GameStop Connection: Retailer's Modern Challenges and Strategies
GameStop, a pioneering retailer in gaming, faces weaknesses in digital adaptation and high operating costs. Explore its strengths, opportunities, and threats, along with strategies proposed by Meliora Consulting Group.
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Presentation Transcript
GameStop Connection In-Person Presented to: GameStop Board Presented by: Meliora Consulting Group Dorian Strong Rajnandini Kothadiya Sean Dozier Krishna Mythili Vusulumarti 1
Meliora GameStop One of the first retailers to create niche around gaming Publicly traded Product Mix: Gaming consoles, games, collectibles, e-stores and online websites Sale of pre-owned games Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 2
Where is GameStop today? Weaknesses Unprepared for digital-first design High Operating costs dur to brick and mortar stores Strengths Established Brand Multi-channel retailing(niche sales)- gaming consoles, games, collectibles Global Presence Opportunities Growth in the gaming market Rise of eSports Women in gaming Cosplay Threats Fierce Competition Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 3
Experience & Interaction with Art All Generations Interacting with Artists Books, movies, shows, games, and competition Millennials Experienced Focused Gen-Alpha eSports Interest Fan Interaction Game of Thrones Cosplay Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 4
Wheres the problem? Addressing change in Consumer Behavior Lack of Big Data Analytics for segmentation and focused targeting Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 5
eSports Analysis High Price Exclusive Microsoft and Sony Halo, Call of Duty Console Personal Computer Free Competitive games Fortnite, League of Legends Meliora Low price Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 6
Merge-Strategy Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 7
Pivot-Strategy Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 8
Sell-Strategy Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 9
Acquire-Strategy Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 10
Divest-Strategy Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 11
Opportunity Cost Shutting Down Stores 20% 30% 50% 12
Pivot Building Community eSports and cosplay Keeping Stores relevant to community strategy Keep the places near youthful communities Close to public transport and densely populated urban areas Mid-high Level households Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 13
Implementation Plan 2023 2021 Branding eSports Cosplay Cost: $50M Pilot Repurpose Seattle, NYC Cost: $100M Repurposing to arenas One arena per city Cost: $500M Build Community CRM Cost: $100M 2022 Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 14
Estimated Results Estimates Sales 14,346 13,089 11,943 Towards 2020, we estimate a 20% rise in sales and going forward declining growth to align with industry standards. 10,897 9,081 8,285 2018 2019 2020 2021 2022 2023 Sales (in USD millions) Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 15
Mischief Managed Risks Contingencies Popularity of eSports Reconsider merger with Walmart Unanticipated costs Not use all of the available funding Brand Dilution Holding Firm Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 16
Key Takeaways Go Niche, Go Social, Go Community Meliora Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 17
Meliora Thank You & Merci Appendix Available Situation Analysis Alternatives Recommendation Implementation Risks Conclusion 18
Industry Analysis Threat of New Entrants: Low Threat of Substitutes: Very High Buyer Power: High Rivalry between Firms: High Supplier Power: High Meliora 19
Financial Forecast Year Sales (in USD millions) Growth 2018 8,285 2019 9,081 9.60% 2020 2021 2022 2023 10,897 20.00% 11,943 9.60% 13,089 9.60% 14,346 9.60% Costs Incurred 7,971 8,737 10,484 11,490 12,594 13,803 Operating profits 314 344 413 452 496 544 20
Opportunity Cost Shutting Down Stores Current cost Stores Avg Cost 638,000,000 109,434 2018 sales avg revenue per store Rev from stores shut down 8,285,300,000 1,421,149 568,460 5,830 Year Stores 0.2 0.3 0.4 2019 2020 2021 2022 2023 2,004 1,040 766 646 1,374 5,830 43,861,132 22,762,264 16,765,283 14,138,868 30,072,453 65,791,698 34,143,396 25,147,925 21,208,302 45,108,679 87,722,264 45,524,528 33,530,566 28,277,736 60,144,906 Total stores Total funding 127,600,000 191,400,000 255,200,000 Total stores shut Lost sales 1,166 1,749 2,332 662,824,000 994,236,000 1,325,648,000 21
