Days after E3 event end
Recommendations
With the competition in the video games industry getting more intense, the next steps of the players become of crucial importance for their positioning on the market. Due to the low product differentiation, the next market leader will be the platform provider that manages to offer much more different gaming experience. Furthermore the extra features of the consoles have to be further developed, as the producers aim to establish the consoles as the central tool for any kind of home entertainment, not just for video games playing. Important issue regarding the extra features is the fact that many of the users are not aware of them, so more information and communication with the customers is required.
The companies have to learn by the mistakes of the past and try to avoid making them again. It is of significant importance to develop a much larger library of games before the introduction of the next console, as this was proved to be a major factor for success in the past. Another factor that needs to be considered is a better control of the games and their distribution, as well as perfectly realised marketing campaigns.
As the video games audience becomes broader, the companies should make an effort to reqruit new players from the new target groups: females and older people, by creating a greater range of games, directed towards the interests of these players, and more intensive advertising. The new image of the video games as family entertainment has to be extended as well.
The possible entrance in the industry of some of the big games publisher creates opportunities for establishing of alliances. An alliance between one of the platform providers and a major publisher will give them a very strong position on the market and a sustainable competitive advantage. Thus, they will have the best chances to become the new leader of the industry.
2015年6月22日 星期一
2015年6月21日 星期日
Idea of Digital Data
In today’s world, people tend to run majority of their daily errands through the internet. It is easy, convenient, and it saves a lot of time. In one hour someone can make a deposit in his personal bank account, order a medical prescription, pay bills, apply for a loan, get some shopping, and more. All it takes for a customer to be able to do this is having an account with each of this company’s websites. Creating an account is usually a very simple process where the person provides some information and creates a user name and a password to be able to return to the website. This information provided by the customer is called: digital data or digital information, which is simply any kind of information in digital format. Digital data can be public or private, it can be kept by the government, banks, medical providers, and other institutions; as well as a freely available in the internet in websites like myspace.com, facebook, LinkedIn, etc.
The use of digital data has increased over the years rapidly. Few years ago, the most significant piece of digital data, and sometimes the only one, a person used to have, was his credit report. It was available on the internet to financial institutions, which used it to determine if the individual was credit worthy or not. Today, we are part of a digital society, where digital data is created every day by people, sometimes without even realizing it. Now, our digital profile is not only a bunch of numbers in our credit report, it is a more logistical report, that contains personal information, professional history, previous events in our live, financial situation, etc. And like everything else, it can be used for legal purposes as well as some illegal ones.
Work Citied:Storing Digital Data for Eternity, Newsweek
http://www.newsweek.com/2015/07/03/storing-digital-data-eternity-345557.html
Last modified: 6-22-2015
2015年6月20日 星期六
Are you ready for E3? (Part II of II)
Summary of industry analysis
Due to a range of factors, which make it difficult for a new company to take part in the video games industry, the threat of new entrants is low. First of all, the industry is characterized by huge economies of scale, as the producers need to sell great numbers of games in order to make a profit. Second, the capital requirements are very high because of the increasing costs of games development and consoles manufacturing. It is also costly for the customers to switch to a new producer, because this would mean they have to buy a new console.
Suppliers pose a medium level of threat. The main reason is the crucial importance, which their input has for the final product. Also the costs for the input are high relatively to the total purchase. However, the concentration of the suppliers is relative low as they are many video games publisher but just three producers of consoles. Threat of forward integration exists as well, due to the fact that some of the big publishers of video games have the resources to try to enter the industry.
Although there are some substitutes for video games and the differentiation is fairly low, buyers don’t have a lot of bargaining power. Their concentration relative to the industry is low and they have to face high costs if they want to switch to one of the substitutes (buy a computer for example). To have the newest console or play the latest games is considered to be a sign of “coolness” at school, so strong incentives for buying exist.
