Strategic Business Plan Prepared to Fulfill Consulting Duties in Service of: GameStop
NOTE: This content was not paid for, endorsed by, or sponsored by GameStop. This paper is a sample of writing by Rebecca Botello (who performed duties as project manager, writer, researcher and editor for this senior business school project) et al to demonstrate technical communication and knowledge learned at the Marilyn Davies College of Business at University of Houston - Downtown.
Presented By:
APOLLO CONSULTING
Jeremias Andrade
Rebecca Botello
Kristin Porter
Alana Stoddart
Patrick Wallace
May 2022
University of Houston - Downtown
Marilyn Davies College of Business
MGT 4302: CRN 12866
Professor Cory Angert
I. EXECUTIVE SUMMARY
External changes are threatening GameStop (GS)’s business model. GS can either accept and combat these threats or avoid them. The consulting firm has researched the company, the competition, and the industry to develop suggestions to keep the GS brand going strong.
The main challenges GS must tackle are the migration to diskless technology, shifting customer shopping preferences, and the advent of subscription based digital gaming. All these challenges involve a transition from traditional disk-based gaming and in-person retail to a more digitized world. To sustain and encourage growth, GS will need to expand its product and service offerings, lower costs considerably, or exit the game gracefully.
Some concepts explored in the report are a potential transition into an arcade, a partnership with Hyper-X to launch localized competitive gaming centers, investment in collector cards and tabletop gaming, conversion into retro gaming collectibles and repairs, and suggestions for improving online engagement with customers.
With so many opportunities in the ever-changing world of gaming, there is no reason why GS must fail. The consulting team is excited to share these possibilities with GS in hopes that this wonderful gaming resource will continue to exist.
II. INTRODUCTION
The “Reddit Boom of 2021” brought renewed interest to GS, and the continued growth of the gaming industry promises continued returns if the GS can grow and change with the industry. To keep up with changing customer preferences and technological advances, GS will need to reassess its strategic vision and plan. Research on GS’ competition and external changes in the gaming industry suggest there are ways to improve GS’ profitability.
The consultants first examined the competitive environment. GS’ main competitors are Target, Best Buy, Amazon, and Walmart. To compete with these retailers’ low cost and best cost strategies, GS will need to reduce costs significantly, increase the quality of its products and services. As another option, the company can expand its product and service offerings to escape competition with these major retail chains.
Next the team looked at GS’ strengths, weaknesses, opportunities, and threats. Renewed interest in the brand from the “Reddit Boom” could be leveraged on social media. The trade-in program provides some of the highest profit margins of any GS product but will need to be revised considering diskless technology. GS team members continue to be a draw for less knowledgeable shoppers and customers who enjoy chatting about games. The PowerUp Rewards program has made positive changes and continues to be an asset.
Customer preferences and technological changes like diskless technology are hurting the trade-in program, as well as new game sales. Ease of purchase from other retailers with wider product offerings are pulling customers away from GS. Subscription services are threatening both new and used game purchases.
The GS strategies outlined in the most recent 10K are a good starting point but some aspects of the plan like investment in NFT may prove too risky. Instead, the consultants suggest combining the Zing Pop Culture brand with GS to reduce overhead and marketing costs. The team has also developed a concept for expansion into tabletop gaming to entice a new customer base. Acceptance of external changes like the advent of diskless gaming potentially enable GS to become a vintage game retailer, and trade-ins could be expanded to a new repair service.
Alternatively, a transformation of brick-and-mortar stores into arcades with pay-to-play subscription fees could revitalize the in-person locations and establish a new revenue stream. The company could purchase game studios and develop branded GS games available to loyalty club members in the arcade.
The success of these arcades could positively influence a partnership with the Hyper-X Gaming Arena in Vegas. GS could become the primary retailer for competitive gaming and offer local competitions in-store.
To develop its online presence, a robust AI system for advertising curated products to individuals and the creation of a more unique social media presence could energize the company’s web engagement and drive users to the web store.
Finally, as a last resort the company could choose to sell or form a partnership with a larger retailer like Target. Target already has partnerships with brands like Ulta and is developing itself into something more like a department store. After reading this report one should come away with a contemporary, agile business plan that addresses the changing industry, and an idea of what steps the company could take to secure its future.
