Blackboard Inc. marketing plan

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 aimed to facilitate the e-learning process. Aside from online learning, the Blackboard products are also used for online purchases and other e-commerce operations. However, the current marketing plan is focused on the learning features of the Blackboard products, represented by the Blackboard Academic Suite.

But in order to analyze the one particular product, emphasis must be placed on the current features and characteristics of the overall company, including its’ vision, objectives, core competencies, human resource and financial highlights. The outside environment must also be analyzed in order to identify what defines the company’s competition, social, political, technological and economic backgrounds and also the company’s current and potential customers. Also, analyses have to be conducted as to better understand the manufacturer’s internal strengths and weaknesses, along with the environment’s opportunities and threats.

Further on, the emphasis will be placed on the product itself, through a detailed description of its unique features, its functionality, its price and the adherent promotion and distribution strategies. Once these elements are understood, the past financial highlights will be discussed, followed by projections for the future. In order to successfully market the Blackboard Academy Suite, the company has to possess a skilled marketing department to design and implement the stated strategies, which will be evaluated and controlled by the Blackboard management.

2. Company Description

Blackboard Inc. was founded in 199 in Washington DC; it operates in the electronics industry and it went public in 2004 (NADAQ: BBBB). Given that they are a relatively new public company on the stock market, Blackboard is committed to the highest quality of their financial and accounting reports, 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 groups: The Blackboard Academic Suite and the Blackboard Commerce Suite. The Blackboard Academic Suite includes the following three applications: the Blackboard Learning System, the Blackboard Community System and the Blackboard Content System. Blackboard Transaction System, along with the Blackboard Community System and the Blackboard One are the remaining three applications that compose the Blackboard Commerce Suite.

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

Customers of the e-learning and e-commerce systems manufactured and sold by Blackboard can choose between installing the application onto their own servers or installing it on the company’s server. “As of December 31, 2006, approximately 87% of Blackboard Inc.’s installations were installed locally and approximately 13% were hosted by it.”

However their existence is short, it has been marked by legal confrontations with other software companies. In all, Blackboard Inc. manufactures software applications that support the e-learning process. They sell their products worldwide, currently being present in over 70 countries. In 2006, the company operated with a total of 765 employees. Their financial highlights for fiscal year 2006 included:

Revenue: $183.06 million

Gross Profit: $128.38 million

Operating Income: -$11.83 million

3. Strategic Focus and plan

Mission/Vision

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

Blackboard Vision:

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. has certain financial, strategic and individual goals. The financial goals “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 contracts with clients. The company strategic goals and individual goals components are based on criteria established by the Committee and the Board of Directors.” All Blackboard goals are SMART in the meaning that they are Specific, Measurable, Attainable, Realistic and Timely.

The company’s financial goals revolve around:

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 quotation on NASDAQ from $42.52 in November 9, 2007 to $60.49 in November 9, 2010

Increase customer palette and market share from 60% to 80% by 2010.

Product Improvement goals:

Increase Ease of Use by enabling meaningful adoption among both novice as well as advanced users

Create an Open Architecture and provide pedagogical and administrative flexibility through extensive API technology for clients and 3rd-party developer

Enterprise Technology – Enabling a mission critical e-Education operating environment that is reliable, scalable and interoperable with other key systems

Maximizing Value – Addressing client’s goals while protecting previous technology investments and reducing burdens on precious administrative resources.”

Other goals:

Increase investments in client support and services; the goals is to register 100% client satisfaction

Upgrade goal: “integrating the campuses through technology, better sharing and distribution of knowledge resources and enhancing learning opportunities for the more than 18,000 students and faculty at the institution.”

