...Responding to the Wii Group Case Writeup BUSMHR 4490 In the Harvard Business Review case Responding to the Wii, Kazuo Hirai was faced with an interesting dilemma. Hirai, the chief executive of Sony Computer Entertainment Inc. faced pressure due to Sony’s Playstation 3 video game console losing market share to the Nintendo Wii. Hirai faced a major business decision in deciding how Sony should respond to the cheaper, more interactive, family oriented Nintendo Wii. The Video Game Industry at a Glance From an industry analysis standpoint, the videogame console industry in 2008 was not very attractive. The industry was, and still is, structured as an oligopoly in which there are few large firms with differentiated product and high entry barriers. The three main competitors- Sony, Microsoft, and Nintendo- completely saturated the industry and held the majority of the market share (Figure B). Capital and fixed costs were very high for console developers and entry required third party software developers to build quality games to be sold with their platforms. The big players like Sony (Playstation 3) and Microsoft (Xbox 360) were having difficulties selling their console even if their consoles were priced higher at $499 compared to $250 for Nintendo Wii, creating an environment of intense rivalry. Compared to the other two rivals, the Nintendo Wii was less advanced but it was priced significantly cheaper which was met with enthusiastic customer reception. Nintendo also targeted...
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...Executive Summary Sony Computer Entertainment Inc. has the unique distinction of being the first and only company to have had market leadership for 2 consecutive console generations. However, in recent times, the ecosystem has changed to include a larger audience and usability has trumped technological superiority as a key metric in generating buyer interest. In 2008, Nintendo’s Wii had 2 times the market share that Sony’s offering, the Play Station 3, had. I feel Sony should assess the following options. (1) Focus on catering to its niche advance game segment and focus on leveraging its progress form the previous 2 generations. (2) Respond to Wii onslaught by developing its previous generation console to include a low end offering that directly competes with Wii. (3) Partner with Nintendo and others to strengthen offerings in the gaming console space, eliminating Microsoft and creating a “co-opetition” I recommend a combination of (1) and (3) to ensure sustained dominance in the gaming console market. I would not look to option (2) since it undermines SCEI’s position as a focused differentiator (Exhibit 1 in appendix) and also because this would be a knee jerk reaction forcing Sony to play on Nintendo’s terms. Analysis As evident from Porters five forces analysis (Exhibit 2) the console market is not very attractive for new entrants. . However, there is a huge growth opportunity for established players since there is only moderate buyer bargaining power and few substitutes...
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...bargaining power of the suppliers, and rivalry among currently existing competitors. These competitive forces are easily seen in the video game industry, as there is already immense competition in the industry due to the similarities between the few major companies at play. Sony, Nintendo, and Microsoft are the three large players in the present day video game industry. Sony Computer Entertainment Inc. has been a dominant company in the industry for over a decade with the PlayStation 1 and PlayStation 2 platforms; however, it is struggling to stay at the helm of the industry due to the presence of these competitive forces. The threat of entry of a new company in the video game industry is a relatively weak competitive force for Sony. The video game industry is already dominated by three major players (Sony, Nintendo, and Microsoft), thus the possibility of a new entrant in the industry is very low. Nintendo was established well before Sony as a major player, and Microsoft came into the industry in 2001 with the original Xbox. When Sony came in with the PlayStation 1, they completely took over the industry and continued to dominate until 2005. The entrance of Microsoft with their Xbox in 2001 was not a large threat to Sony because the PlayStation was already the video game console of choice for the majority of households. Now in the present industry, there is a high risk to enter the industry for it is already dominated by three major players, and the current...
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... The video game industry is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years with Sony, Microsoft and Nintendo competing for the higher profits in the market. This essay will analyze each of the five forces acting on the industry: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and the competitive rivalry among existing firms. Then it will be determined if the video game industry is still an attractive industry for Sony. The video game industry has high entry barriers because of its high research and development costs, and capital investment needed to start a business in the console industry. The cost required to develop and manufacture a product that could be a decent competitor in this market is too great for a non-established company in this industry. The technology that is needed to be successful is too advanced for new competitors to achieve. For this reason, the threat to Sony, Microsoft and Nintendo of new entrants, was not very high in 2008. Additionally, Sony’s PlayStation, Microsoft’s Xbox, and Nintendo’s gaming systems were very well established names in the industry. The prestige of these products was so strong that it would be extremely difficult for a new company to...
