Situation analysis for Sony
1. SWOT analysis
2. Key customers
3. Economic (i.e. revenue from video game occupy how many percent of whole Sony
company)
4. Tring to predict what’s the next curve or shifts for Sony video game
5. What’s the next thing that will catch the gamers be interested in
6. Predict how the company will develop in 3-5 years
7. What are the competitors, how it differentiates from competitors
8. How the Sony video game operate in different country (i.e. Japan, China and North
America)
9. Could add some charts
10. Please cite all the references
Competitive Strategy
Consultancy: Mirage Inc.
Members (Group One)
Xiaoyu Qiao, Hailan Jiang, Isnigdha Chaturvedi
What is the industry?
Video Game industry is the economic sector involved in the development, marketing, and
monetization of video games. My team at Mirage consultancy has chosen it this quarter to
analyze and predict the trends in the future.
Why does it interest you?
3 out of 5 people admit to playing on a daily basis, serves as a testament to the
widespread video game culture within American society. Since its commercial birth in the
1950s as a technological oddity at a science fair, gaming has blossomed into o
ne of the
most profitable entertainment industries in the world. The mobile technology boom in
recent years has revolutionised the industry and opened the doors to a new generation of
gamers. Indeed, gaming has become so integrated with modern popular culture that
now even grandmas can name a few video games.
Video games are more than just a booming entertainment business — they're reshaping
the way we interact with the world. The gaming industry inspires innovation by constantly
pushing the boundaries of what's possible, driving companies like Google and Microsoft
to create new technology to serve the billions of gamers around the world.
As Peter Drucker said, innovation and marketing is the essence of any management and
industry to survive for a long term.The global Video Games market size is about US$83.1
billion in 2019 and it accounts for 54.2% of the Digital Media market. The video game
industry is growing so fast that some believe it will reach over $300 billion by 2025. With
billions of dollars in profit and over 2.5 billion gamers around the world, we can expect
video game platforms to continue developing in 2020.
Who are the key players large and small?
Leaders based on the YOY growth
1.
2.
3.
Sony
Microsoft
Alphabet
based on 2018 Revenue
1.
2.
3.
Tencent
Sony
Microsoft
Followers
1.
2.
3.
Electronic Arts (EA) - creator of most sports game franchise - NBA, FIFA
Take Two Interactive - creator of Grand Thief Auto
Activision Blizzard Entertainment - creator of world warcraft
Up and comers
1. Thunderful - swedish company
2. Sea Limited - founder of a southeast Asian regional gaming platform called Garena
In trouble
1. Atari - known as the grandpa of video games
2. THQ - developers of WWE Smackdown
3. SEGA - kings of the golden age of arcade with games like Sonic the hedgehog and
Atron Belt
_______________________________________________________
Source:
https://techcrunch.com/2015/10/31/the-history-of-gaming-an-evolving-community/
https://markets.businessinsider.com/news/stocks/5-ways-the-video-game-industry-will-ch
ange-in-the-next-decade-2019-7-1028394586
https://www.businessinsider.com/video-game-industry-120-billion-future-innovation-20199
https://www.forbes.com/sites/ilkerkoksal/2019/11/08/video-gaming-industry--its-revenue-s
hift/#4509cc16663e
https://techjury.net/stats-about/video-game-demographics/#gref
https://www.fool.com/investing/2019/05/17/these-6-giants-control-half-the-global-video-g
ame.aspx
https://www.forbes.com/sites/kevinanderton/2019/06/26/the-business-of-video-games-ma
rket-share-for-gaming-platforms-in-2019-infographic/#5b8bef7e7b25
https://builtin.com/media-gaming/gaming-companies
https://www.thegamer.com/15-video-games-companies-that-died-because-of-bad-decisi
ons/
https://www.fool.com/investing/2020/01/15/the-fastest-growing-video-game-company-yo
uve-never.aspx
Chen
Pengyu Chen
Strategy Paper
1011-Competitive Strategy
05.10.19
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Background and High Level Overview
Our group chose the Amusement Park Industry for our project. The global market for
Amusement Park Industry is forecast to reach $44.3 billion by 2020, driven by the
recovery in leisure spending, rise in international tourism, and growth of the middle
class population in more and more countries. The US is the largest market worldwide
and Asia-Pacific led by China is expected to emerge as the fastest growing market.
Over the five years to 2023, industry revenue is expected to rise at an annualized rate
of 1.5% to $19.9 billion, which represents the effects of a stabilizing US economy.
Growing number of businesses and 4.8% annual growth rate on 2013-2018.
o
Size: The global amusement parks market size as I mentioned above, will
reach $44.3 billion by 2020.
o
Growth Rate: The expected compound annual growth rate for this industry is
5.8% from last year to 2025.
o
Trends: Some of the newest trends in Amusement Parks Industry are virtual
reality, video games, dinosaurs’ projects and artificial intelligence robots.
o
Key Recent Events:
l
Plopsaland De Panne in De Panne, Belgium, has a new virtual reality
wooden roller coaster called “Heidi The Ride.”
l
The Kraken Virtual Reality (VR) Roller Coaster in summer 2017 at
SeaWorld Orlando.
