Sustainable Way of GameStop XMU Consultancy Team
Key issues in addressing poor financial performance, decision-making strategies, challenges faced by GameStop including e-commerce shifts, sales decrease, and competition, proposed solutions like online and offline sales, efficient customer experiences, and vertical ecosystem, along with analysis of GameStop's profile, industry and market trends, and recommendations.
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Presentation Transcript
Sutainable way of Gamestop XMU CONSULTANCY TEAM SUSAN, GEORGE, ALEX, PHIL
Key Issues How to cope with the crisis of poor Finance Performance in the scenario How to make the decision onward? Sell, M&A, Downsize or Pivot Challenge1: Sales channel being shifted caused by E-commercial Challenge2: Net sales decrease Challenge3: Competition from competitors
Solution Online shop Offline Game station Efficient Sales Experience VS competitors Vertical Eco-system Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Agenda Key Issues Analysis Alternatives & Evaluation Recommendation Implementation Risk & Mitigation Conclusion
Analysis--Profile Position Location Employee Products Traditionally structured multi-channel retailer WW 5830 locations US 3846 Others 1984 16,000 regular 23,000-45,000 part time Hardware Software Pre-owned video game software Accessories Digital currency, Collectibles Alternatives & Evaluation Recommendatio n Risk & Mitigation Key Issues Analysis Implementation Conclusion
AnalyisValue Chain End User Channel Retailer Game Producer GameStop Sony Microsoft Traditional Retailer Customer Online game publishers EA(international game-publish giant) Gamefly, Amazon Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
AnalysisIndustry Trend Industry Growing Trend 1. $18 billion USD per year for new video game 2. Additional %25-32 billion USD per year for digital game content, growing 9.6% 3. Retail raise 3.8% YOY in US market, top $3.8 trillion in USD 4. Online shopping 14.3% total retail, $517 billion USD in US, cagr 15% Gameover in downside Trend 1. Sales, Margin, Profit, Store sales ALL DOWN! 2. Stock price from $53 in 2014 to $5! Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Market Trend Dramatical Change Customer Experience Digital E-Sport Community While Gamestop not get the market trend change, 25% American mall will close in next 5years, 92% retails outlets are located in traditional retail malls. Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
GameStop product Analysis Gross Profit by Segment Trend Revenue by Segment Trend 3000 10000 2500 8000 2000 1500 6000 1000 4000 500 2000 0 0 2016 2017 2018 2016 2017 2018 New video game hardware New video game software New video game hardware New video game software Pre-own and value products Accessories Pre-own and value products Accessories Digital Collectibles Digital Collectibles Others Others
Competitor Ananlysis Type Name Location Revenue(Billion) Remark Traditional Best Buy 997 $42 NA Target 185 $75 Walmart 11389 $123 E-commerce grew 37% Kmart 2323 115 $25 Bankrupt Game Stop 5830 $8.2 Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Competitor Analysis Game Publisher Origin, own by Electronic Arts, $5billion per year game, 50million registered user Uply, own by Massive Entertainment Additional competitor Gamefly and Amazon Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Alternative & Evaluation Channel shift more Offline upgrading Vertical Acquisition Sell Merge Downsize Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Channel shift more Benefit Risk & Hurts Cater to new trend on-line shopping Widely geographical coverage Customer data gathering and analysis Long-term cost reduction Experience drecrease Loosing communication inter-players Go option but losing customer experience Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Offline upgrading Benefits Risk Customer experience Extend customer touching time Face to face communication to dig our deep demand Short-term cost raised Off-line sales trend is decreasing Go option but fail to catch the on-line Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Vertical Acquisition Benefits Risk Go option Subject to right target Closely work with supplier & stake holders Long term corperation Capital requirement Dis- centralized sourced Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Sell Benefits Risk Return of cash flow soon Staff loy-off risk Industry is not futureless Brand value decrease Non-go! Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Merge Merge OEM & Ecommecial Giant Risk Benefit Products resource centralize Immediately channel expasion Not easy to seek potential targets Cash flow is challenge Non-go! Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Evaluation Downsize Benefit Risk Cust-cost immediately Staff relocation or lay-off Negative sign to customers and other stakeholders Non-go! Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Recommendation Online shop Offline Game station Efficient Sales Experience VS competitors Vertical Eco-system Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationChannel Shift What: From Physical to on-line. Why Adapt the trend customers consumption habit. Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationChannel Shift How(HR&Operation) Close criterion Refurnish the website; The Apps on mobile; New talent team for E- commerce; Shrink the Physical store; The staff transfer plan; Base on the expiration schedule avoid lease negtive effect; The square feet; Staff stransfer rate; The inventory management; Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationGame station What: The update physical entity game station, not only sales, but the experience center and club culture center Why: Provide more experience service except sales to keep aquisite new customers, for membership management.. Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationGame Station The E-sport world cup How(HR&Operation) The E-sport management team Campaign based on Global store; From country To world cup; The O2O model; The club management team; The station design and test; HR Training plan; The sales transfer from game to exprience, accessories and colloectible ; Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationVertical Ecosystem What: Build vertical integrate of customers value; Why: The new competitive landscapes (OEM) Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
ImplementationVertical Ecosystem How(HR&Operation) World cup Long term strategy depends on capability; Acqurie small and bueatiful; Relize, Invest, aquire; The data management OEM On-line Customers Station Data Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Time Mapping 2019 2020 2021 2022 2023 On-line Stop->station e-sport World cup Aquire Data management S-10 G S-2 Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Financial Forecast net income forecast revenue segment 16000 16000 25% 13977 23% 23% 22% 14000 14000 12504 20% 20% 11583 12000 12000 10712 18% 17% 17% 9460 16% 10000 10000 8547 15% 8285 7965 9984 8000 8000 9618 9266 10% 8927 6000 6000 8600 8547 8285 4000 4000 7965 5% 2000 2000 3994 2885 6103 6638 6397 7568 8784 9614 10378 11741 2317 1785 860 0 0 0% 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 Online Gamestation&Gamestop Net sales net income % Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Open & cloes financial analysis 2019 2020 2021 2022 2023 open Gamestation 10 50 100 100 100 colesd traditional store 100 500 1000 1000 1000 2019 2020 160 2021 319 160 2022 319 160 2023 319 160 cost down Adding working capticap Bring revenue from Gamestation 32 16 80 128 638 1275 3825 7650 Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Financial forecast-ROE improvement 2018 2023 ROE=-4.94 ROE=8.79
Risk and Mitigation Item Cashflow Relocation risk Executive management Marketing promotion Impact H M M H PossibilityMitigation L L L L Close monitor, clear finance plan Relocation plan, transportation subsidy Incentive plan, Equity share, Create respect and communication culture Try run in small area Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
Recommendation Online shop Offline Game station Efficient Sales Experience VS competitors Vertical Eco-system Alternatives & Evaluation Recommen dation Implementa tion Risk & Mitigation Key Issues Analysis Conclusion