III. COMPETITION
The video game retail industry is highly competitive. Per CSIMarket, the industry features, “rapid changes in consumer preferences and frequent new product introductions.” The gaming industry changes as quickly and as often as any technology industry, and customers like to see new features and innovative content. This means that competing in this market requires agility and vigilant awareness of trends.
GS competes somewhat with the brands it sells (Sony, Nintendo, and Microsoft, among others) and more heavily with e-commerce and brick and mortar sellers like its main United States competitors, Target, Best Buy, Walmart, and Amazon (GameStop 10-K, 2022). Brands like Sony and Nintendo benefit from the sales at GS stores, but the other retailers are direct threats that are worth examining further.
The most obvious theme among companies GS views as competitors is their broad product and service offerings, and these offerings will continue to expand. Each store offers a lot more than video games. Best Buy offers all sorts of technologies. The company just announced, in their 10K (2022), a strategy of horizontal expansion into new services and product categories like healthcare technology. Target is becoming more like a department store featuring partnerships with outside retailers like Ulta (Ulta Beauty, 2022). They sell everything from clothing to groceries. Amazon is well known for its endless array of product types; a person can buy almost anything from Amazon. Walmart is another semi-department store committed to a broad product assortment, and the firm also specializes in low prices. GS continues to offer only video games and video game accessories, which may become problematic.
This year Target has stated a best-cost strategy providing affordability to customers while differentiating through their brand assortment, engaging shopping, and convenience (United States, 2022). As stated, Walmart is a low-cost provider, and both Walmart and Target offer price matching. This is a threat to GS’s sales.
As a best-cost provider, Target offers benefits to customers who enroll in their loyalty program. Customers enrolled in Target Circle receive one percent of each Target purchase as a store credit balance. Target provides additional incentive to philanthropic consumers by allowing customers to participate in the selection of a nonprofit during each period of giving, which is about two months. The customers earn a vote for each Target visit. The Circle program also gives its loyalty club members a birthday gift each year of 5% off their purchase (Target Circle, 2022). Some of the changes that GS has made more recently to the PowerUp Rewards Program are helping to equal out competition with these features.
To compete with low cost and best-cost strategies, GS must find ways to lower costs and/or increase the quality of its offerings. Otherwise, GS can get out of that market by differentiating the brand significantly. Throughout the following report there are suggestions for vertical and horizontal expansion to lower the fierceness of competition with retailers who offer more than games, and some ideas that could exclude GS from competition with these retailers completely.
IV. STRENGTHS and OPPORTUNITIES
GS had an exciting year in 2021 with massive interest from Reddit (Phillips, 2021), which the company can continue to capitalize on with careful marketing. This is a great opportunity to enhance the online relationship GS has with its customers and stakeholders. Clever social media use could prove fruitful, as a large section of GS’s demographic is represented by youths. Currently the GS social strategy is somewhat dry, focusing solely on product offerings (GameStop, Inc, 2022). If the company were to create a unique voice and compelling content, they could capitalize on the recent increase of interest from websites like Reddit. These online platforms provide a great opportunity to advertise e-commerce offerings and push users toward the website.
For inspiration the team looked to other gaming companies on social media, particularly Instagram. Where we see GS providing informative posts detailing products, others like the PlayStation and Xbox Instagram pages try to make more unique content relates to gamers on an intellectual and emotional level. These pages use humor and original videos that don’t really try to sell anything to the viewer. There are products in the content, and some posts are directly about selling, but there is fun content too. These “fun” posts are why people subscribe and engage with these pages. (PlayStation (@playstation), 2022) (Xbox (@xbox), 2022)
GS has kept physical stores in the black with the trade in program, which can only be done efficiently through brick-and-mortar locations because disks must be inspected, and systems must be tested. This is a unique feature of the GS sales model that competing retailers do not offer, but this program may be facing major threats due to technological changes. With the change toward diskless technology, the consultants believe that GS must expand its offerings to engage with this threat effectively.
