gamestop retail
TRANSCRIPT
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Submission by: Group 2
Members: Ajinkya Poundrik | Avinash Murali Nair | Baidyanath Bose | Balakrishnan M. | Jeevan Nishant Prakash
Retail ManCase Presentation
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GameStop The Business & Recurring Challenges faced
2
New and used game Accessoriesfor PCs and gaming consoles
New and usedSoftware and
Hardware for PCs andgaming consoles
Strategy guides,Action Figures, DVDs
and other relatedmerchandise
IssGachdi
Isscoag
Isprco
Became the worlds largest video game retailer in 2005 Spread across 14 countries with 4490 stores with more than 5000 SKUs of constantly changing in-store inve
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Industry Analysis
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Portable games like Nintendos Gameboyhelped manufacturers
to increase andmaintain sales duringthe release of console
systems. Wide varietyof games, wireless
capability and lowercost led to increase in
sales
Next Generationconsoles like Xbox 360
and PS3 continued
gaining popularity andincreasing gaming sales
Used late generationconsoles started
leading to increase intrade-ins and sales.
Allowed thecontinuation of
producing old modelgames. Increase innumber of peopleusing two or moreconsoles by 15%
Continuoretail PCTraditiowere beand m
gamingconsol
games befor the
Gaming Trends
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Company Details
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Trade InSupport
MarginCapitalization
MerchandizingProcess
SupplierReliance
Trade In Process
EmployeeRelation
Customers brought their old console or gamesto trade inGame stops employee inspected the productand trade in pride were allocatedCustomers usually had 2 optionExchanged games or received cash
The price margin was very high
80% of customers used trade in credit tonew games or systemsThere were instances of shortage ofinventory for used games
Huge margin were mused video game & hMargin were betwee85%Inventory managemhelped in decreasingdays from 80 to 72 dHelped in providingtrade in quotesReplenish the stock tweek
Games and systems were merchanaccording to systemsNew and Used games were placedeach other - helped in price compaBest selling system and games weplaced near the frontXbox 360 and Nintendo DS
Highly concentrated SuppliersNintendo, Sony, Microsoft Major consoledevelopersEA, Activision and Acclaim Largest game publishersNintendo and EA comprised 25% of Game stoppurchasesMarketing, Advertising materials and money wereprovided by Game and Console developers
More than 33000 employeesEmployees were well informed aboutthe gaming industry and Game stopproduct lineEach store employed 1 manager, 1assistant manager and up to 6 parttime associates
Company Processes
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Company Details
Company Growth
Concept of Selling used video games
was relatively new Game Stop wanted to be recognized as
The destination for new and usedvideo games and systems
Planned to change all its EB brandstore to Game stop brand store by2007
GameStop.com and EBgames.com Had an option to receive game by
mail, reserve game or pick up atretail store
Game informer Magazine sold atGameStop, Barnes and Noble
It served as marketing tool
W E B S I T E &
M A G A Z I N E
Operated in 4490world
Average size was
Mall store carriedused items whilcarried a balancedused items
Strip centre were
Since 2003 , Game Stop
grew at an average of20% per year Strong cash flow Company was valued
at 9.2 billion dollars F I N A N C I A L G R O W T H
I N T E R N A L I S A T I O N
Electronic Game Enthusiastic Value oriented casual gamers Seasonal gift givers T A
R G E T
C U S T O M E R S
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Understanding the competition
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Porters Five Forces
- Industry is attractive &competitive pricing give High
bargaining power to buyers
- Industry is innovation
power with marketing a- Suppliers ca
- Advancement in technology Allows emergent players
- Digital games market is growing
Identifying the right segmentof digital/online reduces threat
- Consumer shift to Social Mediagame Cheaper alternative
- Game rental establishments
- Competitors (bselling popula
- Switching cosmedium (digitidentified
SupplThreat of new entrants
Buyers bargaining power
Threat of substitutes T
Gaming Industry
H
M
H H
M
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Competitive Landscape & Advantages
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Successful retail model:- 4490 retail store worldwide- 5000 SKUs of constantly changing in
store selection- Owned gaming magazines (Game
Informer) and e-commerce websites(gamestop.com and ebgames.com)
Employee relations:- Huge employee strength that was
knowledgeable about games &consoles
- Employees were allowed to takegames home to keep up to date onthe products
Robust processes:- Trade-In process allowing customers
to trade in their used games- Strategy of trade-in price being
greater than the monetary price
- Trade-In Support: Used gamesallowed GameStop to supportdeclining rev.
Brand Management:- Concept of selling used games was
relatively new- Projected itself as the only
destination for used games, newgames & gaming systems
Competi
1. Used Vide- Competi- Offering
selection2. Box Store - Carried - Easily ac- Limited
proven g3. Rental bas- Monthly- Expansi
games4. Online Pur- Used gam
a cheapeassuranc
- Gave coonline &
Competitive Advantages
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Recapturing the current scenario
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Low entry barriers and changes intechnology (digital) have attracted a
number of newer competitors
Higher Buyer Power: Can check forprices online and compare
Higher Supplier Power: Can havetheir own platforms in the future
Virtually no switching costs,especially in case of popular
substitutes like Mobile and SocialMedia games
Unlike competitors, iBrand Image and an
marketing the bra
Best of both worlds: BPositioning new ggamers & gift-shopp
appeal to loyalists
Unparalleled After SResource Managem
turn-o
Positives and NegativesIn the Current Scenario
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What are the options?
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Status-quo Backward Integration
Product Extensions Focus on Online Medium
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RECOMMENDATION
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ONLINE PRESENCE
Risk Free ventureIntroduce gradually along withthe Physical storesAvoid losing loyal customerswho want to switch to onlinegamesCan also capture the marketthat is oriented towards onlinegaming build loyalty
PRODUCT EXTENSION
Can attract hardcore gamersCan boost sales in off-seasonsIncrease brand loyalty
CONTRACT WITH SUPPLIERS
Can reduce competition in themarket
Tradeoff: Increase in Suppliersbargaining power
BACKW
Can bancash rese
Reduce SpowerCompeti
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IMPLEMENTATION
Online Presence
STEP 1: Hire a Top End Website development team to integrate the 2 current websites (already done)
STEP 2: Develop payment gateways and product delivery service by partnering with Banks and Transport compa
STEP 3: Implementing this and integrating with the current sales strategy Task assigned to Sales and Ma
STEP 4: Create department and deploy team to streamline both online and offline platform
STEP 5: Employ gamification techniques in online platform to engage gamers and reduce switching to other onlin
Product Extension and Contract with suppliers
STEP 1: Extend the product line in both the online and offline platform to attract hardcore games & offset season
STEP 2: Establish contracts with suppliers like EA Sports & Nintendo to develop games for Gamestop, thus limit
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THANK Y