Introduction
Cranium firm was a board game making venture made by Microsoft veterans Richard Tait and Whit Alexander. They quit Microsoft and hit the flooded board game industry, which forced them to do an extensive research on all the available games in the industry.
Nevertheless, games like monopoly and scrabble were a fertile ground for these Microsoft veterans since very few people had taken up the business. Cranium laid a very strong foundation through research and distribution strategies, which made it a very successful firm in the gaming industry (Gayatri and Madhav, 2005)
Cranium begun by retail marketing, with its major target being Starbuck coffee stores; however, it never invested much on advertising in the beginning since it would satisfy its targets through the word of mouth.
Even without much advertising, cranium managed to remain at the top of all the other companies in the industry. It later on moved from retail marketing to mass trading in stores like Wal-Mart and Target, and this did not affect its performance (Gayatri and Madhav, 2005). The case of Cranium may be analyzed by answering the following 4 questions.
Would you characterize Cranium as a rapid growth firm? If so, what steps did Cranium take to prudently manage its growth?
Cranium is a very rapidly growing firm whose mission “Clever, High-Quality, Innovative, Friendly, and Fun” has taken it a long way. Its founders Richard Tait and Whit Alexander who were both Microsoft software developers created their original cranium game in mid-1998 and they have managed to be the best board game developers since then.
To manage their growth, the first thing they did after quitting Microsoft was an extensive research on all the available games in the board game industry. Through this research, they identified the fields that were not ventured into, specifically, monopoly and scrabble.
They made their company an industry player through a combination of creativity and systematization where their knowledge on Microsoft and software development was a key role. They were so different from other companies since they broke almost every rule in the game industry.
Their attitude of not complying with the fact that the board game industry was flooded took root with its forward-looking distribution strategy, which stood as a hallmark to its success, and within no time, they started branding, product development and even hiring (Dann, 2010)
When Cranium missed the annual Toy fair in New York in February 1999, they worked hard to come up with an alternative plan, mainly due to its significance in toy industry since it is during this time that most dealers make their procurement in preparation for the year’s Christmas festivities.
“Fortunately, Starbucks had been looking for a game for two years that tied in with its ‘coffee culture”; they therefore got off as the best selling independently produced game (Dann, 2010).
Specifically, the following are the growth strategies that Cranium undertook: Phase 1 specialized in moment engineering whereby they picked on a game with deep emotional fulfillment. The game served the whole family regardless of age giving the participants a chance to shine. Phase two involved formulation of a “game with specific activities, editorial content, tangible componantry, and formal rules” (Dann, 2010).
Phase 3 came to cross check and ensure that they were still working on their mission i.e. “Clever, High-Quality, Innovative, Friendly, and Fun”. Phase 5 was about manufacturing mind meld meaning their products had to be world class. The final phase in Cranium growth strategy was to be able to gather views as took their product to the market since it would help them on correcting their areas of weaknesses.
Prior to its acquisition by Hasbro, Cranium did not acquire any firms itself as part of its growth strategy. Why do you think Cranium avoided this growth alternative? Would mergers and acquisitions be an effective growth strategy for Cranium?
Before Hasbro purchased Cranium in January 2008 (Arneson, 2008), it did not acquire any firms as part of its growth strategy mainly because the aim of its founders, Richard Tait and Whit Alexander was to offer quality products to its customers. If they had ventured in other firms within that short duration of ten years, it would have been hard for them to perfect what they had already started.
According to Cook and Harris report (2010), it seems Cranium had financial crisis by the time it was acquired by Hasbro since it had laid off a fifth of its workers in the previous spring and some of the cash deal was to pay off debts and investors.
Therefore, Cranium could not be in a position to any other firms. It was evident from the report that cranium had a challenge somewhere since they never disclosed most of their information including the value of its debt.
Which one of the growth strategies covered in this chapter do you think represents the most fruitful strategy for Cranium, moving forward? Why?
Among the growth strategies that Cranium undertook, phase one about moment engineering was the most fruitful strategy that enabled the company to move forward very fast. Hasbro was the maker of scramble and monopoly and the second largest toy and game company in the world (Arneson, 2008; Cook and Harris, 2010).
The reason as to why Hasbro acquired Cranium was that they had an ongoing strategy to bring to the market the most innovative games and toys in the world. The founders of cranium also saw Hasbro as a perfect home for Cranium. Reports showed that Craniums purchase price was below its annual revenue, thus, the offer was not bad for Hasbro.
Hasbro also had a newly formed subsidailly, which he wanted to merge with Cranium. Hasbro also considered the fact that Cranium founders Richard Tait and Whit Alexander would stay on for a while to oversee its transition before entering into new ventures (Arneson, 2008; Cook and Harris, 2010).
Why do you think Hasbro acquired Cranium? Are you surprised that Tait and Alexander will be leaving the company? Do you think Cranium will become a more popular or a less popular game now that it is a fully owned subsidiary of Hasbro?
It is a surprise that Richard Tait and Whit Alexander who were the founders of Cranium are selling the company to Hasbros. According to its history, it started very well and was the best selling games and Toy Company. It dominated the board game industry for a long time and it was reported that it was making some annual revenue, thus the reasons behind its acquisition by Hasbros are not convincing.
Cranium may continue being a popular game even after its acquisition by Hasbro regardless of the fact that its founder will leave it entirely to him.
This is because Hasbro has been the second largest game and toy company in the world and will of course employ the strategies, which has brought it that far to Cranium. In addition, the time Craniums founders will invest in Hasbros before they leave will leave much effect to the future of Cranium in Hasbro.
Conclusion
The case study of on Cranium shows clearly that there are so many ventures in the world, of which the most important thing is to be aggressive and careful.
It is so evident that by the time cranium were venturing in to board game industry, it was already flooded, but they did not comply with the traditions and the expectations of the industry. Rather, they laid down strategies on how to venture in to the industry, which turned out to be very successful.
References
Arneson, E. (2008). Hasbro Acquires Cranium. Web.
Cook, J. and Harris, C. Hasbro to buy game maker Cranium. Web.
Dann, J. (2010). What’s So Smart About Cranium? Web.
Gayatri, D. & Madhav, T. (2005). Cranium Inc. The Board Game Maker: Winning the Marketing Game! Web.