Activision Blizzard

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This analysis of Activision Blizzard is part of our coverage of the world’s 10,000 largest companies.

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Company Description

Activision Blizzard is a global interactive entertainment company headquartered in Santa Monica, California. It was founded in 2008 and is best known for its video game products and services, such as Call of Duty and World of Warcraft. Activision Blizzard caters to a wide range of markets, including PC, console, mobile, and online platforms. It also provides digital advertising services and has a presence in over 190 countries.

Industry Overview

Activision Blizzard operates in the global interactive entertainment industry, which is estimated to be worth $152.1 billion in 2020. The industry employs over 2.8 million people worldwide, with the majority of employees based in the USA, United Kingdom, and Canada. According to a 2019 report, the interactive entertainment industry as a whole employs around 1.2 million people in the USA alone, with over half of those working in the video game industry.

Industry Classification

In terms of formal classification, Platform Executive has tagged Activision Blizzard as a business operating within the Software industry.

Major Products & Services

The main products and/or services commercialised by this business include:

  • Video Games: Call of Duty, World of Warcraft, Overwatch, and Diablo
  • Merchandise: Clothing, toys, and collectibles
  • Esports: Competitive gaming leagues and events
  • Mobile Games: Candy Crush and other mobile titles
  • Advertising: Advertising opportunities on the company's websites, apps, and games

Table of Contents

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Competitive Landscape

Activision Blizzard operates in a highly competitive environment, constantly facing challenges and pressures from other major players in the gaming industry. With the rise of mobile gaming and indie developers, traditional console and PC gaming companies are facing increased competition for consumers' attention and spending. Additionally, Activision Blizzard must also contend with the emergence of virtual reality and esports, which are rapidly growing in popularity and attracting a significant portion of the market share. In this cutthroat landscape, companies are constantly innovating and pushing boundaries to stay ahead, making it crucial for Activision Blizzard to continuously deliver high-quality and engaging gaming experiences.

Key Competitors

We have identified the following organisations as being key competitors:

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Key Stakeholders

Stakeholders are individuals or groups affected by a business's actions. Understanding their needs helps a business make decisions that benefit all parties.

Internal and external stakeholders include the following:

1. Customers: The customers of Activision Blizzard are the people who buy and play their games, subscribe to their services, and watch their esports tournaments.

2. Employees: Activision Blizzard's employees are a key stakeholder as they are responsible for developing, marketing, and distributing the company's products and services.

3. Shareholders: Shareholders own the company and are entitled to dividends and other benefits associated with their investments.

4. Partners: Activision Blizzard partners include game developers, console manufacturers, and retailers.

5. Government: Governments around the world regulate the gaming industry, and Activision Blizzard must comply with their laws.

6. Community: The local and global community can be affected by the company's decisions and is an important stakeholder.

Customers and Cohorts

The main customers of the organisation include:

  • Casual gamers
  • Competitive gamers
  • Mobile gamers
  • eSports fans
  • Streamers
  • Console gamers
  • PC gamers
  • Virtual reality gamers
  • Augmented reality gamers
  • Indie game developers1Publishers1
  • Retailers1
  • Advertising partners

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Diverse Portfolio: Activision Blizzard has a diverse portfolio of games across multiple genres and platforms, allowing the company to capture a wide variety of gamers and generate a steady stream of steady revenue.

Established Brand: Activision Blizzard has an established brand that has been around for decades, giving it a strong presence in the gaming industry and a loyal fan base.

Financial Strength: The company is financially strong, with a diversified revenue stream and strong balance sheet. This allows Activision Blizzard to make strategic acquisitions and investments to help grow its business.

Experienced Management Team: Activision Blizzard is led by an experienced and successful management team that has demonstrated an ability to develop and grow its business.

Global Reach: Activision Blizzard has a global presence, with its games being played in more than 180 countries. This gives the company a competitive advantage over smaller rivals.

Market Trends

Market trends can significantly impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and ultimately affecting the organisation’s ability to remain competitive in the market. Staying ahead of these trends enables businesses to proactively adapt their strategies, mitigate risks, and capitalise on emerging opportunities.

As part of this study, we have identified a number of potential trends that could impact the organisation. These include the following:

Market Trends

Key Performance Indicators

Key Performance Indicators
KPIs (Key Performance Indicators) are important to a business such as Activision Blizzard as they help measure progress towards achieving organisational goals and objectives. They provide a useful insight into the performance of different areas of the Activision Blizzard business and therefore enable informed decision-making.

