Harvard Case - Angry Birds
"Angry Birds" Harvard business case study is written by Sunil Gupta, Dharmishta Rood. It deals with the challenges in the field of Marketing. The case study is 22 page(s) long and it was first published on : Mar 9, 2012
At Fern Fort University, we recommend that Rovio Entertainment adopt a multi-pronged strategy to maintain its market leadership and achieve sustainable growth. This strategy will focus on expanding the Angry Birds brand beyond mobile gaming, diversifying revenue streams, and leveraging the power of digital marketing and social media. We suggest Rovio prioritize a strategic shift towards a holistic entertainment ecosystem, encompassing mobile games, merchandise, theme parks, and licensing agreements, while maintaining a strong focus on innovation and customer engagement.
2. Background
Rovio Entertainment, the Finnish company behind the popular Angry Birds franchise, experienced meteoric success in the early 2010s. The mobile game, launched in 2009, quickly became a global phenomenon, generating immense revenue and capturing the hearts of millions. However, the case study highlights the challenges faced by Rovio as the mobile gaming landscape evolved and competition intensified. The company struggled to maintain its initial momentum and faced declining revenue, leading to a need for strategic re-evaluation.
The main protagonists of the case study are:
- Mikael Hed: CEO of Rovio Entertainment, responsible for leading the company through its period of growth and subsequent challenges.
- Peter Vesterbacka: Chief Marketing Officer, known for his creative marketing strategies and the driving force behind the Angry Birds brand's initial success.
- The Rovio Team: The dedicated team of developers, designers, and marketers responsible for creating and promoting the Angry Birds franchise.
3. Analysis of the Case Study
To analyze Rovio's situation, we can employ a combination of frameworks:
SWOT Analysis:
- Strengths: Strong brand recognition, loyal customer base, established mobile gaming expertise, diverse product portfolio, global reach.
- Weaknesses: Dependence on mobile gaming revenue, limited diversification, declining user engagement, potential for brand fatigue.
- Opportunities: Expanding into new markets, licensing agreements, merchandise and theme park development, leveraging social media and digital marketing.
- Threats: Intense competition in the mobile gaming market, evolving consumer preferences, potential for brand dilution, economic fluctuations.
PESTEL Analysis:
- Political: Government regulations on mobile gaming, data privacy concerns.
- Economic: Global economic fluctuations impacting consumer spending, competition from low-cost developers.
- Social: Increasing demand for engaging and immersive experiences, growing popularity of social gaming.
- Technological: Rapid advancements in mobile gaming technology, emergence of new platforms and devices.
- Environmental: Sustainability concerns related to manufacturing and distribution.
- Legal: Intellectual property rights, data protection laws.
Marketing Analysis:
- Target Market: Initially focused on a broad audience, Rovio needs to refine its target market segmentation to cater to specific demographics and interests.
- Brand Positioning: The Angry Birds brand needs to evolve beyond its initial 'casual mobile game' positioning to encompass a broader entertainment experience.
- Marketing Channels: Rovio needs to leverage digital marketing channels like social media, influencer marketing, and targeted advertising to reach its target audience.
- Consumer Behavior: Understanding evolving consumer preferences and gaming habits is crucial for Rovio to stay relevant.
4. Recommendations
Rovio should adopt a multi-pronged strategy to address its challenges and achieve sustainable growth:
1. Diversify Revenue Streams:
- Expand beyond mobile gaming: Develop new game genres, explore console and PC gaming, create interactive experiences for theme parks and other entertainment venues.
- Merchandise and Licensing: Leverage the strong brand recognition to create and sell merchandise, enter licensing agreements for toys, apparel, and other products.
- Theme Parks and Entertainment: Create immersive theme park experiences, develop animated films and television shows, explore collaborations with other entertainment companies.
2. Strategic Brand Management:
- Refine Brand Positioning: Position Angry Birds as a holistic entertainment brand, encompassing gaming, merchandise, and experiences.
- Maintain Brand Consistency: Ensure all products and services align with the core Angry Birds brand values, maintaining a consistent brand experience across all platforms.
- Engage with the Community: Foster a strong online community through social media, forums, and interactive events, encouraging user-generated content and feedback.
