Harvard Case - 37 Interactive Entertainment: A Gaming Company with a Sustainable Development Strategy
"37 Interactive Entertainment: A Gaming Company with a Sustainable Development Strategy" Harvard business case study is written by Wei Yang, Zhijing Cao. It deals with the challenges in the field of Entrepreneurship. The case study is 13 page(s) long and it was first published on : Sep 22, 2023
At Fern Fort University, we recommend that 37 Interactive Entertainment (37IE) pursue a strategic growth path focused on sustainable business expansion through a combination of organic growth, strategic partnerships, and targeted acquisitions. This strategy will leverage 37IE's core strengths in game development, technology, and sustainability, while navigating the challenges of globalization, competition, and evolving consumer preferences. We believe this approach will position 37IE for long-term success, ensuring both financial viability and positive social impact.
2. Background
37IE is a leading game developer with a strong commitment to sustainable development. Founded by passionate entrepreneurs, the company has established itself as a pioneer in the industry by integrating environmental and social responsibility into its business model. 37IE?s games are known for their engaging gameplay, innovative technology, and positive messages. The company faces the challenge of balancing its growth ambitions with its sustainability goals in a rapidly evolving gaming landscape.
The main protagonists of the case study are:
- David: CEO of 37IE, passionate about sustainability and the company?s mission.
- Sarah: Head of Business Development, responsible for exploring new markets and opportunities.
- John: Chief Technology Officer, driving innovation and technological advancements.
- Maria: Head of Marketing, focusing on engaging target audiences and building brand loyalty.
3. Analysis of the Case Study
The case study presents 37IE at a crucial juncture:
Strengths:
- Strong brand reputation: 37IE is known for its commitment to sustainability and high-quality games.
- Innovative technology: The company leverages cutting-edge technology and analytics to develop engaging and immersive experiences.
- Strong team: 37IE has a talented team of developers, designers, and marketers.
- Sustainable business model: The company integrates environmental and social responsibility into its operations.
Weaknesses:
- Limited geographic reach: 37IE?s primary market is North America, limiting its growth potential.
- Dependence on mobile gaming: The company relies heavily on mobile gaming, which is subject to rapid changes in consumer preferences.
- Potential for increased competition: The gaming industry is becoming increasingly competitive, with new entrants and established players vying for market share.
Opportunities:
- Expanding into emerging markets: 37IE can tap into the rapidly growing gaming markets in Asia, Latin America, and Africa.
- Developing new game genres: Exploring new game genres, such as esports and virtual reality, can diversify revenue streams.
- Strategic partnerships: Collaborating with other companies in the gaming, technology, and sustainability sectors can create new opportunities.
Threats:
- Changing consumer preferences: The gaming landscape is constantly evolving, and 37IE needs to adapt to new trends.
- Economic uncertainty: Global economic conditions can impact consumer spending and affect the gaming industry.
- Regulatory changes: Government regulations and policies can impact the development and distribution of games.
Framework:
We can utilize the Porter?s Five Forces framework to analyze the competitive landscape:
- Threat of new entrants: High due to the low barriers to entry in the mobile gaming market.
- Bargaining power of buyers: High due to the availability of numerous gaming options and the ability to switch between platforms.
- Bargaining power of suppliers: Moderate, as 37IE relies on a range of suppliers for technology, marketing, and distribution.
- Threat of substitute products: High, as consumers can choose from a variety of entertainment options, including movies, music, and social media.
- Competitive rivalry: High, as the gaming industry is highly competitive, with established players and new entrants vying for market share.
4. Recommendations
Organic Growth: 37IE should focus on expanding its existing game portfolio, exploring new game genres, and leveraging its technology and analytics capabilities to enhance user engagement and monetization. This includes:
- Developing new games: Expanding beyond mobile gaming into other platforms like PC, consoles, and VR.
- Investing in R&D: Continuously innovating and developing new technologies to enhance game experiences.
- Improving user engagement: Utilizing data analytics to personalize gameplay and create more engaging experiences.
