GameStop Corporation : Analysis, Strategies And Opportunities

Company’s Focus

Discuss about the Strategic Management Of GameStop Company.

The video game world is growing rapidly and the GameStop Company has become one of the largest retailers all across the world. The company has been selling new as well as old hardware and software, accessories for playing games in computers, action figures, game consoles, DVSs and other merchandizes of gaming. Along with increased growth of Gaming industry, GameStop came up with different generic competitive strategies available. The core purpose of the company is to ensure that they have an increased advantage over other rival companies. The GameStop Company’s core strategy is to compete and lead the world of Gaming Industry (Miller, 2014).

GameStop Company has divided its target segment into three different groups. The devoted gamers are the ones who comprise around 41% of the customers. They play games for longer periods, which can extend up to seven days a week. There are gamers who prefer categories such as role playing games, action games, stimulation and sports games. The social gamers typically represent 31% of the gamers, who play games for comparatively shorter periods of time. They mostly prefer fighting or sports games categories. The last segment represents 28% of the gamers, who play twice or thrice a week. The company’s main weakness is that their major concentration is on the geography and suppliers (News.gamestop.com, 2018).

In order to ensure that the company retain their status, it is important to analyze their current situation, corporate governance, external and internal environmental analysis and strategic factor analysis. The internal and external environmental analysis is being done on the basis of the company’s strengths, weaknesses, opportunities and threats. In addition to this, the report also recommends several strategies regarding the implementation and evaluation control. The gaming market is growing and blooming, hence it is important to create vast opportunities for GameStop Company. Moreover, the storage factor is also growing rapidly. However, the company’s main threat is intense competition with other retailers of video game and increased piracy.

The past corporate performance of the GameStop Company has been languishing due to their miserable stock performances. The shares were down over seventy five percent since 2013, reaching around forty percent of the float. The current mission and vision of the company is to serve its target customers and create great experiences for them by sharing the wonderful experience of gaming. The organizational goals and objectives of the company is to disrupt legacy with agility and innovation and creating power packed experiences for their customers. In addition to this, their corporate strategy is to take risks and trust each member at the time of making any decisions (Tinjala, Pantea & Alexandru, 2015).

Target Segment

The company is responsible for considering each other and doing what is right for their long term success. The core values of the company form their foundation of what they are today. They believe that the employees are the building blocks of their success and moreover, the company takes their safety and protection into consideration. GameStop believes that if the employees, clients and shareholders of the company work together and fulfill their mission, they can face any challenges around them. The company keeps on looking for new and innovative opportunities in order to serve the communities (Hill, Jones & Schilling, 2014). Their corporate and business level strategy is to hire the brightest and best talent in order to grow and compete on the international level.

The company offers its customers with a huge range of new and innovative products. Their knowledgeable associates and value added products are aimed to deliver satisfaction among the customers. The company is committed to the gaming industry and a highly disciplined business perspective, which helps them in driving continuous values with the customers, employees, vendors and shareholders. Their strategic corporate level goal is to be the leading retailer in selling new and used consoles and videogames (Barney, 2014).

GameStop Corporation engages into the retail of consumer electronics, wireless services and multichannel video games. It conducts its operations through several segments of Canada, United States, Europe, Australia and others. The segment of United States includes retail operations and e-commerce websites and the board of directors comprises an executive chairman, chief executive officer and director, executive vice president, senior vice president, independent director, lead independent director and others. Meanwhile, Daniel A. DeMatteo is the chief executive officer and chairman of the Company, who has served the organization for the past years (Wheelen et al., 2017). He has helped the company in hiring the best talents for its betterment.

The top management comprise of the chief executive officer, chairman, director, financial officers and others. The interim CEO, Executive Chairman and Director of the company is Dan DeMatteo, who has served the company since August 2008. In the year 1987, he began his career into the gaming industry and has served in the management and executive positions. The director and chairman of the Audit Committee is Stephanie M. Shem, who has served the company since 2002. The GameStop family is associated with the growth and progress of the company and constantly looks for new opportunities in order to serve their best (Rothaermel, 2015).

Strengths, Weaknesses, Opportunities and Threats

At GameStop Corporation, the communities they serve are the backbone of their business. This particular reason has helped them in extending their support beyond four walls of their stores. This helped them in improving their business strategies, ethics and social responsibilities. It is the vision of the company to utilize gaming, geek fanaticism and technology for supporting nonprofit partners. Their aim is to improve the youth’s wellbeing as well as create responsible and inclusive communities through ongoing volunteerism, fund-raising and sustainable efforts (Meyer, Neck & Meeks, 2017). They also concentrate on the reduction of their impact over the environment.

GameStop Corporation has great opportunities in introducing themselves into the international markets. However, there are several threats as well, which can arise later like fluctuations with varied currency rates, entry to the areas, corruption and other barriers. The company can overcome these issues if proper planning is done by the correct management team. In addition to this, the rise of information technology can be regarded as the gateway to several opportunity areas for the GameStop Corporation. The company should make use of this advantage in the most appropriate manner for catering to the most number of customers. However, there are potential threats as well and to maximize their opportunities the company should advance their presence in all the social networking sites (Lasserre, 2017).