One of GS’ best assets are its sales associates who are selectively hired for their gaming knowledge. GS’ gaming-knowledgeable team members are a wonderful draw for in-person shoppers, particularly less knowledgeable shoppers making gift purchases. This is especially important during the 4th quarter when many retailers see huge increases in revenue. The timely and relevant data a person receives from a sales associate while shopping is inimitable in e-commerce scenarios.
The GS loyalty program has made positive changes that should continue to improve repeat customer sales. GS PowerUp Pro rewards members accrue points and receive 2% cash back, making the reward system comparable to competitors, but to compete with the best-cost strategies of big box retailers, GS will still need to broaden its offerings.
V. WEAKNESSES and THREATS
A. Evolution of Technology and Customer Preferences
Disk-based gaming has been popular for years and has allowed GS to generate most of its revenue through new game purchases and the trade-in program. With the recent releases of the diskless Microsoft X-box S and the Sony PlayStation 5 Digital Edition Console, it is becoming apparent that gaming systems are evolving toward diskless technologies. Additionally, computers and laptops are being produced without disk readers. This could mean that compact discs will eventually become obsolete technology. Although it is possible that video game disks will continue to be purchased by collectors, the disks may no longer be required to play newer gaming software. This is a major in the world of gaming technology that directly affects GS’ bottom line. Throughout the following report there are suggestions that capitalize on these technological changes and bring GS’ retail services back toward relevancy.
Changes to technology are not the only reason GS should make moves from physical to digital. The plastic disks and packaging from games often end up in the waste bin, potentially making it to the ocean or landfills. Studies have shown that modern customers are willing to pay a premium for more environmentally friendly purchases, and GameStop can capitalize on this by shifting their focus to a new industry or by broadening the GS product offering.
B. Ease of Purchase with E-Commerce
GS competes with the convenience their competitors offer to customers. Changes to customer preferences may reduce the strength of the company’s “knowledgeable salespeople” assets. Convenience is outweighing the importance of retail experiences which can be seen in the shifting preference of e-commerce over in-person shopping. Competitors like Target, Amazon, and Best Buy who offer a wide variety of products outside of video games make it convenient for customers to meet minimum spending requirements for free shipping. Even for in-person shopping, the convenience of department-store-style shopping is pulling customers from GS. GS retail locations are frequently in the same center as their competition, causing the stores to compete fiercely with the convenience of department-store-style retailers.
With so many enticing and convenient places to purchase video games, GS needs to develop a competitive advantage that will draw customers to make purchases through GS retail locations or the GS website. Same day delivery is becoming a standard which GS has adopted. However, through Target a person can order their games and groceries online at the same time, Best Buy offers many types of technology, and Amazon is known for its excellent customer service. GS may need to broaden product offerings to compete or explore ways to create retail locations and web-based purchasing that draw customers through differentiation.
C. Subscription Based Gaming Services
PlayStation, Xbox, Apple, and even Netflix offer gaming subscription services that enable console-based video games to be played via streaming, making games available anywhere with access to an internet connection. PlayStation and Xbox’s subscription services offer day-1 access to major game titles, completely negating the need for GS’ historically popular pre-orders. There is no chance of running out of popular titles, and no need to visit a busy store to pick up a game. The games are downloaded to the user’s console immediately upon release. GS will need to either develop a subscription strategy to directly compete with competitors or broaden its offerings to make up for the loss in revenue from new game sales.
VI. OVERALL STRATEGY ASSESSMENT and SUGGESTIONS
A. Stated Strategy
Per the GS 10K published in 2022, the most recent strategy is to transform the brand into a customer-obsessed technology company “to delight gamers.” This strategic vision is easy to remember and repeat but it is also somewhat broad and could be tightened up to establish GS’s vision as a top tier gaming retailer. It is commonly suggested that a vision should be both distinctive and specific, but the current vision statement could apply to any number of companies in the gaming industry. Every company wants their customers to be obsessed and delighted. A more appropriate vision statement might be something like the following:
“To provide valuable offerings that satisfy a wide range of customers at an affordable, competitive price, and to develop customer loyalty with our unique products, service, and convenience.”
