 Each student should prepare a memo to the leadership of Activision’s Skylanders franchise answering the three questions below. Your write-up should be no more than five typed pages (1-inch margins, 1.5 line spacing, 11-point font). It is ok to include non-textual addenda (over the five pages), and please cite references (including websites) as appropriate. Going over the page and format limits will be counted against your grade.  While there is a great deal of online information about Activision, Skylanders, and the toyto-life market (and you are free to draw on this information), you should be able to complete your analysis by reading the case “Activision Defends the Skylands” available for download through Stellar. We have also included a few supplementary (and non-required) links at the end of the case, particularly for those that might be unfamiliar with the market for video games or toys.  Remember that the key learning and assessment objective is to use the course tools and frameworks to help you assess and develop firm-level strategy. Remember to use the course materials directly in your responses (including case examples where appropriate).Assignment Activision has hired you to help them consider the future of the Skylanders franchise and Activision’s future in the toy-to-life market. While the franchise has had significant success up to this point, the Skylanders team is seeking synthetic and original insights into the sources of their current competitive advantage, the impact of entry by Disney and the potential entry of Lego, and strategic recommendations going forward. Specifically, please address the following three questions: 1. How does Activision create and capture economic value through the Skylanders franchise? What strategic choices did Activision make that has allowed them to establish competitive advantage in the toys-to-life market? What have been the key strengths and weaknesses of the strategy so far? How sustainable is their strategy going forward? [14 POINTS] 2. The Bala brothers recognize that their choices going forward depend importantly on their understanding of what actions Disney and Lego are likely to make in this market over the next few years. Please answer one of the two sub-questions below. [10 POINTS] a. Beginning with the release of Skylanders: Swap Force in 2013, Activision has introduced a new “game mechanic” each year (Swappables, Trap Team, and Superchagers). To date, Disney has focused on introducing new characters and enhancing the experience within the video game (e.g. expanding Disney Infinity to include franchises such as Marvel and Star Wars)1. Complete a competitive strategy profile of Disney and use your analysis to evaluate whether Disney is likely to compete more directly with Skylanders by also imitating or introducing new “game mechanics.” b. The successful entry of Lego Dimensions is a new source of competition in the toysto-life market. Dimensions targets older gamers with the most complex game mechanics in the industry, including requiring players to interact with the physical toy in real time to progress in the video game.2 Complete a competitive strategy profile of Lego and use your analysis to evaluate whether Lego is likely to compete more directly with Skylanders by targeting a younger audience in future products. 3. Based on your strategic analysis in the preceding two questions, what actions would you recommend to the Bala brothers and the rest of Activision for how they should lead Skylanders? [6 POINTS] 1 http://www.gamerevolution.com/features/side-by-side-skylanders-vs-disney-infinity-vs-lego-dimensions-toys-to-life 2 http://www.polygon.com/features/2015/12/14/9868062/amiibo-disney-infinity-skylanders-lego-dimensions-aguide-to-gaming#lego