Rovio should focus on profitable theme parks operation through creation of experiences with their targeted users (Young men/Families) and leveraging more than only angry birds. Consumer products should be used to support brand growth by licensing commodities product and focusing on high value products and massive sales through traditional retailing channels. Create online-offline synergies through the angry card. Opening of only a handfull of selected experience centered stores that offer shopping experiences and create traffic through high value limited collectible articles.
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of the environment is usually needed. This paper analyses the
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common configurations: one based on three planar LiDARs Sick
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drawbacks related to system installation, calibration complexity
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Authentically Social by Corey Perlman - EO Puerto Rico
Rovio Branding for China
1. ROVIO ROLL OUT FOR CHINAROVIO ROLL OUT FOR CHINA
ANGRY BIRDSANGRY BIRDS
Ernesto J ContrerasErnesto J Contreras
Hult international business School MBAHult international business School MBA 6 August 20126 August 2012
3. Strategic Problem
Situation
1
Executive
Summary
2
Can Rovio roll expand into adjacen entertainment
industries profitably and tap on a 178 Billion US$ market by
leveraging on their highly popular characters?
Rovio is a highly known and demanded brand in China, there
is the high demand for angry birds products and experiences
that is now being exploited mostly by pirated products.
Executive
summary
1
Alternatives
Recommendation
3
4
1) Rovio can maintain Status Quo and focus on gaming exclusively.
2) Rovio opens wholly owned stores.
3) Rovio can license their products to established retailers.
4) Open wholly owned parks and focus only on Angry birds.
5) Open wholly owned parks and include characters beyond angry
birds.
Rovio should focus on profitable theme parks operation through creation of
experiences with their targeted users (Young men/Families) and leveraging more
than only angry birds. Consumer products should be used to support brand growth
by licensing commodities product and focusing on high value products and massive
sales through traditional retailing channels. Create online-offline synergies through
the angry card. Opening of only a handfull of selected experience centered stores
that offer shopping experiences and create traffic through high value limited
collectible articles
5. Rovio’s strategy is to leverage their content succes to
become an entertainment company
Goals &
Objectives
Where to Play
• GOAL: Leverage Angry birds succes and capitalize on adjacent markets to increase
sales
• OBJECTIVE: Establish itself as an experiential brand in china by 2012 and itriple their profits
by 2012 by opening obtaining 100MM$ in angry birds merchandising , open 2 parks
• Digital gaming
• Theme park experience
• Consumer products
• Leverage dominant position ifro brand in digital world
Competitive
Strategy
2
5
How to Win
Resources &
Capabilities
Metrics
• Leverage dominant position ifro brand in digital world
• Create relevant synergies on the new BU and focus on
experiences and emotions
• Cross sell and up sell to followers
• Create and nurture the right partnerships across industries
• Product technology
• Strong brand
Implication is a new set of strategies and tactics must be made
1. Brand awareness
2. Initial & repeat purchase
3. Profitability
4. Market share (Value and volume)
7. Situation
Analysis
457 million gamers
2/3 in engage online game play
China is the world’s biggest online gaming
market but growth has slowed
Average online gamer
• 18-30 Ys
• > secondary ed
• Settled in
larger cities.
Situation
analysis:
Category
3
2/3 in engage online game play
Market size $1.3 billion (2008)
Earnings 800MM US
Industry rivalry likely to increase in gaming industry to attract network
members and profits
Q2 2011 online game advertising market
size $173 million,
larger cities.
http://www.atimes.com/atimes/China_Business/IE19Cb02.html
8. Online gaming Industry shows a highly volatile industry
analysis
High threat from new entries due to low entry barriers
High threat of substitutes from upcoming entertainment and
gaming technologies
Complementors play a key role in gaming industry
Industry
forces
3
High industry rivalry in terms of massive capital expenditures in
development and deployment of new games. Key players
• Netease’s Fantasy Westward Journey, 1.66 MM concurrent users.
• Giant‘s Zhengtu Online, 1.52 MMconcurrent users. (2007)
Angry birds has a high need to stay on top of the market by leveraging
internal abilities and ensuring the right partners
9. Chinese market are high demanders of Angry Birds’
game and merchandise
AB’s China
position
¼ Rovio’s
total downloads
3
Rovio has an opportunity to leverage high relevance and awareness of the
Angry Birds franchisee
Rovio’s 2nd market (150 million downloads games).
Piracy and lack of effective payment methods limits revenue from mobile game
10. Strong fan base continually download updates, new
versions of Angry Birds and buyes themed merchandise.
Brand health Higher
frequency
users
• 18-24 Ys
• Single
• Play 25+ times
Chinese
users’
3
Low esteem: Customers not willing to
pay premiums
Low knowledge: No strong positive
brand experiences beyond games.
