Why Getting Out of Phone Design by BlackBerry is Classic Sun Tzu

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As China becomes an ever more powerful technology country, more of us are likely doing what BlackBerry has apparently done–study the grandfather of military strategy, Sun Tzu, who lies at the core of much of China’s business strategy. This is a bit humbling for us in the US because Sun Tzu was a brilliant strategist thousands of years before the US was even founded as a country. What is even more frightening is that his strategies translate very well into business and most Western executives don’t study him as matter of course.

This came to mind when BlackBerry announced it is eliminating its in-house design team and would instead use the designs from ODMs and other OEMs to further its efforts. Let’s talk about why this is smart, and why this is also classic Sun Tzu.

When Facing A Superior Foe Elude

There is actually a rather impressive use of Sun Tzu, who Steve Jobs also studied, in the current market dynamic in smartphones. As we saw Apple and Google come to market, both used classic Sun Tzu tactics. As soon as Apple had a market advantage Apple encircled its competitors by dominating app developers and denying competitors this same access. Apple effectively knocked Palm and Nokia out of the market. Google, with similar scale, challenged this strategy head-on and was able to keep Apple from fully taking over the market which is now largely defined by both vendors.

BlackBerry was another one of the casualties—missing the threat until it was too late to effectively challenge. It then tried to directly challenge Apple from an inferior position and didn’t shift strategies fast enough to assure it could prevail. BlackBerry is currently a far smaller and weaker vendor, which means it can’t challenge Apple or Google directly and has shifted to the advised Sun Tzu strategy that says that if you are outclassed you elude.

When you elude you hide behind others and attempt to not appear as a threat so that the larger armies—or in this case companies–don’t focus on killing you. By moving to a partnering model BlackBerry potentially gains far more potential shelf space, can field a higher variety of phones, and its differentiating technology starts looking like more of an asset to Google—which suffers from the reputation of being unsecure—than a competitor.

This keeps Apple focused on Google and Google partners like Samsung and not focused on BlackBerry—allowing BlackBerry to build market share again largely unchallenged. On this vector not only is Apple not focused on killing BlackBerry, it might—as its own security problems increase, (though this is remote at this time)—eventually partner with or buy BlackBerry.

BlackBerry, with this simple move, just effectively eliminated its most powerful competitors and turned a subset of them into partners or potential partners. In effect turning an inherent weakness—being small in a market with large players—into a strength as a not threatening strategic security partner at a time when every cell phone maker and carrier needs this to assure their customers aren’t compromised. Nobody wants a Yahoo breach event, and—given the attack methods are increasingly targeting smartphones using root kits and BlackBerry has the only real defense at scale—this strategy should significantly boost its prospects.

Wrapping Up: Read Sun Tzu

Sun Tzu should be a critical source of business strategy for firms increasingly competing with Chinese companies. His strategies are surprisingly easy to grasp and amazingly applicable across time and yet they are astonishingly omitted as a foundation for company strategies. The fact that BlackBerry is increasingly showcasing decisions that seem to pull from his teachings bodes well for it and this latest decision dramatically changes the competitive landscape—effectively eliminating a broad cross section of competitors and turning an increasing number into partners. For BlackBerry, and pretty much the entire segment given the increasing security threat, that is a good thing.

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About Author

As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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