Improve the quality and the interface of the Blackboard Academic Suite in order to make it more user-friendly study conduced at the Humboldt State University by professors Munoz and Van Duzer revealed that only 21.4% of the participating students prefer Blackboard; therefore the company’s goal is to increase users’ preference of Blackboard Academic Suite

Core Competency and Sustainable Competitive Advantage

Blackboard Inc.’s core competencies are those of a high quality of their products and services, combined with the usage of the latest technologies. “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 their large understanding of the business sector, understanding which led to several alliances with companies that produce and market 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 our Blackboard’s core system architecture is a key to a successful partnership and business outcome.”

4. Situation Analysis

Blackboard’s situation analysis revolves around the five major C’s of any company’s situation analysis: Company, Collaborators, Customers, Competitors and Climate. The Company component answers questions in regard to the organizational culture, its perception on the market, its objectives, products and services, the technologies used and the company’s expertise in its work domain. The Collaborator component highlights any strategic alliances and the company’s relationships with the distributors, purveyors and other intermediaries or partners. The Customers component answers questions in regard to Blackboard Inc.’s market share, segments, customer demands and behaviour. The fourth C. points out competitors’ features and the level of threat they pose upon Blackboard. Finally, the Climate component, otherwise known as the PEST analysis, answers questions in regard to the political, economic, socio-cultural and technological environments.

Company

Blackboard Inc. produces software applications that ease the e-learning and e-commerce processes. The current plan is focused on the Blackboard Academic Suite

The Blackboard products are perceived as high technology software, with great potential, but with high prices that other competing products and with a less user-friendly interface

Blackboard uses Java programming language, and imports API packages into each other, instead of importing the packages into classes, the general procedure used by developers. The technologies used allow clients to host their applications on the company’s servers or on their own servers. The main purpose of the technologies used by Blackboard is to improve the e-learning process. The technologies developed by the producer include: the Blackboard Learning System (TM), the WebCT Vista (TM) and the WebCT Campus Edition (TM). Other technologies used by Blackboard include.NET, Datatel, Macromedia, Oracle, Sun Microsystems

In the ten years since its foundation, Blackboard has gathered significant expertise in the e-learning and programming processes and has successfully managed to combine the two into the Blackboard Academic Suite

Blackboard is committed to its stakeholders and combines their personal goals with the company’s organizational goals through actions that promote diversity, satisfaction and high ethics standards

Blackboard’s main goals are those of expansion and growth through product improvement and increase of customer palette.

Collaborators

Blackboard collaborators are primarily 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 to extend the Blackboard applications. Partners strategically invest in and collaborate with us to deliver joint solutions to our clients. Channel Partners/Resellers are primarily focused on international sales and distribution of Blackboard software and services.”

Blackboard continually collaborates with universities in order to get feedback and improve the products. Among the universities which collaborate with the manufacturer are the University of British Columbia or Princeton

Blackboard collaborates with Microsoft and they have even formed an alliance in order 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.”

Blackboard has initiated several strategic alliances with companies that produce complementary products or software technologies that can be used to improve the quality of the Blackboard Academic Suite. These alliances include a partnership with the U.S. military, provided that the military always possesses the latest cutting-edge technologies; Microsoft Corporation, Barnes and Noble, Berkley Electronic Press, Concord USA Inc., Dell Inc., Eiffel Corp., Health Education Systems Inc., Intel or Pearson Education.

Consumers

Blackboard has a current market share of 60% and they desire to increase this to 80% by 2010

Blackboard Academy Suite consumers are students, teachers and universities across the globe

Clients’ needs include a more diversified and efficient learning system to suit students’ changing features and demands (such as distance learning) and to allow universities to keep up with the rapid pace of development in the social as well as the technological life

Blackboard Academic Suite programs are generally available for online purchase from the company’s own webpage or from other partners of Blackboard’s. Also, clients are given telephone numbers and emails where they can address any question

Competitors

Blackboard’s main competitor in 2006 was Moodle, a free and open source course management system (CMS), followed by Sakai. Moodle was the market leader, with a market share of 54%; Blackboard was the challenger, with 45% and Sakai was the third as market share, with 0.63%

Source: Zacker, Higher LMS market penetration: Moodle vs. Blackboard + WebCT vs. Sakai

Blackboard’s primary competitor possesses less developed technologies and less trained personnel. However, their comparative advantage lies in the application’s pleasant interface, its user-friendly structure and its’ being free and open source

Blackboard can easily surpass Moodle by redesigning their interface and by “moving away from compartmentalized presentation to a more natural flow of the 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. OS will ensure it a small market, but that will not move it into the “big time” markets.”

