Another strength of the company is the founder of the company, Yoshikazu Tanaka who was the main person behind the inception of this company and had created the vision for the company. Yoshikazu Tanaka knew the insights of this industry and he was well aware about the preferences of the consumers and the shifts in the consumer. Apart from this, the chief financial officer of the company, Naoki Aoyagi, had also helped the company with the amount of capital required for its inception.
Apart from these resources, the company’s core competencies comprised of about the company’s expertise in data mining and producing meaningful results after structuring that data into useful forms. The company had a good edge in this area. The company had spent about $2.8 billion in 2008 for TV advertising and this has resulted in an immediate increase for the revenues of Gree. This shows that the company had the capability to comprehend in terms of the expenses that the company had incurred on advertising used it to gain insights about the customer’s reactions.
The company had also created a new route and generated revenue from third party developers. The company provided them the platform to create their own games. The company gets the fees for providing this platform to these third party service providers. Apart from this, the specialized assets and the human resource of the company are the core competencies of the company. These all resources and core competencies of Gree had made the company to create competitive advantage and sustain it for the long term.
RECOMMENDATIONS
Gree is now considering about international expansion. Looking at the business model of the company the company had two options to pursue its expansion plan. First, the company can either increase its business in the area of game developer or on the other hand the company can pursue in providing the platform to the external developers.
If the company pursues the first option, it would have the advantage of a strong management. The company can then focuses on this area and capitalize on its strengths to create innovative products by carrying out extensive research and development. In this way the company can focus on its products to create differentiated offerings to provide best gaming solutions to its international and domestic markets. However, the company’s needs to weigh out the risks of pursuing this strategy. First of all, there would be intense competition in the global market. Second, if the company focuses just one game development area, the company will not be able to generate the revenue it is currently generating by providing platform for external developers.
On the other hand if the company pursues for the second option, the company will be able to attract many developers and it can provide them with platform to create a new game. This will boost the revenues of the company. It would have a dual operation and the source of the revenue for the company. The disadvantages associated with this strategy are that the company might lose attention from its core operations and it might create a ripple effect which will negatively affect the company’s brand image and also its core products. The final and the biggest disadvantage concerned with this strategy is that the company might not face the intense global competitors like Google and Apple for Android and IOS respectively.
CONCLUSION/ RECOMMENDED OPTION
Looking at the pros and cons of each individual option, it would be in the best interests of the company to adopt a dual strategy. The company should primarily focus on the game development and simultaneously it should also provide a platform to the external service providers. An important reason for Gree to go for this dual-service strategy is that the company has the core resources of data mining and comprehending its data for which the company can.........................
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ALFA COLLER
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