. The strategic and individual goals components are based on criteria established by the Compensation Committee and the Board of Directors. All Blackboard goals are SMART — Specific, Measurable, Attainable, Realistic, and Timely.

The company's financial goals include:

• Increase total revenues from $183.06 million in 2006 to $339 million by 2010
• Increase gross profit from $128.38 million in 2006 to $140.00 million by 2010
• Increase the BBBB NASDAQ quotation from $42.52 (November 9, 2007) to $60.49 by November 9, 2010
• Increase customer palette and market share from 60% to 80% by 2010

Product improvement goals include:

• Increase ease of use by enabling meaningful adoption among both novice and advanced users
• Create an open architecture providing pedagogical and administrative flexibility through extensive API technology for clients and third-party developers
• Develop enterprise technology enabling a mission-critical e-education operating environment that is reliable, scalable, and interoperable with other key systems
• Maximize value by addressing clients' goals while protecting previous technology investments and reducing administrative burdens

Additional goals include:

• Increase investments in client support and services with a target of 100% client satisfaction
• Integrate campuses through technology, improve knowledge-sharing, and enhance learning opportunities for more than 18,000 students and faculty
• Improve the quality and interface of the Blackboard Academic Suite to make it more user-friendly — a study conducted at Humboldt State University by professors Munoz and Van Duzer revealed that only 21.4% of participating students preferred Blackboard, and the company's goal is to increase that preference

Core Competency and Sustainable Competitive Advantage

Blackboard Inc.'s core competencies lie in the high quality of its products and services, combined with the use of the latest technologies. As the company states: "Blackboard has built core competency in continually delivering cutting-edge software for the education industry and we will continue to do so for years to come."

The company's comparative advantage is represented by its deep understanding of the business sector, an understanding that has led to several strategic alliances with companies producing complementary products and services. "Blackboard Inc. has entered strategic alliances with a few companies selected for their core competencies and shared vision of expanding the Networked Learning Environment. Providing complementary products or services, or incorporation of the partner's products or services into Blackboard's core system architecture, is key to a successful partnership and business outcome."

Situation Analysis: The Five C's

Blackboard's situation analysis revolves around the five major C's: Company, Collaborators, Customers, Competitors, and Climate. The Company component answers questions regarding organizational culture, market perception, objectives, products and services, technologies used, and domain expertise. The Collaborators component highlights strategic alliances and relationships with distributors, suppliers, and other intermediaries or partners. The Customers component addresses Blackboard's market share, segments, customer demands, and behavior. The Competitors component examines rivals' features and the level of threat they pose. Finally, the Climate component — the PEST analysis — addresses the political, economic, socio-cultural, and technological environments.

Company

Blackboard Inc. produces software applications that facilitate e-learning and e-commerce processes. The current plan is focused on the Blackboard Academic Suite. Blackboard products are perceived as high-technology software with great potential, but also with higher prices than competing products and a less user-friendly interface.

Blackboard uses the Java programming language and imports API packages into each other rather than importing packages into classes — a departure from the general procedure used by most developers. The technologies used allow clients to host applications on Blackboard's servers or on their own. The main purpose of these technologies is to improve the e-learning process. Technologies developed by Blackboard include the Blackboard Learning System™, WebCT Vista™, and WebCT Campus Edition™. Other technologies used include .NET, Datatel, Macromedia, Oracle, and Sun Microsystems.

In the decade since its founding, Blackboard has accumulated significant expertise in e-learning and programming, successfully combining the two into the Blackboard Academic Suite. The company is committed to its stakeholders and aligns personal goals with organizational goals through diversity, satisfaction, and high ethical standards. Blackboard's primary organizational goals are expansion and growth through product improvement and an expanded customer base.

Collaborators

Blackboard's collaborators are divided into three categories: members, partners, and channel partners or resellers. Members are typically Independent Software Vendors (ISVs) who independently develop and market software solutions that extend Blackboard's applications. Partners strategically invest in and collaborate with Blackboard to deliver joint solutions to clients. Channel partners and resellers focus primarily on international sales and distribution of Blackboard software and services.

Blackboard continually collaborates with universities to obtain feedback and improve its products. Partner universities include the University of British Columbia and Princeton. Blackboard also collaborates with Microsoft, having formed an alliance to improve the quality of the e-learning process: "Students and faculty using Blackboard's learning platform, built on Microsoft .NET technologies, will be able to more easily integrate a wider array of academic resources in a learning environment tailored to their individual needs and preferences."

Additional strategic alliances have been established with organizations producing complementary products or technologies, including a partnership with the U.S. military, as well as agreements with Microsoft Corporation, Barnes & Noble, Berkeley Electronic Press, Concord USA Inc., Dell Inc., Eiffel Corp., Health Education Systems Inc., Intel, and Pearson Education.

Consumers

Blackboard holds a current market share of 60% and aims to grow this to 80% by 2010. Its Academic Suite consumers are students, teachers, and universities across the globe. Client needs include a more diversified and efficient learning system suited to students' changing demands — such as distance learning — and one that allows universities to keep pace with rapid social and technological development. Blackboard Academic Suite programs are generally available for online purchase from the company's website or through partner channels, and clients are provided with telephone and email support for any questions.

Competitors

Blackboard's main competitor in 2006 was Moodle, a free and open-source course management system (CMS), followed by Sakai. Moodle held a market share of 54%; Blackboard was the challenger with 45%; and Sakai held approximately 0.63% (Zacker, Higher LMS Market Penetration: Moodle vs. Blackboard + WebCT vs. Sakai).

Blackboard's primary competitor possesses less developed technologies and less specialized personnel. However, Moodle's comparative advantage lies in its pleasant interface, user-friendly structure, and the fact that it is free and open source. Blackboard can surpass Moodle by redesigning its interface and "moving away from compartmentalized presentation to a more natural flow of information, like Moodle has. Blackboard has superior tools; they just need to be presented to the user in a more natural manner. If Blackboard does that, then Moodle has nothing on it, other than being open source."

Climate (PEST Analysis)

Political, legal, and regulatory environment: The laws and policies governing the software application domain include copyright, patents, and fair competition regulations, all of which Blackboard fully respects.

Economic environment: A growing economy nurtures a beneficial environment for the development of software applications. Economic factors such as inflation, taxes, and interest rates are incorporated into Blackboard's pricing model.

Socio-cultural environment: There is increasing demand for software applications developed with cutting-edge technologies and aimed at supporting e-learning and e-commerce processes.

Technological environment: The rapid pace of technological development is reflected in Blackboard's products, which employ the latest market technologies. The development of AJAX — a set of technologies used for the front end of web applications — is positioned to further sustain improvements to the Blackboard Academic Suite.