On June 17th, 2011 RIM’s stock lost 21 percent of its value, as investors cashed out.

This doesn’t come as a surprise, as I have been observing my friends and classmates at the New York University gradually get rid of their old BlackBerrys, replacing them with flashy new iPhones or Android operated phones. Obviously, RIMM is losing the smartphone war to the competition, for three reasons:

1. RIMM has an ineffective innovation Model.

RIMM has simply not been able to keep up with the innovation of Apple and Google (GOOG). In fact, RIMM spends more money on R&D than Apple, but still fail to create better products. Specifically, it has failed to compete with the new touchscreen smartphones from Apple, Samsung (SSNLF.PK), LG (066570.KS), and HTC (2498.TW) that are fast and easy to use. Its latest attempts to break into this market with the BlackBerry Storm and Torch flopped.

2. RIMM is late to the app market.

RIMM was slow to develop the various apps, widgets, and games that are standard features of Apple and Google phones. Apple is the pioneer of the app market, now having over 450,000 apps, with Google following suit, with over 150,000. RIMM is dead last, with the smallest app store, and still many of its phones do not support apps. Without a strong app program, RIMM phones lack personalization, making them less appealing, and contributing little to the company’s bottom line in the long run.

3. RIMM is unable to create hype and buzz for new products.

With competition so intense in the smartphone industry, the ability to create hype for new products is vital. Apple has mastered the art of creating hype, with a cult following for the iPhones, and Google’s Android seems to be quickly gaining popularity. RIMM, on the other hand, has only been losing followers as its products and marketing campaign have come up short.

Ultimately, RIMM is fighting a losing battle. Its software and hardware are becoming outdated, edged out by a highly innovate, new generation of touch screen phones with great personalization and usability. I would stay away from the stock, even after its sharp decline, as it is unwise to jump on a sinking ship.

To grasp this new concept of strategic planning, corporate planners must understand the very nature of China´s emerging economy, a cocktail of capitalism and socialism, whereby the government continues to hold on to a crucial resource, i.e., land. The Chinese government is developing and managing land through State Owned Enterprises (SOEs) and Town Village Enterprises (TVEs) or by leasing it to private companies and joint ventures. In either case, business organizations operate under community-based strategic planning that begins with the available means and resources, and proceeds with the ways, and the ends, i.e., the satisfaction of the community needs.

This sort of planning that places the community at the center of the economic universe is effective. It allows business organizations to nurture and develop resource-based capabilities and achieve certain social objectives, but is inefficient. It turns Chinese business organizations into welfare agencies rather than true business enterprises, putting the cart ahead of the horse and wasting resources in producing commodities that add little value to consumers. Resource-based competitive advantages are further easy to be replicated and copied by the competition and are often followed by price destruction, profit erosion, and trade friction.

Community-oriented strategic planning is sharply different than customer- oriented strategic planning prevailing in market economies, whereby most resources, including land, are owned by private parties, and business organizations. Customer-oriented strategic planning begins with goals and objectives, i.e., the satisfaction of private needs and proceeds with the allocation of resources to reach them

This sort of strategic planning process which places the consumer at the center of the economic universe is efficient. It allocates resources to produce what consumers want and delivers it when and where they need it. But it isn´t an effective process. It doesn´t nurture or develop resource-based capabilities; and it doesn´t provide for certain social needs, e.g., the education, the health, and the natural environment of the community, at least not in the form of a budget that allocates the funds to address these needs.

As has been the case with most overseas markets, business strategists tend to approach the Chinese market with a customer-oriented mindset that focuses on Chinese people´s private needs. This means that they prepare and launch products that improve the lives of people as consumers, but not as users of the commons. This approach conflicts and contradicts with the community-based mindset prevailing in China, and is often the source of failure even for foreign brand names. What´s the solution?

Comconsumer-oriented strategic planning, a new form of planning that combines and compromises the two types of planning by matching the internal capabilities of business organizations with the emerging consumer as well as community needs. This kind of planning begins with goals and objectives that deliver consumer value and proceeds with the development of the appropriate ways and the required means to reach certain community ends and eventually delivering consumer value.

Placing both the consumer and the community at the center of the economic universe, comconsumer-oriented strategic planning is both effective and efficient. It is effective because it allows business organizations to develop resource-based capabilities and reach certain private and social objectives. It is efficient because resource allocation is demand- rather than supply-driven. Corporations provide the goods and services consumers, rather than government bureaucrats, value the most.

The understanding and implementation of a comconsumer-oriented strategic planning requires a new mindset, which focuses on bundles of private and social goods and services, providing thereby both for the consumer and the community needs of a target group, and nurturing close ties with local governments. Companies that sell TV sets in a Chinese prefecture, for instance, must budget sufficient funds into their plans for addressing the community needs of the prefecture rather than just paying taxes or contributing to charity from the profits they earn from the sale of their products.

They come from all strands of life; they crowd the central streets and alleys of major South European towns; they protest peacefully; they are the movement of the “outraged citizens.” But why they are outraged?

As is the case with every social movement at its infancy, the voices are many and the direction is unfocused, but one message is loud and clear: citizens who join the movement are angered by the unfair austere policies that seek to save Europe’s political and economic system yet divides Europe into a tale of two worlds. One world that has access to EU money and the other one that doesn’t! Europe isn’t a land of opportunity for all, but a world of opportunity for the few in power: the nepotist government bureaucrats and politicians, union activists and their respective members.

For almost half a century Europe was caught in a sharp division between two contrasting movements: a “right wing” which embraced the prevailing a Keynesian-style liberal capitalist system, and a “left wing” which embraced a socialist system to replace Keynesian liberalism. With the aftermath of Soviet communism, Europeans are no longer divided along the their respective wings. Instead, they are now split among those who have access to EU funds and those who don’t. The gap between these two groups is opportunity. Those on the losing side of the equation lack access to EU-financed infrastructure projects, R&D and training funds, EU subsidies, and even privileged employment in government and unionized sectors.

The new European divide is supported a semi-Soviet model of “supply-side entrepreneurship” whereby Brussels and member-nation governments continue to gather economic resources and act as entrepreneurs and managers, apportioning those resources by political fiat rather than by market forces. Ultimately, money goes to bad welfare, declining industries and outdated technologies rather than areas that can lead to advancement and economic amelioration.

Abandoned buildings and vacant factories constitute a form of bad welfare; they were constructed for the purpose of providing “employment opportunities” for certain niches—the clientele of the local politicians that handled the EU funds—rather than true business enterprises pursuing genuine business opportunities. Unfortunately failed socialism is leading to nepotism.

Common to every welfare program, EU welfare programs have a short-term stimulative effect on the economy (multiplier effect). They create incomes and employment only as long as they last, and only for the politically connected rather than the needy. Instead, if the money that financed said projects went towards  long-term projects that have a sustainable effect on the economy (accelerator effect), the downward spiral of stagnation, soaring government deficits, and debt crises may stop.

Outraged European citizens are the underprivileged citizens. They don’t have access to EU and national government funds; they are called upon to pay for a crisis they didn’t cause.  Don’t they have the right to be mad?