Angry bird’s customer base is highly engaged with the brand and are price
conscious and like free downloads
12. Every targeted industry has different opportunities, threats and
competitive position for Rovio and competitors
Complication
4
•Rovio is well positioned here and has a clear business model
•Threats and competitor forces are currently fought with clear
strategy.
Gaming
Business unit
•High sales of counterfeit products in many categories from clothes to toys
and electronics- Rovio should profit from this opportunity.
•Fight for consumers share of wallet is tough because of highly fragmented
Consumer
products
There needs to be a different business unit strategy for each segment and one
corporate strategy in order to link all efforts into a fine tuned relevance brand.
•Fight for consumers share of wallet is tough because of highly fragmented
and fierce competition of products outside of counterfeits.
•Threat comes from product differentiation is very difficult to maintain.
products
78 B$ category
•Projected growth of parks and entertainment industry in China in next 5 years
will boost category(Disney 2015 3.5 B$ - Universal in 2016 3,2 B$
•First mover advantage is possible and big threat from strong entrants.
•New set of skills are needed to attract and retain loyal park customers as this
is a new business for rovio China.
•Big opportunity in leveraging strong brands from gaming business units
Theme
parks
183 B$ category
13. Creativity
How can Rovio capture value from the
oportunities in Chinese market?
DifferentiationDifferentiation
FocusedFocused
DifferentiationDifferentiation
TYPEOFADVANTAGETYPEOFADVANTAGE
DIFFERENTATIONDIFFERENTATION
Online gamingLifestyle
experience
1
Key question
4
Synergy
Brand
Equity
OverallOverall CostCost
LeadershipLeadership
CostCost basedbased
FocusFocus
TYPEOFADVANTAGETYPEOFADVANTAGE
LOWLOW
COSTCOST
SCOPE OF PARTICIPATIONSCOPE OF PARTICIPATION
BROADBROAD NARROWNARROW
To capture value there needs to be a strategic move from a creator and distributor of
media content into an experience brand with great synergies between BU
2
3
14. Different BU with different marketing strategies:
Rovio and Angry birds strategy in China
OperationalOperational
excellencyexcellency
CustomerCustomer intimacyintimacy
--RovioRovio parksparks andand MerchandiseMerchandise
• Define clear segments and targets markets
precisely
• Tailor offerings to match exactly the
demands of those niches
• Create cross BU loyalty programs .
•Create experiences that drive emotions in
stores and parks
• Integrate busines s systems, supply chain
78 B$
Apparel
market (2009
Key question
4
ProductProduct leadershipleadership
-- AngryAngry BirdsBirds FranchiseFranchise
• Offers customers continuos stream leading-edge gaming.
• Focuses on speed: innovation, time to market, cycle-time,
decision-making
• Relentlessly pursues new offerrs
• Encourages entrepreneurship at all levels
• Integrate busines s systems, supply chain
and roadmaps with the customer at all
points of contact
• Jointly offer to customized niches (Avid
players-Families- Casual players)
• Analyze every BU separately
Rovio can enter a 200+ B$ industry segments by leveraging their brand power and
deploying a customer intimacy marketing strategy
1.3B Game
market
183 B$
Hospitality
market
16. Key
Question
To maximize chances of successful strategic deployment,
several key questions need to be addressed
Can Rovio engage in large scale experiential
branding across china and significantly increase
profits by leveraging their intellectual property?
Alternatives
5
Can the expansion
strategy be
integrates into the
gaming business
unit plans?
A
Can Rovio
create profitable
experiences in
their parks
leveraging their
IP?
C
Can Rovio
increase their
revenue stream
from consumer
products?
B
Source: ???
Rovio must decide in which activities take bolder, stronger actions, which ones to
partner and which ones should they postpone or cancel
17. Can the expansion strategy be integrates into the gaming
business unit plans?
Past Present Future
Next
big hit
Next
big hit
-Continue launch of relevant games.
-Maintain free basic download for relevance
- Sell upgrading possibilities at very low cost (2RMB?)
- Create levels or add-ins available in cards to be used for consumer
Key
Question
Alternatives
5
Source: ???
Constant growth can be achieved by adding intellectual property characters or
extentions to the portfolio following the current formula of expansion
- Create levels or add-ins available in cards to be used for consumer
products(cards with a code that’s activated when an authorized product is
sold and code gets input in game)
Acces to Level 50
Code: 1244381692 1834
Shoe couponShoe coupon
High desire for game
although low esteem --
Translates into low
willingness to pay among
regular users (They like
free downloads)
18. Can Rovio increase their revenue stream from
consumer products?
Authorized
138 yuan
iPhone case
Unauthorized
15 yuan
Worse
value for
customer
Better
value for
customer
Official
licensed
products
Key
Question
Alternatives
5
Price sensitive consumers don’t perceive increased value in authorised products vs
counterfeit. Licensed Rovio products difficult to differenciate which puts the brand in
defensive position forcing price cuts that hurt long term brand.
