Tequila Mobile SA Harvard Case Solution & Analysis

Tequila Mobile SA

Introduction:

Tequila mobile is a company located in Wroclaw, Poland. It is engaged in the development of mobile games, service providing along with publishing the games as well. It is a private sector company and initially developed its reputation as developing fun, casual and simple games particularly designed for mobile devices. These games were then delivered to top publishers, mobile operators and app stores worldwide. By the year 2009, the company started developing games for tablets and Smart phones.

In 2011, the business model of the company has changed from game developer to game publisher. In addition to that, the company has engaged itself as the operator of a free2play games platform through which it will provide in-app purchases capability and social features. Tequila Mobile has initiated a platform known as a Multi-Sided Platform (MSP) as also known as Tequila Planet in the same year. The purpose of that platform was to deliver its new business model interactions internationally. The basic advantage of Tequila Planet was that it provided downloading facility to customers free of any charges. With the aid of the platform given by the company, it facilitated the linkage between parties like traffic partners and game developers. Tequila Planet also facilitates other parties as well that include billing partners and traffic partners. The games developed by the company has been installed on more than 100 million mobile and other devices, and the Tequila Planet has nearly more than 20 million players from all over the world.

Summary of issues:

The president, co-founder and the CEO of Tequila Mobile, Wojciech Woziwodzki needs to make important analysis about the strategic decisions of the company. Tequila Mobile has to make a choice on two main critical aspects. Initially, the company had to make a choice about whether they should focus the business in the markets where the penetration of Smart phones was high with high development in the economy or the markets where the use of mobile devices was less, but the economy was still developing.

Another strategic decision that the company had to take was related to making investment in different platforms. The management of the company needed to decide whether they should invest on becoming a platform providing tools for third-party developers or to invest on in-house game development.

In addition to that, all the strategic decisions made by the company were difficult to accomplish because of the scarce and limited availability of resources and restricted budget of the company. Due to the limited resources, it became extremely difficult for the company to provide services to both developing and developed markets and to become both an in-house game developer and gaming platform for the consumers. Furthermore, the cost of developing games was rising, and companies were more inclined towards intense advertising that would increase the cost in turn. The basic reason behind that intense rising in cost and aggressive advertising was the ferocious competition in the industry.

Recommendations:

The portable game industry had blasted lately with the presentation of advanced mobile phones, (application) stores, and wireless infiltration into creating economies. It brought with it a critical expansion in the amount of portable amusements that was being created and distributed and Woziwodzki needed to separate Tequila Mobile SA from the developing number of players in the rapidly advancing industry.

The management of the company needs to make a decision about whether the company should focus on penetration in different markets that will be based on the economic conditions and the rate of use of mobile phones in respective countries. As Tequila Mobile has to make a decision to go with fermium revenue model, the company has to analyze in which countries the users of mobile phone and tablets are more. Further, revenues from developed and emerging regions should also be analyzed. Exhibit 6(a) in the case reveals that number of users in developed region, i.e., Western Europe is approximately 3.9 million while the users of Tequila Planet in emerging markets are 12.4 million approximately, but the total revenue from the developed region is more than the emerging regions. ........................

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Wojciech Woziwodzki, co-founder, president and CEO of Tequila Mobile SA, developer of mobile games publisher and services had to make some critical strategic decisions. Tequila Mobile SA has decided to switch to a new "free2play" revenue model, but you need to decide whether to focus on building their businesses in markets where smartphone penetration was high, and the economy has been developed or in markets where the use of mobile devices shot, but the economy is still growing. Another important decision was whether to continue to invest in developing their own games, or focus on what platform providing tools for third-party developers. Mobile games industry has exploded in recent years with the advent of smartphones, application (s) stores, and cell phone penetration in developing countries. She had brought a significant increase in the number of mobile games developed and published, and would differentiate Woziwodzki Tequila Mobile SA with a growing number of players in the fast-growing industry. "Hide
by Hannah Halaburda, Jerzy Surma, Aldo Sesia Source: Harvard Business School 14 pages. Publication Date: April 13, 2012. Prod. #: 712453-PDF-ENG

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