Business Strategy King Digital Entertainment Company
King Digital Entertainment is the company that developed Candy Crush, which is a globally popular mobile game (Wilhelm). The company has registered rapid growth in the past few years, particularly during the years between 2011 and 2014; the company’s revenue generation grew from USD 63.9 million in 2011 to USD 1.88 billion in 2013. During the same period, the company’s active user count increased from 30 million to 408 million, as of the last quarter of 2013 (Wilhelm). About three-quarters of the revenues of the company accrue from the mobile channel, which demonstrates the centrality of the mobile channel to the company’s business strategy (Chapman). The company employed a very unique strategy in the already saturated games market; it developed and concentrated on a handful of games, which were well received in the market (NBC News). The positive reception and popularity of the games can be attributed to the company’s competitive pricing of its products.
Business Level Generic Strategies
The main business level generic strategies used by King Digital Entertainment include cultivating more competitive advantage over competing companies, through maximizing the value offered to its customers (Kozami). The company does this through increasing the benefits enjoyed by their customers and also offering more service areas, which justify their pricing. In this area, the actions of the company include the development of games with a solidly social nature, the use of cross-platform technology infrastructure during the development process, the utilization of viral channels, and offering highly effective social features. Relevant to this generic business strategy, there is also game longevity and the cross-promotion of new games to the audience, which offers higher value to gaming customers.
The second business level generic strategy used by the company is that of differentiation, where the company has maintained the leadership position in the offering of games with distinctive qualities, which are customer-driven (Kozami). Towards putting this strategy into action, the company maintains a massive layer network, which informs product development and product purchases. The strategy is also informed by the fact that the company spreads the news about the social features of their products through viral channels, which ensure a wide scope of coverage. Additionally, the wide-reaching time-based campaigns help the company to develop products that are reflective of the needs of their customers, which also improves the experience of the customer.
The ways in which functional level strategies support generic strategies
Functional level strategies are the approaches used by the functional centers of a company, towards the realization of business and corporate unit objectives and strategies, through the maximization of productivity and the utilization of resources (Kozami). These strategies support generic strategies by streamlining the resources of a company and its productive capacity towards the generic strategies. For example, towards increasing differentiation, the resources and the productive capacity of the company is channeled towards research into new game designs and incorporating the changing needs of customers (Wilhelm).
Identification and discussion of business-level growth strategies
The business-level growth strategies of the company revolve around the exploitation of the differences of the target customers from the industry-wide balance (Kozami). The company realizes this through isolating a specific buyer classification, isolating their segment, and concentrating on the group to find its niche. In the real world case of King Digital entertainment, it has included diversifying into the mobile game portfolio and broadening the game portfolio through capitalizing on the mobile channel, which yielded 75 percent of the company’s revenues (Wilhelm).
The mission statement of the company revolves around the provision of highly engaging content to the different customer groups, in a way that matches their mobile needs at any time, place and on different devices. This mission statement is encapsulated in the growth strategy of the company, which revolves around increasing app-usage during different times and customer groups (Wilhelm).
The strategic plan of King Digital entertainment revolves around capitalizing on successful brands to foster the growth of newer ones, which increases the uptake of the company’s products within the market (Chapman).
- Capacity to change strategy; for example, the capitalization on the three leading titles: Candy crush saga, farm heroes saga, and Pet rescue saga to grow other game brands.
- Focus on research and development, incorporating discrete campaigns.
- The popularity of their games, particularly Candy crush saga.
- Dependence on the success of the current game brands to foster growth
- A streamlined niche market: more than 75% of revenues came from the mobile channel
- Stagnant global sales
- Developments in mobile gaming
- Increased uptake of online and mobile gaming
- Changing customer needs
- Issues related to consoles
- Increases in software copying and piracy
- Strategic game release dates, to avoid the slowdowns of holidays among other events (Wilhelm).
Chapman, Llizette. IPO-Minded Gaming Co. Kabam Buys Phoenix Age; Largest Buy Yet. Business Strategy – The Wall Street Journal. 10 Mar. 2014. Web. 17 Mar. 2014.
Kozami, Azhar. Business Policy and Business Strategy Management. Second Edition. New Dellhi: Tata Mc-Graw-hill Publishing Company, 2006.
Wilhelm, Alex. Inside The IPO of Candy Crush Maker King Digital. Business Strategy Techcrunch, 13 Mar. 2014. Web. 17 Mar. 2014.
NBC News. Candy Crush Game Maker Aims to Hit $7.6 Billion IPO Sweet Spot. 2014. Web. Business Strategy Snapshot. 18 Mar. 2014.