The power of substitutes is considered to be low to medium. The biggest threat comes from computer games. Due to the fact that almost every family possesses at least one computer, computer games are a cheaper alternative to video games as one doesn’t have to buy the console. However, the lack of multiplayer function impairs their performance, especially when video games are regarded as a family or group activity. The switching costs are high as well and the buyer propensity to switch is fairly low, particularly for buyers, who are addicted to playing video games.
The video games industry is characterized by medium rivalry, which is getting more intense lately. The industry grows slowly as they are three establishes players, that compete among each other and every one of them try to outsell the others and become the market leader. The rivalry is enchanced by the low level of product differentiation and the high fix costs of the manufacturing of the consoles. However, the rivalry is reduced by two major factors: the switching costs for the buyers are high and there is a lack of understanding of the technological differencies of the consoles, because of their complexity.
As a result of the stage of these five forces in video games industry, the industry is considered to show a relatively high level of profitability.
Interconnections and interrelationships between the two analyses
There are several interconnections between the macro-environmental analyse and the industry analyse that can be found. Mostly the macro-environmental trends have an impact on the forces, which determine the profitability of the industry. Sticter regulation of the video games content limits the scope of games a new company can present to the market while trying to enter the industry and make this more difficult for them. The increasing licensing fees for the exclusive rights to intellectual property of media companies or sport organisations are addtitional obstracles for entering the industry as they enhance the capital requirements.
Economical factors such as decreasing disposalble income have also an impact. People start searching for cheaper substitutes so the power of substitutes for video games grows. The bargaining power of buyer becomes higher as well, as buyers condition their purchases on the price-performance ratio of the product.
As the number of video games players goes up, the demand for a larger library of games rises. This leads to an increase in the power of suppliers due to the fact that the producers need them to develop more new games and develop them faster.
With the rapid advance of new technologies it is to be expexted that new substitutes for video games will be introduced to the market for enertainment in the near future. Thus, the power of substitutes will rise, as well as the bargaining power of buyers.
The growing rivalry in the video games industry prompts the companies to improve their products, sell them cheaper and expand their target group. As a result video games become amore attractive kind of entertainment for a broader audience.
Summary of industry analysis
Due to a range of factors, which make it difficult for a new company to take part in the video games industry, the threat of new entrants is low. First of all, the industry is characterized by huge economies of scale, as the producers need to sell great numbers of games in order to make a profit. Second, the capital requirements are very high because of the increasing costs of games development and consoles manufacturing. It is also costly for the customers to switch to a new producer, because this would mean they have to buy a new console.
Suppliers pose a medium level of threat. The main reason is the crucial importance, which their input has for the final product. Also the costs for the input are high relatively to the total purchase. However, the concentration of the suppliers is relative low as they are many video games publisher but just three producers of consoles. Threat of forward integration exists as well, due to the fact that some of the big publishers of video games have the resources to try to enter the industry.
Although there are some substitutes for video games and the differentiation is fairly low, buyers don’t have a lot of bargaining power. Their concentration relative to the industry is low and they have to face high costs if they want to switch to one of the substitutes (buy a computer for example). To have the newest console or play the latest games is considered to be a sign of “coolness” at school, so strong incentives for buying exist.
The power of substitutes is considered to be low to medium. The biggest threat comes from computer games. Due to the fact that almost every family possesses at least one computer, computer games are a cheaper alternative to video games as one doesn’t have to buy the console. However, the lack of multiplayer function impairs their performance, especially when video games are regarded as a family or group activity. The switching costs are high as well and the buyer propensity to switch is fairly low, particularly for buyers, who are addicted to playing video games.
The video games industry is characterized by medium rivalry, which is getting more intense lately. The industry grows slowly as they are three establishes players, that compete among each other and every one of them try to outsell the others and become the market leader. The rivalry is enchanced by the low level of product differentiation and the high fix costs of the manufacturing of the consoles. However, the rivalry is reduced by two major factors: the switching costs for the buyers are high and there is a lack of understanding of the technological differencies of the consoles, because of their complexity.