Consumers always demand the most updated technology and at the lowest rates possible. The threat of new entrants is comparatively lower due to the entry barriers and startup costs. However, there is presently a medium to low amount of competitive rivalry for GameStop Corporation. In addition to this, the threat of substitute products or services is higher as other companies also have larger presence over the social networking sites (Bettis et al., 2016). Moreover, the current companies like Wal-Mart, Amazon and others are expanding their presence over the social media by utilizing appropriate measures. The bargaining power of the buyers is at a lower level and the bargaining power of the suppliers is at the medium to higher level. Last but not the least; the relative power of stakeholders is at medium to higher level (Michael, Storey & Thomas, 2017).

External Factors	Weight	Rating	Weighted Score
Opportunities:
1.      Product Segment Growth	0.10	3.0	0.30
2.      New Markets in the Developing Countries	0.20	4.0	0.80
3.      Gaining Domestic share in the market	0.05	3.0	0.15
4.      Expansion in the global markets	0.05	4.0	0.20
5.      Rise of electronic commerce	0.15	3.5	0.525
Threats:
1.      Increased Competition	0.10	3.5	0.35
2.      Economic Downturn	0.03	3.5	0.0875
3.      Electronic Commerce/ Internet Competition	0.25	4.0	1.0
4.      Advancement in the Computer Technology	0.05	3.0	0.15
5.      Employee Free Choice Act Implementation	0.025	3.5	0.0875
Total Scores	1.00		3.65

 

GameStop Corporation has a network style of management, where the employees make up the base structure followed by the management and department supervisors, the general manager, district and regional manager, corporate staffs, company executives and all up to the Chief Executive Officer of the company. The internal corporate culture of the company is the tradition top down structure and they believe that the innovation comes from the company’s fringes, instead of the management. The company believes that intensive training is the key to their success, which truly sets them apart from their competitors (Morschett, Schramm-Klein & Zentes, 2015).

Past performance and Corporate goals

GameStop Corporation’s marketing ventures are all related to make sure that the customers’ technological needs or demands are adequately met. This is done by providing or making a superior gaming product at reasonable rates and providing the customers with end-to-end services or solutions. The main item which drives the company is their income growth. The ratio analysis reveals that the company is in a good position and their sales have increased by 22% in the recent years (Daspit et al., 2017). As the technology industry is advancing, the company is also investing on the research and development sector in order to compete. In addition to this, the company uses standard method of distribution by having the merchandizes and products shipped directly to their stores from the manufacturers and the distributors. The company also has an effective human resource management, which enhances employee engagement to a large extent (Bettis et al., 2014). Presently, the company uses the information technology for creating new websites and upgrading their capabilities.

Internal Factors	Weight	Rating	Weighted Score
Strengths
1.      Highly trained employees	0.25	4.0	1.0
2.      Acquisitions’ management	0.10	2.75	0.275
3.      Consistent growth in the sales	0.25	4.0	1.0
4.      Customer-centric operating model	0.05	3.5	0.175
5.      Extensive product or service offerings	0.05	3.3	0.165
Weaknesses
1.      Weak Online Presence	0.05	3.25	0.163
2.      New CEO	0.05	3.3	0.165
3.      Cannot match the level of low priced competitors	0.05	3.1	0.155
4.      Financial Position	0.10	3.80	0.380
5.      Research and Development expenses	0.05	3.3	0.165
Total Scores	1.00		3.6425

 

Strengths	Weaknesses	Opportunities	Threats
1.      GameStop Company has highly trained employees. This helps in ensuring the fact that the services’ quality is higher than that of its competitors. 2.      Consistent increase in their sales. 3.      Customer centric model of operations, which is viewed as their core competency. 4.      This in turn, helps in increasing the customer loyalty as well as trust for GameStop Corporation. 5.      Highly knowledgeable and qualified staff members (Stead & Stead, 2014).	1.      Their presence in the social networking sites is weak as compared to their competitors. 2.      Cannot match the low-pricing competitors. 3.      The GameStop Company’s financial positioning is strenuous. 4.      It can have a negative impact upon the reputation and revenue generation of the company (Frynas & Mellahi, 2015).	1.      Growth in the product segment. 2.      The company can continue prospering their relationships and gain more markets. 3.      Rise of electronic commerce. 4.      This can help them in increasing overall revenue and sales (David & David, 2017).	1.      Increased competition with competitors like Amazon and Wal-Mart. 2.      Electronic commerce and internet competition is a serious threat. 3.      Profits may decline due to this, in a drastic manner. 4.      The company’s weak online presence may prove to be a drawback (Morden, 2016).