There are four main focuses listed as the strategic plan:
· Establishing quality ecommerce
· Expanding selection in gaming and entertainment
· Leveraging strengths and assets
· Investing in new opportunities
These are all admirable goals, but some of the concepts need more direction to become fruitful and keep investors engaged. Others have been expanded upon, but the details seem risky. The following section analyzes the plans behind these four conceptual focuses and offers suggestions that will elaborate on these goals, suggesting ways to take advantage of opportunities and avoid threats from competition and environmental factors.
1. Investing in New Opportunities
Some of the strategies GS has begun to engage in rely on high-risk tactics. None more so than investments in a non-fungible token (NFT) marketplace (GameStop 10-K, 2022). While this is a horizontal move that broadens the GS customer base and offerings, it may be too far from the core business model. It is loosely related to GS’ current business model in that video games utilize technology, but NFTs and blockchain technology are vastly different from console the gaming world. There will be a huge learning curve for the company, and while it is possible to hire subject matter experts and become educated about new technologies, there may be better, less potentially costly opportunities to pursue, with fewer risks.
Despite risks, GS has already begun pursuing the NFT marketplace with the Digital Worlds agreement, in which GS will receive approximately $150 million in Immutable X Pty. Limited tokens upon completion of milestone activities. On a positive note, the February 2022 hiring of fintech legal expert Cindy Yang (Baxter, B., 2022), should help guide the legal aspects of the NFT distribution pursuit. Notably, the blockchain technology used to secure NFT ownership is accepted as secure. The technology behind NFTs is not the risky aspect, it’s the challenge of keeping up the perceived value of NFTs.
NFTs values are notorious for being falsely inflated and the function and value of NFTs are hotly debated because they are easily reproduced and difficult to protect. There are also many who condemn the environmental impacts of blockchain technology, which could impact the reputation of GS. The technology industry in general creates waste, and many have sought to improve recycling efforts and reduce single use item usage. There is a major trend in the retail environment toward environmentally conscious behaviors, and GS has an opportunity to participate in this movement. If the company could show customers that there are environmental benefits to shopping at GS versus competitors, then this environmental consciousness could become a part of GS’ value it provides to customers.
With these ideas in mind, once the contract(s) have been completed, it would be beneficial to revisit and review investments in blockchain and NFT technology -- not only because they are considered high-risk (Dow Jones & Company, 2022) and could end up burning through capital, but because they stray so far from the core business identity. GS is a video game retailer at its heart, and the addition of an NFT marketplace to their mix may muddy the waters in an already shallow pool. Some have said the drastic changes in direction at GS might give investors “whiplash” (PYMNTS.com, 2022).
GS is on the edge of relevancy in this changing world, and it is losing market value fast even after the 2021 Reddit-boost. It may be wise to consider more proven and stable methods of revenue gains while avoiding investments that have potential for unpredictable results. The brand and the industry have a lot to offer, but GS could easily lose its ability to grow. Cautious investing is advised.
Potentially less-risky opportunities may take the form of investments in game-centric vertical integration like the production of video games or in distribution. If GS were to purchase licenses for popular brands the company could begin producing merchandise for its best-selling games. With manufacturing and warehousing available, the company could then move into the distribution arena. GS already has familiarity with some aspects of manufacturing and distribution, so this move would be more in line with the current knowledge of the firm.
2. Leveraging Assets and Strengths
GS states in the most recent 10-K that its assets and strengths are the loyalty program (Power-Up Rewards), Game Informer magazine, and trade-in program.
Microsoft, Sony, and others are moving toward diskless technology, so the trade-in program may suffer. While systems and accessories do not seem to be going anywhere, the most frequently purchased items and the items with highest inventory numbers in GS locations are still video game disks. This external change is something that the company will need to consider moving forward. The solution to this problem is to expand product offerings or move into a new area of the gaming industry.
The loyalty program that gives customers a discount on used items and a subscription to the magazine called Game Informer. The new additions of points and other benefits to the loyalty program are great and should continue to generate repeat sales.
One of the loyalty program’s best benefits is the magazine subscription. However, this benefit must be weighed with the value of information available on the internet about new games and the popularity of streaming video gameplay. To enable the value of the loyalty program, GS will need to enhance its offerings. One such opportunity might be enabling customer access to a set of digital games. GS could take a cue from Netflix and investigate purchasing or partnering with game studios to develop completely unique games for PowerUp Rewards members.
