Case Study Description of Transformational Gaming: Zynga's Social Strategy (C)
Following the May 2010 Sweet Seeds campaign, Zynga announced that it would expand its FATEM partnership to build a school for children in Haiti who had been affected by the devastating earthquake in January of that year. In one week, more than 45,000 FarmVille users raised $110,000 through the purchase of virtual social goods. Sweet Seeds would be the first of several campaigns Zynga launched to raise funds for the school. In the meantime, Zynga.org's management had to establish concrete measures for the various projects' success, including efficient implementation, self-sustainability, and replication. Maintaining a strong feedback loop so that those who contributed to these campaigns could see the results was important. Despite competition, Zynga remained, in 2010, a wildly successful company and its dot-org arm helped Mark Pincus and Laura Hartman realize the new type of social strategy they had discussed over the years.
Authors :: Patricia H Werhane,, Jenny Mead, Laura Pincus Hartman, Danielle Christmas
Swot Analysis of "Transformational Gaming: Zynga's Social Strategy (C)" 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 Seeds facing as an external strategic factors. Some of the topics covered in Transformational Gaming: Zynga's Social Strategy (C) case study are - Strategic Management Strategies, Social platforms and Communication.
Some of the macro environment factors that can be used to understand the Transformational Gaming: Zynga's Social Strategy (C) casestudy better are - – increasing commodity prices, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is increasing trade war between United States & China, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (C)
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 (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zynga Seeds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zynga Seeds 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 (C) can be done for the following purposes –
1. Strategic planning using facts provided in Transformational Gaming: Zynga's Social Strategy (C) case study
2. Improving business portfolio management of Zynga Seeds
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 Seeds
Strengths Transformational Gaming: Zynga's Social Strategy (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zynga Seeds in Transformational Gaming: Zynga's Social Strategy (C) Harvard Business Review case study are -
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Zynga Seeds digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zynga Seeds 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.
Analytics focus
– Zynga Seeds 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.
Cross disciplinary teams
– Horizontal connected teams at the Zynga Seeds 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.
Ability to recruit top talent
– Zynga Seeds is one of the leading recruiters in the industry. Managers in the Transformational Gaming: Zynga's Social Strategy (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Zynga Seeds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zynga Seeds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Zynga Seeds
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zynga Seeds does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Transformational Gaming: Zynga's Social Strategy (C) 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.
Successful track record of launching new products
– Zynga Seeds has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zynga Seeds 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.
Training and development
– Zynga Seeds 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 (C) 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.
High switching costs
– The high switching costs that Zynga Seeds 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.
Superior customer experience
– The customer experience strategy of Zynga Seeds in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Zynga Seeds is present in almost all the verticals within the industry. This has provided firm in Transformational Gaming: Zynga's Social Strategy (C) 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 (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transformational Gaming: Zynga's Social Strategy (C) are -
Interest costs
– Compare to the competition, Zynga Seeds 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Transformational Gaming: Zynga's Social Strategy (C), in the dynamic environment Zynga Seeds has struggled to respond to the nimble upstart competition. Zynga Seeds has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Transformational Gaming: Zynga's Social Strategy (C) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zynga Seeds 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Transformational Gaming: Zynga's Social Strategy (C) 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 Seeds has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Zynga Seeds 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 Seeds 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 Seeds products
– To increase the profitability and margins on the products, Zynga Seeds needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Transformational Gaming: Zynga's Social Strategy (C), 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.
Skills based hiring
– The stress on hiring functional specialists at Zynga Seeds 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.
Need for greater diversity
– Zynga Seeds 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.
Products dominated business model
– Even though Zynga Seeds 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 (C) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Zynga Seeds is dominated by functional specialists. It is not different from other players in the Communication segment. Zynga Seeds needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zynga Seeds to focus more on services rather than just following the product oriented approach.
Opportunities Transformational Gaming: Zynga's Social Strategy (C) | 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 (C) are -
Creating value in data economy
– The success of analytics program of Zynga Seeds has opened avenues for new revenue streams for the organization in the industry. This can help Zynga Seeds to build a more holistic ecosystem as suggested in the Transformational Gaming: Zynga's Social Strategy (C) case study. Zynga Seeds can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zynga Seeds can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Zynga Seeds 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.
Buying journey improvements
– Zynga Seeds can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transformational Gaming: Zynga's Social Strategy (C) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zynga Seeds 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.
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 Seeds can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Zynga Seeds 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.
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 Seeds 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.
Developing new processes and practices
– Zynga Seeds can develop new processes and procedures in Communication 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.
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 Seeds in the consumer business. Now Zynga Seeds can target international markets with far fewer capital restrictions requirements than the existing system.
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 Seeds 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 Seeds 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zynga Seeds is facing challenges because of the dominance of functional experts in the organization. Transformational Gaming: Zynga's Social Strategy (C) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zynga Seeds 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.
Threats Transformational Gaming: Zynga's Social Strategy (C) 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 (C) are -
Consumer confidence and its impact on Zynga Seeds 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.
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.
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 Seeds in the Communication sector and impact the bottomline of the organization.
Increasing wage structure of Zynga Seeds
– 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 Seeds.
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 Seeds.
Technology acceleration in Forth Industrial Revolution
– Zynga Seeds has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Zynga Seeds 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.
Regulatory challenges
– Zynga Seeds 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 Seeds 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zynga Seeds 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 (C) .
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.
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 (C), Zynga Seeds 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 .
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 Seeds needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Environmental challenges
– Zynga Seeds 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 Seeds can take advantage of this fund but it will also bring new competitors in the Communication industry.
Weighted SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (C) 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 (C) 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 (C) 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 (C) 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 (C) 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 Seeds needs to make to build a sustainable competitive advantage.
