Harvard Case - mGames
"mGames" Harvard business case study is written by Allen Morrison, Sam Hill, Scott Hill. It deals with the challenges in the field of Strategy. The case study is 16 page(s) long and it was first published on : Aug 12, 2002
At Fern Fort University, we recommend that mGames pursue a strategic alliance with a well-established mobile gaming company with expertise in international markets. This alliance would leverage mGames' innovative technology and game design capabilities with the partner's global reach and established distribution channels, allowing for rapid market expansion and globalization. This strategy will enable mGames to achieve sustainable competitive advantage by combining its core competencies with the partner's resources, ultimately leading to increased market share and value creation.
2. Background
mGames is a successful start-up specializing in innovative mobile games, particularly in the casual gaming category. The company boasts a strong team of developers and designers, and its games have garnered significant user engagement and positive reviews. However, mGames faces challenges in scaling its operations and expanding into international markets. The company's founder, David, recognizes the need for a strategic shift to achieve long-term growth and profitability.
3. Analysis of the Case Study
Porter's Five Forces Analysis:
- Threat of New Entrants: High - The mobile gaming industry is characterized by low barriers to entry, attracting numerous new players.
- Bargaining Power of Buyers: High - Consumers have a wide range of choices and can easily switch between games, creating pressure on pricing and features.
- Bargaining Power of Suppliers: Low - Developers and designers are readily available, and mGames can leverage its strong reputation to attract talent.
- Threat of Substitutes: High - Alternative forms of entertainment, such as social media and streaming services, compete for users' time and attention.
- Competitive Rivalry: Intense - The mobile gaming market is highly competitive, with established players like Tencent and Zynga vying for dominance.
SWOT Analysis:
Strengths:
- Innovative game design and development
- Strong user engagement and positive reviews
- Experienced and dedicated team
- Strong brand reputation
Weaknesses:
- Limited resources for international expansion
- Lack of established distribution channels
- Dependence on a single market (US)
Opportunities:
- Growing mobile gaming market globally
- Potential for strategic alliances with international players
- Expanding into new game genres and platforms
Threats:
- Intense competition from established players
- Fluctuating user preferences and trends
- Regulatory changes in the gaming industry
Value Chain Analysis:
mGames' core value chain activities include:
- Research and Development: Creating innovative game concepts and mechanics.
- Game Design and Development: Building high-quality games with engaging gameplay.
- Marketing and Promotion: Reaching target audiences and driving user acquisition.
- Distribution: Making games available on app stores and other platforms.
- Customer Support: Providing assistance and resolving user issues.
Resource-Based View:
mGames possesses valuable resources, including:
- Human Capital: A talented team of developers, designers, and marketers.
- Intellectual Property: Innovative game designs and technologies.
- Brand Reputation: Positive perception among players and industry peers.
Dynamic Capabilities:
mGames demonstrates dynamic capabilities in:
- Innovation: Continuously developing new game concepts and technologies.
- Market Adaptation: Adjusting to evolving user preferences and market trends.
- Strategic Partnerships: Forming alliances to leverage external resources and expertise.
4. Recommendations
- Strategic Alliance: mGames should pursue a strategic alliance with a well-established mobile gaming company with a strong international presence. This partner should have expertise in global distribution, marketing, and localization.
- Market Expansion: mGames should leverage the alliance to rapidly expand into new international markets, focusing on regions with high mobile gaming penetration and growth potential.
- Product Differentiation: mGames should continue to innovate and differentiate its games through unique gameplay mechanics, engaging stories, and compelling visuals.
- Marketing Strategy: mGames should develop a targeted marketing strategy for each international market, considering local cultural preferences and language barriers.
- Financial Management: mGames should carefully manage its finances to ensure sustainable growth and profitability, considering the costs associated with international expansion and marketing.
5. Basis of Recommendations
This recommendation aligns with mGames' core competencies in game design and development, while leveraging the partner's strengths in international market access and distribution. The alliance will enable mGames to reach a wider audience, increase market share, and generate value creation through expanded revenue streams.
The recommendation considers:
- External customers: The alliance will provide access to new customer segments in international markets.
- Internal clients: The alliance will provide opportunities for growth and development for mGames' employees.
- Competitors: The alliance will enhance mGames' competitive position by leveraging the partner's resources and experience.
- Attractiveness: The alliance is expected to generate positive returns on investment through increased revenue and market share.
Assumptions:
- The selected partner will be a reputable and reliable company with a strong track record.
- The alliance will be mutually beneficial, allowing both companies to achieve their strategic goals.
- mGames will effectively manage the integration process and maintain its core values.
6. Conclusion
By pursuing a strategic alliance with a global mobile gaming company, mGames can significantly accelerate its growth trajectory, expand its market reach, and achieve sustainable competitive advantage. This approach will enable the company to capitalize on the global mobile gaming market, while leveraging its core competencies in game design and development.
7. Discussion
Alternatives:
- Organic Growth: mGames could pursue organic growth by building its own international operations, but this would be a more time-consuming and resource-intensive approach.
- Acquisition: mGames could acquire an existing international mobile gaming company, but this would require significant capital investment and integration challenges.
Risks:
- Cultural Differences: Misunderstandings and conflicts may arise due to cultural differences between mGames and the partner company.
- Integration Challenges: Merging two companies can be complex and require careful management to avoid disruptions.
- Loss of Control: mGames may lose some control over its operations and decision-making within the alliance.
Key Assumptions:
- The selected partner will be committed to the alliance and share mGames' values.
- The integration process will be smooth and efficient.
- The alliance will generate positive returns on investment.
8. Next Steps
- Identify Potential Partners: Conduct thorough research and identify potential partners with strong international presence and complementary capabilities.
- Due Diligence: Conduct due diligence on shortlisted partners to assess their financial health, operational efficiency, and cultural fit.
- Negotiate Agreement: Negotiate a mutually beneficial agreement that outlines roles, responsibilities, and financial terms.
- Integration Planning: Develop a comprehensive integration plan to ensure a smooth transition and minimize disruptions.
- Market Launch: Launch the alliance's first international products and services, focusing on key markets with high growth potential.
This strategic alliance will enable mGames to achieve significant growth and become a global leader in the mobile gaming industry. By leveraging its core competencies and partnering with a strong international player, mGames can capitalize on the global market opportunity and achieve its long-term goals.
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Case Description
mGAMES is a manufacturer of game-based software for portable computers, PDAs, and cell phones. The company's new CEO was just informed of a potential hostile takeover of the company by a major PDA manufacturer. At the same time, he received a phone call from a senior executive at a Scandinavian telecommunications company expressing interest in forming a partnership. With all of this happening, the CEO faces growing pressure from the company's chairman to address ongoing performance problems. In a complex and changing environment, he must choose which customer group (traditional handheld gaming device manufacturers, telecom manufacturers, or PDA manufacturers) to focus on.
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