As a result of the stage of these five forces in video games industry, the industry is considered to show a relatively high level of profitability.
Interconnections and interrelationships between the two analyses
There are several interconnections between the macro-environmental analyse and the industry analyse that can be found. Mostly the macro-environmental trends have an impact on the forces, which determine the profitability of the industry. Sticter regulation of the video games content limits the scope of games a new company can present to the market while trying to enter the industry and make this more difficult for them. The increasing licensing fees for the exclusive rights to intellectual property of media companies or sport organisations are addtitional obstracles for entering the industry as they enhance the capital requirements.
Economical factors such as decreasing disposalble income have also an impact. People start searching for cheaper substitutes so the power of substitutes for video games grows. The bargaining power of buyer becomes higher as well, as buyers condition their purchases on the price-performance ratio of the product.
As the number of video games players goes up, the demand for a larger library of games rises. This leads to an increase in the power of suppliers due to the fact that the producers need them to develop more new games and develop them faster.
With the rapid advance of new technologies it is to be expexted that new substitutes for video games will be introduced to the market for enertainment in the near future. Thus, the power of substitutes will rise, as well as the bargaining power of buyers.
The growing rivalry in the video games industry prompts the companies to improve their products, sell them cheaper and expand their target group. As a result video games become amore attractive kind of entertainment for a broader audience.
2015年6月19日 星期五
Ready For E3 2015? (Part I of II)
Rivalry in Video Game Industry
Introduction
The video games industry faces an entirely new rivalry situation. After 11 years of leadership, Sony has nearly lost its strong positions on the market, which gives the other two players – Microsoft and Nintendo - the chance to compete for the leadership. While the goal of Nintendo is to stay in the industry, Sony and Microsoft aim to strengthen their positions on the home entertainment market, which is constantly growing. The key factors, the companies need to consider in order to gain a competitive advantage, are good marketing and well developed distribution, as well as providing a huge range of games with recognizable characters. As the market segmentation increases, it is of crucial importance to put an emphasis upon the new target groups and recruit as many new players as possible. However, there are also a lot of factors outside and inside the industry, which play a major role and have to be considered in order to become a better idea of the state of the industry, and to estimate its profitability and tendency of growing.
Summary of macro-environmental analysis
Stricter legislation both advantageous and disadvantageous for the video games industry is expected. As governments become more concerned about the increasing violence among teenagers the control of video games content is strengthened. On the other hand the laws against piracy aim to reduce the number of the illegaly copied games.
With the rise of the prices of everyday goods, petrol, etc., while salaries don’t go up as fast, the disposal income declines and for many entertainment becomes a luxury good. People are not willing to spend as much on it as they used to. However, as the average age of the video games players goes up, there are more players with own incomes, who are able to buy more games.
The industry is expected to grow due to the fact that, as surveys of the NPD Group show, kids spend more time playing and the hardcore gamer spend an average of 45 hours per week playing video games. On the other hand the growth prospects are dampened by the increasing concerns of the parents about their children being too inactive and spending more time playing video games than playing sports or taking part in other activities. However, there is also a tendency of video games being increasingly regarded as an entertainment for the whole family.
The future growth of the industry is threatened by the declining birthrates. Teenagers are the main consumer and less teenagers in the future means less games sold. This effect is compensated by the fact that the average age of the video games players goes up. Video games reach a broader audience and more adults and even elderly people start playing.
The technological progress is beneficial for the growth of the industry as the the producers are able to constantly improve the quality of the games and include new features and functions to the consoles. However, this causes higher costs and also the time needed to develop a new game grows.
The growing awareness of environmental issues has also an impact on the video games industry. The implementation of eco-friendly technologies and the constant growth of energy prices cause an increase in the cost for manufacturing of the consoles and the DVDs.
