Gamestop Business Analysis

However, GameStop is still at a disadvantage, because there are such a large number of competitors in the industry. Buyer’s bargaining power are high, since there is no brand loyalty in the industry. Customers are very well aware of the market price of a product and will look for the best deals they can find. Suppliers have high bargaining power since suppliers can choose to integrate forward and sell their products themselves. The success of the retail gaming industry is very dependent on the availability of supplier’s goods. Additionally, since there are low barriers of entrance, substitute products and new entrants often appear in the market. Since most competitors in the industry do not have a strong presence, the expected retaliation towards new entrants is low. An increasing popularity of smartphone games and social media games such as Farmville on Facebook, allows customers to play against friends. Although these social media games do not offer the same experience as a video game, the fact that virtually no switching cost is associated with switching to a competitor’s game and since they are so cheap compared to video game disk and consoles, can easily drive customers from video gaming to online gaming. (Exhibit 2)

The company's Babbage's Etc. subsidiary (renamed GameStop, Inc.) acquired video game retailer Funco for $161.5 million in 2000. In 2001 Barnes & Noble joined barnesandnoble.com in acquiring a majority stake in magazine subscription seller enews.com.

Toys R Us is the world's largest children's specialty retailer. The company operates toy stores throughout the world and is publicly traded on the New York Stock Exchange. In this paper I will give a brief company history, cite where the competitive environment is coming from, strategies that were attempted, and where they stand today.

401 Games has very competitive prices for games compared to other retailers, which helps customer’s loyalty. Another big aspect of loyalty is word of mouth to recruit new customers, which 401 Games has currently. A loyal customer, not only comes back and continues to buy from the store, but is more likely to tell their friends too, thus keeping the business thriving.

Let’s start with GameStop; it is a heavy hitter in the gaming consumer world. With presence online and at retail store you can find one, even in the smallest of cities. It’s main selling point is that it takes trade-in games and sells them a cheaper price then new games. The prices of trade-in values for games, consoles, and even smart phones and tablets are all listed on the website. That way you know exactly what you’ll be getting if you choose to trade with them. You can choose to take cash, which you’ll receive a smaller amount of return or store credit, which is slightly higher.

GAMETRONICS Inc. continues to thrive to become your best source of low-priced quality videogame products, whilst upholding the value of achieving excellent customer service. Together, they look forward to bigger opportunities.

401 Games is a Toronto-based retailer of board games, card games, and collectibles which also provides on-site gaming space. A recognized early mover in the board game revolution, owner John Park was among the first to tap into the collectible gaming card segment, starting with Magic: The Gathering (MTG) in 1993, which he introduced in response to customer interest. He later moved into hosting tournaments in the store and offering other card and board games.

The North American Free Trade Agreement, commonly known as the NAFTA, is a trade agreement between the United States, Canada and Mexico launched to enable North America to become more competitive in the global marketplace (Amadeo, 2011). The NAFTA is regarded as “one of the most successful trade agreements in history” for its impact on increases in agricultural trade and investment among the three contracting nations (North American Free Trade Agreement, 2011). Supporters and opponents of the NAFTA have argued the effects of the agreement on participating nations since its inception; yet, close examination proves that NAFTA has had a relatively positive impact on the economies of the United States, Canada, and Mexico.

The company I selected to analyze is GameStop. I understand that GameStop isn’t necessarily a small business but I have only ever seen a handful of them throughout my life, so to my knowledge, it could fit within the small business parameters. GameStop currently utilizes digital media in a multitude of ways, ranging from customer awareness to company statistical information regarding customer traffic. GameStop, like many other companies, utilizes digital media to advertise and persuade the minds of customers across the world into purchasing “fun, new” digital content that they are selling. This is most important for GameStop’s success as it is the most likely reason for increasing the company’s revenue as well as the customer base of consumers who both play video games and are looking to purchase a product for someone else.

GameStop is a retailer that was started in Dallas, TX in 1983. Babbage’s merged with Software Etc Barnes and Noble purchased Babbage’s who had also purchased Funco stores. Funco Stores changed its name to Gamestop. In 2005 GameStop became GameStop Inc buying back its shares from Barnes and Noble.

The company anticipates a 4% to 7% decline in the second-quarter same store sales with earnings in the range of $0.23 to $0.30 per share. However, GameStop reiterated it’s fiscal 2016 earnings outlook range of $3.90 to $4.05 per share. With a share price of about $28, the forward PE ratio works out to about 7. The company also offers an attractive dividend yield of 5%. Thus, it is quite clear that the shares are now available at a bargain. So, we can expect the share price to remain range bound with bullish bias during the second-quarter.

2013 sales were $50 million. As of November 2014, the company had 275 employees and was projected to do $150 million in sales. 80% of its sales were online

The North American Free Trade Agreement (NAFTA) facilitates the free flow of goods and services between Canada, The United States and Mexico. This allows ALPES to move into untapped markets in three countries rather than just its base country of Mexico. This would also increase profits substantially due to an increasing market demand.

Mr. Brandon, CEO of Toys R Us, Inc. stated “There is simply no reason to go somewhere else-our focus is kids and families every day of the year-unlike some of our competitors who only play (pun-intended) a few weeks a year” Toys “R” Us Inc.,2017, Oct 24). Another innovative way the company has gained competitive advantage recently is by introducing Play Labs nationwide. Play Labs are a free reality application which includes AR games and play experiences that children can play on their smartphone or tablet devices while they are in the stores shopping. Toys R Us is now more than just a place to shop, they have created experiences which bring their stores to life with their interactive games that the kids highly enjoy playing (Toys “R” Us Inc, 2017).

GameStop has mostly focused on serving Western and affluent markets which are becoming saturated and where high competition is present, especially in terms of software sales. It is not maximize its resources to respond to a strong demand for gaming products and services in existing and new markets. Also, it fails to consider that it should expand in new markets without being exposed to very high risks in new markets and in offering new products and services.