Climate (PEST Analysis)

Political, legal and regulatory environment: the laws and policies that govern the software application domain include copyright, patents and fair competition, all regulations fully respected by Blackboard Inc.

Economic environment: the growing economy nurtures a beneficial environment for the development of software applications. All economic features, such as inflation, taxes or interest rates are incorporated in the Blackboard prices

Socio-cultural environment: there is an increasing demand for software applications, developed with cutting-edge technologies and aimed to aid the e-learning and e-commerce processes

Technological environment: the rapid pace of the technological development is incorporated into the Blackboard products, which uses the latest technologies on the market to come up with the most efficient products. The development of AJAX, a set of technologies used for the front end of web applications, is prone to further on sustain the improvements of the Blackboard Academic suite.

SWOT Analysis

Internal Strengths

Blackboard possesses an extremely skilled and trained human resource, including an experienced management board and a marketing department

Blackboard is internationally recognized for their merits in the e-learning process, being presented with numerous awards, among which the Prestigious 2002 CODIE Award or the SIIA 2006 CODIE Award

Blackboard products are well received and perceived by the market, registering a constant increase in demand

Blackboard Inc.’s financial highlights reveal a strong organization, with sustainable growth and real investment opportunities

The company is continuing to increase their investments in the Research and Development department in order to improve the overall quality of their existent products and come up with new ones

Blackboard is the market leader, with a market share of 60%

Blackboard has set the basis for a multitude of strategic alliances, mergers and collaborations, including hi-tech corporations (WebCT and Microsoft), universities (British Columbia, Illinois Chicago, San Francisco, Texas or Princeton) and the U.S. military

The company uses the best technologies available on the market and improves their performance. They use Java and import packages into each other, as opposed to the traditional importing into a class. This makes the system easy to maintain and sustains its growth and development

The “Building Block” features eases external programs’ access to the Blackboard and has the ability to save memory

Internal Weaknesses

The Blackboard products have a poor interface, they are complicated, require to many clicks, are poorly organized and are not at all user-friendly

The company has registered significant growth in terms of functionality, in the detriment of easing the users’ access to the Blackboard Academic Suite

The Blackboard system has become chaotic due to numerous code purchases from outside Blackboard has promoted limited thought and consistency in regard to product design

Blackboard has a poor sales and support department, which offers limited aid to the customers

In their desire to host all applications on their personal servers, Blackboard seems to have shifted their attention towards server management, in the detriment of product design, the manufacturer’s core competency

Users’ confidentiality is unsecured. In order to better understand, take for instance the case of a student in Canada. His personal data have to go all the way to Washington DC, where the Blackboard server is hosting, and then return to the Canadian university

The Blackboard servers are located in numerous U.S. cities, and the company does a poor job at managing them. Therefore, they are slow in responding to their clients

External Opportunities:

The external environment, through economic growth and technological development, sustains Blackboard Inc.’s growth and development

The market presents the manufacturer with a high demand for their Academic Suite

Blackboard is presented with the chance of incorporating the features desired by customers with other systems, such as WebCT

The usage of AJAX will aid Blackboard developers to create a more pleasant design and a more user-friendly interface. In addition, with the usage of AJAX, the Blackboard software applications will become better responsive, timely and interactive

Due to their strategic alliances, Blackboard is presented with the opportunity of using their partners’ latest technologies. For instance, Blackboard Inc. could benefit from their partnership with the U.S. military, as the latter generally possess the latest technologies

