Gamestop corp is an American company headquartered in Grapevine, Texas. The company sells video games as well as consumer electronics such as smartphones. Additionally, after the acquisition of ThinkGeek, the company has also ventured into the market of pop culture collectibles. The company, thus, has several subsidiaries such as Micromania and EB Games that enhance the company’s present grip within the video game and entertainment industry. The company’s mission statement is a robust “Power to the players” declaration while the vision statement is “Together, we hold a passion for gaming, a commitment to our industry and a disciplined business perspective to continuously drive value with shareholders, vendors, customers and employees.”
In order to facilitate the aforementioned strategic action, extensive research has been conducted in order to establish the current state of the digital gaming and entertainment market. Primary research sources include interviews on consumers; especially recurrent customers of GameStop Corp. products. Additionally, secondary research sources employed for this task include the GameStop website as well as annual financial reports obtained from the internet.
Most of the consumers interviewed describe GameStop products as ‘top notch’ especially regarding to quality. Services such as the reselling service and holiday deals have also been termed convenient for most customers. Analysis of the company’s annual report reveals that the company not only has enough capital to sustain and expand the company but also that the company, through a number of subsidiaries, has significant stake in a number of markets such as the video games market, mobile phones market as well as pop culture collectibles market among several others. Below is a table highlighting the income and profit margins for the company.
As such, with prudent management, the company is set to proceed to the next level of operation through expansion (Hubner, 2016). In order to effectively accomplish this, however, it is important to conduct analysis of the business environment of GameStop Corp. by use of a SWOT and PEST analysis.
Strengths
GameStop corp displays a high level of dominance in the industry within which it operates. The company has over seven thousand stores scattered between fourteen nations globally thus impacting a greater consumer base. The company also affords the company enough resources to produce high quality games and other products that give credence to the company in the target market. By being located in multiple regions such as Australia, United States and Europe, the company has access to diverse knowledge and ideas from people of different locations, ergo, cultures and practices (Triguero-Sanchez, Pena-Vinces & Guillen, 2018). By incorporating all this resource within their products, GameStop Corp has been able to deliver globally acceptable product standards. The company has also been in the industry for a substantial time period which has afforded them the chance to grow and build their brand to a strong and recognizable brand with a respectable reputation.
Weaknesses
The present organizational structure only works for the present business model and thus, altering the structure would require drastic changes in the business model of GameStop corp. additionally, the marketing strategies for the company over the last few years have left a lot to be desired as the performance of certain products distributed by the company within the market indicate. While the sales of the said products indicate consistent relative success, gaps exist as regards to brand positioning and propositions of unique sales. In the gaming and entertainment industry, these gaps provide an opportunity for competitors. Additionally, predicting the demand of certain products has proved an elusive task for the company in previous years which has led to inventory management hiccoughs in the past.
Opportunities
Consumer spending has been on the rise since the recession and technological advances are galvanizing desire among customers to possess the latest trend as regards technology. By ‘riding this wave’, GameStop could benefit greatly from enhanced marketing of their products as well as improving customer satisfaction in order to retain optimal sales every quarter. Additionally, with reducing data costs by the day, utilizing internet resources such as periodic updates and subscription-based consumer relations, the company stands to benefit greatly in the coming years. Various adjustments on government-controlled rates such as taxation and transport costs are sure to afford GameStop an opportunity to adjust various features of their commodities, including prices, which enhances their relationship with consumers of their products.
Threats
Laws. Competitors often find loopholes that could be used to derail a company with numerous lawsuits and this could happen to GameStop. It thus becomes important to adhere to all relevant guidelines of the law. Additionally, the gaming and entertainment industry has constantly proved to be profitable, thus attracting other players that add to the bulk of competition that GameStop already has to contend with.
Political factors
The political state of a region greatly influences the progression of business activities within the region. Some of the political factors that influence GameStop Corp’s business include the tax policies of the different nations within which they operate. Taxation has direct impact on GameStop as it affects the profit margin of products. Additional political factors include policies by various commercial authorities such as the North American Free Trade Alliance which dictates business activities in North American countries as well as the European Union. These authorities define trade standards on matters such as international trade relations etc.
Economic factors
The economic state of a region affects the business activities conducted within the region. High employment rates in most of the countries where GameStop operates means that most consumers in these countries have the capacity to continuously buy GameStop products (Brandolini & Viviano, 2016). In nations with well-established infrastructure, business becomes easy to conduct for GameStop as transportation is streamlined thus reducing transport costs (Palei, 2015). Additionally, GameStop operates in countries that have low inflation rates and high level of access by consumers to credit. All these factors help to ensure a stable market for GameStop products.
Social factors
Key social factor that affect the business activities of GameStop Corp. include the high level of education of most customers of GameStop corp which affords the company a substantial customer base. Emphasis on education over the last few decades has led to more markets opening up even in regions such as Africa (Hajli, 2015). Changes in lifestyle trends also affect the business of the company. With increased obesity cases, people are now being advised to spend more time outdoors which may in turn lead to a decline of sales of digital games and gaming hardware by GameStop corp (Schaltegger & Wagner, 2017).
Technological factors
This is one of the biggest drivers of this company as technology encompasses all the products and services of the company. Therefore, all new innovation and inventions are opportunities for the company to further enhance their business practices in alignment with the new innovative environment (Straub, 2009). The new technology is not only incorporated within the products but also utilized within the company’s internal context to streamline various communicative and technical processes (Weaver, et al., 2017).
Conclusion
GameStop Corp is a multinational video game and entertainment company. Their primary products include video game hardware and associated software, pop culture collectibles as well as consumer devices such as phones. The company has had a long established market that it has since enjoyed and seeks to grow. Analysis of the internal and external environment of the company help determine the next course of action as identified by the analyses above.
As the company already has enough capital for expansion, emphasis needs to be placed upon revising the present organizational structure in order to conform it not only to industry standards but also the next level of operation that the company intends to venture into. Additionally, during the transition, it is necessary to keep track of all relevant legislative processes in order to keep the company’s practices in accordance with the law and avoid opportunistic lawsuits by competitors.
References
Brandolini, A. and Viviano, E. (2016) Behind and beyond the (head count) employment rate. Journal of the Royal Statistical Society: Series A (Statistics in Society). 179(3), pp.657-681.
Hajli, N. (2015) Social commerce constructs and consumer’s intention to buy. International Journal of Information Management. 35(2), pp.183-191.
Hubner, G. (2016) Investment Thesis for GameStop Corp. (NYSE: GME). Retrieved from https://jhir.library.jhu.edu/handle/1774.2/44580
Palei, T. (2015) Assessing the impact of infrastructure on economic growth and global competitiveness. Procedia Economics and Finance. 23, pp.168-175.
Schaltegger, S. and Wagner, M. (2017) Managing the business case for sustainability: The integration of social, environmental and economic performance. 1st ed. London: Routledge.
Straub, E.T. (2009) Understanding technology adoption: Theory and future directions for informal learning. Review of educational research. 79(2), pp.625-649.
Triguero-Sánchez, R., Peña-Vinces, J. and Guillen, J. (2018) How to improve firm performance through employee diversity and organisational culture. Revista Brasileira de Gestão de Negócios. 20(3), pp. 217-244.
Weaver, P., Jansen, L., Van Grootveld, G., Van Spiegel, E. and Vergragt, P. (2017) Sustainable technology development. 1st ed. London: Routledge.
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