KPIs also help to motivate employees towards achieving targets.

Below is a list of Key Performance Indicators we deem relevant to this company:

Brand Strength

Brand strength is more than a logo or name. It reflects a company’s reputation and how it is perceived by customers, investors, and employees. It is built on core values, mission, and a unique selling proposition (USP) that differentiates the business.

Brand strength goes beyond superficial elements and taps into core values, the defined mission, and unique selling proposition (USP) of a company.

Below are key reasons why brand strength matters:

Trust and Credibility: In a market flooded with choices, customers gravitate toward brands they trust. A strong brand signals reliability and quality, fostering customer loyalty. Loyal customers not only make repeat purchases but also advocate for the brand, driving word-of-mouth growth.

Brand Strength Analysis

Differentiation: A strong brand helps a company stand out in competitive markets by clearly communicating its value proposition. It creates a unique identity, establishes a competitive edge, and positions the company as a leader in its industry. For example, Google is synonymous with internet search.

Customer Loyalty: A positive brand experience builds emotional connections, making customers less price-sensitive and willing to pay a premium. Loyal customers generate repeat business and act as brand ambassadors, reducing customer acquisition costs and boosting long-term profitability.

Talent Acquisition and Retention: A strong brand not only attracts top talent but also enhances employee morale and engagement. Employees who identify with a reputable brand are more motivated, productive, and committed, driving better business outcomes.

Benchmarking Brand Strength

Below is a guide as to the scoring mechanism used to gauge the brand strength of this company:

A

The company enjoys an excellent level of brand strength.

  • This score signifies that the company has developed a highly regarded and well-recognised brand.
  • Customers and the wider community perceive the company as trustworthy, reliable, and superior to competitors.
  • The company enjoys a strong connection with customers, who actively engage with and advocate for the brand.
  • The company's brand effectively communicates its unique value proposition.
  • The corporate attracts and retains top talent, and its reputation extends beyond its target market.
B

The company has a good brand strength, indicating that it has a solid and respectable brand presence.

  • Customers generally have positive perceptions of the company.
  • While the company may not be as distinctive or well-known as the top brands, it still differentiates itself from competitors and enjoys a loyal customer base.
  • The brand inspires some level of customer engagement and advocacy.
  • The company attracts top quality employees and maintains a good reputation. People want to work there.
C

The business has an average brand strength, meaning it is neither strong nor weak in the marketplace.

  • Customers perceive the company as ordinary or run-of-the-mill, lacking an emotional connection or distinctiveness.
  • The company faces challenges in standing out among competitors and needs to better communicate its proposition.
  • Decent level of customer satisfaction, but significant there is room for improvement in terms of brand loyalty.
  • The company's reputation is neither a huge positive, or negative.
D

The company's brand is quite weak. Work required to increase its potential.

  • Customers have mixed or negative perception of the company, associating it with average or below-average quality.
  • The business struggles to differentiate itself from its competitors and lacks a compelling value proposition.
  • Customer engagement and brand loyalty may be minimal, requiring some effort to improve the brand experience.
  • The company's reputation may have encountered challenges, poor press, or may not be well-known in the market.
E

The company's brand is weak and fails to resonate with customers and audiences. This needs to be addressed.

  • Customers perceive the company as being too unreliable, lacking in quality, or irrelevant.
  • The company struggles to differentiate itself from competitors, and there is a lack of customer engagement, or loyalty.
  • The company's reputation may be tarnished or negatively perceived, hindering growth efforts.
  • Significant efforts are required to rebuild the corporate brand and establish a more positive image in the market.
F

The company has a severe lack of brand strength. It is a problem that needs addressing with urgency.

  • The company is poorly recognised, and customers have negative perceptions or zero awareness of its offerings.
  • The company fails to communicate its unique value proposition or inspire customer loyalty.
  • The company's reputation may be highly unfavourable, and attracting customers or top talent is challenging.
  • Immediate and extensive actions are likely necessary to revitalise the brand.

Brand Strength Score

Scoring brand strength is subjective because it relies on individual perceptions and interpretations of various factors, such as customer sentiment, market dynamics, and the competitive landscape, which can vary.

Using our scoring methodology, the average score of a business is calculated as being C (average). This differs from the average score of the top 10,000 businesses featured in our coverage. Weighted to that cohort, the average brand strength score increases to a B (good).

