Business Strategy Report: Analysis of Riot Games Company's Operations

This report provides a comprehensive business strategy analysis of Riot Games, a multinational video game developer and e-sports organizer. The analysis begins with an introduction to business strategy and its application to Riot Games, followed by a macro-environment analysis using the PESTLE f...Read More

BUSINESS STRATEGY- A case study
on Riot games company
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INTRODUCTION...........................................................................................................................5
PART 1............................................................................................................................................5
LO 1.................................................................................................................................................5
P1Appropriate framework to conduct the macro-environment analysis for given organization.
................................................................................................................................................5
M1 critical analyse the macro environmental factors to determine the strategic management
decision...................................................................................................................................7
D1 Description on interpret information and data applying environmental and competitive
analysis to produce set of strategic directions........................................................................7
LO 2.................................................................................................................................................7
P2 Appropriate frameworks analyse the internal environmental and capabilities of the
organization............................................................................................................................7
M2 Description on critical analysis of the internal environment to access the strength and
weakness of the enterprise......................................................................................................9
PART 2............................................................................................................................................9
LO 3.................................................................................................................................................9
P3 Define porter five forces model to evaluate the competitive forces of the given market
sector.......................................................................................................................................9
M3 Appropriate strategies to improvise competitive edge and market position..................10
D1 Critique and interpret the information by applying environmental and competitive
analysis.................................................................................................................................11
LO 4...............................................................................................................................................11
P4 Description on the range of theories, models, interprets and devise strategic planning g for
given organization................................................................................................................11
M4 Define strategic management plan that tangible and tactical strategic priorities...........12
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13
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INTRODUCTION
Business strategy means direction to achieve desired ends with help of setting up competitive
moves and actions (Masnan, Saad and Ramlee, 2018.). It is assistive in terms to attract
customers, compete successfully, strengthening performance and to achieve desire profitability.
It is carefully planned and flexibly designed for the achieving effectiveness, mobilising
resources, gaining command over the situation. The present report is based on business activities
of Riot Games Company and engages in business activities as multinational video games
developer and also organizer of E-sports Company.
However, report will look over upon the things as PESTLE analysis, SWOT and Porter five
forces etc. The main aim of this report is to frame the strategic framework so that function can be
undertaken effectively and efficiently. Furthermore, it is kind of working plan that formulates to
achieve vision, prioritizing objectives competing successfully and optimising financial
performance to earn, sustain and grows profits.
PART 1
LO 1
P1Appropriate framework to conduct the macro-environment analysis for given organization.
Vision- it can be defined as that why the enterprise is exist among the market. The Riot
Games company has it vision statement as to be the most high valued business in the eyes
of the customer. They must have high valued employees so that they can provide effective
services and firm can operate its business activities for the longer period.
Mission- This means deciding in advance the long term plans that where the firm wants to
operate its business functions in near future (Rahmani, Doshmanziari and Asgari, 2018).
The main aim is to offer the competitive price o that they can able to attract with the
customers. To offer the services considering the main issues as innovation, sports activities
and other things to support in the welfare of the community and protection of the
environment.
Objectives-
 The main aim is to meet the needs of customers by constantly seeking and taking
actions as relates with the innovations, product quality, store facilities and services
etc.
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 To provide good and services on the affordable prices to its customers.
 To develop the employees capabilities by providing effective training so that that
can undertake all the activities effective and efficiently (Epstein, 2018.).
PESTLE analysis on the Riot games company-
It is helpful in order to identify the external capabilities of the enterprise so that initiatives
can be taken in order to carry out the business function in the effective manner. Thus, it has been
defined in the following context as are-
1. Political- in this, there are some specific rules and regulations by the UK government for
the video games industry. It has been as the government of the taking various kind of the
initiatives in terms to protect the children from such violent or disturbing video games
(Hayes, 2018.). Furthermore, there is presence of fixed rate and traffic related issue. The
legal authorities are charging high amount of the taxes and that leads to have negative
impact over the business activities.
2. Economical factor- The data of the particular video games industry is quite low. The fall
down of the UK currency is also affected he total economic scenario inclusive of the
video games. Thus, Riot is largely affected by the worldwide economic recession. This is
holding up in the recession because they offer many more hours of the entertainment for
the amount of money spent in comparison to traditional forms of entertainment.
