A Strategic Analysis of Activision Blizzard

A Strategic Analysis of Activision Blizzard
Management Information Industry BackgroundCompany Background and Organization AnalysisAbstract
SWOT An
• Gaming industry is one of the most tremendous growing industries
• Position of the companies will depend upon the financial
performance and the fluctuations in the prices of the stock
• Top companies within the gaming industry are Sony Corp,
Activision Billizards, Nvidia and Valve Corporation
• The future for all the companies is anticipated to be growing if they
find a diversified base and customers in different market segments.
Porters Generic Strategies
Financial Analysis
Referen
Marketing
Stock Summary
Strengths
Activision Billiards: Wide experience, smoo
revenue stream and vast and global inventory
Opportunities
Activision Billiards: Pre own market and lau
of Guitar Hero for iPhone
:
PESTEL Analysis
Management Information
Sales and Market Share Growth
Strategic Group Map
Corporate Strategy an
Ethics, Social Responsibility and Current Events
• Product: Activision Blizzard sells pro
numerous and unique product features
• Price: Activision Blizzard follows
• Place: Activision Blizzard sells its
channels retail and online (Kotler and Arm
• Promotion: Activision Blizzard uses tra
advertisement on television and radio
• The business strategy of Activision Blizzard
The strategy of the company is to strengthen
building the franchise that are engaged with
• Activision Blizzard corporate strategy is to
the effectiveness and transparency the comp
employing its external stakeholder data
• Activision Blizzard adopted
the differentiation strategy like
its video game studio is
different from its competitors
(Chell, Spence, Perrini, and
Harris 2016)
Particulars SIC NAICS
Sony Corp 3944 334310
Activision Blizzard 7374 518210
Nvidia Corp 5063 423610
Valve Corp - -
• Mobile gamers are increasing over years
and it is having highest contribution in the
overall video gaming industry
• Online gaming is the current trend which is
evolutionary change in the gaming
industry provides facility to chat, talk and
download games from app store
(Baumgartner and Rauter 2017)
• The overall gaming industry consists of
mobile gaming, console games and PC
games, the maximum share of 46% is
captured by mobile gaming followed by
console games have 33% share and rest
21% is catered by PC games (Bell, Bryman
and Harley, 2018)
Particulars Symbol Stock listed at Outstanding shares Market value of
equity
Beta coefficient Dividend paid
Sony Corp SNE NYSE 1.27 Billion $47.02 1.15 No
Activision Blizzard ATVI NASDAQ 751.15 million $41.75 1.20 No
Nvidia Corp NVDA NASDAQ 610 million $157.00 1.58 No
Valve Corp - - - - - No
• Activision Blizzard is listed on NASDAQ with outstanding shares
751.15 million and a bets of 1.20 indicating slight more responsiveness
towards the changes in the market indices
Particulars 2016 (Billion) 2017 (Billion) 2018 (Billion)
Sony Corp 813.00 763.00 855.00
Activision Blizzard 2.39 2.5 2.52
Nvidia Corp 5.01 6.91 9.71
Valve Corp 5.9 7.6 8.164
• The analysis of the
sales of Activision
Blizzard indicates
continuous
improvement in the
sales from 2.39 in
2016 to 2.52 in year
2018 (Harrison and
Lock 2017)
• Activision Blizzard
has lower sales
output as compared
to NIVIDA Corp
and Sony Corp
(Armstrong et al.
2015)
• Activision Blizzard
must reduce price
and increase
produce line
 Armstrong, G., Kotler, P., Buchwitz, L. A., Tri
introduction.
 Baumgartner, R. J. and Rauter, R., 2017. Strat
management to develop a sustainable organiza
pp. 81-92.
 Bell, E., Bryman, A. and Harley, B., 2018. Bus
press.
 Bell, G. G., Dyck, B. and Neubert, M. J., 2017
Generic Strategies. Radical Thoughts on Ethic
 Belton, P., 2017. Competitive Strategy: Creati
Macat Library.
 Chell, E., Spence, L. J., Perrini, F. and Harris,
business ethics: Does social equal ethical?. Jo
625.