Rovio Reaction: Summer
discount online 58 yuan
138 yuan 15 yuancustomer
Counterfeit
- Stores selling licensed products do not differentiate enough from counterfeits and do
not create high willingness to pay and loyalty to gain customers from counterfeits.
- Selling Rovio material at traditional outlets gives opportunity to reach high mass of
customers (e.g Carrefour)
19. Can Rovio create profitable experiences in their parks
leveraging their IP? Situation
Analysis
Based assumptions for parks:
European parks costs some 315,000 euros (340.000 Dollars)
2 China parks on plan.
European ticket fee US$44.7
Situation
Analysis
Key
Question
Alternatives
5
7.800 visitors to break even
Given Chinese highly populated cities, ROI in parks is high if repeat visitor rate is
achieved
There is an opportunity to
increase brand loyalty and
capture value in parks as long as
the EMOTIONAL and
EXPERIENTIAL side of the brand is
maximized.
20. There are different profit pools in the different industries as
well as different levels of competition
Differentiated
Relevant
Needs of
Stage
experiences
Deliver
Situation
Analysis
Situation
Analysis
Focus
Key
Question
Alternatives
5
Undifferentiated
Competitive
position
ValueMarket Premium
Irrelevant
Needs of
customer
Extract
commodities
Extract
commodities
There are different profits per industry and diferent competitor landscape so and
focused efforts will pay high revenues
Make Goods
Deliver
services
Partner
Focus
22. Recommendations: Consumer products
Open only a few flagship stores that create sense of exclusivity.
Balance exposure with erosiong of the brand
Focus stores on experiential activities. Provide gaming stations with
unique versions that visitors can play while in the store.
Use the angry birds card as a way to reward customers selection of
licensed products.
Contents
Key
Question
Recommendations
6
licensed products.
Product selection should highlight collectible articles. 3D clocks,
interactive shirts and others that are more difficult to copy and limit
their edition. Include booklet with stories or games in these high value
products. These depends on targeted segments.
Commodities such as shirts, pens, phone cases should be used to fill in
the rest of the stores and also sold through traditional channels.
Stores should be temples of interactive gaming and exclusive odd products which
leverage on online games. “Buy one-Download this extention” type of offers. Rovio will
win in the consumer products customer segment through sale of differentiated items.
Regular products should be offered through traditional retail stores.
23. Theme parks are the HIGHEST level of customer experience opportunities. They
should make the connection between all business units.
Rides and games should tell the behind the scenes of the games. Why is the bird a
red one? How was it raised? Why are the green pigs laughing? This makes the
experience memorable
Synergies among the three BU’s is key. (E.G: Downloading game gives coupon of free entry
on low activity days to promote park, or Product purchase gives you a no-waiting in line pass for
Contents
Key
Question
Recommendations
6
Recommendations: Theme Parks
on low activity days to promote park, or Product purchase gives you a no-waiting in line pass for
popular new ride- Local customers with highest scores enter hall of fame in the park, etc.)
Creation of VIP sections in the park only available for customers of certain
products or higher scores. VIP Section can include a developing platform for
upcoming games or levels.
Create partnership with other games to include them in the park. Can we include
characters of “Fantasy westward journey” to complement our rides? Can we
partner with other developers.
Parks are the biggest opportunity to create loyal customers and create and capture
value from them. Focusing on activities that drive action from the current interest and
desire of the customers it is possible to leverage the created sinergies and win.
24. Deploy Chinese Rovio customer intimacy strategy and gain
sustainable competitive advantage through
SYNERGIES.
Keep pipeline of character
and game developments
Roll out product launches in
exclusive events offered
through experiencial
channels
Don’t spend too many
resources in large amount
of stores. Focus on few
highly interactive stores
that carry collectionables.
Focus parks on experiential
activities targeted to key
Consumer products
Gaming
Theme parks
channels
Appeal consumers via paid
apps using gambling
principles
Adpating to local culture
Create levels available only
for product purchases or at
park locations with Angry
card. Target by segment
that carry collectionables.
Focus on higher value
products in stores. Avoid
having only commodities
such as shirts.
Offer content cards for
counterfeit products in
exchange for fees.
Leverage traditional retail
channels for comodity type
products
activities targeted to key
segmentes:
Hardcore players: Players
lounge- Best player
competitions award
Family: Activity games, story
telling rides
Advertise parks in
downloaded apps to
increase awareness and
new attractions
Allow customers to input on
new games or
developments
25. Thanks….Thanks….
Ernesto J ContrerasErnesto J Contreras econtreras2012@student.hult.eduecontreras2012@student.hult.edu
Hult international business SchoolHult international business School
MBA class of 2012MBA class of 2012