3. Social- These games are available almost all around the globe and in today’s society so
that the gaming culture is growing stronger and stronger and it also helps to have
enhancement in the popularity and profitability to the enterprise. In addition to it, games
are suitable for the certain age groups (Alexy, West, Klapper and Reitzig, 2018.). The
video games which are harmful and creating the violence among the children should be
banned by the authorized government. With the help of survey it has been identified that
there are maximum customer whose age is approximately 40. They have purchased it for
the children between the age group of the 18. In this way, it can be said that the Youngers
are usually use to purchase the games.
4. Technology- The Riot is taking various initiatives in terms to provide innovative products
to the customers. In this, the technical issues are that they are not able to make their files
digitally due to their size. The video games industry is totally technology advanced. In
this, it can be said that the price of the highly advanced video games are really higher
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than the other products and it also leads to have negative impacts over the working of the
enterprise (Feenstra, 2018.). Furthermore, it can be said that technology helps to enhance
the competitive advantage in the market.
M1 critical analyse the macro environmental factors to determine the strategic management
decision.
From the above discussion it can be said that there are number of factor that can influence
the gaming industry in the UK. There are some specific laws and legislations in every nation
inclusive of the United Kingdom. The recession of the country affects the working of the
enterprise in the badly manner. Thus, the various people of mid age use to purchase the games
for their children as it also assistive in terms to enhance their practical knowledge about the
things. In this, it can be said that the external factors can impact the working of the enterprise in
the huge context.
D1 Description on interpret information and data applying environmental and competitive
analysis to produce set of strategic directions.
The main issue under it, relates with the development of the games for this legal authorities
are charging high amount of tax rates. There are various equipment on which government of UK
has banned as it negatively impacts the mind of children’s. Thus, they are also using
technological innovation in the product so it can provide better and practical learning to the
children.
LO 2
P2 Appropriate frameworks analyse the internal environmental and capabilities of the
organization.
The firm need to take various kinds of initiatives in terms to analyse the internal
environment of the enterprise so that effective steps can be taken for having enhancement in the
growth. It has been defined in the following manner as are-
SWOT analysis on Riot Games Company-
The one of the main strength of the Riot entertainment is that this firm has worldwide
popularity from the last many decades (Jones, Harrison and Felps, 2018.). They are having
diverse range of products as action figures, novel board games, sport activities etc. In this, the
one of the most famous game is world of craft and it is available in eight languages. Thus, it can
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be said that the young generation are the main customer of this product. Therefore, the number of
the buyers is generally very high.
This firm is operating its business activities on the large market so it can be termed out as
multinational company. In the present scenario the products as video games, e-sports type of
product are generally in high crush so that they are in wide popularity.
Weakness-
 There are number of specific market for this video games industry. Thus, this product
cannot be suitable for all aged people.
 The one of the common threat relate with this is that the product are available on the
higher rates so the few not people are not able to afford them as they belong to average
income of the society.
 This kind of the products are required for the daily uses. In addition to this, it can be said
that the demand of the commodities are not so much to the FMCG and FMCD products.
 This firm also provides many of the video games in which the adultery seen or violence
cannot be acceptable in the society (Nagle and Müller, 2017.). The legal authorities have
also taken initiatives so that they can ban it.
Opportunities-
 In the present scenario, the world is full of technology so the demand of the technological
related things has great importance. This also works as the attractive feature as innovative
features attracts the wide number of buyers in market (Andriof and et.al., 2017.).
 The Riot enterprise can also work as to open their firm in new locations. Thus, with the
increase uses of games over the smartphones are day by day increasing. In addition to it,
gaming firms can target young children to senior and aged people.
 In enterprise, growth in infrastructure like internet bandwidth in even remote locations
will increase the number of users of the game. This will be helpful for having increment
in demand for smartphone.
Threats
 The main barrier to take entry into the gaming sector is quite low and individuals with the
minimum knowledge even the individuals with minimum amount of knowledge can able
to develop games. Furthermore, there is also one of the threat of substitution from online
and phone games.
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 Thus, the main threat of video games industry is that the legal authorities inclusive of the
UK government will issue many laws to protect the sale of this particular product in the
market. In addition to it, the nation’s political and economic factor is also bringing threats
to the industry in harsh manner.
