Electronic Arts Essay Example | Topics and Well Written Essays - 1250 words

Electronic Arts - Essay ExampleThe EA has a significant commercialize share of sports and hero-based flick bizs. The Electronic Arts core competence is its ability to develop spirited-quality sports and feature games and offer a fascinating childs play experience to the kids, teens, and young adults in many countries around the world. closeness Although there are relatively a couple of(prenominal) large competitors in the worldwide video game industry, it is still a heavily saturated market. The high fixed costs of developing a new game lead to increasing competition among the game programmers for the additional unit sales.Product Differentiation Attributable to EAs efforts to diversify its fruits from other video games, it has been able to impinge on a competitive advantage over its competitors. They have a few areas in which true product differentiation exists - graphics, harm, use of celebrities and licensed themes etc.Cost Conditions due to the short product life and cr ushed node price sensitivity the economies of scale do not have significant impact on the industry performance. Nevetherless, the learning curve effects are present. in that location is little threat of entry from companies external of the video games market, however, within the market there is possible threat from manufacturers not yet fully complete in the video games (i.e. manufacturers of game consoles), and even then there are significant barriers.Capital RequirementsThere are moderate capital requirements associated with entering the video games market as supplies can be outsourced and no major investment into R&D and equipment is needed.Access to Channels of DistributionThe channel of distribution is another(prenominal) barrier to entry. This has to due to the fact that the retail channels are already saturated with a anatomy of competing products from established brands. In addition, there may be preference for distributors to sell products with higher margins or great marketability and volume, making entry difficult.Threat of Substitutes/ComplementsBuyer propensity to substitute There are very few other forms of entertainment that can be considered as direct substitutes for video games. However, within the video games market segment there are a number of substitutes because each manufacturer offers their own product rove and the customers rarely have high brand loyalty. Complements video games constitute a complementary good themselves with suppose to the game consoles. Although the demand for them can not be considered purely derived, the video games market capacity does front on the spread of the gaming devices.Bargaining Power of BuyersPrice Sensitivity the end customer perceives price as an indicator of quality and, therefore, is often price insensitive within certain price range.Concentration Size of the end customer (i.e. consumer) is small and size of one purchase is small, so the end customer itself lacks the bargaining power. However, the wholesale distributors and retailers are bigger in size and their purchases have impact on the summate amount of purchases, so they have also more