Acting on a Strategic Vision - Case Study Example

Management at Work: Acting on a Strategic Vision SWOT analysis helps a company in identifying its strengths, weaknesses, opportunities and threats. For any company to compete successfully against other in the industry, a SWOT analysis would the best way to draw its strategy. SWOT analysis helps managers in drawing the strategic plans of their organizations by establishing their strengths, weaknesses, opportunities and threats. This would have helped Electronic Arts assess its slippage in the video-gaming industry. The company had a strong market presence, and controlled a considerable market share in the gaming industry. It had the expertise, and had the best knowledgeable game developers in the market then. With these strengths defined, the management could have looked at the weaknesses. Weaknesses are the internal factors that if not managed properly can potentially affect an organization’s very existence. Weaknesses in most times are what other competitors dwell in in offer to win a competitive advantage over other firms in the same industry. When Kotick took over the leadership of the activation blizzard company, he looked at the weaknesses of the EA Company, and capitalized on t5hese to get the company on it5s feet again. After a number of years, the company surpassed the company in the level of sales and the market share. Had EA seen these weaknesses and capitalized on them, perhaps Activision Blizzard would not have taken over from its market leadership. In essence, an opportunity is an unexploited business idea. Kotick, after joining the industry saw a number of opportunities that EA could not see. Subsequently, the company managed to take over the leadership of the gaming business from the EA Company. Therefore, exploiting these opportunities before Activision Blizzard could, would have given the company a competitive advantage and saved it from the slippage that it currently faces. Threats on the other hand are a myriad of setbacks that would potentially affect the existence of the company. Competitors are part of the threatening factors for a company, a factor that EA never saw until it was very late. By the time it realized the strength of Activision Blizzard, it was too late as it controlled the biggest portion of the video-games market. 2. Michael Porter’s generic strategies theory consists of three strategies that businesses apply in order to stay ahead of their competition thus maintaining their competitive advantage. Porter classified these strategies into two dimensions, which included the strategic scope and the strategic strength competitive advantages. While the strategic scope focuses on the demand side by particularly paying attention to the size and composition of the market, strategic dimension focuses on the supply side of the organization, especially how to meet the needs of the target market (Mun, 10). In his theory, the cost leadership strategy involved two main ways of achieving the competitive advantage in a market, i.e. profit maximization by reducing costs but charging industry rates, or increasing the market share by charging lower market prices. Since the main objective of cost leadership is cost maximization, the costs that customers have to pay for commodities is a different issue (Mun 10). EA could have charged exorbitant prices for its games, regardless of the supply in the market. Perhaps, its games priced high, despite the market prices being relatively low. This way, customers could have preferred the company’s biggest competitor, Activision Blizzard. Differentiation strategy is the manner in which companies strive to make their products unique from the rest of the competitors in the industry. Through research, an organization can provide high quality products and through effective sales and marketing strategies. While Activision Blizzard capitalized on the features of its games, and providing its customers with improved games, EA relaxed, and never improved on the quality of its games through features. Activision Blizzard could have developed a series of games that would have captured the customers, unlike EA, which never paid attention to the features if the game that it provided to its customers. Finally, with the focus strategy, companies concentrate on a particular niche market. Companies then, through research identify the dynamics of the market, thereby p0rovuiding the identified market with the required goods. Companies aim at satisfying their customers in the identified niche markets by providing them with competitive prices for their commodities. Through adequate research, Activision Blizzard could have identified a niche market, never before exploited by other companies in the games industry. Therefore, the company could have made more revenues from this market, while EA relied on the traditional markets for its revenues. 3. Winning a market leadership is easy; maintaining the leadership is the most difficult part the management has to deal with. Activision Blizzard, having acquired leadership in the game industry, can maintain its leadership using the miles and snow’s strategy typology. According to these experts, managers seek to formulate strategies, which are more congruent with the external environment. To remain at the leadership, Activision Blizzard should strive to achieve internal organizational strategies, blending them with the external environment. Using the prospector strategy, Activision Blizzard should aim at increasing innovation, seeking new opportunities that would contribute to its growth (Daft et al. 61). After winning a considerable number of customers, the company, using the defender strategy, should retain the acquired customers (Daft et al. 61). While innovating on the periphery, Activision Blizzard should maintain stable business operations, as the analyses strategy stipulates (Daft et al. 63). Finally, since the reactor strategy requires the management to take the most appropriate immediate action whenever ion a crisis, the company should invest in highly experienced and qualified managers to steer it through crises (Daft et al. 63). 4. People tend to have little trust in startup businesses and in most cases prefer the existing companies’ products. Competing against EA and Activision Blizzard, I would employ the focus strategy that involves identifying a market and conducting research in the market to understand its dynamics, tastes and preferences. I would then capitalize on meeting the needs of this market, so that in the end I would win their confidence. Capturing this market, for instance the schoolchildren in a particular area, I would then diversify to other markets. 5. If I were a games player, aspects of Activision’s strategy that would lead me to playing its games would be its centralization of groups of designers and programmers intro regional offices in an effort to increase production efficiency. The company even lets them retain their names, showing that it does not intend to use them in profit making, then dump them after exhausting their talents. However, the fact that the company seems to neglect the consoles business shows how profits influence its strategies rather than customer satisfaction. There are people who love playing console games, which the company dopes not provide. This would make me hate playing the company’s games. 6 In repairing its image as one of the worst performing companies, Electronic Arts could use three strategic goals. One of these goals would be increasing its profitability from the current $3.7 billion. Secondly, aim at acquiring back its market leadership in the games industry and finally capture an additional 20 per cent of the total games market by developing highly competitive games and investing in research and development. Tactical plan for increasing the profitability of E.A from $3.7 billion to 12 billion Target audience Game players and interested game players Recruiting new people into video games Objectives Increasing the profitability of E.A from $3.7 billion to 12 billion in two years Key target messages The use of the phrase, “All work without play makes jack a dull boy” Video games helps improve a person’s cognitive ability Channels/ vehicles The use of online platforms to market our games Television commercials The use of school games department Measuring success By monitoring and evaluation of the strategy, we will ensure that the plan succeeds. As a result Works Cited Daft, Richard L, Jonathan Murphy, and Hugh Willmott. Organization Theory and Design. Andover: South-Western Cengage Learning, 2010. Print. Mun, Hwi-chang. Global Business Strategy: Asian Perspective. Singapore: World Scientific, 2010. Print. Read More