Case Study Description of Transformational Gaming: Zynga's Social Strategy (B)
The B case of this three-case series outlines how Mark Pincus, with help from his sister Laura Hartman, began to implement his new brand of social strategy. Initial steps included two partnerships: (1) Zynga's YoVille and the San Francisco SPCA; and (2) Mafia Wars and the Huntington's Disease Society of America. A new program within Zynga was created: Zynga.org, which would focus on global problems and ways to address them. Its first project, in partnership with Zynga's wildly popular FarmVille, was a strategy in which users could purchase "Sweet Seeds for Haiti." Through FarmVille, Zynga would contribute 50% of all proceeds from the sale of these seeds to two Haiti-based causes: Fonkoze and FATEM (a microfinance initiative and an educational and school-meals program, respectively). In 2010, Zynga.org continued to evolve, with periodic bumps along the way when Zynga encountered bad press and unfavorable attention.
Authors :: Patricia H Werhane,, Jenny Mead, Laura Pincus Hartman, Danielle Christmas
Topics :: Communication
Tags :: Social platforms, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Transformational Gaming: Zynga's Social Strategy (B)" written by Patricia H Werhane,, Jenny Mead, Laura Pincus Hartman, Danielle Christmas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zynga's Zynga facing as an external strategic factors. Some of the topics covered in Transformational Gaming: Zynga's Social Strategy (B) case study are - Strategic Management Strategies, Social platforms, Social responsibility and Communication.
Some of the macro environment factors that can be used to understand the Transformational Gaming: Zynga's Social Strategy (B) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
there is backlash against globalization, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transformational Gaming: Zynga's Social Strategy (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zynga's Zynga, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zynga's Zynga 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 Transformational Gaming: Zynga's Social Strategy (B) can be done for the following purposes –
1. Strategic planning using facts provided in Transformational Gaming: Zynga's Social Strategy (B) case study
2. Improving business portfolio management of Zynga's Zynga
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zynga's Zynga
Strengths Transformational Gaming: Zynga's Social Strategy (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zynga's Zynga in Transformational Gaming: Zynga's Social Strategy (B) Harvard Business Review case study are -
Training and development
– Zynga's Zynga has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Transformational Gaming: Zynga's Social Strategy (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Zynga's Zynga 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.
Highly skilled collaborators
– Zynga's Zynga 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 Transformational Gaming: Zynga's Social Strategy (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Zynga's Zynga is one of the leading recruiters in the industry. Managers in the Transformational Gaming: Zynga's Social Strategy (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Zynga's Zynga digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zynga's Zynga 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.
Diverse revenue streams
– Zynga's Zynga is present in almost all the verticals within the industry. This has provided firm in Transformational Gaming: Zynga's Social Strategy (B) 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.
Low bargaining power of suppliers
– Suppliers of Zynga's Zynga in the sector have low bargaining power. Transformational Gaming: Zynga's Social Strategy (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zynga's Zynga to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Zynga's Zynga has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Transformational Gaming: Zynga's Social Strategy (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Zynga's Zynga is one of the most innovative firm in sector. Manager in Transformational Gaming: Zynga's Social Strategy (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Zynga's Zynga 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.
Organizational Resilience of Zynga's Zynga
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zynga's Zynga does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Zynga's Zynga has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zynga's Zynga 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.
Weaknesses Transformational Gaming: Zynga's Social Strategy (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transformational Gaming: Zynga's Social Strategy (B) are -
No frontier risks strategy
– After analyzing the HBR case study Transformational Gaming: Zynga's Social Strategy (B), it seems that company is thinking about the frontier risks that can impact Communication 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.
Increasing silos among functional specialists
– The organizational structure of Zynga's Zynga is dominated by functional specialists. It is not different from other players in the Communication segment. Zynga's Zynga needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zynga's Zynga to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Zynga's Zynga 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. Zynga's Zynga 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.
Lack of clear differentiation of Zynga's Zynga products
– To increase the profitability and margins on the products, Zynga's Zynga needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Zynga's Zynga needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Zynga's Zynga 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.
Low market penetration in new markets
– Outside its home market of Zynga's Zynga, firm in the HBR case study Transformational Gaming: Zynga's Social Strategy (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Zynga's Zynga 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 - Transformational Gaming: Zynga's Social Strategy (B) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Transformational Gaming: Zynga's Social Strategy (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Zynga's Zynga has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Transformational Gaming: Zynga's Social Strategy (B), it seems that the employees of Zynga's Zynga don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Transformational Gaming: Zynga's Social Strategy (B) 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 Transformational Gaming: Zynga's Social Strategy (B) can leverage the sales team experience to cultivate customer relationships as Zynga's Zynga is planning to shift buying processes online.
Opportunities Transformational Gaming: Zynga's Social Strategy (B) | 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 Transformational Gaming: Zynga's Social Strategy (B) are -
Using analytics as competitive advantage
– Zynga's Zynga 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 Transformational Gaming: Zynga's Social Strategy (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zynga's Zynga to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Zynga's Zynga 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 Communication segment.
Creating value in data economy
– The success of analytics program of Zynga's Zynga has opened avenues for new revenue streams for the organization in the industry. This can help Zynga's Zynga to build a more holistic ecosystem as suggested in the Transformational Gaming: Zynga's Social Strategy (B) case study. Zynga's Zynga can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zynga's Zynga in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
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 Zynga's Zynga in the consumer business. Now Zynga's Zynga can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zynga's Zynga can use these opportunities to build new business models that can help the communities that Zynga's Zynga operates in. Secondly it can use opportunities from government spending in Communication sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communication industry, but it has also influenced the consumer preferences. Zynga's Zynga can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Zynga's Zynga to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Zynga's Zynga to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zynga's Zynga 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. Zynga's Zynga 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
– Zynga's Zynga 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.
Better consumer reach
– The expansion of the 5G network will help Zynga's Zynga to increase its market reach. Zynga's Zynga 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.
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. Zynga's Zynga can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Transformational Gaming: Zynga's Social Strategy (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transformational Gaming: Zynga's Social Strategy (B) are -
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. Zynga's Zynga 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 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.
Consumer confidence and its impact on Zynga's Zynga 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.
Environmental challenges
– Zynga's Zynga 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. Zynga's Zynga can take advantage of this fund but it will also bring new competitors in the Communication industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zynga's Zynga 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 Transformational Gaming: Zynga's Social Strategy (B) .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zynga's Zynga with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Zynga's Zynga needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Regulatory challenges
– Zynga's Zynga 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 Communication industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zynga's Zynga in the Communication industry. The Communication 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zynga's Zynga can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Zynga's Zynga.
High dependence on third party suppliers
– Zynga's Zynga 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.
Increasing wage structure of Zynga's Zynga
– 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 Zynga's Zynga.
Weighted SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (B) 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 Transformational Gaming: Zynga's Social Strategy (B) 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 Transformational Gaming: Zynga's Social Strategy (B) 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 Transformational Gaming: Zynga's Social Strategy (B) 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 Transformational Gaming: Zynga's Social Strategy (B) 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 Zynga's Zynga needs to make to build a sustainable competitive advantage.