After the acquisition of EB Games, GameStop rose as the leading video game retailer in its industry. In an effort to sustain their position, GameStop will have to tackle several technological and sociocultural issues that have arisen from its competitive environment. The strategic objective we wish to accomplish in this analysis is to formulate a viable strategy that will continue GameStop’s growth in the industry to remain as the go to video gaming store for the video gaming enthusiast.
The retail gaming industry is a relatively new industry but GameStop has shown tremendous growth since 2002. An external analysis of GameStop’s general environment will show threats to the industry that include age restrictions for rated games, weak copyright laws in foreign countries, and the emergence of substitute gaming options. An internal analysis of GameStop’s resources capabilities will show GameStop’s marketing and brand capabilities that gives them a sustainable competitive advantage. GameStop’s value creating activities are often superior or equivalent to that of their competitors. Its business strategy of having a wide selection of products allows them to market to a wide range of customers, which positions the firm as a broad differentiator in its industry.
GameStop has several problems when trying to obtain their strategic objective. These include the low level of barriers against new competitors and a dependence on supplier’s goods to succeed in the marketplace. I would recommend GameStop to contract with their suppliers to create stronger barriers to limit new entrants into the market and utilize technology by creating online accounts for their customers to track their trade in points, which will increase the switching cost to other companies for these customers.
GameStop’s external analysis of its general environment shows a variety of threats as well as opportunities (Exhibit 1). The threats and opportunities that the