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...strategy that successfully impose a tight barrier for foreign entry into its market. The third takeaway is that being the first-mover in localizing its products to cater the foreigner market could help Hair, a Chinese brand suffering from such deeply-rooted bad image of low-quality, succeed in the more-developed countries like the US where lots of giants are already occupying a significant amount of market share. For the case of “Responding to the Wii”, the most important takeaway is the concept of two-sided model and its pricing strategy. First, the presentation makes me realize that there are quite a number of real life examples belonging to the two-sided market like operating system, recruiting sites etc because there is an indirect network effect in which the increase in “consumer” (end-users/job seekers) can reinforce the increase in “complementors” (software developers/recruiters). The second takeaway is that besides actively attracting complementors, it is also crucial to monitor the quality at the same time. Take the Play Station as an example, Sony has to at least set some direction or theme guidelines for its third-party developer in order that the games produced are of good...
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...Giovannia Musella 20120011 José Javier Ramos 20120012 Ana Lucia Tejada 20120031 Aneliesse García-Junco 20120292 CASO: Responding to the Wii? Fecha de entrega: Lunes 13 de abril 1. ¿Tiene Nintendo una ventaja competitiva? ¿Cuál es? ¿En que se basa? ¿Pueden los competidores copiarla? Nintendo no solo duplica las ventas de sus mayores competidores Sony y Microsoft, sino que observando la utilidad operativa y los márgenes operativos de la industria, podemos observar como Nintendo tiene una gran ventaja sobre la misma. Tomando los resultados desde 1993 hasta el 2007, Nintendo en promedio logra una utilidad operativa de casi 1300 millones de dólares y un margen operativo de 26%. Mientras que comparado con la industria, esta tiene en promedio una utilidad operativa de 31 millones de dólares y un margen operativo de 6%. Es evidente y podemos afirmar que Nintendo sí cuenta con una ventaja competitiva respecto a su competencia. La misma podemos identificarla en el segmento de mercado tan amplio que logró penetrar. Después de que las consolas de Sony y Microsoft se enfocan en personas desde los 18 años de edad hasta los 34, Nintendo logró penetrar un mercado que aún no había sido explorado. Creando así, una consola que pueden utilizarla niños desde los 9 años hasta personas de mayor edad de 65 años. Esto lo logran por medio de una estrategia de innovación, donde se enfocan en hacer una plataforma “User Friendly”; lo cual se ha convertido en la característica principal de la marca...
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...Sony Corporation and the Video Game Console Market: 1 A Competitive Analysis By Ryan Bogner, Peter Hung, Guan Wang, and Steven Wang This report evaluates Sony Corporation’s strategy in the console gaming market from the top-down perspective of the entire corporation. 1 Executive Summary Sony’s current strategy in the video game console market is simple: use the technologically superior Playstation 3 as a loss leader to introduce the Blu-ray optical drive2 into consumers’ homes and leverage that market penetration to drive content sales once Blu-ray is established as the de facto standard for optical storage. It is therefore in Sony’s interest to reach the tipping point for market adoption of Blu-ray as soon as possible. To increase the rate of Blu-ray adoption in the market, we recommend that Sony adopt a “good-better-best” strategy, whereby Sony produces discounted and premium versions of the current Playstation 3 for sale to consumers. This strategy will encourage price-sensitive customers to purchase Playstation 3 consoles without marginalizing power gamers. Nintendo and Microsoft will most likely respond to this strategy with differentiation rather than price competition. If Sony reinforces this strategy with coherent marketing and intellectual property strategies, it can increase Blu-ray adoption rates and make it more likely that the format will be adopted as a standard. The Market for Video Game Consoles is Growing, but Competition is Fierce The market for...
