ABQ 2013 – Galaxy Games Ltd
Galaxy Games Ltd is a small indigenous company, operating in the gaming technology sector. It was founded by two college graduates, David Whelan and Jane Ward. David is a software engineer and a web architect while Jane is a marketing graduate. Their design team recently identified some ideas for new games in action-adventure, music, and e-learning.
After reviewing the various ideas put forward, ‘Knights’ Domain’, a new action-adventure game that involved building a fantasy kingdom, was chosen. The design team decided to use Irish music and cutting-edge graphics to set the game apart. Jane completed a business report, including a detailed break-even analysis, to determine the potential of ‘Knights’ Domain’.
Following on from this report, the design team introduced more challenging levels to the game and added more 3D graphics. The game was introduced to a group of transition year students from a local secondary school, who commented positively on the different levels and on its distinctive graphics. The product ‘Knights’ Domain’ was launched in various games stores with an advertising campaign accompanying the launch.
Social responsibility is a key element in Galaxy Games’ corporate business plan. Funding was invested in supporting the development of a highly skilled customer service department. Galaxy Games Ltd attracts and retains high quality, creative employees. A major European venture capital firm has invested €1.5m in the company to date. Galaxy Games Ltd maintains good relationships with its suppliers, many of whom have continued a business relationship with the company since its establishment. When choosing a suitable business premises, David and Jane prioritised energy efficiency.
As a result of Ireland’s growing international reputation in the gaming technology sector and Galaxy Games’ successful company presentation at the ‘2012 Dublin Web Summit’, the company became a target for acquisition. In January 2013 it was taken over by Bizz Buzz, a US global gaming company and a market leader in the industry.
Bizz Buzz implements a global approach to marketing its games. All games are available in ten different languages. Prices per game are set taking account of competitor prices and various economies of scale. Recent developments in technology enable Bizz Buzz to distribute its games worldwide through download from the Internet to laptops, smartphones and tablets. Bizz Buzz is a globally recognised brand name and uses the slogan ‘A new game every day’ on its website.
(A) Outline the stages involved in the product development process of ‘Knights’ Domain’ for Galaxy Games Ltd.
(30 marks)
(B) Discuss the social responsibilities of Galaxy Games Ltd to its stakeholders. (20 marks)
(C) Evaluate the global marketing mix of Bizz Buzz. (30 marks)
(A) Outline the stages involved in the product development process of ‘Knights’ Domain’ for Galaxy Games Ltd. [Marking scheme: 5 at 6 marks (2 + 2 +2)]
Idea generation:
- Initial ideas for the new product are thought up systematically. They can be internal or external. - Ideas may be generated by brain-storming sessions, market research, staff suggestions and customer suggestions/feedback on existing products or services, competitors, through R&D etc.
develop Galaxy Ltd identified a range of different ideas in order to a concept for their product.
Link: ‘Their design team recently identified some ideas for new games in action-adventure, music and e-learning.’
Product screening:
- All ideas are vetted and the impractical and unworkable ideas are dropped, leaving the most viable ones for further examination and development.
- Careful screening helps businesses to avoid huge expenses in developing ideas that are subsequently not marketable and it ensures that good opportunities are not lost. - Galaxy Ltd analysed its different ideas and chose the product which was thought to be the most profitable. Link: “After reviewing the various ideas put forward, ‘Knights’ Domain’ a new action-adventure game that involved building a fantasy kingdom, was chosen.”
Concept development:
- This involves turning the idea into an actual product or service that will appeal to/meet the needs of customers. - A unique selling point (USP) is identified which will differentiate it from other products on the market. - Galaxy Ltd developed its idea and added extra features to make it a more finished product. Link: “The design team decided to use Irish music and cutting-edge graphics to set the game apart.”
Feasibility study:
- This is carried out to assess if a product has potential. It looks at whether it can be produced technically (production feasibility) and whether it will be profitable (financial feasibility).
there It seeks answers to questions such as, what demand will be for the product; what will it cost to produce and can the business afford it?
financial Galaxy Ltd compiled a report in order to determine the feasibility of the product. Link: “Jane completed a business report, including a detailed break-even analysis, to determine the potential of ‘Knights’ Domain’.”
Prototype development:
- This stage involves developing a sample or model of a product. It is produced to see what materials are required to make it and whether it appeals to customers.
- It can be used to test the product to see if it conforms to certain standards and to determine what adjustments/ improvements can be made before deciding to go into full production.
