gamestop retail

8/10/2019 GameStop Retail

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Submission by: Group 2

Members: Ajinkya Poundrik | Avinash Murali Nair | Baidyanath Bose | Balakrishnan M. | Jeevan Nishant Prakash

Retail ManCase Presentation


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GameStop The Business & Recurring Challenges faced

2

New and used game Accessoriesfor PCs and gaming consoles

New and usedSoftware and

Hardware for PCs andgaming consoles

Strategy guides,Action Figures, DVDs

and other relatedmerchandise

IssGachdi

Isscoag

Isprco

Became the worlds largest video game retailer in 2005 Spread across 14 countries with 4490 stores with more than 5000 SKUs of constantly changing in-store inve


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Industry Analysis

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Portable games like Nintendos Gameboyhelped manufacturers

to increase andmaintain sales duringthe release of console

systems. Wide varietyof games, wireless

capability and lowercost led to increase in

sales

Next Generationconsoles like Xbox 360

and PS3 continued

gaining popularity andincreasing gaming sales

Used late generationconsoles started

leading to increase intrade-ins and sales.

Allowed thecontinuation of

producing old modelgames. Increase innumber of peopleusing two or moreconsoles by 15%

Continuoretail PCTraditiowere beand m

gamingconsol

games befor the

Gaming Trends


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Company Details

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Trade InSupport

MarginCapitalization

MerchandizingProcess

SupplierReliance

Trade In Process

EmployeeRelation

Customers brought their old console or gamesto trade inGame stops employee inspected the productand trade in pride were allocatedCustomers usually had 2 optionExchanged games or received cash

The price margin was very high

80% of customers used trade in credit tonew games or systemsThere were instances of shortage ofinventory for used games

Huge margin were mused video game & hMargin were betwee85%Inventory managemhelped in decreasingdays from 80 to 72 dHelped in providingtrade in quotesReplenish the stock tweek

Games and systems were merchanaccording to systemsNew and Used games were placedeach other - helped in price compaBest selling system and games weplaced near the frontXbox 360 and Nintendo DS

Highly concentrated SuppliersNintendo, Sony, Microsoft Major consoledevelopersEA, Activision and Acclaim Largest game publishersNintendo and EA comprised 25% of Game stoppurchasesMarketing, Advertising materials and money wereprovided by Game and Console developers

More than 33000 employeesEmployees were well informed aboutthe gaming industry and Game stopproduct lineEach store employed 1 manager, 1assistant manager and up to 6 parttime associates

Company Processes


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Company Details

Company Growth

Concept of Selling used video games

was relatively new Game Stop wanted to be recognized as

The destination for new and usedvideo games and systems

Planned to change all its EB brandstore to Game stop brand store by2007

GameStop.com and EBgames.com Had an option to receive game by

mail, reserve game or pick up atretail store

Game informer Magazine sold atGameStop, Barnes and Noble

It served as marketing tool

W E B S I T E &

M A G A Z I N E

Operated in 4490world

Average size was

Mall store carriedused items whilcarried a balancedused items

Strip centre were

Since 2003 , Game Stop

grew at an average of20% per year Strong cash flow Company was valued

at 9.2 billion dollars F I N A N C I A L G R O W T H

I N T E R N A L I S A T I O N

Electronic Game Enthusiastic Value oriented casual gamers Seasonal gift givers T A

R G E T

C U S T O M E R S


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Understanding the competition

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Porters Five Forces

- Industry is attractive &competitive pricing give High

bargaining power to buyers

- Industry is innovation

power with marketing a- Suppliers ca

- Advancement in technology Allows emergent players

- Digital games market is growing

Identifying the right segmentof digital/online reduces threat

- Consumer shift to Social Mediagame Cheaper alternative

- Game rental establishments

- Competitors (bselling popula

- Switching cosmedium (digitidentified

SupplThreat of new entrants

Buyers bargaining power

Threat of substitutes T

Gaming Industry

H

M

H H

M


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Competitive Landscape & Advantages

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Successful retail model:- 4490 retail store worldwide- 5000 SKUs of constantly changing in

store selection- Owned gaming magazines (Game

Informer) and e-commerce websites(gamestop.com and ebgames.com)

Employee relations:- Huge employee strength that was

knowledgeable about games &consoles

- Employees were allowed to takegames home to keep up to date onthe products

Robust processes:- Trade-In process allowing customers

to trade in their used games- Strategy of trade-in price being

greater than the monetary price

- Trade-In Support: Used gamesallowed GameStop to supportdeclining rev.

Brand Management:- Concept of selling used games was

relatively new- Projected itself as the only

destination for used games, newgames & gaming systems

Competi

1. Used Vide- Competi- Offering

selection2. Box Store - Carried - Easily ac- Limited

proven g3. Rental bas- Monthly- Expansi

games4. Online Pur- Used gam

a cheapeassuranc

- Gave coonline &

Competitive Advantages


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Recapturing the current scenario

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Low entry barriers and changes intechnology (digital) have attracted a

number of newer competitors

Higher Buyer Power: Can check forprices online and compare

Higher Supplier Power: Can havetheir own platforms in the future

Virtually no switching costs,especially in case of popular

substitutes like Mobile and SocialMedia games

Unlike competitors, iBrand Image and an

marketing the bra

Best of both worlds: BPositioning new ggamers & gift-shopp

appeal to loyalists

Unparalleled After SResource Managem

turn-o

Positives and NegativesIn the Current Scenario


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What are the options?

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Status-quo Backward Integration

Product Extensions Focus on Online Medium


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RECOMMENDATION

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ONLINE PRESENCE

Risk Free ventureIntroduce gradually along withthe Physical storesAvoid losing loyal customerswho want to switch to onlinegamesCan also capture the marketthat is oriented towards onlinegaming build loyalty

PRODUCT EXTENSION

Can attract hardcore gamersCan boost sales in off-seasonsIncrease brand loyalty

CONTRACT WITH SUPPLIERS

Can reduce competition in themarket

Tradeoff: Increase in Suppliersbargaining power

BACKW

Can bancash rese

Reduce SpowerCompeti


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IMPLEMENTATION

Online Presence

STEP 1: Hire a Top End Website development team to integrate the 2 current websites (already done)

STEP 2: Develop payment gateways and product delivery service by partnering with Banks and Transport compa

STEP 3: Implementing this and integrating with the current sales strategy Task assigned to Sales and Ma

STEP 4: Create department and deploy team to streamline both online and offline platform

STEP 5: Employ gamification techniques in online platform to engage gamers and reduce switching to other onlin

Product Extension and Contract with suppliers

STEP 1: Extend the product line in both the online and offline platform to attract hardcore games & offset season

STEP 2: Establish contracts with suppliers like EA Sports & Nintendo to develop games for Gamestop, thus limit


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THANK Y

gamestop retail

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