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Harvard Case - Supercell (Abridged)

"Supercell (Abridged)" Harvard business case study is written by William R. Kerr, Sarah Gulick. It deals with the challenges in the field of Entrepreneurship. The case study is 13 page(s) long and it was first published on : Feb 20, 2020

At Fern Fort University, we recommend that Supercell, while maintaining its focus on entrepreneurial management and disruptive innovation, consider a strategic shift towards globalization and business expansion through a combination of organic growth and strategic acquisitions. This strategy should be underpinned by a strong emphasis on product development, marketing, and organizational culture to ensure continued success in the competitive mobile gaming market.

2. Background

Supercell, founded in 2010, is a Finnish mobile game developer known for its highly successful mobile games like Clash of Clans, Clash Royale, and Hay Day. The company has achieved remarkable success through its lean startup methodology, data-driven decision making, and focus on creating engaging and addictive games. However, Supercell faces challenges in maintaining its growth trajectory in a rapidly evolving market.

The main protagonists of the case study are Ilkka Paananen, the CEO of Supercell, and the company?s founders, who are grappling with the decision of whether to maintain their current organic growth strategy or pursue acquisitions to accelerate their expansion.

3. Analysis of the Case Study

Supercell?s success can be attributed to its unique business model that emphasizes:

  • Entrepreneurial culture: Fostering a culture of experimentation and innovation, allowing teams to develop and launch new games with minimal bureaucracy.
  • Data-driven decision making: Utilizing technology and analytics to gather insights into player behavior and optimize game design and monetization strategies.
  • Focus on quality: Creating high-quality games with engaging gameplay and long-term appeal.
  • Limited product portfolio: Maintaining a focused product portfolio with only a few highly successful games, allowing for dedicated resources and attention.

However, Supercell faces several challenges:

  • Market saturation: The mobile gaming market is becoming increasingly competitive, with new entrants and established players vying for market share.
  • Growth limitations: Organic growth may not be sufficient to maintain Supercell?s current growth trajectory in the long term.
  • Innovation challenges: Maintaining a constant flow of disruptive innovation in the mobile gaming market is crucial for sustained success.

To address these challenges, Supercell needs to consider a strategic shift towards globalization and business expansion. This can be achieved through:

  • Organic growth: Expanding into new markets through marketing campaigns tailored to different demographics and cultures.
  • Strategic acquisitions: Acquiring promising game studios or companies with innovative technologies or established user bases in new markets.

4. Recommendations

Supercell should implement the following recommendations to achieve sustainable growth:

1. Global Expansion:

  • Market Segmentation: Identify and target specific market segments in key regions like Asia, Latin America, and Africa.
  • Localization: Adapt games and marketing materials to local languages and cultural preferences.
  • Partnerships: Collaborate with local developers, publishers, and influencers to enhance market penetration.
  • Emerging Markets: Focus on developing games that appeal to emerging markets with high mobile penetration and growing gaming communities.

2. Acquisitions:

  • Strategic Acquisitions: Identify and acquire promising game studios or companies with complementary technologies, established user bases, or expertise in specific genres or markets.
  • Due Diligence: Conduct thorough due diligence to assess the acquired company?s financial health, technology, and cultural fit.
  • Integration: Develop a smooth integration process to minimize disruption and maximize value creation.

3. Product Development:

  • Innovation: Continue to invest in disruptive innovation by exploring new game genres, technologies, and monetization models.
  • Diversification: Expand the product portfolio to include games with broader appeal, catering to different player demographics and preferences.
  • Data-Driven Development: Utilize technology and analytics to gather insights into player behavior and optimize game design and development.

4. Marketing:

  • Targeted Marketing: Develop marketing campaigns tailored to specific market segments and regions.
  • Influencer Marketing: Leverage the power of social media influencers to reach target audiences and generate buzz for new games.
  • Esports Integration: Explore opportunities to integrate games into the growing esports scene, attracting a wider audience and generating revenue streams.

5. Organizational Culture:

  • Global Mindset: Foster a global mindset within the organization, embracing diversity and inclusivity.
  • Empowerment: Empower local teams to make decisions and adapt to local market conditions.
  • Communication: Establish clear communication channels to ensure effective collaboration across different regions.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies: Supercell?s core competencies in game development, data-driven decision making, and entrepreneurial culture are transferable to new markets and can be leveraged through acquisitions.
  • External Customers: Understanding the needs and preferences of diverse customer segments in different regions is crucial for successful expansion.
  • Competitors: Analyzing the competitive landscape in different markets will inform strategic decisions regarding market entry and acquisition targets.
  • Attractiveness: The potential for growth in emerging markets and the acquisition of promising companies with established user bases makes this strategy attractive.

6. Conclusion

Supercell?s future success lies in its ability to adapt and evolve in a rapidly changing mobile gaming market. By embracing globalization and business expansion through a combination of organic growth and strategic acquisitions, Supercell can maintain its leadership position and achieve sustainable growth.

7. Discussion

Alternative options include:

  • Maintaining the current organic growth strategy: This option carries the risk of falling behind competitors in a rapidly evolving market.
  • Focusing solely on acquisitions: This option might lead to cultural clashes, integration challenges, and a loss of the entrepreneurial spirit that defines Supercell.

Key assumptions include:

  • The mobile gaming market will continue to grow globally.
  • Supercell can successfully adapt its games and marketing strategies to different cultures and languages.
  • Supercell can find and integrate promising acquisition targets effectively.

8. Next Steps

  • Develop a detailed global expansion strategy: This should include market analysis, target market identification, and a timeline for market entry.
  • Establish a dedicated team for acquisitions: This team should be responsible for identifying, evaluating, and integrating acquisition targets.
  • Invest in research and development: Continue to invest in disruptive innovation and explore new game genres, technologies, and monetization models.
  • Monitor market trends: Stay informed about the latest developments in the mobile gaming industry and adapt strategies accordingly.

By implementing these recommendations, Supercell can navigate the challenges of the mobile gaming market and achieve sustained growth through globalization, business expansion, and continued innovation.

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