Case Study Description of Transformational Gaming: Zynga's Social Strategy (A)
In January 2009, Mark Pincus, founder and CEO of the immensely popular and successful Zynga Game Network met with his sister Laura Hartman, DePaul University business ethics professor, to discuss building a new brand of corporate social strategy. Pincus wanted to find a way that Zynga could have a greater social impact on the world. He and Hartman talked about creating a new social strategy that would naturally flow out of Zynga's success in developing highly profitable interactive social games. The two of them wondered whether it was possible for one company to develop a strategy that would both be profitable and engender social change.
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 (A)" 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 Hartman Social facing as an external strategic factors. Some of the topics covered in Transformational Gaming: Zynga's Social Strategy (A) 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 (A) casestudy better are - – there is increasing trade war between United States & China, central banks are concerned over increasing inflation, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (A)
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 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hartman Social, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hartman Social 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Transformational Gaming: Zynga's Social Strategy (A) case study
2. Improving business portfolio management of Hartman Social
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 Hartman Social
Strengths Transformational Gaming: Zynga's Social Strategy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hartman Social in Transformational Gaming: Zynga's Social Strategy (A) Harvard Business Review case study are -
Organizational Resilience of Hartman Social
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hartman Social does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Communication field
– Hartman Social 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 Hartman Social in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Hartman Social 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.
Learning organization
- Hartman Social 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 Hartman Social is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Transformational Gaming: Zynga's Social Strategy (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Hartman Social has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hartman Social to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Hartman Social is present in almost all the verticals within the industry. This has provided firm in Transformational Gaming: Zynga's Social Strategy (A) 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.
Highly skilled collaborators
– Hartman Social 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 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Hartman Social is one of the most innovative firm in sector. Manager in Transformational Gaming: Zynga's Social Strategy (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Hartman Social 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 (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Hartman Social is one of the leading recruiters in the industry. Managers in the Transformational Gaming: Zynga's Social Strategy (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Hartman Social 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 (A) 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.
Analytics focus
– Hartman Social 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.
Weaknesses Transformational Gaming: Zynga's Social Strategy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transformational Gaming: Zynga's Social Strategy (A) are -
High cash cycle compare to competitors
Hartman Social 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.
Increasing silos among functional specialists
– The organizational structure of Hartman Social is dominated by functional specialists. It is not different from other players in the Communication segment. Hartman Social needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hartman Social to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Patricia H Werhane,, Jenny Mead, Laura Pincus Hartman, Danielle Christmas suggests that, Hartman Social 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Transformational Gaming: Zynga's Social Strategy (A), it seems that the employees of Hartman Social 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hartman Social is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Transformational Gaming: Zynga's Social Strategy (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Transformational Gaming: Zynga's Social Strategy (A), in the dynamic environment Hartman Social has struggled to respond to the nimble upstart competition. Hartman Social has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Hartman Social 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.
Skills based hiring
– The stress on hiring functional specialists at Hartman Social 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.
Interest costs
– Compare to the competition, Hartman Social 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Transformational Gaming: Zynga's Social Strategy (A), is just above the industry average. Hartman Social 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.
Low market penetration in new markets
– Outside its home market of Hartman Social, firm in the HBR case study Transformational Gaming: Zynga's Social Strategy (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Transformational Gaming: Zynga's Social Strategy (A) | 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 (A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hartman Social can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hartman Social can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Transformational Gaming: Zynga's Social Strategy (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Hartman Social has opened avenues for new revenue streams for the organization in the industry. This can help Hartman Social to build a more holistic ecosystem as suggested in the Transformational Gaming: Zynga's Social Strategy (A) case study. Hartman Social can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Hartman Social can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transformational Gaming: Zynga's Social Strategy (A) 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.
Leveraging digital technologies
– Hartman Social 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.
Using analytics as competitive advantage
– Hartman Social 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 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hartman Social to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Hartman Social 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.
Developing new processes and practices
– Hartman Social 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 Hartman Social in the consumer business. Now Hartman Social can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Hartman Social to increase its market reach. Hartman Social 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hartman Social 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hartman Social can use these opportunities to build new business models that can help the communities that Hartman Social operates in. Secondly it can use opportunities from government spending in Communication sector.
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. Hartman Social 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. Hartman Social 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.
Threats Transformational Gaming: Zynga's Social Strategy (A) 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 (A) are -
Regulatory challenges
– Hartman Social 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.
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 Hartman Social 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.
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 Hartman Social.
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. Hartman Social can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hartman Social 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.
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.
Increasing wage structure of Hartman Social
– 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 Hartman Social.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hartman Social 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 (A) .
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 Hartman Social business can come under increasing regulations regarding data privacy, data security, etc.
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 Hartman Social in the Communication sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Hartman Social 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.
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. Hartman Social needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Transformational Gaming: Zynga's Social Strategy (A) 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 (A) 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 (A) 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 (A) 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 (A) 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 Hartman Social needs to make to build a sustainable competitive advantage.
