Competitive Analysis Of Video Game Store

EXECUTIVE ANALYSIS

The objective of this analysis is to analyze the internal and external environment of the video game store industry and consequently provide the best and most suitable business-level strategy for video game store business through analyzing different strategic tools with regards to Michael Porter’s Five Competitive Forces. Business-level strategy discusses the means a company uses to contest against its rivals in a specific business industry. These strategies indicate a company’s prospect on where and how it has an advantage over its competition (Li and Dimitratos 2013). The strategy must be able to provide a suitable structure for a company’s operations with customers (Jones and Butler 1988). Through this analysis, businesses

It is also crucial to probe the status of product costs and its attractiveness (Porter 1996; Nguyen 2013). An analysis of Michael Porter’s five competitive forces will be related to each business-level strategy can help us determine which business-level strategy to use. Starting with the five competitive forces, each will be recognized in relation to the advantages and disadvantages of the generic strategies and continues on with a defensive or offensive approach (Porter 1996; Nguyen

In addition to that, relating to the differentiation strategy, there are several specialties of the store that will stand out from other retailers. In terms of product differentiation, stores usually sell almost the exact same thing everywhere, thus it would be beneficial to sell video game figurines or carry out “nostalgia selling”. For example, people from the 90s who are familiar with Donkey Kong or Mario or Pokemon will feel nostalgic every now and then when they think about their childhood, and would want to experience playing these games again along with the original console (Wesley and Barczak 2010). An emotional connection with customers may garner their attention. Video game stores may also be able to benefit from network economics by allowing gamers to hang out with and play together in the store or hold multiplayer massive online gaming (MMOG) competitions wherein store credit can be given as rewards. Moreover, it will also be beneficial to encourage local game developers to showcase their own creations. Another way to be unique amongst competition is in terms of capturing customer’s loyalty by providing a membership card with unique privileges (Grant et al 2010). For example, a customer who is a member may get special advantages such as direct uploading on gadgets, or priority on game launch days. The exclusivity will garner customers who are willing to pay for its