Strategic Management Assignment Unilever and Blizzard

Topics: Video game industry, Video game, Strategic management Pages: 10 (1439 words) Published: February 28, 2015


Manchester Business School Global MBA
Strategic Management
Course Assessment 1

Contents
1.1 Video Game Industry in the USA ----------------------------------------------------------3 1.2 Activision Blizzard Inc -----------------------------------------------------------------------3 2.1 Video Game Industry in USA: Porter’s Five Forces Analysis -----------------------4 2.2 Actvision Blizzard: BCG Portfolio Analysis ---------------------------------------------5 3.1 Ice Cream Market in Singapore: Strategic Group Analysis --------------------------6 3.2 Unilever: Resources and Capability Analysis -----------------------------------------7-8 4. References ----------------------------------------------------------------------------------------9

1.1 Video Game Industry in the USA
The video game industry includes video game software, hardware and digital gaming. The USA has the largest market share of 27% and revenue of $18.3 billion (Euromonitor, 2014). The industry is stagnant with an annual growth rate of 0.3% in 2013 (Euromonitor, 2014). The industry is also transforming from traditional PC or console software purchases to digital game downloads. Specifically, the mobile and tablets game segment of digital gaming in the USA has a strong 38% annual growth in 2013 (Newzoo Market Research, 2013). With the growing customer base and lower barrier in digital distribution, traditional gaming giants are losing market share to new entrants.

1.2 Activision Blizzard Inc

Activision Blizzard had a decrease in revenue of $273 million in 2013. Despite a 2% drop in margin in 2013, it is still very profitable at 22% net margin. Its biggest segment is video game software which contributes 53% of its total revenue. The company is ranked second in the gaming industry in USA with a value share of 16% in 2013 (Euromonitor, 2014). It is ranked first in the digital gaming segment with 13.6% share. Digital gaming has been their key focus, with newly released smartphone/tablets compatible game, HearthStone making $114 million revenue by September 2014 (SuperData Research, 2014).

2.1 Video Game Industry in USA: Porter’s Five Forces Analysis

The video game industry is highly competitive in the USA. Its leading market size continues to attract new entrants and with technology advancement, competition continues to intensify with lower barrier-of-entry. The growth currently lies with the mobile/tablet games and competitors who adopt strategies to exploit the growth are overcrowding the market. Increase in customer expectation and the efficiency of distribution network also increase the challenges within the industry. Industry leaders are facing challenges within the ever-changing landscape and smaller players remain financially challenged to innovate and are prone to acquisitions. Innovations and technologies remain the key to produce differentiated products to be successful in the market.

2.2 Actvision Blizzard: BCG Portfolio Analysis

Activision Blizzard has an overall balanced profile as shown in figure 2. Stars: Hearthstone is the top strategic title and has been exceeding expectation (Activision Blizzard, 2014). The smartphone versions are currently under development. Question Marks: Heroes of Storm is the second most important strategic investment, as MOBA genre is a booming market where Blizzard has no presence yet. It is also a defense move in the hardcore real time strategy games genre. Cash Cows: These four blockbusters continue to generate significant revenue but they are on a declining growth rate. Blizzard is continuously working on their sequels to sustain growth (Blizzard.com, 2014) Dogs: Diablo 3 was a commercial hit in 2012, however it has quickly degenerated to a dog. Guitar Hero does not have new releases since 2011 and the content release has been terminated in 2014. Most of Activision Blizzard’s...

References: Activision Blizzard Inc (2014) Annual Report 2013
Activision Blizzard Inc (2014) Proxy Statement 2014
Blizzard.com (2014) Offical website of Blizzard Entertaiment
Euromonitor (2014) Activision Blizzard Inc In Toys and Games (USA)
Euromonitor (2014) Ice Cream in Singapore
Euromonitor (2014) Video Games Industry Report
Newzoo Market Research (2013) ExSmartphone and tablet gaming 2013 – Games market sector report
SuperData Research (2014) MMO market report 2015
Unilever (2014) Annual Report and Accounts 2013
Jagiello Associates (2014) Case A: Unilever
Jagiello Associates (2014) Case B: Unilever and Ice Cream
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