Zynga INC. (2011) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Zynga INC. (2011) Case Solution

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- No new ideas flow and regular supply of inventive games, over a long time the company has developed various items but those are regularly reaction to the development by other players. Besides the supply of new products isn't regular in this way driving to high and low swings within the sales number
- No restrictions on user’s login in different accounts, this will affect on revenue.
- Cyper-attacks and data security and privacy in big challenge for Zynga and have put some reliability of the platform at risk.
- As the company is working in various countries it is uncovered to currency variances particularly given the unstable political climate in number of markets over the world
- The company can confront claims in different markets given - diverse laws and continuous variances with respect to product standards in those markets

Market analysis EFAS, IFAS and SFAS

External Factors Analysis Summary (EFAS)

Competitor and strategy (Porters)

to achieve this and guarantee that the organization has the greatest deals even with the opposition around, we need to follow the three conventional techniques by Porter

Cost Leadership
Differentiation
Focus

Porter Five (5) Forces Analysis

Threats of New Entrants

New entrants in Multimedia & Graphics Software brings innovation, new ways of doing things and put pressure on Zynga Inc. through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Zynga Inc. has to manage all these challenges and build effective barriers to safeguard its competitive edge.

How Zynga Inc. can tackle the Threats of New Entrants

By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to buy Zynga Inc. ‘s products.
By building economies of scale so that it can lower the fixed cost per unit.
Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Zynga Inc. keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.

Bargaining Power of Suppliers

All most all the companies in the Multimedia & Graphics Software industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Zynga Inc. can earn in the market. Powerful suppliers in Technology sector use their negotiating power to extract higher prices from the firms in Multimedia & Graphics Software field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Multimedia & Graphics Software.

How Zynga Inc. can tackle Bargaining Power of the Suppliers

By building efficient supply chain with multiple suppliers.
By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.
Developing dedicated suppliers whose business depends upon the firm. One of the lessons Zynga Inc. can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third-party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on Zynga Inc. profitability in the long run. The smaller and more powerful the customer base is of Zynga Inc. the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

How Zynga Inc. can tackle the Bargaining Power of Buyers

By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.
By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Zynga Inc. keep on coming up with new products then it can limit the bargaining power of buyers.
New products will also reduce the defection of existing customers of Zynga Inc. to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example, services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

How Zynga Inc. can tackle the Treat of Substitute Products / Services

By being service oriented rather than just product oriented.
By understanding the core need of the customer rather than what the customer is buying.
By increasing the switching cost for the customers.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Zynga Inc. operates in a very competitive Multimedia & Graphics Software industry. This competition does take toll on the overall long-term profitability of the organization.

How Zynga Inc. can tackle Intense Rivalry among the Existing Competitors in Multimedia & Graphics Software industry

By building a sustainable differentiation
By building scale so that it can compete better
Collaborating with competitors to increase the market size rather than just competing for small market.

Implications of Porter Five Forces on Zynga Inc.

By analyzing all the five competitive forces Zynga Inc. strategists can gain a complete picture of what impacts the profitability of the organization in Multimedia & Graphics Software industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail Zynga Inc. 's managers can shape those forces in their favor.

Grand Strategy Matrix

First Quadrant

In this we will check for the initial stages of our company. When Zynga was initially introduced it was introduced as an online mobile gaming features. Due to its unique market parameters Zynga became very popular especially among the youth. Zynga captured the market via various social media applications such as Facebook. However during this stage the company had a lot of new opportunities that it was always looking for.

Second Quadrant

During this phase the company had to face few weak points as when the founder decided to build the company it has failed about three Zynga was introduced and it was a success. After the immense success of the social media gaming industry a lot of new competitors were introduced to the market which affected the company’s position and the company had to work a lot harder to maintain its position in the market.

Third Quadrant

In this stage the company’s position gets weakened and it requires to explore several ways and implement a lot of efficient strategies to re-obtain its market position. For the company, 2011 was such of a phase when the number of users for the company was decreasing as result of shift of consumer preferences. By 2011, the people preferred to play games on this mobile cells instead of playing them on their computers.

Fourth Quadrant

By the year 2012, the company was in this quadrant as its market became very slow and the company had to invest in various other channels and distributions in order to capture maximum consumers. By this quadrant the company, a significant portion of the traffic was hosted by Zynga. With investing in different channels the company also took steps for diversification.

Zynga Case Analysis PESTLE Analysis
1. Political forces:
  - politician now using social media and gaming platforms for their election campaign
  - governments realized the importance of platforms to send messages and endorsements events and advertisements
2. Economic factors:
  - Growth trending is expected for social gaming platforms globally.
  - In some areas like Asia pacific region considered a huge market
3. Social factors:
  - Social gaming trending increasing and connecting societies all over the world and have effect to users more than politics.
  - It considered a self-marketing tools between the huge number of users.
4. Technological factors:
  - New coming technology like 5G will add value and enhance many features can be used by designers
  - Clouding can eliminate cost of hardware and effort for users.
  - Crypto currency and block chain will add experience to the gamers
5. Legal factors:
  - High cost of patency and copyrights, games copy and illegal use increasing
  - In some regions some of the games using gambling may be banned.
6. Environmental factors:
  - In some video games can promote and focus on environmental sustainability issues and increase awareness and responsibility for the people watching and using these games.................
  - Zynga INC. (2011) Case Solution