Strategic Recommendations for GameStop's Future Success
Explore strategic recommendations for GameStop's future success, including reducing retail locations, focusing on community-building, and capitalizing on innovative gaming experiences like virtual reality. Analysis of industry trends and key success factors sheds light on the path forward.
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Presentation Transcript
Transforming the GameStop Experience Goodman School of Business GSB Consulting Jason Presented to: GameStop Piash Anna Ariana
Problem Stakeholders Which strategy should GameStop employ to ensure relevance in the gaming market of the future Future of Gaming Competition Customer Base Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Recommendation -Reduce number of retail locations 34% closure by 2025 -Convert stores to GameStop experience centers -Focus on community both online and offline -Capitalize on new, innovative gaming experiences such as virtual reality Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis What drives the industry? Malls losing popularity E-commerce is on the raise Threat of suppliers What does the future look like? More and more online, but .. Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis Long history Reselling model Magazine subscription Selling collectables Reward system S Weak financials 92% locations in shopping malls W Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis Creating community and culture Online streaming services Data analytics O Key Takeaway: Creating community will set us apart from competitors; new revenue streams will help financials Suppliers Competitors and Substitutes Retail in malls decreasing T Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis Key Success Factors Customer reach Profit Long term sustainability Innovation Creating community Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis Customer Profile - Frank - 31 years old - Works as a junior bank analyst for BMO - How will Frank experience your business? Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Analysis Strategic Map Additional Revenue Stream Generation will lead you to EBITDA of $891 Million by 2025 Losing revenues and profits due to many factors Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Alternatives Transform the GameStop experience Close retail go online only Merge- UPlay Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Alternatives Merge with Uplay Pros Cons Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Alternatives Close retail, go online only Pros Cons Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Alternatives Transform the GameStop experience Pros Cons Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Alternatives Customer reach Creating community Innovation Profit Sustainability Merge -> Uplay Close retail, online only Transform the GameStop experience Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Implementation: Transforming GameStop Retail Experience with VR 3.8 trillion industry 3.8% YOY One Stop Experience with Future of Gaming Data generation: Newsletter, push notification Customer touchpoint and interaction Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Implementation - Timeline 2020-21 100 stores Florida and Texas combine 600+ 1000 stores Incentive and loyalty program 500 stores California and Texas 1000 stores 2019 2022 Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Implementation: LaunchGameStop 2.0 Streaming Growing trend among millennials 14.3% online shopping 517 billion industry 15% growth Subscription Model Nano influencers Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Implementation - Timeline 2020 R& D Build Eco System Build Team and IT Innovative reward program Community of gamers Launching GameStop Global gaming Launch app Marketing with nano influencers GameStop Game informer 2019 2021-22 Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Implementation - COST PROJECTS COSTS Renovations Game Stop 2.0 2019 2020 2021 2022 2023 2024 2025 TOTAL $ $ $ $ $ $ $ $ 2 $ $ $ $ $ $ $ 10 15 6 5 2 2 5 $ $ $ $ $ $ $ 20 16 7 5 2 2 17 $ $ $ $ $ $ $ 20 17 8 5 2 2 10 $ $ $ $ $ $ $ 20 18 9 5 2 2 8 $ $ $ $ $ $ $ 9 $ $ $ $ $ $ $ - 81 127 22 5 5 10 2 19 10 5 2 2 8 20 11 5 2 2 8 R&D Team IT Misc Marketing $ 208 Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Risk Risk Likelihood Mitigation Customer buy-in Med -Adapt to current consumer needs/wants Competition with online platforms High -GameStop UVP community driven PR due to employee layoff Med -Address head on Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Key Take-Aways -Adapting with the future of the industry -Transforming the experience -Focus on community and engaged customer base -Bring EBITDA to 891 million by 2025 from 419 million in 2018 Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Thank You Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
APPENDIX Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
2016 2017 1,792 $ 2,582 $ 2,150 $ $ $ $ $ $ 8,547 $ 6,062 $ 2,485 $ 2018 1,768 $ 2,450 $ 1,866 $ $ $ $ $ $ 8,285 $ 5,977 $ 2,308 $ 2019 1,744 $ 2,324 $ 1,620 $ $ $ $ $ $ 7,745 $ 5,499 $ 2,246 $ 2020 2021 1,574 $ 2,098 $ 1,462 $ $ $ $ $ $ 7,130 $ 4,919 $ 2,210 $ 2022 1,495 $ 1,993 $ 1,389 $ $ $ $ $ $ 6,810 $ 4,631 $ 2,179 $ 2023 1,495 $ 1,993 $ 1,389 $ $ $ $ $ $ 6,825 $ 4,505 $ 2,321 $ 2024 1,495 $ 1,993 $ 1,389 $ $ $ $ $ $ 6,840 $ 4,446 $ 2,394 $ 2025 1,495 $ 1,993 $ 1,389 $ $ $ $ $ $ 6,856 $ 4,388 $ 2,468 $ Hardware Software Pre-owned Accessories Digital Collectibles Membership Other Total COGS Gross Profit $ $ $ $ $ $ $ $ $ $ $ 1,397 2,493 2,254 677 181 494 - 469 7,965 5,465 2,500 31% $ $ $ $ $ $ $ $ $ $ $ 1,657 2,208 1,539 862 175 637 784 189 636 - 414 957 194 707 - 344 907 184 671 - 294 819 166 605 111 294 778 158 575 128 294 778 158 575 143 294 778 158 575 157 294 778 158 575 173 294 92 294 7,465 5,225 2,239 30% 29% 28% 29% 31% 32% 34% 35% 36% Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
Sales % Changes YOY 7% -3% -7% -4% -4% -4% 0% 0% 0% Susbcribers (millions) 0 0 0 0 0.56 0.64 0.74 0.83 0.91 1.00 Selling and Admin Costs EBITDA Sales % Changes YOY $ $ (1,862) 638 $ $ (1,910) 575 -10% (1,889) $ 419 $ -27% $ $ (1,781) 465 11% $ $ (1,717) 522 12% $ $ (1,640) 570 $ $ (1,566) 613 $ $ (1,570) 751 22% $ $ (1,573) 821 $ $ (1,577) 891 9% 7% 9% 9% Problem Recommendation Analysis Alternatives Implementation Risk Conclusion
