Flevy Management Insights Case Study
Global Expansion Strategy for Online Gaming Platform in eSports
     David Tang    |    Service Strategy


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Service Strategy to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR The organization experienced a drop in user engagement and market share due to server capacity issues and heightened eSports competition. By optimizing its service strategy, entering the mobile market, and enhancing community engagement, it achieved a 30% boost in user engagement and a 40% increase in new mobile registrations, underscoring the value of SP and innovation in overcoming challenges.

Reading time: 11 minutes

Consider this scenario: The organization is a rapidly growing online gaming platform specializing in eSports, facing challenges in scaling its service strategy to meet global demand.

It has experienced a 20% decline in user engagement due to server capacity issues and faces stiff competition from established gaming platforms that have recently entered the eSports niche, reducing its market share by 5% over the last quarter. The primary strategic objective of the organization is to expand its global presence while enhancing its service delivery and user experience to regain and increase its market share and user engagement.



The organization, despite its initial success in the eSports market, finds itself at a critical juncture. Pausing to refine its service strategy amid rapid scaling efforts has led to noticeable performance bottlenecks. Additionally, the entry of heavyweight competitors into the eSports domain has intensified market rivalry, diverting user traffic away from the platform. Innovating the service delivery model and leveraging technological advancements might be the key to overcoming these hurdles and securing a competitive edge in the fast-evolving eSports landscape.

Industry & Market Analysis

The eSports industry is witnessing unprecedented growth, fueled by the increasing popularity of online gaming and the expansion of digital audiences worldwide.

Understanding the competitive landscape reveals:

  • Internal Rivalry: High, with numerous platforms vying for user attention and engagement, leading to a fiercely competitive environment.
  • Supplier Power: Moderate, as the availability of game development tools and platforms provides a variety of options for content creation.
  • Buyer Power: High, given users' ability to switch platforms with minimal cost or inconvenience.
  • Threat of New Entrants: High, due to low entry barriers for new online platforms and the continuous emergence of new games appealing to diverse audience segments.
  • Threat of Substitutes: Moderate, with alternative entertainment forms like streaming services competing for the same digital audience.

Emergent trends include the rise of mobile gaming, increasing investment in eSports teams and events, and the growing importance of community engagement. These trends signal significant shifts in industry dynamics, presenting both opportunities and risks:

  • Integration of mobile gaming: Expanding into mobile eSports presents a lucrative opportunity, albeit with the risk of diluting brand identity if not executed properly.
  • Investment in proprietary eSports events: Can significantly enhance brand visibility and user loyalty, but requires substantial upfront investment.
  • Enhanced community engagement through social features: Offers the chance to build a loyal user base, though mismanagement could lead to negative public perception.

The PEST analysis highlights the impact of technological advancements, regulatory changes, societal shifts towards online entertainment, and economic factors such as disposable income on the eSports industry. These external factors underscore the importance of adaptive strategies to navigate the complex and rapidly changing market landscape.

For effective implementation, take a look at these Service Strategy best practices:

Service 4.0 Transformation (52-slide PowerPoint deck)
Key Business Processes | Service Delivery (12-slide PowerPoint deck)
Services Growth & Effectiveness Approach (17-slide PowerPoint deck)
Service 4.0: Service Innovation (25-slide PowerPoint deck)
Service Marketing (198-slide PowerPoint deck)
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Internal Assessment

The organization possesses a strong foundation in innovative online gaming experiences and a loyal, albeit niche, user base. However, it struggles with server capacity issues and has been slow to adopt mobile gaming technologies.

SWOT Analysis

Strengths include a dedicated user community and pioneering eSports tournaments. Opportunities lie in expanding into new markets and leveraging mobile gaming trends. Weaknesses are seen in infrastructural limitations and a reactive approach to tech adoption, posing a threat from more agile competitors and the fast pace of technological change.

Value Chain Analysis

Analysis of the organization's value chain uncovers inefficiencies in technology infrastructure and user support services. Optimizing these areas could enhance service reliability and user satisfaction. Strengths include content development and community engagement, which are critical drivers of user loyalty and platform growth.

Gap Analysis

The gap between current capabilities and the desired state of global market leadership is attributed to technological and infrastructural limitations, alongside a need for more proactive innovation strategies. Addressing these gaps is essential for sustaining growth and competitiveness.

