Case Study: Strategic Management in Action
The major Zynga’s goal is to enable users build social connections through online games. Besides that, the company aims at maximizing profits or generate as much income as possible from the sale of games (Wingfield, 2016). This goal will affect the way strategies are pursued in such way that the due process of strategic management would not be followed to the letter. The company makes decisions very fast without going through the whole process of strategic management which includes situation analysis, strategic formulation, implantation and finally evaluation.
For instance, when they discovered that players were buying a translucent angelfish at six times the rate of other sea creatures using an imaginary currency people get by playing the game, the company quickly created a set of similar imaginary sea creatures with translucent fins and other distinctive features without adhering to the due process of strategic management. Neither the situation analysis nor strategic formulation was conducted. This might affect the company’s financial performance in long run by consistently making losses.
How do you build a viable business getting people “to buy a bunch of things that don’t exist?” It is all about technological development and innovations. It starts from the real life situation by analysing what people like to do (Wingfield, 2016). Upon realising what people like to do, one can design something similar to the real world situations and occurrences to test individuals ability, reasoning and how he or she can control some objects or items. It starts with designing the gameplay which includes audience, devices, determine players’ option, outlining challenges and creating incentives for the players (Wingfield, 2016). The second part is covering the components such as tutorial, world, the mechanic, content, levels and interface. Thereafter visuals, audio, story and the character are designed.
To be successful in the game industry, it takes on various factors. The first one is the game itself. How people perceives or enjoys the game determines the success in the industry. A god game will attract many players. The game should be fluid, smooth as well as easy to learn. It should provide enough challenge to keep the players interested with good level design, smart planning which will make players want to keep on coming back for more (Dave, 2016). Another key success facto is the ability to bring something new in the industry. New game should come with something different from the existing games so as to attract players.
Additionally, Advertisements through different means such as social media also contributes significantly to the success in the gaming industry as it increases awareness and introduces more people to the game (Dave, 2016). However, the industry face challenges as well. The first and major challenges is that most games are only available to electronic gadgets such as personal computers and desktops of which not all people with interest in the games can afford them. This reduces the market for the games. Furthermore most games require high technology to design and install. The industry is also faced with stiff competition as anybody with knowledge and skills in the Information technology can design and develop a game.
Pincus and his top management team can use the strategic management process to continue making real profits in the virtual world by conducting a research on the people’s needs and demand as well as the level of competition in the gaming industry. This would be at the first stage of strategic management process which involves situation analysis. Upon identifying the players’ preference and the competition the management can formulate the strategies to counter competition and to design games as per players demand. In the third stage the management should implement the strategies by developing games that are highly demanded in the market (David, 2005). Finally, the management should evaluate on how the new games are faring in the market and make changes if any so as to suit the market needs.
David, F. (2005). Strategic management. Upper Saddle River, N.J.: Pearson Prentice Hall.
Dave S. (2016). Behind the Quiet Success of the Video Game Industry. Retrieved 9 July 2016
Wingfield, N. (2016). Virtual Products, Real Profits. WSJ. Retrieved 9 July 2016, from
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