The company that I chose in this industry is the Walt Disney Company:
Now the Walt Disney Company is a diversified worldwide entertainment company with
operations in four business segments: Media Networks, Parks and Resorts, Studio
Entertainment and Consumer Products. It is an American diversified multinational
mass media and entertainment conglomerate headquartered at the Walt Disney Studios
in Burbank, California. It is the world's largest independent media conglomerate in
terms of revenue, ahead of NBCUniversal and WarnerMedia, which are owned by
telecommunications giants Comcast and AT&T respectively. It already has a market
capitalization about $155 billion making it arguably the most valuable content creators
in the world in 2018.
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Key Differentiation:
1.
The Walt Disney Company’s target audience is mainly family and friends.
It is for younger kids and it is the place to spend time with family or sweet
friends.
2.
The Walt Disney Company has the most valuable original contents that
you can’t find in other places.
3.
It is a worldwide company and located in 4 different countries.
Key Opportunities:
1.
VR technology
2.
Mobile Market
Key Challenges:
1.
Keep the service standard the same in all 6 parks.
2.
Limited target audience.
The Walt Disney Company’s Success in the Future
1.
Expanding the market in different countries, like some developing
countries.
2.
Create more new IP.
3.
Partner with tech companies.
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Market Industry Analysis
1. 4 Ps Analysis
a)
Price
Because the Walt Disney Company is the first and only multinational mass
media and entertainment conglomerate, it has two pricing strategy separately.
i.
Market-oriented pricing strategy:
It uses for common products like movies. The company will adjust the
price baes on competitor’s price and market needs.
ii.
Value-based pricing strategy
It uses for the products at the company’s parks and resorts.
b)
Place
i.
Movie theaters
ii.
Disney stores (Disney Baby, Disney Gallery, and others)
iii.
Official websites (Go.com and others)
iv.
Mobile apps
v.
Licensees and other parties (cable, satellite, telecommunications service
providers, and others)
c)
Product
i.
Media Networks (cable, television, and radio programs)
ii.
Parks and Resorts (Walt Disney World Resort, Disneyland Paris,
themed hotels, and others)
iii.
Studio Entertainment (motion pictures, direct-to-video content, musical
recordings, and stage plays)
iv.
Consumer Products & Interactive Media (Books, magazines, comic
books, video games, merchandise, and online video content)
d)
Promotion
The Walt Disney Company uses different promotion strategies based on
different kind of products. Advertising is the main strategy in this part and it
is very efficient for movies selling and parks tickets selling.
i.
Advertising: major strategy
ii.
Direct Selling: to firms like Marvel and Pixar
iii.
Sponsorship: for nonprofit organizations
iv.
Sales Promotion: Disney outlet stores, ticket package, etc.
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v.
Public Relations: to build a strong brand image
2. SWOT Analysis
a)
Strengths
i.
Popular and Strong Brand Image
ii.
Lots of original contents
iii.
Strong cooperative growth among business segments
iv.
It has wide diversification of business
v.
The Walt Disney is financially strong
b)
Weakness
i.
Limited expansion: only expanded in 4 countries
ii.
Mobile market: no famous mobile game apps and not much promotion
for theme park and resorts apps
iii.
Limited target audience; Disney’s audiences are mainly 2-14 years old
kids and their family.
iv.
Slow new character development: Disney needs to create have more
new characters and IPs.
c)
Opportunities
i.
Technological innovation:
1.
Partner with some tech companies to bring the newest technology
to theme parks’ projects.
2.
Partner with some game companies to develop new projects and
bring VR tech into new projects.
ii.
Expanding worldwide: Disney can definitely expand its business in
some new countries or even in developing countries.
d)
Threats
1.
Hard to keep the service standard all the same: I think it is hard to
keep the service standard in all parks and resorts the same. There is
a lot of bad service review on one of the theme park.
2.
Competition:
The Walt Disney Company’s main competitors are Universal
Studio, Sea World and Six Flags. Except for those main
competitors, local theme parks and businesses are also Disney’s
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threats because their tickets are much cheaper than Disney and their
culture are more suitable with the local community;
3.
High operating cost: Disney needs huge numbers of employees.
4.
Fake products: fake Disney products like toys will lower Disney’s
brand image and deduct a huge amount of the profit from its
products line.
3. Porter’s 5 Forces
Industry Internal Competition
Universal Studio is the biggest competitor for
✭✭
Disney. But they have different target audiences
and content. People who like Universal are more
like to enjoyed exciting projects and played with
friends.
Threat of the New Entrants
Companies needs a lot of money to build an
✭
amusement park, so it is not a common
investment choose. It is hard for new entrants to
get in.
Bargaining Power of Buyers
Even the total number of Disney’s customer
✭✭
increased these years but the growth percent
decreased a lot in recent years.
