After learning about the impacts that inventory days and demand research can have on a business, I decided to look further to find a real life example of a company who has been drastically affected by such factors. An article posted on The Economist described the downfall of the once known Research In Motion (RIM) company now referred to as Blackberry. To any business fanatic, it is by now common knowledge that Blackberry has been on an intense collapse in the past three years. After their diminishing popularity in the smartphone market and recent decline in their share prices and value, the Canadian firm is on the verge of being bought out by private investors. There is currently a $4.7 Billion deal being worked out that aims to make Blackberry go private (The Economist, 2013). This would make Blackberry join the ranks of Motorola and Nokia who both also sought help from larger, more successful companies in order to stay on their feet (The Economist, 2013). It is evident that Blackberry requires this help since they reported that their revenue from the three month period of May-August in 2012 as opposed to this year has been reduced by a half; From $2.9 Billion in 2012 to $1.6 Billion in 2013 (The Economist, 2013). Although experienced economist and business professionals can decipher the causes of Blackberry’s recent downfall, others may wonder what exactly could have brought about their unfortunate decline in the smartphone industry. In my opinion, other than the fact that their main competitor Apple has been more innovative in recent years, Blackberry made costly mistakes with their inventory and demand forecasting. For example, the Canadian firm recently revealed that “it will write down some $960 Million worth of unsold phone inventory in its latest fiscal quarter” (The Economist, 2013) as according to The Economist. This is almost a quarter of their projected worth! To my understanding, this problem may have been brought about due to the fact that they were not as innovative in their demand forecasting and as efficient in their inventory days as their competitors. These astounding results lead me to believe the significance of an efficient business model and inventory days that companies must maintain.

Works Cited:

“Blackberry – Time For Plan Z.” The Economist. The Economist Newspaper, 23 Sept. 2013. Web. 30 Sept. 2013. <http://www.economist.com/blogs/schumpeter/2013/09/blackberry>.

Article URL:

http://www.economist.com/blogs/schumpeter/2013/09/blackberry