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 - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, 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 -
Operational resilience
– The operational resilience strategy in the Transformational Gaming: Zynga's Social Strategy (B) 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 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.
High brand equity
– Zynga's Zynga has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zynga's Zynga to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Zynga's Zynga is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Patricia H Werhane,, Jenny Mead, Laura Pincus Hartman, Danielle Christmas can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Zynga's Zynga in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Strong track record of project management
– Zynga's Zynga is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Ability to lead change in Communication field
– Zynga's Zynga 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 Zynga's Zynga in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Communication industry
– Transformational Gaming: Zynga's Social Strategy (B) firm has clearly differentiated products in the market place. This has enabled Zynga's Zynga to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Zynga's Zynga to invest into research and development (R&D) and innovation.
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.
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.
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 -
Interest costs
– Compare to the competition, Zynga's Zynga 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 Zynga's Zynga supply chain. Even after few cautionary changes mentioned in the HBR case study - Transformational Gaming: Zynga's Social Strategy (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zynga's Zynga vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
Need for greater diversity
– Zynga's Zynga has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Capital Spending Reduction
– Even during the low interest decade, Zynga's Zynga 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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zynga's Zynga is facing challenges because of the dominance of functional experts in the organization. Transformational Gaming: Zynga's Social Strategy (B) 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.
Manufacturing automation
– Zynga's Zynga can use the latest technology developments to improve its manufacturing and designing process in Communication segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zynga's Zynga 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.
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.
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.
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.
Leveraging digital technologies
– Zynga's Zynga 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 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.
Buying journey improvements
– Zynga's Zynga can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transformational Gaming: Zynga's Social Strategy (B) 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.
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.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Transformational Gaming: Zynga's Social Strategy (B), Zynga's Zynga may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
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 Zynga's Zynga business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Zynga's Zynga can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
Shortening product life cycle
– it is one of the major threat that Zynga's Zynga is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Zynga's Zynga has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Zynga's Zynga needs to keep up with the evolution of technology in the Communication 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.
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.
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 Zynga's Zynga in the Communication sector and impact the bottomline of the organization.
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.