Based on some features of the macroeconomic environment, such as market liberalisation or globalization, Blackboard has the opportunity of outsourcing some of their projects to other regions of the globe that possess better technologies, better prepared personnel and cheaper labour force

Also based on the unique features of the contemporaneous macroeconomic environment, Blackboard is presented with the opportunity of expanding to other countries, especially on the European and Asian continents. They could easily make the Academic Suite more accessible to non-English speaking countries by installing several language packages. “Blackboard Academic Suite provides full support for multi-byte characters and includes more than 10 languages. In addition, Blackboard provides a Language Pack Editor which lets institutions edit an existing language pack or create a new one to meet their own needs.”

External Threats

Blackboard is faced with fierce competition from Moodle and Sakai. These two companies pose a threat to Blackboard as their products are either free, either cheaper, and they are almost always open source, as opposed to the Blackboard Academic Suite which is a proprietary application. The competitive products require limited costs and offer the benefit of “power of choice. By being open and allowing it’s users to see the source code, open source opens a gate towards a plethora of opportunities that wouldn’t otherwise be possible, if you would use commercial closed source software.”

An external factor that casts a shadow of doubt upon the Blackboard activities is their involvement in law suits, generally lawsuits against other companies that produce learning management systems, based on patent complaints

There is the general perception that Blackboard is capable of doing more and launching better and innovative products, but they seem to stumble and miss the overall picture.

5. Market-Product Focus

Marketing and Product Objectives

The marketing objective is to successfully launch the new version of the Blackboard Academic Suite 7.8 onto the market. The product objective is to meet all environmental requirements and satisfy customers’ needs through its high quality and easy accessibility. The primary feature of the new product will consists of its major improvements. Created with the AJAX programming technology, the 7.8 version will be better organized, more user-friendly and will increase ease of usage. Another significant goal is that of launching the new product by the end of 2007, on both national and international markets.

A combination of the marketing and product features will generate a satisfied clientele, increased demand and market share, international recognition, increased sales revenues and profits, and consequently, organizational growth and development.

Target Markets

The Blackboard Academic Suite, namely the latest version, the 7.8, is designed to meet the needs of universities within the American, European and Asian continents. However, out of these, not all scholarly facilities are primarily aimed by Blackboard. In order to be considered a desirable market, universities have to meet some criteria:

Possess sufficient financial resources to afford the prices of the Blackboard Academic Suite

Possess skilled personnel to constantly maintain and update the application with the latest data

Possess an internal server on which to host their application or be willing to store it on the Blackboard servers within the United States

However it is not required to be a former Blackboard customer, old business partners and clients have several benefits in comparison to new comers.

Points of Difference

The first features that come to mind when talking about the Blackboard products are negative one which refer to a non-user-friendly interface, increased costs and closed source. However, the 7.8 version can easily annul the chaotic organization of the Blackboard Academic Suite and make the product better that the competitors’ through several product and organizational points of difference, such as:

user-friendly interface, achieved through the usage of AJAX programming technology

Higher market share that the competitors’

Better skilled personnel

Usage of cutting-edge technologies

Greater potential.

Positioning

Positioning of the new version of the Blackboard Academic Suite will be done by creating the image of a much desired, useful and easy to use application. The benefits of the software will be highlighted by stating that the 7.8 can significantly increase the e-learning process by bringing teachers and students closer.

6. Marketing Program

Product Strategy

The product will be manufactured and sold under the Blackboard Inc. license, with the stated functionality of improving the e-learning process by connecting students and teachers through web tools. The 7.8 version is manufactured using the latest technologies available on the it market, including Java for the backbone and AJAX for the interface. The Blackboard sales and support team will constantly serve customers’ needs and complaints and will insure service and support.

