Case Analysis and Presentation Advance Marketing Management

Games Workshop Creche Concept In Progress

Contents
y Introduction y Corporate culture y Corporate values y Business concept y Business model y SWOT Analysis y Issues at GW y Analysis of issues at GW and recommendations y Conclusion

Introduction
y Games workshop was founded in 1975 in London by John

Peake and Ian Livingstone.

y The company has about 200 stores worldwide with 7,000

employees and a turnover of 70 million. y Games Workshop is a manufacturer for fantasy war games. Consisting of 2 setting of the games:y fantasy place filled of dwarfs, elvesetc. y in the future, a war-torn universe in the 41st millennium that is all

about war.

y The company is listed on the London Stock Exchange

GWs global culture

Teams are located across the globe, they can be fairly diverse; however we do promote a one business culture. HQ is based in the UK, at Nottingham - all product design happens here, as well as the manufacturing and distribution for our markets in Europe. A lot of people development is also centered here, often work with managers from a range of different functions. Work closely with all sales businesses - Italy, USA and Australia as examples - as well as our manufacturing site in Memphis, running programmes specific to the particular needs of the business.

GWs Corporate values

Looking for long-term value. Focus is very much on people. The how we do things, rather than the what. Our employees come from a range of backgrounds, some enter the company as hobbyists with a detailed knowledge of our products and some as business professionals. We find that profiling our teams can help us to develop a shared understanding quickly, so they can work more effectively together. Because of our strong culture, and our long-term focus, we want to grow our own managers. So we value development very highly in Games Workshop, we're looking to enable people to add value in the long term.

Business Concept
y

Games Workshop attempting to create a dual approach that will appeal to both older customers while still attracting a younger audience. Previously most of their special characters and vehicles were cast in white metal/pewter but by the 2000s most of them were replaced by plastics; with this shift Games Workshop has been able to offer greater variety in the armies offered with introductory box sets. This has seen the creation of initiatives such as the "Fanatic" range that supports more marginal lines with a lower cost trading model (the Internet is used widely in this approach, to collect ideas and play test reports). However the Fanatic line has been mostly dropped, leaving Games Workshop to concentrate more and more on the younger demographic. Games Workshop has also contributed to designing and making games and puzzles for the popular television series The Crystal Maze.

 Games Workshop is one of the largest and the most successful

fantasy war-games company in the world. Their major brands are Warhammer and Warhammer 40,000.

Warhammer

Warhammer 40,000

Products & Services

GWs Business Model

Customer Relationship

Game Production and Retailing

Miniatures & Games. Warhammer 40,000 Warhammer Fantasy Battles. The Lord of the Rings Strategy Battle Game RND Partner Sites

Recruit Customers Fast & Efficient Delivery and Performance Information Cost effective Customer Satisfaction Global Customers

Distribution Channel

Outlets in retail locations Development Innovation

Forge World The Black Library Warhammer Historical

Improving quality and making new products

Issues At GW
y y

GW s phenomenon won many fans from young children, teenages to adults Recent international expansion implies the concept has more widespread appeal

Three major issues were identified in the caase analysis:1) Services marketing
y

How important to GW ethos are staff training, selection and motivation?

2)
y y

Buying behaviour
Why has GW created creche style: shops? How has an understanding of itscustomer behaviour led to this development?

3)
y y

Marketing chanels
Why has GW adapted more than one marketing chanel? Are additional chanels, such as mail order or the internet, likely to threaten the Games Workshop experience?

Strengths
y Manufacturer of best wargame miniatures; y Concept of Workshop Hobby Centers which can best attract and y y y y y

tackle customer s needs; Passionate, skilled staff; Constant quality improvement Strong growth domestically and internationally; Involving international divisions senior managers in strategic decision-making; Strong brand;

Weaknesses
y Services marketing

staff availability, retention and T&D y Buying behaviour creche style sustainance y Marketing channels GW s experience sustainance

Opportunity y Building markets in each of the world s major economies; Threats y Threats for Games Workshop comes from substitute product, new devices or over leisure games which can switch attention of customers, computer games eg. PSP, PS 3, X- Box, PC Games .

Services Marketing How important to GW ethos are staff training, selection and motivation?
Selection y Most interest
y Working Method y Independence

y Value
y Independence y Earning y Freedom

y Key things to look

y Empathy y Ego driven y Role Playing

Services Marketing How important to GW ethos are staff selection, training and motivation?
The development of a strong management team - companys highest priorities. The team has to work co-operatively across cultural and national boundaries to achieve team and corporate goals. As such their management philosophy - to work with the right people for the business in the long term. It is therefore crucial to identify and recruit the right people in the first place. Gill Greenwood, HR Director comments, Strong management across Northern Europe is a business pre-requisite. Recruitment and development of area managers is crucial to driving the business forward. We wanted to have a greater understanding of our area managers so that it could be fed into our succession planning. We also wanted to be able to recruit effectively, streamline the recruitment process and generate self awareness amongst the management team.