 Datta, H., Ailawadi, K. L. and van Heerde, H.
brand equity align with sales-based brand equi
Marketing, 81(3), pp. 1-20.
 Davidson, C., 2016. Working together: Organ
business performance. Gower.
 Fan, S., Lau, R. Y. and Zhao, J. L., 2015. Dem
intelligence through the lens of marketing mix
 Harrison, F. and Lock, D., 2017. Advanced pro
Routledge.
 Kotler, P. and Armstrong, G., 2015. Principles
 Laudon, K. C. and Laudon, J. P., 2016. Manag
Education India.
• Activision Blizzard makes the use of Oracle Database for its advantage
to promote the reliability. The Oracle helps in benefitting the company
in using it as the customer satisfaction.
• Political: The political factors seem to be favorable for American
gaming industry, government has become more involved with the
development of gaming systems and so Nvidia,
• Economic: the industry provides employment directly as well as
indirectly to over one lakh youngsters across the thirty four states of
USA .
• Social: around twenty five percent of the game players are below the
age of eighteen years, forty nine percent of the players lie between the
age 18-49 years. Video game users are increasing dramatically in
United States (Davidson 2016).
• Technological: With the introduction of augmented reality, the gamers
are able to relate effectively with the virtual objects through software
on the screen.
• Legal: The laws in American video game industry are strict. Thus, it
can be said that being an American Multinational Activision follow all
the laws to sustain in the market. Sony is a Japanese video game
company which needs to be aware of the American laws in order to
compete with Nvidia, Activision and Valve (Laudon and Laudon
2016).
Ethics: Activision Blizzard Code of Conduct
encloses general guidelines for operating business
with the highest standards of ethics.
Social Responsibility:
Activision is committed to strictly comply with
all of the rules, laws, and environmental regulations in
every city, and country, where the company
operates.
Current Events:
In May 2018, Activision was ethically alleged
for breaching the gambling law of Belgium.
Organization Analysis
• Structure- The structure of Activision Blizzard is
divided in three key business segments .
• Leadership- Activision Blizzard follows the
transformational leadership
• Culture- Activision Blizzard promotes the values
and behaviours of employee wellbeing (Bell,
Dyck,and Neubert, 2017)
Company Background
• History: Activision Blizzard is the American video gaming
company that is based in California. Robert A. Kotick serves
as the CEO of the company from the year 1990.
• Vision and Mission: The vision and mission of Activision
Blizzard is to be the leader in the work of entertainment
(Belton 2017)
• Highlights and Recent Events: During the year 2018 the
financial earnings of Activision Blizzard call to shareholder
has witnessed a record in revenue.
• Current Ratio: The current ratio
for Valve Corporation other firms
such as Activision Blizzard and
Sony Corp may struggle to meet its
debt obligation due to greater level
of debt.
• Debt Ratio: Valve Corp has
reported a lower debt ratio over the
last four years. This signifies a
favourable portion of total assets
than its liabilities. While Sony
Corp in the last four years have
reported a higher debt ratio which
signifies that the company tends to
be running at risk. companies such
as Activision Blizzard and Nvidia
Corp have more favourable debt
portion.
• Times Interest Earned: Nvidia
reported a higher TIE ratio and
portrays a favourable ability of
paying interest. Companies such as
Activision Blizzard, Sony Corp
and Valve Corp has reported ratios
better than the present industry
standard.
2014 2015 2016 2017
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2.41
1.30
1.82 1.78
0.88 0.88 0.87 0.83
4.47
5.80
4.02
3.44
1.79
6.38
2.48
4.69
Current Ratio
Activision Blizzard Sony Corp Valve Corp Nvidia Corp
2017 2016 2015 2014
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0.49 0.48 0.47
0.51
0.82 0.81 0.81 0.82
0.28
0.24 0.23
0.30
0.41 0.39 0.39 0.39
Debt Ratio
Activision Blizzard Sony Corp Valve Corp Nvidia Corp
2017 2016 2015 2014
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
8.97
6.60 6.66 5.86
19.85
11.63
2.90
1.13
5.78 6.67
34.46
29.32
33.40
18.68
16.50
13.05
TIE
Activision Blizzard Sony Corp Valve Corp Nvidia Corp