...A Strategic Analysis of Nintendo Contents Contents2 1.Introduction2 1.1Company Overview3 2.External Analysis4 2.1Global Trends4 2.2Porter 5 Forces4 2.2.1 Threat of new Substitutes5 2.2.2 Threat of new Entrants5 2.2.3 Bargaining Power of Customers6 2.2.4. Bargaining Power of Suppliers7 3.Internal Analysis8 3.1Core Competencies8 3.2. Financial Overview9 3.2Resources11 4.Strategy12 4.2 Corporate Level12 4.1. Business Level13 5.Conclusion13 Introduction If we remember a few years ago, everywhere you could see, if on the street, in a restaurant, on the train or at home. You couldn’t avoid meeting little children or even adults playing with a little portable hand-held console. What was that magical thing that seemed to fall just from heaven? And where did it come from? Nintendo DS launched in 2004 by the same titled company Nintendo Co. Ltd. That was the start of a new generation. The company already released distinctly consoles such as the „Gameboy“ where everybody is already supposed to know “Nintendo” all over the world, if this is not the case, now everybody does due to the Innovation of Nintendo DS. An innovation during the period due to the touch screen function who Nintendo has been the first corporation to use this technology in his line. Nintendo DS is able to utilize by both younger generation and elder because of the attached software which for example helped to train the memories of one’s brain. Shortly after 2004 a successful console was released...
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...Executive Summary: Nintendo adopted a differentiation strategy with its seventh generation console the Wii, while simultaneously deciding to focus on serving buyers comprising of a narrow market niche. Rather than building a console with new graphic features and technological capability in to the console itself, the company concentrated on pioneering a daringly different video game controller. The bold new approach allowed Nintendo to tap into an entirely new demographic and to engage new players of video games. Combining these two strategic approaches propelled the company to become the market leader in sales of the third generation video game consoles, far surpassing Sony’s PlayStation 3 (PS3) and Microsoft’s Xbox 360. Nintendo is currently facing two significant problems: 1. The immediate concern is that the company is unable to meet the demand for the Wii console which continues to sell out in stores. 2. The long term issue that needs to be addressed is whether the company can identify and invest in innovations that would allow Nintendo to continue to expand in the market, while resisting a significant attack from its competition. In order to analyze the issues in detail a SWOT, PESTE, financial, and competitive analysis were performed. The findings indicated that the company differentiates itself from the competition with a high emphasis on product differentiation; it is quite susceptible to competition; and that the release of the Wii console has improved...
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...we addressed the Nintendo's external and internal analysis. We analyzed the years from 2010 to 2014. First, we briefly introduced the company and the most notable events. In the external analysis, we applied some of the most-known applications to evaluate the external environment of any given company. That includes PESTEL, Michael Porter's five forces model and SWOT analysis. We also evaluated the internal factors of Nintendo taking into account its financial statements through the past four years. In addition to some financial ratios such as net profit margin, current ratio, debt ratio, inventory turnover and assets turnover. Finally, recommendations have been placed based on the internal/external analysis from our perspective as a Chief Operating Officer of Nintendo. Introduction: Nintendo is a multinational consumer electronics company located in Kyoto, Japan. It is considered as the world's largest video game company by the value of its revenue. Fusajiro Yamauchi founded it on1889; where it originally produced handmade playing cards. In 1963, the company was trying several small niche businesses, including cab services and love hotels. The company relinquished the previous ventures in favor of toys in the 1960s, Nintendo. In the 1970s, it developed into a video game company, substantially becoming one of the most effective in the industry and Japan's third most-valuable listed company with high market value. Nintendo of America is also the plurality owner of Seattle's...
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...future. The three main competitor companies in this industry are Microsoft, Sony and Nintendo. Microsoft is a multinational computer technology corporation that specialize in software such as Microsoft Windows operating system and the Microsoft Office suite. But what is more important they are best known for their consumer products Xbox. Sony is one of the biggest manufacturers of electronics, video, communications, video game consoles, and information technology products for the consumer. The latest generation of its console game products is the Playstation 3 which replaced Playsation 2.Finally Nintendo is one of the largest Japanese technology companies well known for its console games. Its latest and the most successful console Wii was able to outshine Microsoft’s’s Xbox and Sony’s PS3. Analysis of the competitive industry Organizations view competition in an industry as a crucial issue that needs to be analyzed. In terms of economic theory (cited by Johnsons et al.) industry may be defined as “a group of firms producing the same principal products” p. 59. According to Lynch (2006) analyzing a particular industry starts with general examination of the forces that have an impact on the organization. The main objective is to reach competitive advantage of the organization and therefore it would be able to defeat the rival companies. In terms of gaming industry, Microsoft, Sony, and Nintendo with their respective hardware’s MS Xbox 360, PS 3...