- Galaxy Ltd developed its product further and added extra features to its design. Link: “Following on from this report, the design team introduced more challenging levels to the game and added more 3D graphics.”
(B) Discuss the social responsibilities of Galaxy Games Ltd to its stakeholders. [Marking Scheme: 4 Stakeholders at 5 marks (1 + 3 + 1)]
Social responsibilities to investors:
- The business has a responsibility to its investors. It must provide a fair return on the investment by shareholders. It should present a true and fair view of the financial performance and standing of the business and maintain a proper set of accounts.
capital Galaxy Games Ltd has secured investment from a venture firm which will mean it has a responsibility to act ethically when it comes to dealing with this business. Link: “A major European venture capital f irm has invested €1.5m in the company to date.”
Social responsibility to customers:
- The business has a responsibility to be fair and honest in the advertising of its product.
- It should abide by health and safety regulations; all products must be safe. Its goods must be of merchantable quality, match their description, be fit for purpose, etc. - Galaxy Games Ltd understands the importance of providing high levels of customer service, and recently invested money in developing a customer service department. Link: “Funding was invested in supporting the development of a highly skilled customer service department.”
Social responsibility to employees:
- The business must adhere to employment laws, health and safety regulations, etc.
- It must pay a fair wage to all employees and provide them with a safe working environment. It should also treat employees with dignity and respect.
- Galaxy Games Ltd understands the importance of retaining their employees. Link: “Galaxy Games Ltd attracts and retains high quality, creative employees.”
Social responsibility to the general public/community:
- The business has a responsibility to be environmentally conscious and to implement environmentally-friendly business practices. It knows it must co-operate with government offices such as the Environmental Protection Agency. It is aware that it must use recyclable packaging, perform clean manufacturing, and use sustainable development as part of its work.
- Galaxy Games Ltd understands the importance of the role that the environment plays in business and the effect that it has on its customers. As a result, when sourcing suitable premises, energy efficiency is of the upmost importance. Link: “When choosing a suitable business premises, David and Jane prioritised energy eff iciency.”
(C) Evaluate the global marketing mix of Bizz Buzz.
[Marking scheme: 2 elements at 7 marks (2 + 3(2 + 1) + 2) and 2 elements at 6 marks
(1 + 3(2 + 1) + 2) plus evaluation 4 marks (2 + 2)]
Global product:
- This is a product sold throughout the world. This is the one element of the global marketing mix that is most likely to stay the same all over the world.
- To help with global recognition, most businesses will try to use the same product brand name throughout the world. However, the product may need to be adjusted to reflect technical, legal and language requirements, e.g. a left-hand drive car etc.
- Bizz Buzz adapted its product to suit the different markets it was entering by making it available in a number of different languages. Link: ‘All games are available in ten different languages.’
Global price:
- Global firms attempt to achieve a uniform price in each market. However, this objective is often affected by the following factors: standard of living; transportation costs; taxes and tariffs; competition and adjustments.
- Bizz Buzz sets the prices for its products based on two of these elements – economies of scale and in line with the prices that competitors charge for their products in that country. Link: ‘Prices per game are set taking account of competitor prices and various economies of scale.’
Global promotion:
- If a global business can use the same promotion methods all over the world, this will save the business a lot of money.
- The business can use a variety of promotional methods such as advertising on radio and TV, sales promotion methods such as ‘buy-one-get-one-free’, PR through sponsorship, etc.
- Bizz Buzz uses its website as a means of promoting its business. It uses a slogan which will make sure that people associate their brand with this slogan, encouraging a positive image for the business. Link: ‘Biz z Buzz is a globally recognised brand name and uses the slogan ‘A new game every day’ on its website.’
Global place:
- A global business will have to develop a global channel of distribution to ensure that its products get to customers all over the world.
- This can be very complicated. Channels include: exporting directly to the customer; using a local agent; licensing; forming joint ventures/strategic alliances.
- Bizz Buzz uses online methods of technology as a means of distributing its product. This enables customers to download their products from the internet to their laptop etc.
Link: ‘Recent developments in technology enable Bizz Buzz to distribute its games worldwide through download from the internet to laptops, smartphones and tablets.’ Below are a number of sample questions I have chosen from different questions that have appeared in recent years. I have picked a question from each section – remember this is only a guide, and only covers a small section of the Leaving Cert Business syllabus.