Growth Strategies Case Study

Shanda Interactive : The Chinese Online Games’ Growth Strategy

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Abstract:
Shanda Interactive Entertainment Limited (Shanda) was one of the fastest growing Chinese online gaming companies. The online games industry had come of age in China by 2004, with a market size of US$297.9 million and Shanda controlled 35% market share. Mushrooming of online gaming companies led to stiff competition, with each company vying with each other to capture the market. Shanda’s “The Legend of Mir II” was one of the “Massively Multiplayer Online Role-Playing Games (MMORPG)” in China. In order to expand the size of the company and to enrich technological infrastructure as well as the online game contents, Shanda undertook a lot of mergers and acquisitions since its inception. By the end of 2004, the CEO of Shanda, Mr. Chen Tianqiao, intended to expand it as a global entertainment company and not restrict it to online gaming only. However, Shanda was facing increasing competition from rivals like The Online and Kingsoft Co. Besides, the company was adversely affected by technical problems such as hacking of its servers through cheat programs and legal problems related to copyrights. This case deals with the competitive landscape of Chinese online game industry, the strategies adopted by Shanda to become a market leader, challenges it might face to retain its leadership position and strategies adopted by Shanda to meet the challenges of the competitive market.

Pedagogical Objectives:

• To discuss the online gaming industry in China
• To understand the strategic initiatives taken by Shanda Interactive
• To discuss the challenges faced by the company
• To argue about its growth strategies.

Keywords : Shanda Interactive; On-line game; Internet infrastructure; Interactive game; Internet service provider; Role-playing game; Game software; Virtual community; Business model; Research and development; Growth Strategies Case Study; Short messaging service; Market capitalisation; Literature portal; On-line entertainment market; Beta testing

Contents : 
Introduction
Online Gaming In China
Shanda Interactive: The Growth Strategies
Introduction Of New Products
Backward Integration Through Strategic Alliances
The Success And The Award
The Legal Issues
Hacking – The Threa