Wizards of the Coast

Strengths Magic the gathering Brand Loyalty Unique Product Explosive Growth Employee Loyalty Competitive Advantages Sustainability

Weaknesses One hit wonder Cult? Clash of cultures Distribution Roller coaster

Opportunities Retail stores Acquisitions Tournaments Online Macro-environment – Political & Legal – Technological – Demographic – Macroeconomic

Threats Online Changing Demographics Competition

Industry Analysis Potential Competitors Supplier Power Buyer Power Substitutes Rivalry Complementors

Potential Competitors Brand Loyalty Absolute Cost Advantages Economies of Scale Switching Costs Government Regulations Entry Barriers Harry Potter

Supplier Power Few Substitutes Not important customer High switching costs Threat of integration

Buyer Power Few, Large Buyers Buyers purchase in bulk Supplier depends on buyer Low switching Buyer can purchase from many Threat of integration

Substitutes?

Rivalry Games Work Shop – Competitive Structure – Demand Conditions – Exit Barriers On line games Another Strategic Groups Industry Life Cycle – Embryonic, Growth, Shakeout, Mature, Declining – Network Economics

Complementors Books Movies Action Figures Retail Outlets

Leadership Peter Adkison Richard Garfield

Marketing 4 p Target Market Price Product Promotion Distribution

Target Market “player is a person with a good education, disposable income, and an affinity for computers.” “most popular with males in their teens or twenties.”

American DemographicsAmerican Demographics; Jul/Aug2002, Vol. 24 Issue 7, pS4, 1p To understand Gen Y's spending priorities, think personal appearance and fun. Collectively, this group spends 70 percent more than average on alcoholic beverages, 38 percent more than average on tobacco and 25 percent more than average on food away from home. When they're at home, the critical appliance is not a stove or a refrigerator but a home entertainment system. This group spends 31 percent more than average on televisions, radio and sound equipment.

Price $8.95 Starter set $2.95 booster pack $300-$1000

Product Card Game Portable 1 hit Face to Face Award winning

Place/Distribution Small game/hobby shop Target Retail stores

Promotion Co-op Publicity POS

Situational Assessment Product/Services Financial

The Impact of Quality on Profits

The Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices

The Value Chain

Distinctive Competencies, Resources, and Capabilities The roots of competitive advantage:

Strategic Resources and Capabilities Tangible – Land – Buildings – Plant – Equipment Intangible – Brand names – Reputation – Patents – Technological or marketing know- how

The Durability of Competitive Advantage Barriers to imitation – Speed of imitation by competitors in reducing advantage – Imitation by acquiring similar resources – Imitation of capabilities (more difficult) Limits on competitors – Prior strategic commitments – Absorptive capacity for change Industry dynamism – The rapid innovation shortens product life cycles.

Why Do Companies Fail? What went wrong? – Inertia – Prior strategic commitments – The Icarus paradox Avoiding failure and sustaining competitive advantage: – Focus on the building blocks of competitive advantage. – Institute continuous improvement and learning. – Track best industrial practice and use benchmarking. – Overcome inertia.

Alternatives Extending the Brand Mass Market Developing Tournaments Developing Tournaments Opening Game Centers

More Alternatives Product Development Acquisitions Global Expansion IPO Purchase Candidate

Recommendations?

Update Current Situation