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Big Point Case Analysis (Coursework Sample)



Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc434889052" Introduction  PAGEREF _Toc434889052 \h 3
 HYPERLINK \l "_Toc434889053" The Mission  PAGEREF _Toc434889053 \h 3
 HYPERLINK \l "_Toc434889054" Background  PAGEREF _Toc434889054 \h 3
 HYPERLINK \l "_Toc434889055" Problems Facing Big Point – Using a Balanced Score Card  PAGEREF _Toc434889055 \h 6
 HYPERLINK \l "_Toc434889056" 2.1 Problems under financial perspective  PAGEREF _Toc434889056 \h 6
 HYPERLINK \l "_Toc434889057" 2.2 Problems under Internal business processes  PAGEREF _Toc434889057 \h 7
 HYPERLINK \l "_Toc434889058" 2.3 Technological problem  PAGEREF _Toc434889058 \h 7
 HYPERLINK \l "_Toc434889059" 2.4 Problems under Learning & Growth:  PAGEREF _Toc434889059 \h 7
 HYPERLINK \l "_Toc434889060" Strategic Analysis on Big Point – Using SWOT Analysis  PAGEREF _Toc434889060 \h 8
 HYPERLINK \l "_Toc434889061" 3.1 Strengths  PAGEREF _Toc434889061 \h 8
 HYPERLINK \l "_Toc434889062" 3.2 Weaknesses  PAGEREF _Toc434889062 \h 10
 HYPERLINK \l "_Toc434889063" 3.3 Opportunities  PAGEREF _Toc434889063 \h 12
 HYPERLINK \l "_Toc434889064" 3.4 Threats  PAGEREF _Toc434889064 \h 16
 HYPERLINK \l "_Toc434889065" Alternative Solutions  PAGEREF _Toc434889065 \h 18
 HYPERLINK \l "_Toc434889066" Strategies Used by Big Point  PAGEREF _Toc434889066 \h 19
 HYPERLINK \l "_Toc434889067" Bigpoint’s Core Competences  PAGEREF _Toc434889067 \h 20
 HYPERLINK \l "_Toc434889068" 6.1 Strong Market Position  PAGEREF _Toc434889068 \h 20
 HYPERLINK \l "_Toc434889069" 6.2 Customer Loyalty  PAGEREF _Toc434889069 \h 20
 HYPERLINK \l "_Toc434889070" 6.3 Diversification of products and markets  PAGEREF _Toc434889070 \h 20
 HYPERLINK \l "_Toc434889071" 6.4 Broad portfolio of products  PAGEREF _Toc434889071 \h 20
 HYPERLINK \l "_Toc434889072" 6.5 Innovativeness and Creativity  PAGEREF _Toc434889072 \h 20
 HYPERLINK \l "_Toc434889073" Suggestions for Improvement  PAGEREF _Toc434889073 \h 21
 HYPERLINK \l "_Toc434889074" How to Minimize the Side Effects that may Result from Suggested Improvements  PAGEREF _Toc434889074 \h 21
 HYPERLINK \l "_Toc434889075" References  PAGEREF _Toc434889075 \h 22

The Mission
Bigpoint’s objective is to create fun and unique virtual game worlds which are graphically impressive yet playable in a browser. They want to develop games that people across the planet can identify with and can play with their friends.
Background is a web 2.0 game portal with a community of more than 300 million players. It was founded in 2002 by Heiko Hubertz in Hamburg, Germany's second largest city.
The extreme flexibility of browser games sets them apart due to the fact that they can be played wherever Internet is available. PCs, notebooks, Tablet PCs and smartphones make playing possible virtually anywhere.
In addition to its headquarters in Hamburg, Germany, Bigpoint maintains offices in Berlin, San Francisco, Malta and Sao Paulo.
Some of the games developed by include; Icefighter, SpeedCars, ZooMumba, Gangs of Crime (formerly known as Mafia 1930), Seafight, War of Titans, DarkOrbit, among others. Bigpoint games are developed using PHP, Adobe Flash, Java and the Unity engine.
Bigpoint founder and CEO, Heiko Hubertz was a game programmer, he studied programming while at school but after two years he left school. He got a job at INA Germany GmbH which was a software company.
Within two years, He started a telephone-based payment company – AASP GmbH. This made it easy for customers to purchase internet based contents such as games, images, etc. This was through charging customers a per session fee for the service.