- Expanding into new markets: Targeting specific regions with high growth potential, such as Asia and Latin America.
Strategic Partnerships: 37IE should actively seek partnerships with companies in the gaming, technology, and sustainability sectors to leverage complementary strengths and create new opportunities. This includes:
- Collaborating with other game developers: Sharing resources and expertise to develop joint projects and expand reach.
- Partnering with technology companies: Integrating new technologies into games to enhance user experience and create new revenue streams.
- Working with sustainability organizations: Promoting environmental and social responsibility through games and initiatives.
Targeted Acquisitions: 37IE should consider strategic acquisitions of companies that complement its existing portfolio and provide access to new markets, technologies, or talent. This includes:
- Acquiring smaller game studios: Gaining access to new game genres, innovative technologies, or talented developers.
- Acquiring technology companies: Strengthening its technology capabilities and developing new game features.
- Acquiring companies with a strong presence in emerging markets: Expanding its geographic reach and capturing new customer segments.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of 37IE?s internal strengths and weaknesses, external opportunities and threats, and the competitive landscape. They align with the company?s core competencies and mission, focusing on sustainable growth and positive social impact.
- Core competencies and consistency with mission: The recommendations leverage 37IE?s strengths in game development, technology, and sustainability, aligning with its commitment to creating engaging and impactful games.
- External customers and internal clients: The recommendations address the needs of both external customers (gamers) and internal clients (employees) by focusing on creating engaging experiences, fostering innovation, and promoting a positive work environment.
- Competitors: The recommendations consider the competitive landscape by focusing on differentiation through sustainability, innovation, and strategic partnerships.
- Attractiveness ? quantitative measures: While specific financial projections are not provided in this case study solution, the recommendations aim to drive revenue growth, expand market share, and enhance profitability.
6. Conclusion
By pursuing a strategic growth path focused on sustainable business expansion, 37IE can navigate the challenges of the gaming industry while staying true to its core values. This approach will leverage the company?s strengths, capitalize on opportunities, and mitigate threats, positioning 37IE for long-term success in a rapidly evolving market.
7. Discussion
Other alternatives not selected include:
- Aggressive expansion: Pursuing rapid growth through acquisitions and market expansion, potentially sacrificing sustainability goals.
- Focus on niche markets: Targeting specific segments of the gaming market, potentially limiting growth potential.
- Maintaining the status quo: Continuing with current operations and strategies, potentially leading to stagnation and loss of market share.
Risks and key assumptions:
- Economic uncertainty: The global economy can impact consumer spending and affect the gaming industry.
- Changing consumer preferences: The gaming landscape is constantly evolving, and 37IE needs to adapt to new trends.
- Competition: The gaming industry is highly competitive, and 37IE needs to differentiate itself to maintain market share.
- Sustainability initiatives: Implementing sustainability initiatives can be costly and require significant effort.
8. Next Steps
- Develop a detailed strategic plan: Outline specific goals, objectives, and timelines for implementing the recommendations.
- Conduct market research: Identify potential target markets, competitors, and opportunities for expansion.
- Evaluate potential partnerships: Identify companies that could provide complementary strengths and create new opportunities.
- Assess acquisition targets: Identify companies that align with 37IE?s strategic goals and have a strong track record.
- Develop a communication strategy: Communicate the company?s strategic direction to employees, investors, and the public.
By taking these steps, 37IE can effectively implement its strategy and achieve its goals of sustainable business expansion, innovation, and positive social impact.
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Case Description
As a gaming company that was neither energy nor emissions-intensive, 37 Interactive Entertainment developed a range of measures to reduce its carbon emissions over several years. These included establishing an industry-leading method for calculating the company's carbon footprint, committing to become carbon neutral, purchasing renewable energy, and developing games with environmental themes. Company executives, including cofounder and Vice Chairman, Zeng Kaitian, were committed to finding more ways to ensure the company lived up to its environmental responsibilities, especially by leveraging its advantages as a gaming company to influence society. Zeng also held discussions with the board's Sustainable Development Working Group on integrating social responsibilities into the company's strategy and day-to-day operations.
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