Bargaining Power of Suppliers
The Walt Disney has its own factories
✭
worldwide. Too many factories want to work
with Disney.
Threat of the Substitutes
The Walt Disney has so many original and
✭
valuable content that you can only enjoy them in
the Disney theme parks.
This graph shows the total
number
of
customers
( hundred million-orange )
increased and the growth
rate (grey)decreased.
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Customer Analysis
Ø Segmentation, Target Audience, and Positioning
•
Geographic
It is the location of Disney’s parks. Disney likes to locate in the world’s most
visited places like Europe, Japan, US, and China.
•
Demographic
Mainly targets are children from 2-14 years old and their families.
•
Psychographic
Average income families, who live in urban areas.
•
Target Audience is varying from children, to tweens, to teenagers and even
adults who are young at heart.
•
Positioning
The Walt Disney Company is the only entertainment and media company in
the world that combines products, services, and experiences across many
sectors. It mainly focuses on children, parents, friends, and family all over
the world.
•
How will they change in the next 5 years?
I don’t think their target audience, positioning and segmentation will change
too much in the next 5 years. Because all their parks, resorts, product lines,
promotion strategies build up based on their positioning and target audience.
If the Walt Disney company change its positioning and target audience in
the next 5 years, they will have a lot of stuff to change in their theme parks.
Ø Pricing & Distribution
•
How are you priced vs. your competition?
Ø Theme Park Tickets
There are several types of tickets, except after hours’ tickets and
seasonal events tickets, normal theme park ticket price is
differentiating by how many days you are going and how many
parks you want to go in one day. Usually, a one park per day
ticket cost $109. But if you stay longer in the theme park it will
be much cheaper. For example, if you buy one park per day
ticket for 6 days, it will only cost $70 each day.
The Walt Disney Company also have special offers for the local
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community. If you live in the same state with any of Disney
theme park, your ticket will be much cheaper than people from
other states.
Ø Annual Passes
Disney offers annual passes for their customers. Price started
from $894 for normal parks and $139 for water parks.
Ø Vacation Packages
In order to promote Disney theme park resorts, Disney offer
Resort Hotel Packages for their customers. If you live in their
resorts, your park ticket will be a little cheaper, and you can have
special magic hours than other customers. What is that means?
It means you can access to the parks one hour before normal
operating hours and leave the park one hour later than the
operating hours. You will also have some special entrances and
free shuttles to take you back to your hotel.
•
How will your distribution change?
Ø Brick & Mortar
Disney is trying to save its retail store. The close several
locations in the US, even closed one near where I live.
Ø Online
Disney is focusing on digital marketing right now, which is
cheaper than a Brick & Mortar store and more convenience for
customers.
Ø New products or areas of concentration?
•
Mobile game app
I think some new mobile game app from Disney will be a good choice. There
are some Disney mobile game apps in the app store, but none of them are
famous. Not even much promotion for those apps. So since the digital
market is much bigger than before, I think Disney should try to develop
some attractive and creative mobile game app for both kids and adults.
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Measurement of Your Strategy’s Future Success
Factors of Measurement
Importance
Sales
✭✭✭
New Products
✭✭✭✭✭
Margins
✭✭✭
New Markets
✭✭✭✭
New Customer Segment
✭✭✭✭
First, sales and margins are important for the Walt Disney Company’s future success.
Since it still the top#2 company in this industry with strong brand image and enough
money, the company don’t need to worry about these two parts that much.
For the new products and new markets part, I think they are more important than sales
and margins because slow content creation is one of Disney’s weakness. The Walt
Disney Company have to create more new content and more new products to attract
customers from different age groups. And as I mentioned on Disney’s SWOT, I think
Disney should expand its market into other countries, so I think new markers is also
very important.
If the Walt Disney Company can create more new products and expand in new markets,
I think the can also add new customer segment in their positioning. The company can
partner with game and technology companies and bring new stuff to new projects. It
will get more new customers who like new things and exciting projects. For example,
it can add VR interaction ride in the theme park to attract teens who like to enjoy highspeed projects.
Summary
I think in the next five years, the Walt Disney will bring more new technology into its
game projects. Add VR in its games to make interaction with players. Maybe it can
create a virtual amusement world on customers’ phone. Like customers can put on their
glasses and linked it to their phone, to enjoy the virtual amusement experience as in the
theme parks at home. I think it will be a really cool idea, because Disney’s ticket is not
that cheap, and count flight tickets and hotel cost, one Disney trip will cost a lot. If
Disney can create a virtual amusement world on customers’ phone, it will expand its
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customer segments and let more people have the ability to visit Disney.
Also, I think the Walt Disney Company will expand its market into different countries
in the next five years. The new location for Disney will have very splendid culture, so
Disney can add a little bit of the local culture in the theme parks to make it different
from other Disney theme parks.
Next, I think the Walt Disney Company will create more new IP and new content in the
next five years to keep the existing customers and gain new customers.
Overall, the Walt Disney Company is a strong company in this industry and I believe it
will still be the top company in this industry in the future.
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