GameStop Presented by HEC CONSULTING Aditya baid

Transcript:GameStop Presented by HEC CONSULTING Aditya baid:
GameStop Presented by HEC CONSULTING Aditya baid Loretta chan Emilie l.cayer Neha sharma Presented to BARNS AND NOBLE BOARD Agenda Analysis Alternatives Recommendation Implementation Financials Risks Conclusion Can GameStop be a viable company in a disrupted industry? What are the key issues? What is the current landscape for GameStop? Internal Analysis GameStop has high and engaged consumer base but keeps on being faced with declining sales margins and operating losses What is the current landscape of the gaming industry that could affect GameStop? External Analysis The market size growth is faced with high threats such as protective policies and increased competition from giants What is the competitive landscape ? Compare to GameSpot, these retail giants and online competitors all have an advantage of offering high product diversity (household products, computer products, etc.) What is the industry landscape ? Extremely competitive industry with game development companies having a high power advantage over retailers High High High Medium High What are the options ? Diversify offering by adding revenue stream (e.g. acquiring a mobile gaming company) Redesign business model Take advantage of the store square footage (e.g. VR gaming area and e-sport team) Change to a subscription game model Restructuring the business and sell Diversify offering by adding revenue stream (e.g. acquiring a mobile gaming company) Diversifying offering will not solve the profitability issues GameSpot has and high risks of diluting their current asset 2. Redesign business model A. Take advantage of the store square footage (e.g. VR gaming area and e-sport team) Spending capital on underperforming assets with high risk of disruption 2. Redesign business model B. Change to a subscription game model Model easily replicable by game creators and competition already offering the model in a more efficient way 3. Restructure GameStop’s business and sell Exit quickly to capture gains and avoid long-run losses What are the criteria ? Options against criteria Can GameStop be a viable company in a disrupted industry? No immediate solution solves the profitability issues GameStop has encountered and only selling will prevent an even more important loss. We recommend restructuring and selling as the best option. Implementation Step 1: Restructure GameStop’s business Hire strategy consultants to perform strategic analysis on GameStop’s business outlook and profitability Identify and close down stores in countries/regions that are unprofitable to reduce costs and increase profitability: Understand the lease terms to estimate the timing for closing each store Understand the