The analysis team have noted the following factors impacting its brand strength:

  • recognised as a leader in the video game industry with 30+ years of experience,
  • Consistent presence at major gaming events, such as BlizzCon, E3, and PAX
  • Strong relationships with gaming influencers, like Ninja and Markiplier
  • Popular franchises, such as Call of Duty, World of Warcraft, and Candy Crush
  • Presence in multiple global markets, including North America, Europe, and Asia
  • Brand presence in both digital and physical forms, such as streaming platforms and mobile games
  • Brand Strength Score: A

7Ps Marketing Analysis

The 7Ps of marketing are crucial components of strategic decision making for any organisation in any industry vertical.

Using the 7Ps in competitive analysis provides a holistic view of the marketplace, allowing businesses to refine their strategies, capitalise on competitors' weaknesses, and better meet consumer needs. The 7P's are defined as:

  • Product/Service
  • Price/Fee
  • Place/Access
  • Promotion
  • People
  • Physical Evidence
  • Processes

All these elements together frame an organisation's marketing mix, crucial for creating effective marketing strategies.

This 7P analysis is designed to provide a valuable insight into the business strategies of the company. It can be used to reveal strengths and weaknesses in their marketing mix, offering opportunities to compare and enhance a business.

1. Product/Services: Activision Blizzard is a leading video game developer and publisher, offering a wide range of popular games across various platforms, including PC, consoles, and mobile devices. Their products and services include top-selling franchises such as Call of Duty, World of Warcraft, Overwatch, and Candy Crush Saga. In addition to their own games, they also offer distribution and publishing services for independent developers.

2. Price/Fees: The pricing strategy for Activision Blizzard's products varies depending on the game and platform. They offer a combination of one-time purchases, subscription fees, and microtransactions for in-game items. They also have different pricing tiers for different regions, taking into account purchasing power and market demand.

3. Place/Access: Activision Blizzard's games are available worldwide through various distribution channels, including physical retailers, digital storefronts, and their own online platform, Battle.net. This allows for easy access to their products for a wide range of consumers.

4. Promotion: Activision Blizzard utilises a mix of traditional and digital marketing strategies to promote their products. This includes advertising campaigns, influencer partnerships, and social media marketing. They also have a strong presence at gaming conventions and events.

5. Physical Evidence: The physical evidence of Activision Blizzard's products can be seen through their high-quality game packaging and merchandise. They also have physical retail stores and pop-up shops for limited edition releases and special events.

6. Processes: Activision Blizzard has a well-established process for game development, which involves extensive market research, testing, and feedback from players. They also have a robust customer service system to address any issues or concerns from their players.

7. People: The people aspect of Activision Blizzard's marketing model includes their dedicated team of game developers, marketers, and customer service representatives. They also have a large and loyal community of players who serve as brand advocates and ambassadors.

Potential Products

As part of this study, we have carefully examined and prognosticated a range of new products, services, or innovations that this organisation could potentially develop and introduce to strengthen its market position and respond to emerging industry trends.

eSports Tournaments: Activision Blizzard could create an eSports tournament system that would allow gamers to compete in online tournaments for prizes.

Online Multiplayer: Activision Blizzard could create an online platform that would enable gamers to play together in real-time, regardless of location.

Cloud Gaming: Activision Blizzard could create a cloud gaming platform that would allow gamers to play their favourite games on any device with an internet connection.

Mobile Games: Activision Blizzard could create mobile versions of some of their popular console and PC games, enabling gamers to play on their phones.

Merchandise: Activision Blizzard could create merchandise associated with their popular games, such as t-shirts, mugs, hats, and more.

Streaming Services: Activision Blizzard could create an official streaming service, allowing gamers to stream their gameplay and view other players’ streams.

Educational Programs: Activision Blizzard could create educational programs based on their games, allowing gamers to learn about various topics such as programming, game design, and more.

Potential Synergies

Our proprietary product and portfolio-matching algorithm has identified the following organisations as having strong potential synergies with the company, based on strategic alignment, complementary capabilities, and opportunities for collaboration across markets or domains.

1. Microsoft: Microsoft has a long-standing partnership with Activision Blizzard, with the two companies collaborating on various gaming initiatives.
2. Sony: Sony and Activision Blizzard have a strong relationship, with Sony being the exclusive publisher of the Call of Duty franchise on PlayStation.
3. Google: Google and Activision Blizzard have partnered to bring cloud gaming services to the world, with Google’s Stadia offering access to Activision Blizzard games.
4. Apple: Apple and Activision Blizzard have a long-standing relationship, with Apple providing access to popular Activision Blizzard games on their App Store.
5. Amazon: Amazon and Activision Blizzard have collaborated to bring cloud gaming services to the world, with Amazon’s Luna offering access to Activision Blizzard games.
6. Twitch: Twitch and Activision Blizzard have partnered to bring esports content to the world, with Twitch hosting tournaments for Activision Blizzard games.

