+ 44 20 8144 3706Executive Summary
GameStop is the one of the well-known retail players in the market and it’s known for offering video games in digital and physical CD’s. Now days, firms can distribute their video games online and due to this reason they directly sale their video game to the customers. Microsoft and Sony are using the direct contact customer model in their business which creates threat for the GameStop. It mainly relies on physical CD’s to generate sales in its business also create threat for it as now more and more people are moving towards Microsoft and Sony video games. Firms need to change its STP strategy and position itself based on USP like it can offer unique games to the people, which are not available elsewhere etc. By doing so it can remain in the market. The firm needs to follow a defensive strategy in its business.
Macro environment factor
- Demographic factor: Demographic factor matter a lot for the GameStop as it can be observed that from the age of 15 to 35 majority of people like to play video games. Individuals that are nearby to the age group of 18 cover 50% of the total population that use video game for the entertainment and these are early adopters of the digital download video games (Wesley and Barczak, 2016).
- Technological factor:Graphics quality remains superior in case of online available games on Xbox and Sony PlayStation and on this front GameStop lagged behind its rivals and it can be said that there is threat on this front (Osathanunkul, 2015).
- Political factor: Governments are promoting people to use more and more digital platforms to make the purchase of the products. Such kind of thing leads to elevation in demand of the online games.
Porter five forces model or industry competition analysis
- Bargaining power of the customers: This force is very strong and it can be observed that customers have a number of options relative to GameStop like Xbox, Sony PlayStation etc. They have strong bargaining power because Xbox and others offer better gaming experience than GameStop. The third reason is that Xbox and others offer their products at cheaper rate to the customers.
- Bargaining power of suppliers: Suppliers have high bargaining power because they make available hardware to the GameStop (Carenys, Moya and Perramon, 2017).
Competitor analysis
| Competitor | Overview | Graphics | Price | Performance | Content |
| GameStop | It is well known retailer of the physical video games.
It has approx. 7000 stores across the world. Known for offering wide range of video games to the people. |
Graphics quality is not so good relative to rivals. | Price is high relative to rivals. | Performance is good. | Content of video games is excellent. |
| Xbox | Some games Microsoft release are not found elsewhere.
There is feature of backward compatibility for classic Xbox 360 titles |
Excellent quality and have high demand in the market. | Price is affordable. | Performance is excellent. | Content is unique (Cohendetand et.al., 2018). |
| PlayStation | Game quality is excellent and is available at cheaper rate. | Excellent graphics equivalent to the Xbox. | Price is competitive and product is affordable. | Performance is wonderful. | Content is great and competitive to Xbox. |
Targeting strategy of GameStop
GameStop is targeting school and college students as well as professionals. This is because youngsters are mainly interested in playing video games than those who fall in the middle age group. Hence, youngsters which are students and professionals are targeted by the firm.
Positioning strategy of GameStop
GameStop position itself as specialty retailer of the video game hardware and software and PC software’s.
Company current strategy:
The company is evaluating business environment and accordingly it formed its business strategy and under this strategy now it follow Omni channel model. The Omni channel model is one under which any firm operates through both physical and digital platforms. Considering consumer behavior business firm is now operating through both online and offline platforms. It is operating its own physical stores and through its website also it sells video games software to the people. However, it also shuts down some of its physical stores considering loss in the business. It is doing business restructuring and under this according to loss faced in the business it reduces its physical presence and focus more on its online platform.
SWOT analysis
| Strength | Ø GameStop is the market leader in the video game retailing and offer wide variety of the games and gaming consoles.
Ø Strength of the firm is that it makes offer products at affordable price to the people and due to this reason it has a loyal customer’s base in the business. Ø Firm is offering games to the people, which they did not get elsewhere. Ø The business firm hasa large distribution network across the world and there is not rival in its competition in term of physical presence. Ø Firm has large talented and well knowledgeable workforce which is fully dedicated towards video game retail industry. Ø There is higher level of customer satisfaction from the GameStop. Firm has its own customer relationship department which assist firm to meet needs of the customers on time. |
Question 1
On analysis of the segmentation, targeting and positioning strategy of the business firm it can be said that it is segmenting market based on age group. It classifies the market into the two age groups which are different from each other and out of both these it pick a single group age and teenagers. It is positioning itself as a specialty retailer in the market for hardware and software. Now firm need to change its segmentation, targeting and positioning strategy because it is not positioning its business in unique way in front of the customers and also not target people in granular way.
Question 2
One of the major threats that firm is facing is that customers are quickly shifting towards the Xbox and Sony because these firms are making available digital video games on online platform where one can easily access these games by making online payment (Gil and Warzynski, 2015). This is negatively affecting the firm. In order to deal with such kind of situations firm can enter into a deal with the Microsoft and Sony. There are many nations where these firms products are not popular or not are in demand but there GameStop is present and is popular and GameStop have good experience of easily entering into the new market. In these markets GameStop can enter into an agreement with the Microsoft and Sony can sale and do marketing of these companies’ video games under its online and store platforms. Microsoft and Sony will also benefit from this deal as people will be aware about their products and will become habitual of their products. On the other hand, GameStop along with Microsoft and Sony products will also advertise its products and will motivate people to use its video games. Benefit of this deal will be that firm will earn money from Microsoft and Sony for generating sales for them and will also be sale its product. All these things will lead to elevation in revenue and firm will be able to manage itself in the market.\
REFERNECES
Books and Journals
Behm-Morawitz, E. 2017.Examining the intersection of race and gender in video game advertising. Journal of Marketing Communications. 23(3).220-239.
Bulut, E. 2018. One-dimensional creativity: A Marcusean critique of work and play in the video game industry. TripleC: Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society. 16(2).757-771.
