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Harvard Case - Astralis Group: Determining a Brand Strategy

"Astralis Group: Determining a Brand Strategy" Harvard business case study is written by Benjamin C. Esty, Mette Fuglsang Hjortshoej, Emilie Billaud. It deals with the challenges in the field of Strategy. The case study is 24 page(s) long and it was first published on : Mar 25, 2021

At Fern Fort University, we recommend a multi-pronged brand strategy for Astralis Group that leverages its existing strengths in esports, content creation, and community engagement while expanding into new markets and product categories. This strategy focuses on building a strong brand identity that resonates with a global audience, leveraging technology and analytics for data-driven decision-making, and embracing a culture of innovation to stay ahead of the curve in the rapidly evolving digital landscape.

2. Background

Astralis Group is a leading esports organization with a strong brand and loyal fanbase. The company has achieved significant success in Counter-Strike: Global Offensive (CS:GO) and has expanded into other esports titles, content creation, and merchandise. The case study focuses on the company's need to develop a comprehensive brand strategy to navigate the evolving esports landscape and capitalize on new opportunities.

The main protagonists of the case study are:

  • Jakob Lund Kristensen: CEO of Astralis Group, tasked with leading the company's strategic direction.
  • The Astralis Management Team: Responsible for developing and executing the brand strategy.
  • The Astralis Players and Content Creators: Key assets for the brand, contributing to its success through their performance and online presence.

3. Analysis of the Case Study

Competitive Analysis:

  • Porter's Five Forces: The esports industry is characterized by low barriers to entry, intense rivalry among existing players, and increasing bargaining power of players and sponsors.
  • Competitive Advantage: Astralis' competitive advantage lies in its strong brand recognition, established player base, and content creation capabilities.
  • SWOT Analysis:
    • Strengths: Strong brand, loyal fanbase, successful esports teams, content creation expertise, strong leadership team.
    • Weaknesses: Limited global reach, potential reliance on a single game (CS:GO), vulnerability to player turnover.
    • Opportunities: Expanding into new esports titles, developing new product categories, leveraging technology for fan engagement, entering new markets.
    • Threats: Increasing competition, evolving gaming trends, potential for player burnout, economic downturns.

Strategic Framework:

  • Blue Ocean Strategy: Astralis can create a new market space by focusing on unique value propositions and differentiating itself from competitors. This can be achieved through innovative content creation, community engagement initiatives, and expanding into new product categories.
  • Disruptive Innovation: Astralis can leverage technology and innovation to disrupt the traditional esports model and create new revenue streams. This could involve exploring new platforms, developing immersive fan experiences, and creating new forms of esports entertainment.
  • Value Chain Analysis: Astralis can analyze its value chain to identify areas for improvement and cost optimization. This could involve streamlining operations, leveraging technology for efficiency, and optimizing its supply chain.

Marketing Strategy:

  • Market Segmentation: Astralis can target different segments within the esports market, such as casual gamers, hardcore fans, and aspiring esports players.
  • Product Differentiation: Astralis can differentiate its products and services by offering unique content, merchandise, and fan experiences.
  • Marketing Channels: Astralis can leverage a variety of marketing channels, including social media, streaming platforms, and traditional media outlets.

4. Recommendations

1. Expand into New Esports Titles: Astralis should diversify its portfolio by expanding into other popular esports titles, such as League of Legends, Valorant, and Fortnite. This will broaden its appeal to a wider audience and reduce its reliance on CS:GO.

2. Develop New Product Categories: Astralis should explore new product categories that leverage its brand and fanbase. This could include gaming peripherals, apparel, and digital content.

3. Leverage Technology and Analytics: Astralis should invest in technology and analytics to improve its decision-making, enhance fan engagement, and optimize its operations. This could involve implementing data-driven marketing strategies, personalized fan experiences, and advanced analytics for player performance analysis.

4. Embrace a Culture of Innovation: Astralis should foster a culture of innovation and experimentation to stay ahead of the curve in the rapidly evolving esports landscape. This could involve investing in research and development, partnering with technology companies, and encouraging creative thinking within the organization.

