Activision's Skylanders: The Quest to Bring Toys to Life SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Activision's Skylanders: The Quest to Bring Toys to Life
One of the world's most successful video game companies, Activision was looking create a potent new game franchise after the success of its popular Guitar Hero and Call of Duty products of the early 2000s. An internal design studio proposed Skylanders, an entirely new concept and business model in the video game industry. Capitalizing on RFID technology, they created collectible, physical toys that were integrated into game play, pioneering a new game category: "toys to life." After media and game powerhouses introduced similar offerings, Activision executives had to decide what the next wave of growth might be in a crowded marketplace.
Authors :: Jeremy Dann, Marianne Szymanski, Divya Sathyanarayanan
Swot Analysis of "Activision's Skylanders: The Quest to Bring Toys to Life" written by Jeremy Dann, Marianne Szymanski, Divya Sathyanarayanan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Game Skylanders facing as an external strategic factors. Some of the topics covered in Activision's Skylanders: The Quest to Bring Toys to Life case study are - Strategic Management Strategies, Managing organizations, Marketing, Strategy, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Activision's Skylanders: The Quest to Bring Toys to Life casestudy better are - – supply chains are disrupted by pandemic , increasing energy prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing commodity prices, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Activision's Skylanders: The Quest to Bring Toys to Life
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Activision's Skylanders: The Quest to Bring Toys to Life case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Game Skylanders, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Game Skylanders 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 Activision's Skylanders: The Quest to Bring Toys to Life can be done for the following purposes –
1. Strategic planning using facts provided in Activision's Skylanders: The Quest to Bring Toys to Life case study
2. Improving business portfolio management of Game Skylanders
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Game Skylanders
Strengths Activision's Skylanders: The Quest to Bring Toys to Life | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Game Skylanders in Activision's Skylanders: The Quest to Bring Toys to Life Harvard Business Review case study are -
Diverse revenue streams
– Game Skylanders is present in almost all the verticals within the industry. This has provided firm in Activision's Skylanders: The Quest to Bring Toys to Life 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.
Strong track record of project management
– Game Skylanders is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Game Skylanders 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 Activision's Skylanders: The Quest to Bring Toys to Life HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Activision's Skylanders: The Quest to Bring Toys to Life 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Activision's Skylanders: The Quest to Bring Toys to Life firm has clearly differentiated products in the market place. This has enabled Game Skylanders to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Game Skylanders to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Game Skylanders in the sector have low bargaining power. Activision's Skylanders: The Quest to Bring Toys to Life has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Game Skylanders to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Game Skylanders is one of the most innovative firm in sector. Manager in Activision's Skylanders: The Quest to Bring Toys to Life Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Game Skylanders 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 Game Skylanders is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Activision's Skylanders: The Quest to Bring Toys to Life Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Game Skylanders are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Game Skylanders has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Game Skylanders has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Game Skylanders digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Game Skylanders 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.
Ability to lead change in Innovation & Entrepreneurship field
– Game Skylanders is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Game Skylanders in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Activision's Skylanders: The Quest to Bring Toys to Life | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Activision's Skylanders: The Quest to Bring Toys to Life are -
Increasing silos among functional specialists
– The organizational structure of Game Skylanders is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Game Skylanders needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Game Skylanders to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Activision's Skylanders: The Quest to Bring Toys to Life, is just above the industry average. Game Skylanders needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Game Skylanders has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Activision's Skylanders: The Quest to Bring Toys to Life, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Aligning sales with marketing
– It come across in the case study Activision's Skylanders: The Quest to Bring Toys to Life 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 Activision's Skylanders: The Quest to Bring Toys to Life can leverage the sales team experience to cultivate customer relationships as Game Skylanders is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Game Skylanders has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Activision's Skylanders: The Quest to Bring Toys to Life HBR case study mentions - Game Skylanders takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Jeremy Dann, Marianne Szymanski, Divya Sathyanarayanan suggests that, Game Skylanders 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.
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 Game Skylanders supply chain. Even after few cautionary changes mentioned in the HBR case study - Activision's Skylanders: The Quest to Bring Toys to Life, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Game Skylanders vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Activision's Skylanders: The Quest to Bring Toys to Life, in the dynamic environment Game Skylanders has struggled to respond to the nimble upstart competition. Game Skylanders has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Game Skylanders 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. Game Skylanders 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.
Opportunities Activision's Skylanders: The Quest to Bring Toys to Life | 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 Activision's Skylanders: The Quest to Bring Toys to Life are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Game Skylanders can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Game Skylanders is facing challenges because of the dominance of functional experts in the organization. Activision's Skylanders: The Quest to Bring Toys to Life case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Game Skylanders can use these opportunities to build new business models that can help the communities that Game Skylanders operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Better consumer reach
– The expansion of the 5G network will help Game Skylanders to increase its market reach. Game Skylanders 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.
Developing new processes and practices
– Game Skylanders can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Game Skylanders 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 Game Skylanders to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Game Skylanders can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Activision's Skylanders: The Quest to Bring Toys to Life suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Game Skylanders 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. Game Skylanders 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.
Leveraging digital technologies
– Game Skylanders can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Game Skylanders 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 Innovation & Entrepreneurship segment.
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. Game Skylanders can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Game Skylanders 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Game Skylanders can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Activision's Skylanders: The Quest to Bring Toys to Life External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Activision's Skylanders: The Quest to Bring Toys to Life are -
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Game Skylanders can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Game Skylanders will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Game Skylanders has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Game Skylanders needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Game Skylanders in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Game Skylanders.
Shortening product life cycle
– it is one of the major threat that Game Skylanders is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Game Skylanders 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. Game Skylanders can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Game Skylanders 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.
Regulatory challenges
– Game Skylanders 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 Innovation & Entrepreneurship industry regulations.
Increasing wage structure of Game Skylanders
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Game Skylanders.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Game Skylanders business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Activision's Skylanders: The Quest to Bring Toys to Life, Game Skylanders may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Weighted SWOT Analysis of Activision's Skylanders: The Quest to Bring Toys to Life 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 Activision's Skylanders: The Quest to Bring Toys to Life 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 Activision's Skylanders: The Quest to Bring Toys to Life 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 Activision's Skylanders: The Quest to Bring Toys to Life 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 Activision's Skylanders: The Quest to Bring Toys to Life 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 Game Skylanders needs to make to build a sustainable competitive advantage.