GS could further differentiate itself by leveraging its brand recognition to enable partnerships with game creators to offer unique in-game content, exclusive to GameStop Power-Up Rewards members. The concept of exclusive in-game content is already in place for pre-ordered games but could be expanded to the loyalty program.
The “best-cost” strategy of the updated points-based PowerUp Rewards program will help GS compete with businesses like Target who offer cash rewards to loyalty club members based on purchase amounts. Convenience is what GS lacks, but more specialized offerings like in-game content and access to members-only games could create a set of enticing and convenient services for gamers.
3. Expanding Selection in Gaming and Entertainment
i. Additional Brands
GS operates pop-culture themed retail stores under the Zing Pop Culture brand (GameStop 10-K, 2022). Diversifying into other brands could be a good tactic, but the company has tried diversifying before with less than desirable results. The pop-culture stores do tie into GS’s theme and may work out better than the Spring Mobile Business that was sold off in 2019. The mobile business may have been too far outside the core business, with too much of a learning curve.
Physical collectibles and gaming merchandise have been around since the Atari 2600 made its debut (Pollock, C., 2017), and GS has been selling game-themed merchandise for a long time. The Zing Pop Culture brand has been successful so far, but it is important to consider the cost of running and maintaining two brands. It would be possible to combine the two brands and sell Zing Pop Culture collectibles from the GS website and stores. Keeping the brand whole leverages the brand name asset, reducing the need for double marketing and brand maintenance.
ii. Tabletop Gaming
The company could differentiate itself by investing more heavily in a single type of game-related merchandise sales. Vintage and collectible cards are difficult to find for ordinary consumers because only retailers offer such items. This could potentially be an avenue for either GS, Zing Pop Culture, or a merged company to increase profitability and the size of its customer base. Stores that sell trading cards typically offer a trade-in system like GS’ video game trading program so it would be easy to develop training materials. GS could initially purchase cards in discounted lots or start with customer purchases and trades to begin the collection. With some additional marketing, the stores could potentially be used as a gathering spot for tabletop gamers. Tournaments with visible signage outside storefronts would attract crowds to the stores. The introduction of a more focused effort toward trading cards could broaden the target market by serving a different community. Steps like these would move GS into the tabletop gaming space, a horizontal shift. The company could investigate collectible cards or any other type of tabletop gaming and find similar opportunities.
iii. Retro Repair Shop
As previously touched upon, diskless technology has been making waves in the gaming industry. For the trade-in system to work, physical copies of games must be in circulation. GS could overcome changing technology by embracing the changes, becoming a retro games dealer with repair shops for older technology. GS could continue its trade-in program but shift their brand identity toward a retro retailer specializing in collectibles, vintage gaming technology, and repairs. This would be a change from a low-price strategy to a focused differentiation strategy.
The addition of a repair service could make the physical locations more relevant in a world with diskless technology. Customers will continue to need hardware to download and play games on, and there are few businesses that specialize exclusively in video game technology repair. GS may be able to leverage its buying power to secure a discounted inventory of repair supplies and tools. The company would then need to develop a training system for employees or hire employees with experience repairing electronic gadgets and gaming systems. Once the tools and employees are acquired, GS would be able to use damaged systems purchased from customers to fuel its parts inventory, later earning a profit from the sales of refurbished or rebuilt “Frankenstein” systems.
With the dissolution of Radio Shack, there is certainly room for an electronic repair company that specializes in gaming and computer systems. Radio Shack failed for many reasons, but the failure was not due to a lack of customer interest in technology repair. The company had too many stores, failed to move online with the boom of e-commerce, focused too strongly on mobile phone technology, and made several other financial mistakes (Blokhin, A, 2021). With so many articles and insight on why Radio Shack failed, most of these problems should be easy for GS to avoid. A move like this would carry GS downstream to aftermarket purchase care, and it would allow GS to keep much of the existing business model intact while introducing a new revenue stream.
iv. Arcade Transition
To encourage customers to come back to physical retail locations, GS could establish itself as a meeting place for youths to socialize and play video games together. Touching on the loyalty program again, the company could allow customers to access a gaming center as part of the loyalty program. At these gaming centers they would be able to play all kinds of video games on consoles, arcade cabinets, and desktop computers.
