Zynga and the Launch of FarmVille SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Zynga and the Launch of FarmVille
In June 2009, the online gaming company Zynga launched the free social game Farmville on Facebook, which set a new record by reaching one million Daily Active Users four days after launch, skyrocketing to 30 million in six months. The case takes an inside look at how Zynga created FarmVille in just six weeks, including the important strategic and technical decisions Zynga made, the sometimes tense team dynamics, and the challenges Zynga's founder and CEO Mark Pincus faced within Zynga. The company's experienced game developers had strongly resisted his idea to develop a farm game because farm games performed poorly on traditional game consoles and were considered an inferior gaming category. But Pincus believed they afforded access to new audiences and wanted to seize the strategic opportunity offered by the convergence of advances in technology and the meteoric rise of Facebook. These combined well with Zynga's advanced data analytics capabilities, which allowed the company to aggressively advance a new business model "Games as a Service," in which developers continuously added features to make a social game consistently compelling. Post launch, FarmVille was continually evolving and adding new features. But after a few months, the quality of the code and the ideas for new features were getting worse, more bugs and quality assurance problems arose, and users were complaining that new features were late and the game was getting rote. This case is set in late December 2009 as user numbers started to drop, and Pincus and the FarmVille team tried to figure out how to turn this trend around. Zynga's leadership team had to figure out how to reinvigorate FarmVille so that it would continue to be the goose that laid the golden eggs. The case also details the video game industry's recent history, trends and technology advances. It covers video game development and introduces concepts such as game mechanics and core loops, which are applicable to other gamification contexts.
Swot Analysis of "Zynga and the Launch of FarmVille" written by Amir Goldberg, Debra Schifrin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Farmville Game facing as an external strategic factors. Some of the topics covered in Zynga and the Launch of FarmVille case study are - Strategic Management Strategies, Leadership, Social platforms and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Zynga and the Launch of FarmVille casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, there is backlash against globalization, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Zynga and the Launch of FarmVille
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zynga and the Launch of FarmVille case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Farmville Game, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Farmville Game operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Zynga and the Launch of FarmVille can be done for the following purposes –
1. Strategic planning using facts provided in Zynga and the Launch of FarmVille case study
2. Improving business portfolio management of Farmville Game
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Farmville Game
Strengths Zynga and the Launch of FarmVille | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Farmville Game in Zynga and the Launch of FarmVille Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Zynga and the Launch of FarmVille firm has clearly differentiated products in the market place. This has enabled Farmville Game to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Farmville Game to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Farmville Game in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Farmville Game has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Zynga and the Launch of FarmVille Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Farmville Game digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Farmville Game has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Farmville Game has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Farmville Game to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Farmville Game is one of the leading recruiters in the industry. Managers in the Zynga and the Launch of FarmVille are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Farmville Game is one of the most innovative firm in sector. Manager in Zynga and the Launch of FarmVille Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Farmville Game is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Farmville Game is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Zynga and the Launch of FarmVille Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Farmville Game
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Farmville Game does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Farmville Game has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Zynga and the Launch of FarmVille HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Farmville Game is present in almost all the verticals within the industry. This has provided firm in Zynga and the Launch of FarmVille case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Zynga and the Launch of FarmVille | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zynga and the Launch of FarmVille are -
Aligning sales with marketing
– It come across in the case study Zynga and the Launch of FarmVille that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Zynga and the Launch of FarmVille can leverage the sales team experience to cultivate customer relationships as Farmville Game is planning to shift buying processes online.
Interest costs
– Compare to the competition, Farmville Game has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Farmville Game supply chain. Even after few cautionary changes mentioned in the HBR case study - Zynga and the Launch of FarmVille, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Farmville Game vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Farmville Game, firm in the HBR case study Zynga and the Launch of FarmVille needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Farmville Game has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Farmville Game even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Zynga and the Launch of FarmVille, in the dynamic environment Farmville Game has struggled to respond to the nimble upstart competition. Farmville Game has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Farmville Game has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Zynga and the Launch of FarmVille should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Farmville Game has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Zynga and the Launch of FarmVille, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Amir Goldberg, Debra Schifrin suggests that, Farmville Game is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Farmville Game products
– To increase the profitability and margins on the products, Farmville Game needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Zynga and the Launch of FarmVille | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Zynga and the Launch of FarmVille are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Farmville Game can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Farmville Game can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Using analytics as competitive advantage
– Farmville Game has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Zynga and the Launch of FarmVille - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Farmville Game to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Farmville Game in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Farmville Game can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Farmville Game to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Farmville Game to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Farmville Game to increase its market reach. Farmville Game will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Farmville Game can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Farmville Game can use these opportunities to build new business models that can help the communities that Farmville Game operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Farmville Game has opened avenues for new revenue streams for the organization in the industry. This can help Farmville Game to build a more holistic ecosystem as suggested in the Zynga and the Launch of FarmVille case study. Farmville Game can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Farmville Game can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Farmville Game can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Farmville Game has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Farmville Game in the consumer business. Now Farmville Game can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Zynga and the Launch of FarmVille External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zynga and the Launch of FarmVille are -
Environmental challenges
– Farmville Game needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Farmville Game can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Farmville Game demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Zynga and the Launch of FarmVille, Farmville Game may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Farmville Game with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Farmville Game can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Farmville Game high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Farmville Game in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Farmville Game needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Farmville Game has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Farmville Game needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Farmville Game in the Strategy & Execution sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Farmville Game can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Zynga and the Launch of FarmVille .
Weighted SWOT Analysis of Zynga and the Launch of FarmVille Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Zynga and the Launch of FarmVille needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Zynga and the Launch of FarmVille is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Zynga and the Launch of FarmVille is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Zynga and the Launch of FarmVille is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Farmville Game needs to make to build a sustainable competitive advantage.
