Wednesday, December 28
If I was GW CEO: Part 1, SWOT
Well, a while back I promised to do a series on GW business practices titled "If I were GW CEO," Now I am doing it. Essentially I want to look at this as if I was just asked to take over at the company. I want to take this from the business perspective, not just a player perspective. We all know that it is hard to take out the consumer, but Ill try. Anyhow, onward and upward.
My qualifications: I don't want to say I'm more qualified than anyone else, but this way you know I'm not talking out my rear.
- MBA (finance and accounting), CFA, CPA (in progress), BS in Business admin, series 7, series 66, 10+ years private equity/ finance/ institutional investment management. I have also been on my share of advisory councils and boards.
What is a SWOT analysis?
S- Strengths: Characteristics that are INTERNAL to the company that provide an advantage.
W- Weaknesses: Characteristics that are INTERNAL that provide a disadvantage.
O- Opportunities: EXTERNAL areas to improve the company.
T- Threats: EXTERNAL elements that can prove to be problems for the venture.
*note: This is not supposed to be the end all list of the company's attributes, it is just supposed to give us an idea of where the company is. Because the list is not exhaustive there will be some points not made and some may even fit into multiple areas. For example, weak marketing could be a weakness and a threat if it is in comparison to another company.
Before we talk about how to improve/ maintain a company we must first know what it is.
Structure: Publicly traded Company (Listed), PLC (British LLC)
Owners: Though it is public, the company is tightly held. The single largest (non-institutional) shareholder is Tom Kirby at 6.2%. Most shares are owned by institutional firms and pensions. Employees hold a minority of the shares.
Customers: Mostly males 18-45, Above average income and students 12-17 with no income.
- The IP is unassailable. The fictional worlds created by this company are second to none. The stories and characters are large leaders towards continued sales. Model manufacturing is also second to none, the models produced by GW are of very high quality and are seen among many as the top in their class. Strong distributions channels throughout the world in the form of independent retailers pushes a lot of the costs of physical stores off of the GW books. The line employees are some of the best in the business, they can get someone excited in starting a new product better than a large portion of independent retailers. GW also has many income channels open to it besides the models (e.g. royalties). A consistent release schedule (quarterly) is helping to increase customer relations and sales.
- The company has taken a dogmatic approach to the rest of the gaming world, feeling that they cannot be taken off of their high perch. The company has also distanced itself from the customer base by constantly increasing prices well beyond any CPI (Inflation) or COGS (Cost of Goods Sold) numbers. Its approach to news releases has also served to distance itself from the customer base. From an employee standpoint there is (reportedly) an infamous 'glass celling,' for anyone who isn't from England. This can create a sort of tension in employees who feel it is pointless to carry on excelling if they are cannot be rewarded. Because it is tightly held it means there is generally less extreme pressure from new shareholders and sometimes a tightly held company can suffer from group think, or will bow to the will of a single personable large shareholder, or officer of the company (CEO, COO, etc).
- Many peripheral industries are mentioning interest in the Games Workshop IP. Everything from Video games, to Movies. With many new entrants into the field of table top wargaming GW has an opportunity to assert their strength. There is a growing Independent GT circuit that is beginning to get its footing around the world, GW could greatly change public image but putting strong support behind those events they feel deserve it. The target market of the company usually has disposable income to spend on their hobby. With a large focus on marketing there could be a strong response from the target market.
- Third party manufactures are ever encroaching their IP and GW is currently in a deep legal battle to defend themselves. Many new game manufactures are coming into the arena, while their main line system (Warhammer 40k) is not threatened as much their smaller systems are. Game designers from GW are leaving to join other companies. Video games are always a large draw for time for GW target customers. Tom Kirby is approaching 70 years of age where British Law will force him to step down as chairman, unless the company issues a special exception (likely).
Well, folks that is it for now. Im sure you will have comments. All in all I don't think GW is a horrible company, they have many things going for them but I think that there are a few areas that are opportunities and some internal weaknesses that are not being addressed. In future posts I'll go more into detail about how I would go about enhancing the strengths and taking advantage of opportunities as well as limiting threats and weaknesses.
What would you add to this SWOT analysis?
Posted by Duke at 7:57 AM