In many GS locations there are already systems with game demos that can be played, which both kids and adults enjoy. GS’s existing relationships with game developers could be leveraged to allow the company to offer a full gaming experience rather than just a demo. The service could be combined with the loyalty program or as a separate annual, monthly, day-to-day, or hourly fee. This is a true differentiation strategy; no other game retailer offers an arcade, and there are no arcades that offer game and accessory purchases.
As discussed in a previous section, GS could create its own games. Expanding on the arcade concept, these excusive games could become available to play through the arcade. Companies like Netflix have had success purchasing game studios to create their own titles, available with a subscription. GS could use this concept to create unique video games that would only be available through a GS retail outlet.
To bring several concepts together, the loyalty program could potentially offer more tiers. One of these tiers could provide access to the games through physical arcades, and another could provide access to the games through streaming devices (phone, consoles, smart TVs). The addition of multiple tiers and options for in-person or “anywhere” access would enable the company to capture two demographics -- those who would like to play in-person at an arcade and the those who would like to play from home.
This subscription strategy capitalizes on the trends towards subscription services and caters to GS’ main demographic, youths. Young people typically have less access to funding, and the low prices of GS’s used games are attractive to customers who operate on an allowance. New games can cost around $65 after tax, yet some used games cost less than $10. The savings of buying used games are tangible. Subscription services save customers even more money while offering sustainable, regular income to the provider. Xbox’s Game Pass costs only $14.99 per month and includes many popular day-one titles, older games, and indie games. Services like this could pull interest away from GS's trade-in and used games sales, as well as their digital and new games sales. It could be profitable to hop on the subscription train even as a latecomer.
v. Esports Arena Partnership
Expanding on the digital arcade idea, GS could move into the Esports industry. This may be a long-term goal that begins with the digital arcade concept. The digital arcade concept could eventually be expanded to provide local gaming competitions as preliminary events for national and international competitions held at venues like the Hyper-X Esports Arena in Vegas.
The benefit of expanding into the Esports industry is that it eliminates the issue of seasonality within the retail sphere. GS currently sees a 40% spike in sales around the fourth quarter (GameStop 10-K, 2022). Esports competitions take place year-round, with merchandise purchases taking place throughout each competition.
Competitive gaming spaces like Hyper-X allow non-competitors to visit the space and play a variety of games for a fee based on number of hours at the facility, like the digital arcade concept. At the Hyper-X Esports Arena in Vegas, there is no charge to walk in, but visitors pay $50 per day to play console and cabinet games, a premium price fit for the Vegas area (Hyper-X Arena, 2022). A GS-Hyper-X partnership would enable Hyper-X to increase their access to consumers by building smaller competition spaces around the United States and internationally. The companies could alter existing GS storefronts to transform them into or incorporate new competition spaces. GS would benefit by gaining Hyper-X's knowledge of the regulations and customs that go along with competitive gaming, allowing GS to expand its offerings while keeping its own retail sales alive.
Currently, the arena does not sell video games. This is another opportunity for GS to step in. GS would benefit greatly from becoming the retail provider for the arena and a partnership might enable this to happen. GS could leverage relationships with product manufacturers to develop a more robust gaming gift shop at the Hyper-X Arena. With the partnership, GS stores could begin to feature more local, national, and international team gear.
Hyper-X is not just a competitive gaming supporter, they also manufacture quality gaming accessories. Today Hyper-X does not have retail locations of its own and distributes in many retail spaces and from their own website. For Hyper-X to benefit from the relationship as much as GS, they may want top-tier shelf space and prominently featured marketing at GS stores as part of the agreement, which GS could easily provide.
The partnership would have more total cashflow than each single business and allow the companies to share and tackle business opportunities they might not be able to take on alone. This is a vertical, forward move through the supply chain as they would be moving closer to the user’s consumption of gaming technology, and it is in right line with the company’s core business model.
4. Establishing Quality E-Commerce
GS is both a physical and online retailer with 4,573 stores worldwide, 3,018 of which are in the United States. GS stores are intentionally located in strip centers, malls, or other pedestrian areas with an anchor tenant like supermarkets or big box retailers like Target (GameStop 10-K, 2022). This massive physical presence has made GS a household name.