Two years later, Hubertz got bored and sold the company to Coolspot AG in year 2000. He decided to partner with his friend to develop a soccer game that they could play together virtually. It was browser based with no graphics but just characters with just characters with a variety of basic colors. Also, game was a multi player online game.
The popularity and demand for the game grew and became so high causing the server to crash. Being innovative, they came up with a model called ‘free to play’ where users would purchase the best players at a cost of US$0.50 per game for each soccer player a user purchased.
Hubertz friend didn’t want to go into the gaming world and opted to remain in banking. It is then that Hubertz founded the Bigpoint GmbH and was CEO.
Bigpoint would have to invest in technology to meet competition from console games and Microsoft Xbox which created games in three dimensions rather than text based. There was also need to expand the customer base beyond Germany. Hence, Hubertz had to look for funding.
After funding was available, he hired developers and went on to expand the company’s technical capabilities. Bigpoint launched the Seafights which was a one player computer based flash games. Promotions for the game were done through Yahoo! and TV stations.
Throughout 2007, the entire company focused on developing new games and thinking of international strategy. However, it was faced with challenges. In 2008 and 2009, all games launched failed.
All this time, Bigpoint was experiencing changes in the organization structure since 2005. The structure had grown from a flat one to a tall structure. A good CEO was hired and took office in April 2011.
Hubertz wanted to explore and develop additional sources of revenue. He came up with three ways to raise additional revenue; Licensing – form partnerships with big companies in ASIA license games in their network; Advertising – Users of games who didn’t purchase in-game virtual goods were converted into paid users by running adverts on their games.
Hubert wanted to win over the casual gamers but as well protect the core gamers. He evaluated the effects of changing game on the users. He also appreciated the fact that the technology was changing and had to keep up with it.
Problems Facing Big Point – Using a Balanced Score Card
The below problems were analyzed using a balanced score card. A balanced score card is a management tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic objectives.
The balanced scorecard approach provides a clear prescription as to what companies should measure in order to balance the financial perspective.
Problems under financial perspective
Financial Constraints
When the server crashed they did not have finances to buy new servers.
They did not have the funds to develop flash games
Limited access to funding; the Germany venture capital funds were very conservative and if you wanted to borrow more than 10€ million you needed to go to London or elsewhere.
Customer satisfaction
There was interruption whenever customers purchased interned which prolonged per session thus customers being charged higher fees.
The customers were inconvenienced when the server crashed.
The games which were launched in 2008 & 2009 failed thus they did not meet their customer satisfaction.
Problems under Internal business processes
Lack of expertise
The company experienced lack of experts since Hubertz was the only one doubling as an accountant, finance officer as well as the CEO in game production and development.
Management skills
Hubertz was unsure of what the right leadership structure looked like at the top. He was reluctant to leave US to come back to Germany to rescue the head office which was left vacant after Clement Seidler left.
Technological problem
They did not have a back-up server which could have been used when the original server crashed thus business was brought to a halt.
The server did not have the capacity to serve the international market.
There was a competition which is brought about by other players such Android, Facebook and Google+ who had penetrated the US market before Big Point GmbH.
Problems under Learning & Growth:
The market in Germany was limited.
Employee motivation
When Clement was left to manage the head office it was not long before Hubertz started hearing rumblings of discontent from his former direct reports in the home office.
Strategic Analysis on Big Point – Using SWOT Analysis
SWOT is an acronym for internal strengths and weaknesses of a firm and environmental opportunities and threats facing a firm. It is an analytical tool used to create an overview of the company’s strategic situation
Opportunity: Major favorable situation in a firm’s environment
Threat: Major unfavorable situation in a firm’s environment. These are the key impediments to the firm’s current or desired position
Weakness: Limitation or deficiency in one or more resources or competencies relative to competitors that impedes a firm’s effective performance
Strengths: Source of advantage relative to competitor serves or is expected to serve
Core competencies: These are distinctive competence that gives the firm the comparative advantage in the market
Strong market position
They have a large and loyal user base and more than one billion people per month-much more than Facebook.
The paying users spend as much as€50 to€60 every month. Moreover with the introduction of Farmerama, it instantly become a third major hit
Customer loyalty
They had a loyal user base of more than one billion people per month. In 2011 over 227 million people were using Bigpoint’s free ...
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