Price Strategy

The price of the 7.8 version will have to incorporate all the additional work and improvements, cover for all costs and insure the manufacturer with sufficient revenues. However, the price is negotiable, based on the nature and the relationship between producer and client. As such, the new client would purchase the product for $300,000, whereas an already existent client will purchase it for $280,000. The price is also negotiable in regard to the hosting of the application. As such, if the client will host the product on its internal servers, he will pay $290,000 for the application. If the customers desires for Blackboard to host his application on their servers within the U.S., he will pay $310,000 per application.

Promotion Strategy

The promotion of the new Blackboard application will be done via internet, during meeting and conferences with universities and partners and within several it magazines and journals. The advertising strategy will focus on pointing out the benefits of using the 7.8 version and its major improvements as compared to the previous version.

Place (Distribution Strategy)

The distribution will be handled by the sales department within the Blackboard Inc. And also by the manufacturer’s business partners and collaborators. The 7.8 version will generally be available for online purchases.

7. Financial Data and Projections

Past Sales Revenues – in millions of U.S. dollars

Products

Professional Services

Total Revenues

Source: The Blackboard Inc. 2006 Annual Report

Five-Year Projections

Following the continuous growing trend registered during the past years, the Blackboard revenues are expected to grow by a yearly average of 16.4%, as follows:

Increase in percentages

Total Sales

Revenues

The foreseen sales revenues only take into account the current products of Blackboard Inc.’s, including the 7.8 version, but without referring to other new or developing products. If the manufacturer decides to increase its product palette, its sales and revenues will increase accordingly.

8. Organization

However Blackboard possesses a skilled and dedicated marketing team, the organization is rather product and technology oriented, instead of marketing oriented. As such, in order to increase their performances, Blackboard Inc. has to invest more in their marketing department, find ways to better motivate and stimulate their employees in order to develop and implement the most suitable strategies that aid the organization maintain its position as international leader.

9. Implementation

In order to achieve the final goal, that of increasing sales revenues and maintaining its leading position with the aid of the new product, Blackboard Inc. has to follow the next steps:

Strengthen existent partnerships and alliances and form new ones, with state and private organizations, as well as independent software vendors

Recruit and hire new personnel that is experienced with the manufacturing of e-learning systems and the AJAX programming technology

Offer AJAX training to existent employees

Increase investments in the Research and Development compartment

Recruit and hire skilled and experienced personnel for the Marketing Department

Implement Human Resource strategies and offer employees stimulating incentives

Conduct marketing researches in order to identify the competitors’ actions as well as the customers’ demands

Produce the 7.8 version with a user-friendly interface and multiple applications

Develop brochures and hand them out to potential clients during meetings and conferences organized for the promotion of the new product

Offer interviews to specialized magazines and it journals aimed to discuss the improved features of the Blackboard Academic Suite

Develop advertisements and place them on the Internet and university campuses

Present the new products to university deans and other university officials

Place the 7.8 version on the market and begin sales.

10. Evaluation and Control

Once the strategies have been designed, their implementation and results will be closely analyzed by the management at Blackboard Inc. Special emphasis will be placed on product improvements, especially the design of a more user-friendly interface and customers’ reaction to the changes. Managers will also control the implementation of all product, place, price and promotion strategies. They will evaluate how the specified strategies have aided the company in reaching its organizational goals.

As such, emphasis will be placed on the company’s ability to increase its market share from 60% to 80%, its NASDAQ quotation from $42.52 to $60.49 and its gross profit from $128.38 million in 2006 to $140.00 million by 2010. Managers will compare the actual performances with the stated goals and will intervene and make changes when necessary.

Works Cited

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Munoz, K.D., Van Duzer, J., 2005, Blackboard v. Moodle: A Comparison of Satisfaction with Online Teaching and Learning Tools, Humboldt State University, http://www.humboldt.edu/~jdv1/moodle/all.htm, last accessed on November 9, 2007

Zacker, Higher LMS market penetration: Moodle vs. Blackboard + WebCT vs. Sakai, http://zacker.org/higher-ed-lms-market-penetration-moodle-vs.-blackboard-vs.-sakai, last accessed on November 12, 2007

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