Porter's Five Forces

Developed by Michael Porter in 1979, Porter’s Five Forces is a model used to analyse industry attractiveness and evaluate competitive environments. It considers five forces:

  • Competitive rivalry
  • Supplier power
  • Buyer power
  • Threat of substitution
  • Threat of new entries

We include this framework because it supports strategic planning, investment decision-making, and long-term competitive positioning across industries by highlighting structural pressures, market threats, and potential profit constraints.

Activision Blizzard scores WELL in relation to Porter's 5 forces.

1. Threat of new entrants: LOW. The video game industry is capital intensive and requires significant research and development costs. There are also HIGH barriers to entry in terms of distribution and marketing.

2. Bargaining power of buyers: LOW. Buyers are not very price sensitive and are willing to pay for HIGH quality games.

3. Bargaining power of suppliers: LOW. There are many suppliers of video game software and hardware.

4. Threat of substitute products: LOW. There are few substitutes for video games.

5. Intensity of competitive rivalry: HIGH. The video game industry is HIGHLY competitive with many large companies vying for market share.

PESTLE Analysis

A PESTLE analysis is used to evaluate external factors affecting an organisation. It examines (1) Political; (2) Economic; (3) Social; (4) Technological; (5) Legal; and (6) Environmental influences. This framework helps businesses identify potential risks and opportunities in the macro-environment, supporting informed decision-making, strategic planning, and long-term sustainability in dynamic markets.

Reasons to use a PESTLE include:

  • Environmental Scanning: PESTLE helps assess external factors, keeping executives aware of key forces
  • Strategic Planning: It identifies opportunities and threats, aiding market alignment and goal-setting
  • Risk Assessment: PESTLE highlights risks, helping businesses develop mitigation strategies
  • Market Insights: It provides insights into trends, behavior, and regulations for better strategy development
  • Business Adaptation: Regular analysis allows businesses to stay competitive by adapting to changes

Below is the PESTLE analysis for this company:

PESTLE Analysis: political, economic, social, technological, legal, environmental

CATWOE Analysis

CATWOE

The CATWOE analysis helps businesses understand stakeholders' perspectives for informed decision-making, covering six elements:

  • Customers: Beneficiaries of the system’s outputs
  • Actors: Those who influence the system’s functionality
  • Transformation: Converting inputs into value-creating outputs
  • World View: The broader context behind the system’s existence
  • Owner: Decision-makers with authority over the system
  • Environment: External factors impacting the system

The CATWOE analysis is most effective when used alongside a SWOT analysis.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Activision Blizzard business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

SWOT Analysis: strengths, weaknesses, opportunities, threats

Strengths

The strengths of a company refer to its internal attributes or capabilities that provide it with a competitive advantage.

Below is a list of the key strengths we have identified for the business:

1. Strong market position - Activision Blizzard is the world's largest video game company with a market share of 38.6% and is backed by tech titan, Microsoft Corp.

2. Leading franchises - Call of Duty, World of Warcraft and Candy Crush are some of the most popular video game franchises in the world.

3. Diversified business model - The company has a diversified business model with a strong presence in digital and mobile gaming.

4. Strong financials - Activision Blizzard has strong financials with a revenue of $7.5 billion and an operating margin of 30.4%.

Opportunities

Opportunities refer to factors that present potential avenues for growth, advantage, or improvement for an organisation.

Below is a list of opportunities we have identified for the business:

1. Increase digital sales: Activision Blizzard should focus on increasing their digital sales, continuing to leverage their current direct-to-consumer platforms like Battle.net and making use of new platforms like Apple Arcade. By doing this, Activision Blizzard can capture the growing digital gaming market and reach a larger customer base.

2. Expand into new markets: As the gaming industry continues to expand, Activision Blizzard has the opportunity to explore new markets and develop new products to cater to their needs. For example, they could create localised versions of their games, create new IPs, or even acquire new companies to expand their portfolio, which would open up a new revenue stream.

3. Invest in research and development: To stay competitive in the gaming industry, Activision Blizzard should continue to invest in research and development. This could include expanding their existing franchises, creating new ones, and exploring new technologies such as virtual reality and augmented reality.