Overall, the video games industry is expected to grow faster than average industry growth rates, particularly due to the sociology-cultural trends and the constant technological progress.
Work Cited:
Rivalry in Video Game Industry
Introduction
The video games industry faces an entirely new rivalry situation. After 11 years of leadership, Sony has nearly lost its strong positions on the market, which gives the other two players – Microsoft and Nintendo - the chance to compete for the leadership. While the goal of Nintendo is to stay in the industry, Sony and Microsoft aim to strengthen their positions on the home entertainment market, which is constantly growing. The key factors, the companies need to consider in order to gain a competitive advantage, are good marketing and well developed distribution, as well as providing a huge range of games with recognizable characters. As the market segmentation increases, it is of crucial importance to put an emphasis upon the new target groups and recruit as many new players as possible. However, there are also a lot of factors outside and inside the industry, which play a major role and have to be considered in order to become a better idea of the state of the industry, and to estimate its profitability and tendency of growing.
Summary of macro-environmental analysis
Stricter legislation both advantageous and disadvantageous for the video games industry is expected. As governments become more concerned about the increasing violence among teenagers the control of video games content is strengthened. On the other hand the laws against piracy aim to reduce the number of the illegaly copied games.
With the rise of the prices of everyday goods, petrol, etc., while salaries don’t go up as fast, the disposal income declines and for many entertainment becomes a luxury good. People are not willing to spend as much on it as they used to. However, as the average age of the video games players goes up, there are more players with own incomes, who are able to buy more games.
The industry is expected to grow due to the fact that, as surveys of the NPD Group show, kids spend more time playing and the hardcore gamer spend an average of 45 hours per week playing video games. On the other hand the growth prospects are dampened by the increasing concerns of the parents about their children being too inactive and spending more time playing video games than playing sports or taking part in other activities. However, there is also a tendency of video games being increasingly regarded as an entertainment for the whole family.
The future growth of the industry is threatened by the declining birthrates. Teenagers are the main consumer and less teenagers in the future means less games sold. This effect is compensated by the fact that the average age of the video games players goes up. Video games reach a broader audience and more adults and even elderly people start playing.
The technological progress is beneficial for the growth of the industry as the the producers are able to constantly improve the quality of the games and include new features and functions to the consoles. However, this causes higher costs and also the time needed to develop a new game grows.
The growing awareness of environmental issues has also an impact on the video games industry. The implementation of eco-friendly technologies and the constant growth of energy prices cause an increase in the cost for manufacturing of the consoles and the DVDs.
Overall, the video games industry is expected to grow faster than average industry growth rates, particularly due to the sociology-cultural trends and the constant technological progress.
Work Cited:
Gaming’s Biggest Confab Puts the Spotlight on Techhttp://time.com/3926034/whats-next-for-gaming-and-consumer-tech-in-general/
2015年6月18日 星期四
Why is Wal-mart so popular in China? is it?
When Wal-Mart sent an advanced team of executives to China in 1994, they were responsible for researching this enormous untapped market that offered over one-hundred cities with populations of more than one million. The external environment that was challenging Wal-Mart's expansion into the Chinese market was complicated. Wal-Mart opened their superstore which was designed to meet the needs of the people in the new Chinese market. They could not just walk in with the US business model and expect to last. During the research and development period the team of executives in China examined the cultural differences and way to offer unmatched convenience to their new markets.
Many Chinese tend to shop on foot, live in small apartments with smaller refrigerators, forcing them to visit the store every one or two days. They also found their new market to be more "hands-on" shoppers. This stems from the open-air markets that many people are used to do their shopping. Wal-Mart had to understand how their employees' cultural differences would change their operations in the superstores. According to the text, Chinese tend to hold a high level of obligation toward following direction at work. This fit nicely in to Wal-Mart's style of "red shirts, mass cheering, incessant pep rallies and veneration of a deceased founder." However, the consumers in China are not going to consume hot dogs and apple pie. They want their culture represented. Therefore, Wal-Mart adopted a global geographical divisional structure. Wal-Mart could not offer the same items in Smallville, USA as Mexico City nor Chongqing.