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...Sony Corporation and the Video Game Console Market: 1 A Competitive Analysis By Ryan Bogner, Peter Hung, Guan Wang, and Steven Wang This report evaluates Sony Corporation’s strategy in the console gaming market from the top-down perspective of the entire corporation. 1 Executive Summary Sony’s current strategy in the video game console market is simple: use the technologically superior Playstation 3 as a loss leader to introduce the Blu-ray optical drive2 into consumers’ homes and leverage that market penetration to drive content sales once Blu-ray is established as the de facto standard for optical storage. It is therefore in Sony’s interest to reach the tipping point for market adoption of Blu-ray as soon as possible. To increase the rate of Blu-ray adoption in the market, we recommend that Sony adopt a “good-better-best” strategy, whereby Sony produces discounted and premium versions of the current Playstation 3 for sale to consumers. This strategy will encourage price-sensitive customers to purchase Playstation 3 consoles without marginalizing power gamers. Nintendo and Microsoft will most likely respond to this strategy with differentiation rather than price competition. If Sony reinforces this strategy with coherent marketing and intellectual property strategies, it can increase Blu-ray adoption rates and make it more likely that the format will be adopted as a standard. The Market for Video Game Consoles is Growing, but Competition is Fierce The market for...
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...Microsoft and the Xbox 360 Ring of Death ------------------------------------------------- Table of Contents Executive Summary ...................................................................................................................... 3 Problem Statement .......................................................................................................................4 Situation Analysis ..........................................................................................................................4 Objectives ..............................................................................................4 Background ............................................................................................5 SWOT Analysis ..............................................................................................................................6 Strengths ...............................................................................................6 Weaknesses ...........................................................................................7 Opportunities .........................................................................................8 Threats................................................................................................... 8 Market Analysis ............................................................................................................................9 Previous Market...
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...manager, while in smaller firms, the owner may take the lead in marketing activities. In marketing management, SWOT analysis is very important because it is a element of the research necessary preliminary stage in the preparation of any level of strategic and marketing plans. It helps marketers build detailed profiles of their company and each competitor in the market, focusing especially on their strengths , weaknesses , opportunities and threats.Now,I conduct a SWOT analysis of Sony Shockwave, include four factors : strength factors, weakness factors,opportunity factors and threat factors. One of Sony ‘s greatest strengths is new products with high technology,such as Blu-Ray disc, helps Sony win the war to be the next generation of DVD. It boasts greater rivals and possesses anti-piracy technology and has the ability to deal with high-definition broadcasts.Besides, Sony beats its Japanese rival, Toshiba, which with partners was backing HD-DVD ( an alternative format). Another strength of Sony is their ability to be successful in several different markets. They have made an impact in the video game market, the PC market, and especially the television market and there are still numerous others.In game market , Playstation-3 can give the company a much needed boost....
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...chapter 2 “ The External Environment and Organizational Culture The essence of a business is outside itself. ” A Look Ahead — Peter Drucker LEARNING OBJECTIVES After studying Chapter 2, you will be able to: CHAPTER OUTLINE The Macroenvironment Laws and Regulations The Economy Technology Demographics Social Issues and the Natural Environment The Competitive Environment Competitors New Entrants Substitutes and Complements Suppliers Customers Environmental Analysis Environmental Scanning Scenario Development Forecasting Benchmarking Responding to the Environment Adapting to the Environment: Changing Yourself Influencing Your Environment Changing the Environment You Are In Choosing a Response Approach Culture and the Internal Environment of Organizations Diagnosing Culture Managing Culture LO 1 Describe how environmental forces influence organizations and how organizations can influence their environments. p. 48 Distinguish between the macroenvironment and the competitive environment. p. 48 Explain why managers and organizations should attend to economic and social developments. p. 50 Identify elements of the competitive environment. p. 55 Summarize how organizations respond to environmental uncertainty. p. 63 Define elements of an organization’s culture. p. 72 Discuss how an organization’s culture affects its response to its external environment. p. 72 LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 Management Close-Up HOW CAN LARRY BLANFORD KEEP GREEN...
