Research in motion is a Canadian multinational company which is best known for the Blackberry mobile device. The company designs, manufactures and markets wireless solutions for mobile and telecommunication market. Along with the Blackberry the company manufactures various other products such as computer terminal, radio and television broadcasting, wireless communication equipment etc. As Research in motion not only manufactures a single product but multiple products so it should be using multiproduct breakeven analysis.
Break-even analysis calculates the unit or dollar sales needed to generate revenues that exactly match fixed and variable costs to produce net profit of zero. The advantage of break-even is its utility and simplicity.
For example,
Research in motion manufactures two smartphone Blackberry Z3 and Blackberry Q10. The fixed cost is $50000 per month. The company expects the sale of phones as 20% and 30% respectively. Z3 Q10
Selling price per unit $100 $200
Variable cost per unit $50 $100
Break- even point = total fixed expenses Weighted average selling price- weighted average variable expenses
Weighted average selling price= (100*20%) + (200*30%) = 20 + 60 = $80
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References
Reilly, C. (2009). Break-even analysis-making it work for your franchise. Franchising World, 41(7), 29-30
Wild, J.J. & Shaw, K.W. 2012. Managerial Accounting. McGraw-Hill Irwin. Edi
Break even is when your income is equal to your expenditure (total costs: fixed + variable)
The lack of knowledge in 2013 has caused the primary issue that facing blackberry, in this case, is there is a challenge to make blackberry performance efficiently, which led to decrease the competitive advantage of the company. the lack of performance efficiently has showing RIM as against change, that make it hard to be innovation like other completive which also will lead to financially unstable. That the company is going to be a more focused innovation which is a quality that made RIM the company it is today, yet it seems to have lost it over the years.
A poor financial performance reflects BlackBerry Company is going down. In the article of “Company Overview”, the author stated a SWOT analysis of BlackBerry. In the weaknesses of company, the author described the revenues decreased primarily due to lower shipment volumes and lower average selling prices of hardware products. The company’s revenues declined from $19,907 million in FY2011 to $11,073 million in FY 2013. (p.6) Continuous decline impacts the company’s profits and margins. In 2013, RIM recorded the operating loss of $1,235 million compared with operation profit of $1,497 million and $4,636 million in 2012 and 2011. It also suffers a decline in the cash position which from $4,009
BlackBerry’s Market Share has been reduced to less than 1%. In an industry dominated by two major companies, BlackBerry is highly unlikely to gain a larger percentage of the market,
The break- even point is the level of activity (in units of output or sales revenue) at which total costs (fixed + variable) = total sales revenue (Atrill, McLaney 2008: p. 262). First all, we need to calculate contribution per unit for reaching to the break- even point. The pattern for calculate contribution per unit is sales revenue per unit less variable cost per unit. Subsequent we calculate the break- even sales units. Break- even sales units = fixed costs/ contribution per unit. We use the result of BEP unit for next step which calculate the break- even sales value: BEP units x selling price per unit. When we use every formulas, we attain the break- even point.
* 2012 – Apple overtakes RIM on its own turf. According to new figures from IDC, RIM shipped 2.08 million BlackBerrys in Canada in 2011 compared to Apple’s 2.85 million iPhones. In 2010, RIM shipped half a million more BlackBerry devices than Apple did of its smartphone, while in 2008 the BlackBerry outsold iPhones by a factor of five to one.
297). In the case of Motorola and BlackBerry manufacturer Research in Motion (RIM), another intellectual property case, the suit claims that RIM caused irreparable harm. “Motorola is suing the company in the U.S. District Court for the Eastern District of Texas for allegedly infringing seven US patents covering mobile-communications technology” (Cellular). RIM has suffered losses in the marketplace and Motorola has demanded for RIM to give them exorbitant royalties. “Motorola’s strong R&D and intellectual property are critical to our business. Motorola believes in the value of its IP and will move aggressively to protect that value on behalf of our customers, partners, and shareholders”
Mike Lazaridis and Jim Balsillie, co-CEOs of Research in Motion (RIM) has been accosted with an inevitable crisis situation. In an article from Charles Arthur (2013) of The Guardian newspaper has stated that, “three days RIM engineers worked around the clock to fix the widespread technical outages from their server networks.” When a predicament situation arises management has to squash the circumstances that manifested from the problem. However, BlackBerry® executives were only providing a lack of concise statements to the public, causing frustration over the exacerbated circumstances, many consumers have become increasingly anticipated of the newly launch of the Apple iPhone 4. The CEOs have conferred the challenging situation of how RIM should
Breakeven analysis is a powerful management tool, and one that is critical in planning, decision-making, and expense control. Breakeven analysis can be invaluable in determining whether to buy or lease, expand into a new area, build a new plant, and many other such considerations. Breakeven analysis can also show the impact on your business of changing your price structure. As the price goes down (and so your gross margin goes down), breakeven shoots up - usually very rapidly. Breakeven analysis will not force a decision, of course, but it will provide you with additional insights into the effects of important business decisions on your bottom line.
RIM, short for Research in Motion, is a Canadian company which made BlackBerry cell phones. They started out by selling it to the US Government for communication purposes. As the smartphone business started rising in 2005, they branched out to sell to business entities then moved to selling their phones, globally. However, countries overseas were not receptive to the idea of a BlackBerry phone, as it could have easily turned into a security threat.
Blackberry is well known in the enterprise market for security and mobility management. They have been the dominant player in secure messaging for years. Blackberry created secure messaging. As a tech company, Blackberry is full of industry leaders in innovation, programming, and security. Blackberry is still the leader in mobile device management. It created mobile device management and no one comes close to them on this. In the way forward, Blackberry will focus on their core competencies; “delivering enterprise-grade, end-to-end mobile solutions” (Allen, 2013).
A company's break-even point is the amount of sales or revenues that it must generate in order to equal its expenses. In other words, it is the point at which the company neither makes a profit nor suffers a loss. Calculating the break-even point (through break-even analysis) can provide a simple, yet powerful quantitative tool for managers. In its simplest form, break-even analysis provides insight into whether or not revenue from a product or service has the ability to cover the relevant costs of production of that product or service. Managers can use this information in making a wide range of business decisions, including setting prices, preparing competitive bids, and applying for loans.
To understand the history of the BlackBerry, it is important to understand the history of the company, Research in Motion. [10]
In 1999, RIM was listed on NASDAQ under the symbol RIMM, but the bigger event was the introduction of RIM 850, the first BlackBerry QWERTY keyboard. (4) The device had a six- or eight-line display and allowed users to send email, messages and had address books, calendars, task lists, a calculator and an alarm function. The device was the first-featured smartphone that connected people to their corporate email and contacts and led the smartphone market for a decade. According to IDC, RIM sold the most smartphones in the United States for the first quarter of 2008. (7) RIM successfully broadened the appeal of the BlackBerry to more than just professionals with new consumer-friendly devices like the BlackBerry Thunder and the BlackBerry Bold. The company was well-positioned to
▪ BlackBerry product first launched in 1999 ▪ Wide range of Wireless Service Providers (AT&T, Verizon, Sprint and all major global providers) ▪ 41 Million units sold in 2009 ▪ 80+ Million units currently in use globally