3. Leverage Digital Marketing and Social Media:
- Targeted Advertising: Utilize data-driven marketing strategies to reach specific target audiences through social media platforms, search engine marketing, and other digital channels.
- Influencer Marketing: Partner with relevant influencers to promote new products and experiences, leveraging their reach and engagement with their followers.
- Content Marketing: Create engaging content like videos, articles, and interactive experiences to build brand awareness and drive user engagement.
4. Embrace Innovation and Technology:
- Product Development: Continuously invest in research and development to create innovative and engaging games and experiences.
- Technology and Analytics: Utilize data analytics to understand user behavior, optimize marketing campaigns, and identify new opportunities.
- Emerging Technologies: Explore opportunities in augmented reality, virtual reality, and other emerging technologies to enhance the Angry Birds experience.
5. Global Expansion:
- International Business: Identify and target new markets with high growth potential, adapting products and marketing strategies to local cultures and preferences.
- Localization: Translate games, websites, and marketing materials into multiple languages to reach a wider global audience.
- Cultural Sensitivity: Be mindful of cultural differences and sensitivities when developing and marketing products internationally.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of Rovio's strengths, weaknesses, opportunities, and threats. They consider the company's core competencies, external customer needs, competitor landscape, and the evolving mobile gaming market. The recommendations are designed to achieve sustainable growth, diversify revenue streams, and maintain a strong brand position in the long term.
Assumptions:
- The Angry Birds brand retains its strong appeal and recognition.
- Rovio can successfully develop and market new products and experiences.
- The global mobile gaming market continues to grow.
- Rovio can effectively leverage digital marketing and social media to reach its target audience.
6. Conclusion
Rovio Entertainment needs to evolve beyond its initial success as a mobile game developer. By diversifying revenue streams, embracing innovation, and leveraging digital marketing, the company can maintain its market leadership and achieve sustainable growth. The recommendations outlined in this case study solution provide a roadmap for Rovio to navigate the evolving entertainment landscape and solidify its position as a global entertainment powerhouse.
7. Discussion
Alternatives:
- Focus solely on mobile gaming: This approach carries the risk of becoming stagnant in a rapidly evolving market.
- Licensing the Angry Birds brand to other companies: This could lead to brand dilution and loss of control over the brand's image and quality.
Risks:
- Brand fatigue: Overexposure or poor execution of new products could lead to brand fatigue and declining consumer interest.
- Competition: Intense competition from other mobile game developers and entertainment companies could erode market share.
- Technological disruption: Rapid advancements in technology could render existing products and services obsolete.
Key Assumptions:
- The Angry Birds brand remains relevant and appealing to consumers.
- Rovio can successfully execute its expansion strategies.
- The global entertainment market continues to grow.
8. Next Steps
- Develop a detailed strategic plan: Outline specific goals, objectives, and timelines for implementing the recommended strategies.
- Allocate resources: Secure funding and allocate resources to support product development, marketing campaigns, and global expansion initiatives.
- Monitor progress and adjust strategies: Regularly track key performance indicators, analyze market trends, and make adjustments to the strategic plan as needed.
Timeline:
- Year 1: Focus on developing new game genres, expanding merchandise offerings, and exploring theme park opportunities.
- Year 2: Launch new products and services, build brand awareness through digital marketing, and enter new international markets.
- Year 3: Expand the Angry Birds entertainment ecosystem, solidify brand positioning, and achieve sustainable growth.
By embracing these recommendations and implementing a strategic plan, Rovio Entertainment can overcome its current challenges and establish itself as a leading global entertainment company.
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Case Description
Within months of its launch in December 2009, Angry Birds, a mobile game created by a small Finnish company, Rovio Entertainment Ltd., became an international hit. By late 2011, Rovio was not only making Angry Birds games for the iPhone, Android and other mobile platforms, but it had also expanded into plush toys, cookbooks, animation videos and licensing arrangement with major brands. With the goal of making Rovio the next Disney, Mikael Hed, CEO of Rovio, was planning to create an Angry Birds movie. Was Angry Birds a fad that would fade away or was Rovio on a path to build a media empire?
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