Using Online Resources, please answer the following: D. Please discuss Strategic

ID: 361047 • Letter: U

Question

Using Online Resources, please answer the following:

D. Please discuss Strategic Fit and SWOT Analysis for "GameStop" Company (page limit for this analysis is 3-5 pages). Use this section to identify the two most important issues that confront the company as it heads into the future. For each issue you need to explain why it is one of the two most significant issues facing the company and the degree to which the company can address the issue, preferably in a single paragraph. There should be a logical flow from your analyses, your DFs and KSFs, your value chain and financial analyses, to your fit analysis. Please use your analyses to demonstrate why these are the most significant issues facing the company and what will happen if the firm fails to address each issue.

SWOT Analysis. At the very end of your strategic fit analysis, you should also provide a SWOT analysis and a table that summarizes the strengths, weaknesses, opportunities, and threats. Your SWOT analysis should be a concise summary of your environment analyses, not a replicate of the analysis done for the situational analysis (analysis on the internal and external environments), nor a mere repetition of your table. Your SWOT analysis should help clarify the match (or "fit") between the external challenges and internal resources and capabilities.

Explanation / Answer

Positive

Negative

Internal Organizational Attributes

Strengths

Weaknesses

External Environmental Attributes

Opportunities

Threats

Strength

Retail Presence

The company’s extensive retail store network enables it to cater to a wide customer base. GameStop’s strong retail presence helps it to increase its proximity with customers and strengthens its presence in the market. GameStop operates specialty retail stores under EB Games, GameStop and Micromania banners in over eight countries.

echnology Brands: Category Performance

Technology Brands product category is also a contributor of the company’s total revenue. Through this segment, GameStop offers wireless products, services and accessories and consumer electronics. It offers these products under Spring Mobile and Simply Mac brands.

Distribution Network

GameStop has strong distribution channels in order to cater to the wide geographical area in which it operates. GameStop operates distribution centers to support its retail operations. The company’s US segment operates distribution centers in Grapevine, Texas and Louisville, Kentucky. It also operates third-party distribution centers for new release titles in the US. The company also operates two distribution centers in Ontario, Canada; one in Brisbane, Australia; and a small distribution facility in New Zealand.

Liquidity Position

GameStop recorded an increase in its current ratio during the review year. Higher liquidity position might help the company to gain any potential opportunities arising in the market.

Weakness

Dependence on Few Suppliers

GameStop relies heavily on a limited number of suppliers for its merchandise purchases. In FY2017, it procured most of its merchandise from top 10 suppliers, of which Sony, Microsoft, Nintendo, Electronic Arts and Activision.

If any of these five vendors suffer losses in their businesses this could cause disruption in the procurement and supply of merchandise and affect the flow of goods to GameStop stores.

Financial Performance

Weak financial performance disables the company’s ability to provide higher returns to its shareholders and also decreases its ability to allocate adequate funds for future growth initiatives.

Opportunities

Focus on Video Game Industry

The company continues to grow in video game industry with the introduction of new technology. To enhance technological developments, series of gaming consoles are launched to improve graphics, audio quality, game play, internet connectivity and other entertainment capabilities. The growth in the video game industry is driven by sale of video games delivered in digital form and the expansion of other forms of gaming.

Growth of Web-Based Stores

GameStop operates several electronic commerce web sites in various countries allowing customers to buy video game products and other merchandise online besides offering various titles of digitally downloadable PC video games, the company could further enhance its online shops and benefit from the increasing estimates of web-based store concepts. Therefore, growing e-retail market in the US could offer it further growth avenues. Increasing popularity of internet usages along with technological advancement and improving economic situation majorly driving the growth in the market. With the increase in interactive methods and limitless content, the retail e-commerce is growing at a faster rate.

Threats

Expansion by Competitors

GameStop faces intense competition from both domestic and international companies in the retail market. High competition in the market may force the company to increase its product differentiation by offerings at low prices and/or increase its promotional expenses, which escalate its operating costs. Its major competitors include Wal-Mart Stores, Inc., Amazon.com, Best Buy Co., Inc and Target Corporation, among others. While its major competitors have undertaken expansion programs to match the growth rate, the market also recorded consolidation involving mergers and acquisitions, and expansion.

Currency Translation

GameStop operates in many parts of the world and is exposed to fluctuations in foreign exchange rates. The company reports financials in the US Dollars and therefore its revenue is exposed to volatility of the US Dollars against other functional currencies,

Government Regulations

GameStop Corp has a footprint across the US, Canada, Australia, New Zealand and Europe. Therefore, the risk of ensuring 100% compliance with the regulations and laws in the various jurisdictions where it has a presence has increased.