Strategic Factors	Weight	Rating	Weighted Score	Short	Intermediate	Long
Highly trained employees	0.15	4	0.6		X	X
Consistent increase in sales	0.15	4	0.6	X	X	X
Customer centric operating model	0.05	2.75	0.1375	X	X	X
Weak online presence	0.05	2.75	0.1375		X	X
Cannot match low pricing competitors	0.05	3	0.015	X	X	X
Financial position	0.10	3.5	0.35	X		X
Product segment growth	0.10	3.5	0.35	X
Rise of electronic commerce	0.05	3.5	0.175	X		X
Increased competition	0.05	3	0.15	X	X	X
Internet/ electronic commerce competition	0.25	4.0	1.0	X	X
Total Scores	1.00		3.65

The current mission of GameStop Corporation is to improve or enhance the experiences of the customers, while keeping the competitive advantage intact. They offer high level technical support to its customers in order to assist them, with their services. The company’s mission statement is to cater to the target customers as per their choices and become the leader of the gaming industry. However, the company has no such vision statement, which needs to be updated. The organizational goal or objective is to continue being the leading supplier of gaming products and consoles. In addition to this, their objective is to address the issues related to the websites of the company, which undermines public image and trust (Goetsch & Davis, 2014). Moreover, their objective is to provide updated positioning and products for the customers in order to continue future growth or profit.

The international expansion focus of the company should be strong into the countries of China and Europe. This is because the company will be able to increase their abilities of controlling the supply chain management through Information Technology and the creation of new infrastructures for the higher efficiency rate. The increased revenues will help the company in gaining more returns on investments especially in the international markets, which will allow for continuous expansion as well as growth of the revenue and locations. Increased acquisition, presence of the company will assist GameStop Company in several areas like targeting the market and others. This will also allow the company in becoming more specialized (Trigeorgis & Reuer, 2017). However, the initial costs of entering into the foreign markets and constructing new buildings can be a drawback for the company.

Corporate and Business Level Strategy

It can be recommended that the company can select the alternative strategies, which have been suggested in order to generate more revenue in the upcoming years. The strategies will help in determining how the sales revenue might grow in both the domestic and international markets. Another indicator is operating income view and also the growth or expansion associated with it. In addition to this, the SWOT analysis played a very crucial role in the overall decision making procedure and the best available measures are utilized, which ensured success and advantages of the company (Harrison et al., 2017).

The implementation and acceptance of the stable profit strategies focus primarily on the growth of foreign and domestic online services as well as management information systems. GameStop Company’s core competency of being customer centric is also included in the strategy. The initial constructor of these strategies will be the President or CEO of the company, who will announce, develop, support or deploy the decisions of the management. Utilizing the customers’ centric core competency will help the company to hire additional members into the team. However, the implementation of the project will depend heavily on the Chief Information Officer, who needs to perform closely with the human resource manager of the company (Jenkins, Ambrosini & Collier, 2016).

The Chief Information Officer of the company will be leading the operations and logistics and the marketing department will be led by the Chief Marketing Officer. He/she will lead the marketing department along with the assistance from strategic business unit. It is essential for the information technology department to make plans of upgrading their websites, which should be available on mobile devices as well. Therefore, these plans will enable the company in becoming more customers’ centric and attract the most number of heads. The human resource management of the company should constantly keep a track of the risk assessment strategies in order to fight the odds. Moreover, proper training facilities must be organized in order to train the employees to perform their best (Mitchell & Leiponen, 2016).

For the purpose of evaluation and control, the board of directors needs to review the strategic planning annually or semi-annually in order to ensure that all the procedures is flowing in the similar direction and that too, in an appropriate manner. These strategies or amendments need to be enacted as soon as possible. The pro form results can be utilized in order to assess the progress of strategic planning. In addition to this, the results plan should be strictly based upon the revenue generated by the company. The Vice Chairman of the company will be reviewing the progress of the plans and reward the employees on the basis of the achievements (Jenkins, Ambrosini & Collier, 2016). Moreover, revisions should be added onto the general planning for historical or clarification analysis.

Board of Directors and Top Management

The Vice Chairman and Chief Executive Officer, Chief Marketing Officer, Logistics department will review the strategic plan and its operational aspects. This will help in ensuring that the website management strategies are adequately placed for the marketing purpose. If the plans are not successful then the Vice Chairman may have to locate the missed opportunities as well as establish precedence for the problem areas. In addition to this, the human resource department needs to review their training and recruitment plans both weekly as well as bi-weekly. Moreover, the plans to assess risks and manage those should be evaluated and implemented as well (Meznar, Chrisman & Carroll, 2016).

Conclusion

To conclude, the GameStop Company is a video game retailer, which has been operating successfully for the past years. The company has been operating in several countries including two electronic commerce websites. The report throws light on the company’s success and drawbacks, in a detailed manner. The strengths, weaknesses, opportunities and threats of the company are being discussed in a tabular form. Moreover, the report also discusses about the external and internal factors of the company in a detailed manner, so as to establish the study. In addition to this, it is recommended that the company adopts certain strategies in order to expand into the foreign markets. GameStop Company is a successful retailer in the video game industry. The mission of the company is to become the leader of this industry. However, the company’s top line growth has become lower as compared to its past years. This is due to the ever increasing competition in the business world. Therefore, in order to cope up with these problems the company can also think over their pricing strategies and reduce them so that the customers get attracted to a huge extent.

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