5. Build a Strong Brand Identity: Astralis should develop a consistent brand identity that resonates with its target audience. This involves creating a strong brand story, developing a unique visual identity, and communicating its values and mission effectively.

6. Strengthen Global Reach: Astralis should expand its global reach by establishing partnerships with international organizations, translating its content into multiple languages, and engaging with fans in different regions.

7. Foster Community Engagement: Astralis should prioritize community engagement by creating opportunities for fans to interact with players, content creators, and the organization. This could involve hosting online events, organizing fan meetups, and developing social media initiatives.

5. Basis of Recommendations

These recommendations are based on a thorough analysis of the esports industry, Astralis' competitive landscape, and the company's strengths and weaknesses. They are aligned with Astralis' mission to be a leading esports organization and its core competencies in esports, content creation, and community engagement.

Key Considerations:

  • Core Competencies: The recommendations leverage Astralis' existing strengths in esports, content creation, and community engagement.
  • External Customers: The recommendations focus on expanding Astralis' reach to a wider audience and creating compelling experiences for fans.
  • Competitors: The recommendations are designed to differentiate Astralis from its competitors and establish a strong brand position.
  • Attractiveness: The recommendations are expected to generate significant value for Astralis through increased revenue, brand awareness, and fan engagement.

Assumptions:

  • The esports industry will continue to grow and evolve.
  • Technology and analytics will play an increasingly important role in esports.
  • Astralis will be able to successfully execute its brand strategy.

6. Conclusion

Astralis Group has a strong foundation for success in the esports industry. By implementing a comprehensive brand strategy that leverages its strengths, embraces innovation, and expands into new markets, Astralis can solidify its position as a leading esports organization and capitalize on the growing opportunities in the digital entertainment space.

7. Discussion

Alternative Options:

  • Mergers and Acquisitions: Astralis could consider acquiring other esports organizations or content creation companies to expand its reach and capabilities.
  • Vertical Integration: Astralis could consider integrating into the esports ecosystem by developing its own gaming platform or merchandise production facilities.

Risks and Key Assumptions:

  • Economic Downturn: A significant economic downturn could negatively impact the esports industry and reduce consumer spending.
  • Evolving Gaming Trends: The esports landscape is constantly evolving, and Astralis needs to adapt to new gaming trends and technologies.
  • Player Turnover: Astralis is vulnerable to player turnover, which could impact its competitive performance and brand image.

8. Next Steps

Timeline:

  • Year 1: Develop a comprehensive brand strategy, expand into new esports titles, invest in technology and analytics, and launch new product categories.
  • Year 2: Implement a global expansion strategy, strengthen community engagement initiatives, and refine the brand identity.
  • Year 3: Evaluate the brand strategy's effectiveness, adjust as needed, and explore new opportunities for growth.

Key Milestones:

  • Q1 2024: Develop a brand strategy document and secure funding for expansion initiatives.
  • Q2 2024: Launch new esports teams and product categories.
  • Q3 2024: Implement data-driven marketing strategies and enhance fan engagement initiatives.
  • Q4 2024: Begin global expansion efforts and establish partnerships with international organizations.

By following these recommendations and implementing the proposed timeline, Astralis Group can achieve its strategic goals and establish itself as a leading force in the global esports industry.

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Case Description

After launching a Danish esports company in July 2019, and going public in December 2019 with multiple brands associated with different games, the Astralis leadership team was contemplating a shift to a single, corporate brand. While the original arguments for multiple, team-based brands were that esports fans differed by game and the holding company structure made it easier to acquire and divest teams, Jakob Lund Christensen, the firm's chief commercial officer (CCO), now believed that a single, corporate brand strategy made more sense as the popularity of esports continued to grow-the COVID-19 pandemic in 2020 was causing interest and participation in esports to grow rapidly. Rather than a holding company, Christensen saw the possibility of creating a leading esports company under the Astralis brand. In addition to being easier to manage corporate resources, he argued it would be easier and more lucrative to monetize a single brand. He was scheduled to meet with the firm's other leaders-CEO Anders Hørsholt and Chairman Nikolaj Nyholm, in just over a week to discuss whether they should indeed change the firm's branding strategy.

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