4. Improve customer experience: To maximise their customer engagement, Activision Blizzard should focus on improving their customer experience. This could include optimising their online stores, developing better customer support services, and providing exclusive rewards and content to their customers. Additionally, they could use customer data to better understand their players and develop better products and experiences.

Weaknesses

The weaknesses refer to factors that hinder a company's performance or competitive advantage.

Below is a list of the weaknesses we have identified for the business:

1. Lack of innovation

2. Over-reliance on existing IP

3. Lack of engagement with core gamers

4. High fixed costs

Threats

The threats to an organisation refer to factors that pose challenges or risks to a company's success.

Below is a list of the threats we have identified for the business:

1. Growing competition from other video game companies: As the video game industry continues to grow, Activision Blizzard faces more competition from other gaming companies. This could lead to customer attrition, reduced market share and decreased profits.

2. High dependence on external partners: Activision Blizzard relies on external partners for many aspects of its operations, such as game development and distribution. If these partners are unable to deliver on time or fail to meet quality standards, this could lead to delays in product launches and potentially reduced revenues.

3. Changing consumer tastes: Consumer tastes are constantly changing, which can lead to reduced customer demand for certain products. If Activision Blizzard fails to stay ahead of the curve and produce products that appeal to customer preferences, this could lead to decreased profits.

4. Increasing costs: As the video game industry continues to evolve, Activision Blizzard may face increasing costs associated with developing and marketing its products. If these costs are not managed effectively, this could lead to decreased profits and lower returns on investment.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Activision Blizzard. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Activision Blizzard, as well as areas where the company needs to improve its operations or strategy.
Company: Activision Blizzard is a global leader in interactive entertainment, with hundreds of millions of players around the world. Their portfolio includes some of the biggest names in interactive entertainment, such as Call of Duty, World of Warcraft, Overwatch, Candy Crush and many more.

Collaborators: Activision Blizzard works with many partners to develop and publish its games, including Microsoft, Sony, Nintendo, and various third-party developers. They also collaborate with content creators, influencers, and streamers to promote their games.

Customers: Activision Blizzard’s customers are gamers around the world, from casual players to hardcore gamers. They also have a large base of esports fans who watch and follow competitive tournaments and events.

Competitors: Activision Blizzard’s main competitors are Electronic Arts, Take-Two Interactive, and Ubisoft. They also compete with mobile, PC, and console game developers, such as Supercell and King, as well as streaming services like Twitch and YouTube Gaming.

Content: Activision Blizzard’s content focuses on creating immersive, engaging gameplay experiences for players. They also produce esports tournaments, content, and special events to engage their fans and promote their games. Additionally, they create original content, such as videos, comics, and books, to build their brand and expand their reach.
5C Analysis: company, customers, competition, collaboration, climate

MOST Analysis

MOST Analysis: mission, objectives, strategy, tactics

The MOST analysis framework is used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. The MOST analysis helps executives focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles.

  • Mission defines the organisations purpose and core values, providing a clear direction and inspiration for stakeholders
  • Objectives are specific, measurable targets that support the mission; they indicate what the organisation aims to achieve within a defined timeframe
  • Strategy outlines the high-level approach the organisation will undertake to reach its objectives, detailing how resources will be allocated and initiatives prioritised
  • Tactics are the actionable steps and specific plans that implement the strategy, ensuring that all team members understand their roles in achieving objectives

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

The team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism designed to benchmark innovation.

First, we allocate a score of A-E for the industry, based on the key organisations operating within the space; and then score the individual organisation using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Innovation Scorecard

Industry Score:

A The industry is amongst the most innovative; with the leading players all driving the sector forward.
Example industry: PaaS
B The industry and its leading players have a good track record of innovation; and can quickly react to change.
Example industry: Pharmaceutical
C Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate.
Example industry: FMCG
DBusinesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption.
Example industry: Retail Banking
E The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change.
Example industry: Publishing

 

Company Score:

1 The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2 The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3 The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5 The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.
The team at Platform Executive has judged Activision Blizzard as having an innovation score of B2.

Appendices

The appendices section of this report contains supplementary information that we deem helpful in providing a more comprehensive understanding of the report.

Methodology

This study on Activision Blizzard forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The report is based on information and learning from the following sources:

  • Corporate websites
  • Proprietary research databases
  • SEC Filings
  • Corporate press releases
  • News articles
  • Financial data API's
  • Product-matching algorithm

Further Reading

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Disclaimer

All Rights Reserved.

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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