The global geographical division allowed the Chinese region to tailor to the needs of the consumers in that region. Offering Dong's Chicken Feet along with Oreos and Gatorade are an example of this structure. Plus the consumers' attraction to "clamor" has transitioned into joining items together such as the wine with Sprite. Wal-Mart also buys about 10% of its products sold in the US from China. Companies that adhere to the global geographical division typically seek low-cost manufacturing within the country, coupled with meeting the needs of its customers. One problem with this structure is the autonomy of each region's division. Wal-Mart needs to a horizontal connection between their geographical regions. This way new products or operational ideas are not lost due to the structural autonomy.
The environmental domain in China has effected the growth of Wal-Mart in China. Locating sites has been difficult. Due to the fact that the municipal governments control prime real estate, Wal-Mart has a difficult time locating in prime areas. Plus, Wal-Mart has to compete with the state-run Shanghai Brilliance and foreign rivals like Carrefour. They are having trouble finding qualified managers that fit their functional style of management. Wal-Mart also has to find 500 employees for every superstore opened. The environmental uncertainty of Wal-Mart in China fits into the "complex + stable = low-moderate uncertainty." In China, Wal-Mart has a large number of external elements. The fact that China is the most populated country in the world and developing rapidly nationally and globally, Wal-Mart can count on continually fighting competitors, changing government regulations and the education of the population. Wal-Mart plans to open 15 stores per year in China, which is not as aggressive as they would like. Since they are not the largest grocery retailer in China they need to moderate their growth or look to growing through acquisition. This might be a successful strategy due to the vast financial resources of the company.
Work Cited:
http://www.bbc.com/news/business-32509077
When Wal-Mart sent an advanced team of executives to China in 1994, they were responsible for researching this enormous untapped market that offered over one-hundred cities with populations of more than one million. The external environment that was challenging Wal-Mart's expansion into the Chinese market was complicated. Wal-Mart opened their superstore which was designed to meet the needs of the people in the new Chinese market. They could not just walk in with the US business model and expect to last. During the research and development period the team of executives in China examined the cultural differences and way to offer unmatched convenience to their new markets.
Many Chinese tend to shop on foot, live in small apartments with smaller refrigerators, forcing them to visit the store every one or two days. They also found their new market to be more "hands-on" shoppers. This stems from the open-air markets that many people are used to do their shopping. Wal-Mart had to understand how their employees' cultural differences would change their operations in the superstores. According to the text, Chinese tend to hold a high level of obligation toward following direction at work. This fit nicely in to Wal-Mart's style of "red shirts, mass cheering, incessant pep rallies and veneration of a deceased founder." However, the consumers in China are not going to consume hot dogs and apple pie. They want their culture represented. Therefore, Wal-Mart adopted a global geographical divisional structure. Wal-Mart could not offer the same items in Smallville, USA as Mexico City nor Chongqing.
The global geographical division allowed the Chinese region to tailor to the needs of the consumers in that region. Offering Dong's Chicken Feet along with Oreos and Gatorade are an example of this structure. Plus the consumers' attraction to "clamor" has transitioned into joining items together such as the wine with Sprite. Wal-Mart also buys about 10% of its products sold in the US from China. Companies that adhere to the global geographical division typically seek low-cost manufacturing within the country, coupled with meeting the needs of its customers. One problem with this structure is the autonomy of each region's division. Wal-Mart needs to a horizontal connection between their geographical regions. This way new products or operational ideas are not lost due to the structural autonomy.
