Debbie McDonald Case

SWOT ANALYSIS FOR ALPHABET GAMES

I have been asked to carry out a SWOT Analysis for Alphabet Games. Before I carry out the SWOT 3 factors have to be considered. These are:

PEST ANALYSIS

Political

 The Association for UK Interactive Entertainment (UKIE)

 Copyright, Designs and Patents Act 1988

 The Independent Game Developers' Association (TIGA) The Federation Against Software Theft (FAST) and Investors in Software (IiS)

 Political lobbyists against computer games

 European Games Developer Federation (EGDF)

 Training and development Economic

 Development costs (costs up to £15 million for development)

 Government taxes (VAT etc)

 Economic climate

 Customers ever changing tastes

 Economic monetary issues

 Customer wants and needs

 Piracy

 Interest and exchange rates

Social

 What's in trend and what is not (consumer choice)

 Customer and magazine reviews

 On line reviews

 Pressure on parents to buy games

 Major events (e.g. Football season, Olympics and Wrestling seasons)

 Dealing effectively with film and TV production companies and magazines Technological

 Microsoft and Sony have a serious advantage over the smaller games manufacturers in terms of technological development

 Licences and patents

 Rising costs of equipment

 Development of games

 Apple Macintosh computers do not have the ability to run Flash Player

STAKEHOLDER ANALYSIS

Primary Secondary

Owners and shareholders Good revenue and return for initial investment Being part of a successful business

Employees Good rate of pay/good working conditions Pride in working for a successful company

Customers Develop exciting games Excellent return on initial outlays

Creditors Payments made on time Keeps the credit scoring of the company good

Suppliers Payments are made on time Long term partnerships with companies

Government Ensures rules and regulations are adhered to Tax income

Banks Financial status/credit rating Interest received on loans/investments

EGDF (European Games Developer Federation) Ensure interests of members are looked after All members must ensure any rules and regulations are successfully adhered to

MARKET ANALYSIS

Diagram of Porters Five Forces

The threat of entry of new competitors

The threat of new competitors is middle to high threat as although it is a much specialised market to break into; more people have access to computers and the internet and can buy specialised software to produce games to sell or even give away free on file sharing sites.

The threat of substitutes

The threat of substitutes is very high as piracy is a massive drain on software companies. Software companies are losing millions of pounds each year through piracy. Games can be copied very easily and sold online and in markets for a few pounds. Games can also be found on file sharing sites such as Torrent Zap or Pirate Bay.

Peer pressure is a high factor amongst people especially children. Kids want to have what is popular so will purchase whatever software is in trend.

The bargaining power of buyers

The bargaining power of buyers describes the influence customers have on the market. Customers have the choice where to buy their products and seek out the cheapest prices.

Large stores, especially supermarkets buy their stock in bulk so can pass the savings on to the customer whereas small companies do not have the same bargaining