Over the last few years, GS began closing locations worldwide. Around 300 stores were closed in the last year. This was a solid decision because purchases are moving towards digital and e-commerce and consolidating retail locations will reduce costs. However, without its expansive physical presence, brand awareness may decrease, and more efforts may be needed in the marketing department to keep GS as a household name.
The good news is that while most of GS’ competitors had a head start in the e-commerce realm, GS is finally catching up. When COVID-19 forced retail stores to close for a time, GS stepped up to the plate offering free shipping, same day delivery, and store pick-up. These are great additions to the GS e-commerce model and are in line with what competitors are offering.
To help GS compete with sophisticated online retailers, a sincere effort to incorporate analytics for advertising could increase sales. Advertising uniquely curated items to internet users would remind users of GS’ existence, inform them of relevant product offerings, and prompt them to shop.
B. Selling or Partnerships with Competing Retailers
As a last resort GS could sell the firm to or partner with another larger retail competitor like Target. Currently GS purposely positions their retail locations in centers with anchor stores, their 10-K filing specifically mentions Target. Target has been changing its business model to become more like a department store. The brand currently has a partnership with popular makeup retailer, Ulta (Ulta Beauty, 2022). Target plans to feature Ulta in 800 locations. This partnership enables Target to sell popular brands like Tula, Too Faced, and The Ordinary. In the same way, a GS partnership would give Target access to a new revenue stream through trade-ins and GS would give most of their control to Target. An ideal scenario for GS would be one in which Target does most of the management work and provides a percentage of the revenue stream to the GS corporation.
VII. SUMMARY
In the face of changes in the external environment, GS must also change. The current investment project of the NFT marketplace could become successful but it is a risky venture that is outside the realm of products and services that GS typically operates in. Other opportunities should be considered.
The three main challenges that GS faces are diskless technology that is quickly making the trade-in system obsolete, changes in E-commerce that make purchases more convenient through other retailers, and subscription-based gaming services cause individual game purchases to be less attractive. To compete successfully, the company should investigate new strategies. With Target, Best Buy, Walmart, and Amazon outperforming GS in low price and best price areas, and in their variety of product offerings, GS must develop a plan that either reduces or avoids competition with these businesses.
Throughout this report several conceptual changes to the GS business model were detailed, but the company will need to perform further investigations to decide which avenue to pursue. The report also outlined opportunities in the online world to enhance the GS web presence and customer engagement.
If the company can refocus its energy toward goals that are within the core business model and industry, there could be massive gains for GS in the future.
Works Cited
Altun, Y. B. (2021, November 9). Council post: NFTs: The fad that is here to stay. Forbes. Retrieved April 21, 2022, from https://www.forbes.com/sites/forbestechcouncil/2021/11/08/nfts-the-fad-that-is-here-to-stay/?sh=603dcc5323a0
Baxter, B. (2022, March 4). GameStop hires Duane Morris Fintech leader in e-commerce pivot. Bloomberg Law. Retrieved April 21, 2022, from https://news.bloomberglaw.com/business-and-practice/gamestop-hires-duane-morris-fintech-leader-in-e-commerce-pivot
Blokhin, A. (2021, May 19). 5 reasons why RadioShack went out of business. Investopedia. Retrieved April 21, 2022, from https://www.investopedia.com/articles/investing/081315/5-reasons-why-radioshack-went-out-business.asp