The environmental domain in China has effected the growth of Wal-Mart in China. Locating sites has been difficult. Due to the fact that the municipal governments control prime real estate, Wal-Mart has a difficult time locating in prime areas. Plus, Wal-Mart has to compete with the state-run Shanghai Brilliance and foreign rivals like Carrefour. They are having trouble finding qualified managers that fit their functional style of management. Wal-Mart also has to find 500 employees for every superstore opened. The environmental uncertainty of Wal-Mart in China fits into the "complex + stable = low-moderate uncertainty." In China, Wal-Mart has a large number of external elements. The fact that China is the most populated country in the world and developing rapidly nationally and globally, Wal-Mart can count on continually fighting competitors, changing government regulations and the education of the population. Wal-Mart plans to open 15 stores per year in China, which is not as aggressive as they would like. Since they are not the largest grocery retailer in China they need to moderate their growth or look to growing through acquisition. This might be a successful strategy due to the vast financial resources of the company.
Work Cited:
http://www.bbc.com/news/business-32509077
2015年6月17日 星期三
College Graduates Future
Every year thousands upon thousands of college graduates enter the professional world eager to start working. However an important dilemma faces most, what is a reasonable starting salary? With the workforce dynamics consistently changing, and organizations starting to experience in a shortage in skilled labor, new college graduates face a multitude of factors upon entering the employment world.
The increase in starting salaries has several consequences; firms now have to discover ways of dealing with the boost in overhead costs. In several instances, this might result in greater expenses to the customers. Furthermore, the increases in starting salaries can also lead to a distortion of compensation for the rest of the organization. Secondly, professions that are currently seeing a significant pay increase in offer packages will eventually become more sought after and then this will create another “wave” effect as those fields will see an increase in enrollment. Changing expectations of future potential earnings influences growth and enrollment into a specific field of study. This creates a cyclical effect on the overall job market.
This continuous change in enrollment and its effects on the candidate pool can be witnessed in the IT professionals industry. Since the dot-com bubble burst earlier this century, the enrollment into IT programs across the nation dropped. Now companies are starting to feel the need for talented IT specialists and this is creating an upward pressure on salary increases. The business environment also plays a significant role in the salary trends. For instance the financial fiasco caused by Exxon, Tyco, and Worldcom lead to the development of the Sarbanes Oxley act. This in turn has lead to an increase in demand for accountants and auditors. Currently accountants can expect a salary between $38,000 and $42,750
Work Cited:
Millennial College Graduates: Young, Educated, Jobless
http://www.newsweek.com/2015/06/05/millennial-college-graduates-young-educated-jobless-335821.html
Every year thousands upon thousands of college graduates enter the professional world eager to start working. However an important dilemma faces most, what is a reasonable starting salary? With the workforce dynamics consistently changing, and organizations starting to experience in a shortage in skilled labor, new college graduates face a multitude of factors upon entering the employment world.
The increase in starting salaries has several consequences; firms now have to discover ways of dealing with the boost in overhead costs. In several instances, this might result in greater expenses to the customers. Furthermore, the increases in starting salaries can also lead to a distortion of compensation for the rest of the organization. Secondly, professions that are currently seeing a significant pay increase in offer packages will eventually become more sought after and then this will create another “wave” effect as those fields will see an increase in enrollment. Changing expectations of future potential earnings influences growth and enrollment into a specific field of study. This creates a cyclical effect on the overall job market.
This continuous change in enrollment and its effects on the candidate pool can be witnessed in the IT professionals industry. Since the dot-com bubble burst earlier this century, the enrollment into IT programs across the nation dropped. Now companies are starting to feel the need for talented IT specialists and this is creating an upward pressure on salary increases. The business environment also plays a significant role in the salary trends. For instance the financial fiasco caused by Exxon, Tyco, and Worldcom lead to the development of the Sarbanes Oxley act. This in turn has lead to an increase in demand for accountants and auditors. Currently accountants can expect a salary between $38,000 and $42,750
Work Cited:
Millennial College Graduates: Young, Educated, Jobless
http://www.newsweek.com/2015/06/05/millennial-college-graduates-young-educated-jobless-335821.html
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