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Electronic Arts: Blockbuster Strategy
The purpose of this paper is to write an Internal Analysis on the Electronic Arts, the Blockbuster Strategy and identify the problems and concerns of the company as well as company resources and the company's competitive advantage. Further to pinpoint the company's business strategy, assess the company's performance and offer an possible recommendations for the addressing of said problems.
Blockbuster, a major video rental chain has a strategy that appears like that of a "specialty game store" and this has opened up an entirely new marketing and sales field in the industry. In the quarterly earnings report for June 30, 2003. A sales of $58.5 million was reported by Blockbuster and that was incidentally, triple the sales for the same quarter in the preceding year. A total of 21.3% of Blockbuster's sales in merchandise was attributed to video game sales. Business was not only good for Blockbuster but for other video game retailers Movie Gallery and Hollywood Video. During that same quarter Hollywood Video reported an 11% increase from direct sales of games.
The factor of having more than "just video rentals" the "blockbuster" strategy offers a:
Store within a store" is key to success in this channel....these rental chains are making sure that gamers understand that they are serious about games," (Arioco, J 2003)
Competitive Advantage:
CEO and Chair for Blockbuster, John Antioco stated that the Blockbuster chain has decided on plans in opening...
And overseas stating further that:
We now believe we have a business model that will provide extremely high ROI."
Antioco further believes that several thousand of the complete total of 8000 Blockbuster stores have:
Plenty of square footage as well demographic requirements, reliance on low capital investment with expected "very, very high rates of return."
Video rental chains such as Blockbuster have great advantage in dealing with the mass consciousness. The attraction of game sales as well as the customer interaction are some of the advantages that these rental chains have as compared to mass retailer and those businesses in the venue of specialties.
There exists "untapped marketing" in this area. The strategy of the deliberate "stocking of expert" customer assistance is one of used by the "blockbuster" EA businesses demonstrated in their hiring of "expert gamers" as store clerks.
More mature strategies: fewer titles, greater emphasis on retail pre-orders, widespread cross marketing deals, more creative grassroots.' appeal characterize games marketing plans at both large and small publishers of electronic games. " (Geistman, B. 2003)
Mr. Geistman goes on to state that:
They are a great place for marketing for having product on the shelf." "In fact, the marketing possibilities for game sales in video stores remains virtually undiscovered.
Competitors:
Stiff competition from other game…
Bibliography
Antioco, J. & Geistman, B. (2003) "New Concept at Video Stores Spells Opportunity for Publisher" (30 July 2003) Electronic Gaming Business [Online] available at http://www.findarticles.com/p/articles/mi_m0PJQ/is_8_1/ai_110307522
Strategies 2004: How Big & Small Publishers Plan to Break Through the Noise" (2003) Electronic Gaming Business [Online] available at http://www.findarticles.com/p/articles/mi_m0PJQ/is_14_1/ai_110308219
Eisenmann, T. & Wong J. Electronic Arts in Online Gaming: Entrepreneurial Management" Excerpt Case: 804-140 [Online] available at http://www.hbs.edu/research/recent_cases.htm#31
New Concept at Video Stores Spells Opportunity for Publisher 2003
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