Strategic Initiatives

  • Service Strategy Optimization: Revamp the platform’s service delivery model to ensure high reliability and low latency for a global user base. This initiative aims to improve user experience and engagement. The source of value creation lies in enhanced customer satisfaction and retention, expected to drive user base growth. This will require investment in advanced server technologies and a scalable infrastructure.
  • Mobile eSports Expansion: Develop and launch a mobile version of the platform to capture the rapidly growing segment of mobile gamers. Intended to broaden the platform's appeal and accessibility, creating new revenue streams. This initiative necessitates investment in mobile development expertise and marketing.
  • Community Engagement Program: Implement a comprehensive program to foster user interaction and loyalty. Expected to enhance user retention and attract new users through word-of-mouth. Requires resources for community management, event hosting, and social media engagement.

Service Strategy Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


That which is measured improves. That which is measured and reported improves exponentially.
     – Pearson's Law

  • User Engagement Rate: To measure the effectiveness of the service strategy optimization and community engagement efforts.
  • Mobile Platform Adoption Rate: Indicates success in capturing the mobile gaming market segment.
  • Server Downtime: Reduction in downtime will signal improved infrastructural reliability.

These KPIs offer insights into the strategic initiatives' performance, highlighting areas of success and opportunities for further improvement. Monitoring these metrics closely will ensure that the strategic plan remains aligned with organizational goals and market demands.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

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Service Strategy Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Service Strategy. These resources below were developed by management consulting firms and Service Strategy subject matter experts.

Service Strategy Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Global Expansion Strategy Report (PPT)
  • Mobile Gaming Market Entry Plan (PPT)
  • Service Strategy Optimization Framework (PPT)
  • Community Engagement Roadmap (PPT)
  • Infrastructure Upgrade Financial Model (Excel)

Explore more Service Strategy deliverables

Service Strategy Optimization

The organization adopted the Resource-Based View (RBV) framework to guide the optimization of its service strategy. The RBV is a model that suggests that a company can achieve a sustainable competitive advantage through the efficient and effective utilization of its internal resources. It was particularly useful in this strategic initiative because it allowed the organization to focus on strengthening its core competencies, such as server reliability and customer support, which are critical to enhancing user experience in the online gaming sector. Following this framework, the organization undertook the following steps:

  • Conducted a comprehensive audit of internal resources, including server capacity, technology infrastructure, and customer service capabilities, to identify strengths and areas for improvement.
  • Allocated additional resources to upgrade server technology and expand capacity, ensuring that the gaming platform could handle increased global traffic without compromising on speed or reliability.
  • Enhanced the training programs for customer support teams to provide quicker and more effective responses to user inquiries and issues.

Additionally, the organization implemented the Customer Experience Management (CEM) framework to further refine its service strategy. CEM focuses on managing and improving customer interactions across all touchpoints to drive loyalty and satisfaction. This framework was instrumental in identifying key areas where the gaming platform could enhance its service delivery to provide a seamless and engaging user experience. The steps included:

  • Mapping the customer journey to identify critical touchpoints and areas where users experienced friction or dissatisfaction.
  • Integrating user feedback mechanisms directly into the platform to gather real-time insights into user satisfaction and areas for improvement.
  • Developing personalized user engagement strategies, including tailored game recommendations and rewards programs, to enhance user satisfaction and retention.

The combined application of the RBV and CEM frameworks led to significant improvements in the organization's service strategy. Server reliability and customer support response times improved markedly, resulting in a 30% increase in user engagement rates. Additionally, the focus on customer experience management helped the organization to identify and implement several user-centric enhancements, further boosting platform loyalty and satisfaction.

Mobile eSports Expansion

For the strategic initiative focused on mobile eSports expansion, the organization utilized the Diffusion of Innovations (DOI) theory. DOI is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. It was particularly relevant for this initiative as it provided insights into the factors that influence the adoption of mobile gaming platforms among existing and new users. In implementing this framework, the organization:

  • Identified key characteristics of its mobile gaming platform that would influence its adoption, such as relative advantage, compatibility, complexity, trialability, and observability.
  • Launched a beta version of the mobile platform to a select group of users to gather feedback and make necessary adjustments before the full launch.
  • Implemented targeted marketing campaigns that highlighted the unique features and benefits of the mobile platform to encourage adoption among its user base.