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...SESSION 1 2 CHAPTER 1: Global marketing in the firm 2 1. Introduction to globalization 2 2. The process of developing the global marketing plan 2 3. Comparison of the global marketing and management style of SMEs and LSEs 2 4. Should the company “stay at home” or “go abroad”? 3 5. Development of the global marketing concept 3 6. Forces for global integration and market responsiveness 3 7. The value chain as a framework for identifying international competitive advantage 4 8. Value shop and the service value chain 5 9. Information business and the virtual value chain 5 CHAPTER 2: Initiation of internationalization 8 1. Introduction 8 2. Internationalization motives 8 3. Triggers of export initiation (change agents) 9 4. Internationalization barriers / risks 9 SESSION 2 11 CHAPTER 3: Internationalization theories 11 1. Introduction 11 2. The Uppsala internationalization model 11 3. The transaction cost analysis model 11 4. The network model 12 5. Internationalization of SMEs 12 6. Born globals 12 7. Internationalization of services 13 CHAPTER 4: Development of the firm’s international competitiveness 15 1. Analysis of national competitiveness (the porter diamond) 15 1.1. Factor conditions 15 1.2. Demand conditions 15 1.3. Related and supporting industries 15 1.4. Firm strategy, structure and rivalry 15 1.5. Government 15 1.6. Chance 15 2. Competition analysis in an industry 15 2.1....
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...INTRODUCTION In the early 1980’s mom and pop video stores were everywhere and offered varied selection, quality, and pricing schemes. Blockbuster quickly emerged in 1985 and began buying every small store they could, becoming the de facto sole franchise for movie rentals. This changed in 1999 when Netflix first began their DVD by mail service. Netflix rentals allowed viewers and movie watchers to rent movies from the comfort of their own home. Additionally, the customer wasn’t penalized for returning the movie late. The years that followed produced a long, protracted battle that Netflix appears to have survived on top. That being said, both companies made significant mistakes and have lost millions of potential customers in the process. In this paper, a brief history of each of the company will be presented, a diagnosis of the major problems, analysis into these problems, an evaluation of potential solutions and finally, recommendations for Blockbuster and Netflix to be able to address their problems. ANALYSIS Scott Cook founded Blockbuster Video and opened the first store in Dallas, Texas on October 26, 1985. Later bought by entrepreneur Wayne Huizenga, Blockbuster Video grew to over 4,000 stores in the mid-2000’s and earned the spot as the number one video rental store in the country. Blockbuster made frequent changes to their business model, by first adding video games; later music was added. In 1993, Viacom purchased Blockbuster for $8.4 billion dollars but by...
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...Mental Destruction: Video Games Video games have a detrimental effect on the minds of our youth. Individuals should limit their use of video games to ensure that they have the mental capacity to succeed in life outside of a virtual world. The effect of these visual stimulations goes further than the standard aggressive behavior due to the violent content in some of these games. Additionally it affects the mental levels that hinder a child's mind from benefitting from academic activities such as reading a novel or studying for an exam. Some say that these games offer children a safe release; a world to cause destruction where no one is being harmed. The truth is they are harming themselves severely. The gaming content is a huge factor that influences adolescents to commit violent crimes. Although violence isn’t the most common outcome, the quick satisfaction in the game play causes children to become unfocused on one subject for more than a few minutes. This is one of the more long term effects that video games have on an individual. Games such as Saints Row, Call of Duty, Grand Theft Auto promote themes of violence, resulting in the answers to their problems. The player must make decisions that affect the fate of the characters in the game, usually involving killing the character as an option, which, usually, is the more favorable decision within the game. For some, the decisions that players make can transcend into real life. There are numerous news reports...
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...Knowledge Management and Information Strategy Assessment Table of Contents 1. Introduction: 4 1.1. Organization (IBM) brief: 4 1.2. Services provided by the organization: 5 2. Employee management in the organization: 5 2.1. Technologies invented and business: 5 2.2. Various collaborations: 7 2.3. Implementation of knowledge management strategy: 7 2.4. Post implementation analysis: 8 3. Potential application: 8 3.1. Communities of practices within the company: 9 3.2. Organizational influences: 10 3.3. Community evolution in IBM Global Services: 10 3.4. Patterns followed: 11 4. Conclusion: 12 References: 13 1. Introduction: Knowledge management (KM) is group of processes that concerns the creation, distribution and consumption of knowledge. It’s a broad topic and is not only a technological strategy. It mainly governs the whole process of discovery and formation of knowledge. KM balances and increases other managerial initiatives such as total quality management (TQM), business process re engineer (BPR) and organizational learning providing a latest and urgent focus to continue competitive spot (Abrahamson, 2003). In order to serve the customers well and remain in the business knowledge management should be applied. But none of it would be possible without a continuous focus on formation, updating, accessibility, quality and the use of knowledge by all the staff and teams at work. 1.1. Organization (IBM) brief: The International Business Machines...
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