Caldwell, S. (2021, November 23). GameStop Competitors Analysis - Top 9 Competitors. Business Chronicler. Retrieved April 21, 2022, from https://businesschronicler.com/competitors/gamestrop-competitors-analysis/
Dow Jones & Company. (2022, January 7). GameStop Entering NFT and Cryptocurrency Markets as Part of Turnaround Plan. The Wall Street Journal. Retrieved April 21, 2022, from https://www.wsj.com/articles/gamestop-entering-nft-and-cryptocurrency-markets-as-part-of-turnaround-plan-11641504417
Game informer. Game Informer. (n.d.). Retrieved April 21, 2022, from https://www.gameinformer.com/
GameStop 10-K.. (n.d.). Retrieved April 21, 2022, from https://news.gamestop.com/static-files/55a92a3e-144e-4d2b-8ee6-930db9045593
GameStop Completes Sale of Spring Mobile Division. Gamestop Corp. (2019, January 16). Retrieved April 22, 2022, from https://news.gamestop.com/news-releases/news-release-details/gamestop-completes-sale-spring-mobile-division
GameStop, Inc. (@Gamestop) • Instagram Photos and Videos. GameStop, Instagram. (2022). Retrieved April 22, 2022, from https://www.instagram.com/gamestop/
GME Sales vs. its Competitors Q4 2021. CSIMarket. (n.d.). Retrieved April 21, 2022, from https://csimarket.com/stocks/compet_glance.php?code=GME
Green, T. (2021, June 2). GameStop's new strategy isn't so new. The Motley Fool. Retrieved April 21, 2022, from https://www.fool.com/investing/2021/06/02/gamestops-new-strategy-isnt-so-new/
HyperX Arena Las Vegas at the Luxor. (n.d.). Retrieved April 21, 2022, from https://hyperxarenalasvegas.com/
Phillips, M., & Lorenz, T. (2021, January 27). 'dumb money' is on gamestop, and it's beating wall street at its own game. The New York Times. Retrieved April 22, 2022, from https://www.nytimes.com/2021/01/27/business/gamestop-wall-street-bets.html
PlayStation (@playstation) Instagram. (2022). Retrieved April 23, 2022, from https://www.instagram.com/playstation/
Pollock, C. (2017, October 18). A history of gaming merchandise (and its future). Medium. Retrieved April 21, 2022, from https://medium.com/shopify-gaming/a-history-of-gaming-merchandise-and-its-future-141880871c67
PYMNTS.com. (2022, January 10). GameStop's reinventions give investors whiplash. GameStop's Reinventions Give Investors Whiplash | PYMNTS.com. Retrieved April 21, 2022, from https://www.pymnts.com/pymnts-post/news/2022/gamestops-frequent-reinventions-may-give-retail-investors-whiplash/?c=gamestop
Recent study reveals more than a third of global consumers are willing to pay more for sustainability as demand grows for environmentally friendly alternatives. Business Wire. (2021, October 14). Retrieved April 21, 2022, from https://www.businesswire.com/news/home/20211014005090/en/Recent-Study-Reveals-More-Than-a-Third-of-Global-Consumers-Are-Willing-to-Pay-More-for-Sustainability-as-Demand-Grows-for-Environmentally-Friendly-Alternatives
Securities and Exchange Commission Best Buy 10-K. (n.d.). Retrieved April 21, 2022, from https://d18rn0p25nwr6d.cloudfront.net/CIK-0000764478/4f9a6673-8fd9-4fda-a06a-1dd389e73cb6.pdf
Target circle. Target Circle™ Rewards program. (2022). Retrieved April 22, 2022, from https://www.target.com/circle
Team, M. B. A. S. (2021, September 5). GameStop Marketing Strategy & Marketing Mix (4PS). MBA Skool. Retrieved April 21, 2022, from https://www.mbaskool.com/marketing-mix/services/17708-GS.html
Ulta Beauty at Target's coming to hundreds more stores in 2022! See how we're leveling up (and building toward 800 total shop-in-shops). Target Corporate. (2022, February 28). Retrieved April 21, 2022, from https://corporate.target.com/article/2022/02/ulta-beauty-at-target-update
United States Securities and Exchange Commission, Target 10-K. (2022). (Rep.). Annual Report Pursuant to Section 13 Or 15(D) Of The Securities Exchange Act Of 1934. Retrieved 2022, from https://investors.target.com/static-files/105534b6-2fe3-4ab2-840d-c0ae9ef84a91.
Walmart 2021 Annual report. Annual Corporate Financial Reports - Sustainability Reports - Corporate Reports Inc. (CRI). (2022). Retrieved April 22, 2022, from https://www.corporatereport.com/walmart/2021/ar/
Xbox's (@xbox) Instagram . (2022). Retrieved April 23, 2022, from https://www.instagram.com/xbox/