1. What issues did Zynga face in formulating its initial strategy, and how did Zynga choose to compete?
2. What challenges did Zynga face as it implemented strategy, and what choices does leadership have to make now in order to attain and sustain a competitive advantage?

Zynga, located in San Francisco, California, had become a dominant player in the online gaming field, almost entirely through the use of social media platforms. The company name was established by the founder and original CEO, Mark Pincus, to pay tribute to his late beloved pet bulldog, named Zinga. Although this seems whimsical, Zynga was actually quite a powerful company. To exemplify Zynga’s prominence, Facebook was reported to have earned roughly 12 percent of that revenue from the operations of Zynga’s virtual merchandise sales. On the basis of this success, Zynga had gone public in December of 2011.

Zynga had been a dominant force, but had lost market share in recent years due to the absence of a new and innovative product pipeline. Lack of new product-driven growth had lead to year-over-year decline in revenues, with significant losses – over $225 million in 2014.

Zynga’s financials may be at risk because of what may be considered questionable decision making. Many of Zynga’s competitors, and even some partners, were displeased with the company’s actions and have begun to show it in the form of litigation. Agincourt, a plaintiff of a recent lawsuit brought against Zynga, was quoted as saying, “Zynga’s remarkable growth has not been driven by its own ingenuity. Rather it has been widely reported that Zynga’s business model is to copy creative ideas and game designs from other game developers and then use its market power to bulldoze the games’ originators.” If these lawsuits and other ethical issues continued to arise for Zynga, the company will have to watch its step.

As Zynga looks to the future, where will its next big hit come from? With all of the acquisitions surrounding Zynga’s past games, will it continue on the same path it has become so notoriously known for today and reap further accusations of imitating its competitors’ existing games? Or will Zynga change its approach, gain a reputation for intellectual integrity, and begin creating true one of-a-kind games – showing its capabilities as a leader in the industry rather than a follower? With all eyes on it as the former market leader, it will not be easy for Zynga to get away with some of its earlier stunts, especially now as a public company. The newly implemented board of directors had already announced their intention to ensure proper decision making going forward, particularly regarding corporate governance. With all of the changes and concerns that had to be accounted for as a public company, Zynga needed to watch its step or prepare to feel the wrath of its shareholders.