M2 Description on critical analysis of the internal environment to access the strength and
weakness of the enterprise.
The main popular strength is the popularity of the brand name in the market due to technical
advancement in the products. Thus, Riot is taking various initiatives to develop the products so
that brand image can be enhanced. In addition to it, the one of biggest threat in this relation is
that the products are available on high price rates so very one cannot afford the products
available by the firm (Saeidi and et.al., 2015.). This firm also need to provide the product that
can be easily acceptable by the society.
PART 2
LO 3
P3 Define porter five forces model to evaluate the competitive forces of the given market sector.
In order to make the effective analysis, Porter five forces will be helpful in order to
evaluate the business function in appropriate manner. Thus, it has been presented in below
context as are-
Competitive rivalries within the industry- There can be number of high competitive
rivalries that can able to compete effectively. If there are two companies that can able to
manufacture the same products but the one firm can certainly fall their prices then the other than
a problem can be created in the huge context (Saeidi and et.al., 2015.). There is same amount of
the competition exist in the super market to cut down the price of the commodities. Thus, riot
game has number if rivalries as Pop-Cap Games and Valve Software etc. in order to cope up with
it, they should hire the best employees so that they can able to contribute maximum to the
enterprise.
Threats for new entrant- In this, competition can also arise from the firm who are new entrants in
the industry. At the beginning, all firm should take the initiatives to make the price rates less and
this help to attract the customer and also affect the working of existing enterprise. The
competition within the firms can be enhances if other firms come with highly technology
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advanced product to the customers. In order to cope up with it, firm should produce effective
product in the market.
Threat of substitute products- It is also the one kind of big threat to the enterprise, there are
number of the firms that has the same features but there is also existence of variation between the
prices of commodities (Andriof and et.al., 2017). In the modern scenario, there are many firms
who are providing the same products but the price of commodities less than the other entity can
hinder the growth of an enterprise. Furthermore, it is the kind of big threat to the enterprise.
Bargaining power of buyers- This is one of the essential aspect as they need to keep the lower
prices of the product so that Riot games enterprise can able to attract the wide number of
customers. With help of keeping the reasonable price of the product they can able to attract the
wide number of customers. In order to cope up with it, they are taking initiatives to provide
products at discount rate once in year so that people with lower can also afford them.
Bargaining power of suppliers- They play the crucial role in order to running firm successfully in
market. There are number of supplier in the market and each of them supplies many products
that belong to same range. In order to run successfully, they should hire best supplier who can
able to do their work on timely manner. The effective supplier are able to contribute maximum to
the enterprise.
M3 Appropriate strategies to improvise competitive edge and market position.
There are number of the firms that are taking various initiatives in terms to gain
competitive advantage in the market. Thus, there are many way in which it can be done
successfully. Under it, there are four competitive strategies and that can be defined in the
following presented manner as are-
Cost leadership- It is one of the competitive advantage that firm wishes to get in order to be
competitive in the market. This kind of strategy occurs at time when firm is offers same quality
of the products as its competitors provides but at the lower rates. It can be helpful if the firm find
ways to produce commodities smartly in more efficient ways as compare to rivalries. It can also
be termed out as offensive strategy; firm can attempts to drive competitors out of the market with
help of using the effective pricing strategies so that they can win over the consumers.
Differentiation- In this, lowering the price of the product can be a aside down factor that helps to
apart from the competitor commodities. The Riot games company should take the number of the
initiatives in terms to provide effective and better quality products to the customer. In this, entity
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should identify the need of the buyers with help of it they are able to have long term
sustainability in the market.
Defensive strategy- The one of the other way to gain the competitive advantage is to have the use
of this action. It helps the firm to distance itself from the competition exist in the market
(Amadeo, 2018.). It is one of the effective strategies as it is assistive for the so called opposition
to offer real position to the business.
Alliances- In this, firm need to be careful about not crossing the line between the alliance and
collusion. In addition to it, collusion occurs at the time business within the same enterprise takes
place, strategic alliance occurs at the time when the firm uses to pool resources and can able to
have the exposure at the expenses of other competitor not at the alliance.
In order to get the competitive advantage the Riots games company need to produce the better
quality products to the customer. This will helps to earn longer profitability as well sustainability
in the market.
D1 Critique and interpret the information by applying environmental and competitive analysis.
