Business Report: Valve Corporation

Executive Summary
This report will be done on the business Valve Corporation. This report will talk about its nature of business, its operations, its marketing, its finance, its human resources and its ethical business behaviour. Valve Corp. is a national company, however it branches out to the world as it is mainly based on the World Wide Web.

Nature of Business
Valve Corp., which was formally known as Valve Software, commonly referred to as just Valve, is a private company which allows them complete freedom in their business actions, as well as boasting the fact that they have a relatively flat organisational structure; however there are some in that structure which have more say than others.
Valve Corp. is ‘run’ by Gabe Newell, whom is the Managing Director of the company.
Their headquarters are currently located in Bellevue, Washington, U.S. however they branch out to almost all countries as they are a very successful company. Stakeholders of the company include the employees of the business, the Managing Director of the business, competitors, and the largest stakeholder, online gamers.
Products of the business include Team Fortress 1 and 2, Portal 1 and 2, Counter-Strike, Left 4 Dead 1 and 2, and Day of Defeat; all of which are very successful games. They also own a very successful gaming platform, steam.

Operations of the Business
One of the main products of Valve Corp. is Steam. Steam is a gaming hub which is one of the most popular gaming hubs in the entire internet. Valves main inputs into steam include: * The employees * Development kits/Developers * Hardware/Software
The transformation process includes the employees all coming together to have a meeting, coming to a conclusion as to what should be changed to the product, and applying what was spoken about in the meetings to the product.
The outputs of the Valves product include: * A more refined, polished product * A more user friendly product * New content added to the product
An example of Steam being transformed into a better product in the end is that in July 2014, there were over 3,400 games available on Steam, most of which are made by different game development companies, and in January 2014 Valve announced that it had surpassed 75 million active user accounts, which shows the extent of Valves transformation process.

Marketing of the Business
Valve is very unique compared to a lot of other businesses as, unlike a majority of all other businesses, Valves main business head is based on the internet. So it is obvious to see that its main type of market would be online marketing, gaining profit through online transactions. Valves target market is primarily online gamers, as they are the ones who will mostly be using Valves products, and form a large percentage of the online market so is a wise business decision to base their main target market to online gamers.
Valves pricing strategy for Steam is that Steam itself is free, which means anyone can get it if they have a stable internet connection. The way they do their pricing however is with the gaming hub itself, selling games at prices which give both Valve and the company who made the game a split of the sale. They also do discounts and sales of all games in the hub as a pricing strategy to promote more spending in Steam, which can be seen in the picture in the page before, showing an ‘Autumn Sale’, which is one of valves many seasonal sales, which is also another one their Steams pricing strategies. Steam is used as a commercial hub of all pc gaming for its incredibly low prices for all pc games.

Finance of the Business
Valve earns most of their funds through their share of profit through the purchasing of games from their product – Steam, they make money though the micro-transactions within their computer games, and they also make money through people purchasing their own games.
A cash flow statement is a financial statement which analyses income and payments so as to see the month to month profits of a business. Valve can use cash flow statements change the pricing of a game for example so that they can balance out the amount of money they earn, and the amount of money that the developer earns.
An income statement is a financial statement which monitors the profitability of a business within a time frame. Valve can use cash flow statements to their advantage as they can put certain games on special when they start to see a decline in their sales.
A balance sheet is a financial statement which is a record of all the assets, liabilities and the amount of capital that a business has. Valve can use balance sheets to their advantage as they can see where money needs to be put into their business at the right time, which allows for maximum performance and productivity.
Valve use all of these to help maintain the standards at which they perform and allows them to manage to keep all the games located within Steam at such low prices, managing to reel in more customers than many other gaming hubs located out on the internet.

Human Resources of the Business
Valve when it comes to human resource management come under the likeliness of companies such as Google or Apple, which treats employees there as if they were the business owners, and provide many benefits to working with them to encourage productivity and a willingness to work.
As of 2013, Valve currently has 330 employed in their offices around the world. Valve recruits mostly game developers as their employees as that is their main line of work, and select these recruits by going out to events and picking those which Valve believe have real talent.
Valve train and develop their employees by getting them involved in the production of all of their products, which not only gives them training and skills, but gives them experience in working in that environment.
Valves employment contracts are often based around software development and the contract lasts until that product is finished, which can takes years to make and allows those being contracted a chance to stay and work for longer.

Ethical Business Behaviour of the Business
Valve treats their employees much like those at Apple or Google do, which respect and as if they are family. Valve employees are given a lot more creative freedom than a lot of other companies in Valves line of work, which results in a more refined and better made product, which generates more sales for the business.
Most of their operations are internal, and appears to outsource not much work to other companies. Valve manage their financing to the extent that they can constantly place their products on special, showing that they don’t only care about money, rather give others enjoyment out of their product.
Valve communicate within their company very openly, as it is a flat organisation which means people of any level have a say in what is done within the company. Valve shows to the society that they are environmentally sustainable and aware of the environment as they are an online based company, which means that they don’t leave anywhere near as much pollution and waste as many other businesses do.

Conclusion
Valve Corp. is a very successful business as it is a sort of ‘pioneer’ in online gaming businesses and are a good example of an ‘ideal’ business in today’s world. Valve show their strengths in their nature of business, operations of the business, marketing of the business, financing of the business, human resource management of the business and their ethical business behaviour within the business. Businesses should strive to become a business like Valve is.