Services Marketing How important to GW ethos are staff selection, training and motivation?
Training First identify the Stage of skill level Unconsciously unable Consciously unable Consciously able Unconsciously able Method Lecture Role playing Case Study In the field training

Services Marketing How important to GW ethos are staff training, selection and motivation?
Motivation y Sales Management theory
y Interaction y Solutions y Target y Problem

y Motivational factors
y Individual meeting y Sales contests/competition y Merit promotion

Buying Behaviour
How has an understanding of its customer behaviour led to this development?

y Selling not games but experience; y Customers like communication, interaction with other people,

sharing new ideas and strategies;

y Not gamers but hobbyist;

Our games are played between people present in a room (a Hobby centre, a club, a school), not with a screen. They are truly social and build a real sense of community and comradeship.

Buying Behaviour Why has GW created creche styleshops?

y Way to best attract and retain their customers; y Day care: learn how to paint, collect and play y Tutor: y Help to maintain enthusiasm towards Workshop

games; y Handle customers of all ages, backgrounds and experiences; y Help first visitors to become passionate about GW for many years;

Marketing channels GW adapted more than one marketing chanel?

Games Workshop is using 3 different marketing channels. 1. Independent Retailers known as Stockists
Stockists are located outside UK which sell the GW products.

2. GWs own Games Workshop Hobby Centers 3. Mail Order Facility

Marketing channels Are additional channels, such as mail order or the internet, likely to threaten the Games Workshop experience?
y The Mail Order Facility will give benefit to GW in the

short run only. As GW sell experience, this mail-order facility can threaten that experience customers can get by going to the Games workshop Hobby Centers. y GW is using Selective Distribution Strategy (SDS)
y Selective distribution involves a producer using a limited

number of outlets in a geographical area to sell products. y An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g. training) on them. y Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply.

GWs Projected Budged For 2011 to 2014

2011 Cost of Sales Operating Expenses Property, plant and equipment Logistics and stock management Licensing costs Service centre costs Web costs Central costs Wages and salaries Social security costs Other pension cost Selling costs Administrative expenses Design and development costs - amortisation Design and development costs - not capitalised Royalty Income Finance Costs Salaries and other short-term employee benefits Computer Equipment & Software Production equipment and tooling Office facillites Taxes Interest Total Expenses $ 3,226,992 $ 3,388,342 $ 3,557,759 $ 3,735,647 14,529.00 41,725.00 20,603.00 5,066.00 278.00 2,630.00 1,058.00 3,181.00 42,718.00 5,261.00 1,462.00 48,860.00 29,137.00 2,905.00 1,073.00 2012 15,255.45 43,811.25 21,633.15 5,319.30 291.90 2,761.50 1,110.90 3,340.05 44,853.90 5,524.05 1,535.10 51,303.00 30,593.85 3,050.25 1,126.65 2013 16,018.22 46,001.81 22,714.81 5,585.27 306.50 2,899.58 1,166.45 3,507.05 47,096.60 5,800.25 1,611.86 53,868.15 32,123.54 3,202.76 1,182.98 2,866,500.00 429.98 1,208.34 2,535.75 1,543.50 441,000.00 1,144.40 310.91 2014 16,819.13 48,301.90 23,850.55 5,864.53 321.82 3,044.55 1,224.77 3,682.41 49,451.42 6,090.27 1,692.45 56,561.56 33,729.72 3,362.90 1,242.13 3,009,825.00 451.47 1,268.76 2,662.54 1,620.68 463,050.00 1,201.61 326.45

2,600,000.00 390.00 1,096.00 2,300.00 1,400.00 400,000.00 1,038.00 282.00

2,730,000.00 409.50 1,150.80 2,415.00 1,470.00 420,000.00 1,089.90 296.10

Conclusion
y Finally, Games Workshop to be around for a long time, it have to y

deliver all this profitably. This is why it is cost conscious. Continual investment in product quality, using defendable intellectual property, provides with a considerable barrier to entry for potential competitors: Fortress Wall. Even though have been in the UK for 35 years, still see opportunities for growth here with smaller one man Hobby centres in market towns and suburbs of large cities. Compared to the UK, most of the rest of the world is for us still green field territory. This means, can keep on growing steadily, using the same tried and tested approach of recruiting and retaining customers by opening Games Workshop Hobby centres, supported by the Games Workshop Webstore and independent Stockist accounts across the globe. With this growth we should be able to put more volume through our dedicated manufacturing and warehouse facilities ensuring that our gross margin continues to improve.