The organization also applied the Market Segmentation theory to tailor its approach to different user demographics. Market Segmentation involves dividing a broad target market into subsets of consumers who have common needs and priorities, and then designing and implementing strategies to target them. The steps taken included:

  • Conducting market research to identify distinct segments within the eSports and mobile gaming markets.
  • Developing customized marketing strategies and platform features for each identified segment to maximize appeal and adoption.
  • Monitoring user engagement and feedback within each segment to continuously refine and improve the platform’s offerings.

The strategic application of the DOI theory and Market Segmentation led to a successful entry into the mobile eSports market. The organization saw a 40% increase in new user registrations on the mobile platform within the first six months of launch. Furthermore, the targeted approach to different market segments resulted in higher levels of user engagement and satisfaction, contributing to the overall growth and success of the mobile expansion initiative.

Community Engagement Program

In launching its Community Engagement Program, the organization embraced the Concept of Social Identity theory and Gamification principles. Social Identity theory, which explores how individuals’ self-concepts are influenced by their membership in social groups, was instrumental in understanding and fostering a strong, cohesive online gaming community. The implementation process involved:

  • Creating exclusive community groups and forums that encouraged users to interact, share experiences, and form a collective identity around the gaming platform.
  • Organizing online and offline events that brought users together, reinforcing their sense of belonging and loyalty to the platform.
  • Highlighting standout community members and their contributions to foster a sense of recognition and prestige within the community.

Simultaneously, the organization applied Gamification principles to make the community engagement more interactive and rewarding. Gamification involves the use of game design elements in non-game contexts to enhance user engagement and motivation. The steps taken included:

  • Integrating leaderboards, achievements, and reward systems to recognize active community members and encourage continued participation.
  • Developing community challenges and competitions that aligned with users’ interests and incentivized engagement.
  • Offering exclusive content and rewards for community milestones to maintain interest and momentum.

The strategic use of Social Identity theory and Gamification significantly enhanced the organization's Community Engagement Program. The platform experienced a 50% increase in active community participation, with marked improvements in user retention and satisfaction. This initiative not only strengthened the platform’s user base but also created a vibrant, loyal community that contributed to the platform’s overall growth and success.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Increased user engagement rates by 30% following the optimization of the service strategy, leveraging the RBV and CEM frameworks.
  • Expanded into the mobile eSports market, achieving a 40% increase in new user registrations on the mobile platform within six months.
  • Reduced server downtime significantly, enhancing infrastructural reliability and user experience.
  • Boosted active community participation by 50%, utilizing Social Identity theory and Gamification principles in the Community Engagement Program.
  • Improved customer support response times through targeted training programs, contributing to higher user satisfaction.

The strategic initiatives undertaken by the organization have yielded notable successes, particularly in user engagement, mobile market expansion, and community participation. The 30% increase in user engagement and the significant reduction in server downtime are direct outcomes of the service strategy optimization, showcasing the effective application of the RBV and CEM frameworks. The 40% rise in new user registrations on the mobile platform underscores the successful entry into the mobile eSports market, guided by the DOI theory and Market Segmentation. Furthermore, the 50% increase in active community participation highlights the impact of leveraging Social Identity theory and Gamification in the Community Engagement Program. However, the results also reveal areas for improvement, particularly in the speed of technological adoption and infrastructure scalability. The initial challenges with server capacity and slow adoption of mobile technologies suggest that a more proactive approach to innovation and infrastructure investment could have further enhanced outcomes. Additionally, while community engagement has improved, continuously evolving engagement strategies to keep pace with user expectations and technological advancements is crucial.

Given the successes and areas for improvement identified, the recommended next steps include a continued investment in technological infrastructure to support scalability and reliability as user numbers grow. Further, the organization should adopt a more aggressive approach to innovation, particularly in emerging technologies and gaming trends, to stay ahead of competitors. Expanding the mobile eSports offering with new features and games, based on user feedback and market trends, will help sustain growth in this segment. Additionally, enhancing community engagement through more personalized and interactive experiences, leveraging data analytics for insights into user preferences and behaviors, is recommended. Finally, exploring strategic partnerships or acquisitions to accelerate technological advancements and market expansion could also be beneficial.


 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

The development of this case study was overseen by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.

To cite this article, please use:

Source: Electronics Service Strategy Enhancement for High-Tech Firm, Flevy Management Insights, David Tang, 2024


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