In this, it can be said that the Riot games company is facing the huge competition in the
market. In order to cope up with they need to produce more qualified products with effective
technological advancement. In order to gain the competitive advantage in the market the firm
should have the use of effective strategy as cost differentiation and differentiation so that they
can able to run their business functions effectively. In order to be attractive the firm need to have
the use of the things in effective and efficient manner.
LO 4
P4 Description on the range of theories, models, interprets and devise strategic planning g for
given organization.
The strategic planning will always be helpful for the enterprise in order to determine the
scope and direction to the enterprise. In the environment of the business it is essential to plan the
all the function of the firm in strategic manner so that they can able to be successful in the
market. In addition to it, strategic planning has differed set of approaches for developing new
products as well services. Thus, it has been defined in the following manner as are-
Resources dependence theory- The aim of this theory is to secure the all kind of resource’s
that are required by the Riot games organization (Feenstra, 2018). Thus, this works as to explain
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the capabilities for surviving in the enterprise without interacting with other to limit their
boundaries.
Transaction cost economics theory- it is also called as social cost theory. It is one of the
contractual concepts that have been developed by the British economist this is very supportive in
terms to address the importance of the entities or firms in market economy. It suggests the
process to run in the market of business in the growing manner.
Sustainability theory- It deals with to maintain the long term sustainability of firm in the
market. It is involving of the various activities as are political, social, economic activities. Thus,
it is essential to put some focus over to bring development in the products. In order to compete in
the today’s environment it is essential to bring improvement in the commodities and have growth
in market for longer period (Epstein, 2018.).
M4 Define strategic management plan that tangible and tactical strategic priorities.
The strategic plan must be framed in order to communicate about the goals and objectives
of the organizations. In this, it is essential to set the all priorities to utilise the resources in the
well and effective manner. It is very effective plan as it provides the better sense of outlines as
well directions so that one particular aim and objective can be achieved. The riot games company
has included goals and objectives so that they are able to undertake business activities
effectively. In this, it is very affective in order to bring improvement in quality of the products. It
derives the plan of action they must be followed by the managers and employees to enterprise.
CONCLUSION
Based on the above report it can be concluded that business strategy is one of effective
terms that helps to define the strategic direction to the enterprise. The present report has been
considered over Riots enterprise of UK. The assignment has covered the various aspects as are
PEST & SWOT, Porter’s 5 forces and various other factor that negatively impact over the
working of the enterprise.
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REFRENCES
Book & Journal
Masnan, F., Saad, N.M. and Ramlee, A.A., 2018. Assessing the Implications of Dynamic
Capability and International Opportunity Recognition on Export Performance of Manufacturing
SMEs in Malaysia.
Rahmani, R., Doshmanziari, E. and Asgari, N., 2018. The Relationship Between Implementing
Knowledge Management Practices in on-the-Job Training and Developing Professional Skills of
Oil Industry Employees. J. Mgmt. & Sustainability. 8. p.137.
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Hayes, J., 2018. The theory and practice of change management.
Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
Alexy, O., West, J., Klapper, H. and Reitzig, M., 2018. Surrendering control to gain advantage:
Reconciling openness and the resource‐based view of the firm. Strategic Management Journal.
39(6), pp.1704-1727.
Feenstra, R.C., 2018. Restoring the product variety and pro-competitive gains from trade with
heterogeneous firms and bounded productivity. Journal of International Economics. 110. pp.16-
27.
Jones, T.M., Harrison, J.S. and Felps, W., 2018. How applying instrumental stakeholder theory
can provide sustainable competitive advantage. Academy of Management Review, (ja).
Nagle, T.T. and Müller, G., 2017. The strategy and tactics of pricing: A guide to growing more
profitably. Routledge.
Andriof, J and et.al., 2017. Unfolding stakeholder engagement. In Unfolding stakeholder
thinking. Routledge.
Saeidi, S.P and et.al., 2015. How does corporate social responsibility contribute to firm financial
performance? The mediating role of competitive advantage, reputation, and customer
satisfaction. Journal of business research. 68(2). pp.341-350.
Online
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Amadeo, k., 2018. What Is Competitive Advantage? Three Strategies That Work. [online]
Available through:< https://www.thebalance.com/what-is-competitive-advantage-3-strategies-
that-work-3305828>.
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