What do you think are the main reasons behind the firm’s demise?

Case 1

– Game EnoughGame Enough recently reported a very substantial trading loss for the past twelvemonth’s operations. The loss amounted to some £185 million and, as a result, the companyreckons it will have to make some 10 per cent of its workforce redundant. The top managementin the company places the blame firmly at the feet of deteriorating worldwide economicconditions and a very uncertain outlook for the future.The company has enjoyed rapid growth over the last decade and found it easy tomake money in a market where variations on a theme have been very much the name of thegame. It has been a ‘me too’ attitude where anyone who can find some new narrative for an ‘oldtheme’ can make a quick profit. Characters and plots abounded and the same basic mechanicsin constructing games and controlling game play have been employed in a seeminglyendless fashion to tempt would-be gamesters into parting with their cash. Sales of the firm’sgames have multiplied from small beginnings in a rapidly developing home market to multimillionpound global sales.The latest loss has come about as something of a surprise to a company that hastraditionally been earning big profits, and the Chairman of the Board of Directors and ChiefExecutive are having discussions about what action they should instigate. The Chief Executiveblames a worldwide economic recession and argues that it is simply a case of ‘weathering thestorm’. A leaner organization, he argues, will be better able to come out of the recession fitterand able to take advantage of the recovery that will ultimately come about. The Chairman, on theother hand, is less convinced with this argument and feels that there are problems in the industryas a whole. He is influenced in his view by the opinions of several of the non-executive directorsof the Board who have wider experience of what happens in other industries.

Question:

What do you think are the main reasons behind the firm’s demise? Can it do anythingabout the situation? Explain.