Electronic arts value chain

Threat of Substitutes A substitute is not a similar product from a competitor, such as a football video game made to compete with "Madden," but a product in a different niche that a consumer might choose in place of a company's offering. However, Electronic Arts must not take it as a rigid, standalone framework by assigning the equal importance to all activities. Cost Advantage of Electronic Arts 4. Dividing the operations into primary and support activities may not be separable due to increased complexity. The division process can be time consuming and finding the required information can also be difficult. The effective Value Chain Analysis requires Electronic Arts to realise that all activities or functions do not require same scrutiny level. The research and development department of Electronic Arts is classified in this category.

Thorough fundamental analysts evaluate more than the company itself. Consumers can be selective about where they spend their money.

electronic arts value proposition

Even the most fundamentally sound companies face constant external threats; how they respond to them plays a big role in their continued success. We are actively engaged in enforcement and other activities to protect against unauthorized copying and piracy, including monitoring online channels for distribution of pirated copies, and participating in various industry-wide enforcement initiatives, education programs and legislative activity around the world.

Electronic Arts's Comment on Supply Chain Like other entertainment companies, our business is based on the creation, acquisition, exploitation and protection of intellectual property.

Large companies in this industry operate through economies of scale in manufacturing, marketing, distribution, and selling while small companies have primarily relied on gaming creativity in order to remain competitive. The heavy dependence of Electronic Arts on employees' talent will increase the importance of this value chain support activity. Most often, organizations are elements of a value system or supply chain. Cost Advantage of Electronic Arts 4. The connection between the value chain and cost leadership strategy reflects a parallel focus on the low cost operational activities. Electronic Arts can control the infrastructure activities or commonly called overhead costs to strengthen the competitive positioning in the market. Additionally, these new console have new technology which allow games and software to utilize new technological innovations of their own to increase graphics and provide more fluid gameplay then was available in previous console generations. Some of this intellectual property is in the form of software code, patented technology, and other technology and trade secrets that we use to develop our games and to make them run properly. They look at the entire industry and identify external factors that affect the company. He approached his model with the idea that it would probe specific external threats more deeply.

It can be divided into product and process technological development activities. Demographics The average age of consumers who play video games is 34 years old while the average age of most video game purchasers is 39 years old.

The company must analyse its support activities to avoid damaging brand reputation, and instead use it as a tool to spread positive word of mouth due to quick, timely and efficient support services. Most often, organizations are elements of a value system or supply chain. Unlike Coke or Nike, EA cannot rely on its brand name to give it an edge over competitors. Without analysing the in-bound logistics, Electronic Arts can face various challenges in product development phases. However, Electronic Arts must avoid making false commitments about product features that cannot be fulfilled by the production department. The research and development department of Electronic Arts is classified in this category. It can be divided into product and process technological development activities. Consumers constantly seek new styles and versions of games, but more importantly they want the best graphics and fluid gaming experience which stems of the rapid evolution of the hardware systems on which the games are played Hoovers industry description. Industry Competition Of Porter's five forces, industry competition represents the biggest threat to EA. Another Value Chain Analysis Example is using the value chain information to make modest advertising budget that can reduce marketing costs and offer the product at an affordable cost. Industry Structure Driving Forces With the video gaming industry in a time of uncertainty and change, driving forces play a key role in the unpredictability. Because a wide array of ingredients make up an EA game, the company uses a wide array of suppliers. Electronic Arts may find it difficult to get required information if its Business Information System is not structured accordingly.

The model examines horizontal competition from industry competition, the threat of new entrants and the threat of substitute products, and vertical competition from suppliers and buyers.

The power of negative e-WOM due to poor support service cannot be undermined in the current technologically advanced era. Effective infrastructure management can allow Electronic Arts to optimise the value of the whole value chain.

electronic arts strategy analysis

Additionally, the two major gaming consoles produced by Microsoft and Sony are being completely redesigned and set to launch late inwhich will - 5 - provide an entirely new competitive landscape for video game software companies. Analysis of primary value chain activities can improve the performance of Electronic Arts as explained below.

Compare Investment Accounts. Unique Resources Unique Resources are those resources that critically underpin competitive advantage and that others can not easily imitate or obtain.

electronic arts business strategy

Electronic Arts can control the infrastructure activities or commonly called overhead costs to strengthen the competitive positioning in the market.

Rated 8/10 based on 2 review
Download
Electronic Arts Inc.'s (EA) Suppliers by Company, Division and Industry