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...Strategic Management of Change BUMGT5926 Scenario Planning Syafiqa Anneisa Abdullah Navaneeswary Ganesamoorthy Rei Lynn Lim 30089404 30089407 30089392 Presentation Overview (1/2) •Introduction •Company Profile •Microenvironmental Analysis •PESTLE Analysis •SWOT Analysis •Porter’s 5 Forces Analysis •The Industry Life Cycle •Nintendo’s Key Success Factors Presentation Overview (1/2) •Analysis of Key Uncertainties •Analysis of Future Trends •The Scenarios & Implications •Conclusion •References A Brief History of Video Games Atari to Wii Introduction (1/2) • Video games have been around since the 1940s. • Over the decades, game machines continuously evolved to become powerful machines capable of stunning visuals and graphics. • In the mid 2000 to 2007, social media, smartphone and tablet technology entered the gaming scene. • Casual games become the norm attracting previously non-gamers into the market. Introduction (cont 2/2) • As the dominant force of the mobile and gaming market, in the next coming 5 years, where does Nintendo see itself competing with threats from smartphones and other gaming platforms taking up its share of the market? • Scenario planning : To make strategic decisions that will be a sound foundation for all plausible and possible future scenarios. Company Profile (1/3) • Founded in 1889 in Kyoto, Japan by Fusajiro Yamauchi. • Manufacturer of Hanafuda “flower” cards • Expanded in 1960s by Hiroshi Yamauchi. • Following the crash...
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...Introduction: Strategic analysis for a business and a clear planning and forecasting about the sales and making new target market etc are important business phenomenon in a competitive industry like the video games industry. At first we should have a complete idea about strategy. The definition of strategy states that- “A specific pattern of decisions and actions undertaken by the upper echelon of the organization in order to accomplish performance goals is called strategy [1]”. From the case study we get a fantastic idea about how a business plan should be made and executed to sustain the highly volatile and oligopolistic market (few sellers with uniform/non-uniform product). I will discuss about these strategy of Nintendo here. Assessment of current strategy: Though Nintendo is a big and renowned video game publisher from the very early age of video games in Japan, it captured 80% of USA games market a few years later than Japan. Before reaching the big USA market they made an outstanding plan for positioning their product with care and consciousness. While other companies like Sony and Microsoft made a mess among their business strategy Nintendo did well by making careful relation between software and hardware, uniform distribution as well as quality assurance of the product. Target market and market research are important tools for forecasting business policy. While other companies confined their market within the consumer range of 13 to 30 years, Nintendo expanded their...
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...Nintendo’s Wii Case Analysis SUMA11 Sec F Business Policy July 24, 2011 CASE ANALYSIS Nintendo’s Wii COMPANY NAME: Nintendo Corporation Limited. INDUSTRY: Video Game COMPANY WEBSITE: (www.Nintendo.com) COMPANY BACKGROUND: Nintendo was founded in Japan in 1889 by Fusajiro Yamauchi, originally they sold playing cards called hanafuda cards, a popular card game in Japan, after few decades in 1983 they became as a video game company, creating the first video console known as NES (Nintendo Entertainment System), with the advances of the technology they continue improving their systems and realizing more advanced consoles, in 1990 their release an improved version of the NES, the super NES (SNES), then in 1995 they created another console positioned as the #2 in sales at that time behind the first Sony playstation, the Nintendo (N64). The GameCube console was released in 2001 to compete with the new generation of video games like Sega Dreamcast, Microsoft XBOX and Sony Playstation 2, with very popular games like Mario Bros and Sonic, converting the characters of these games part of their image. In 2006 they created the Nintendo Wii, an extraordinary console with a great innovation technology; with a motion sensor allowing the user to play moving the remote control in the air adding realism and interaction between the user and the videogame. The other great characteristic of this console is the internet capabilities, Nintendo Wii was the first console...
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...COMPANY NAME: Nintendo Co.,Ltd WEBSITE: www.nintendo.com INDUSTRY: Video game industry BACKGROUND/HISTORY/TIMELINE: “Nintendo Company Ltd .was founded in 1889 as a producer of Japanese playing cards, but by the 1980’s the corporation had turned its attention towards the production of video game hardware and software”. “Since then, Nintendo has gone on to become the third most valuable company in Japan selling more than 470 million home game consoles and handhelds as of 2009”. Nintendo was founded by Fusejiro Yamauchi the great grandfather of the current president of Nintendo.” Nintendo's products arose in the mid-1980s from the relative obscurity of the amusement arcade to change the concept of home entertainment in both Japan and the United States”. SWOT ANALYSIS: Strengths: Nintendo “strongly established brands”, “robust revenue growth”, “strong cash flow from operations, and “Nintendo derived most of its revenue from the video game business, Nintendo was in the lead in video console” (pg.C269). Weakness: Nintendo weakness is “Inventory shortages”.”Nintendo was unable to meet demand during 2007 and also struggled throughout 2008”.”In an interview on the website Game Theory, Perrin Kaplin, Nintendo vice president of marketing and corporate affairs, suggested that shortages were expected some time”. “We are at absolute maximum production and doing everything we can…but demand continues to be really high” (pg.C273). Also Opportunities: “Rising demand for company’s...
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...2004, Nintendo had a number of strategies available to change the company position in the market. It had become more than clear that following the same tactic would not allow them to overlap its competitors. In order to growth further, Nintendo could integrate the opportunity to reduce costs and expand into other markets at the same time. Secondly, and maybe most promising, they could explore different consumers segments, which would enable Nintendo to reach market opportunities that had been ignored by Sony and Microsoft so far. VERTICAL INTEGRATION After analyzing its core competences, the costs, benefits and risks involved, Nintendo developed a strategy based on internalizing as much as possible gaining substantial influence in the final products. This allows the company to outsource primarily activities in which either they possess a low level of core competencies and/or transaction costs show clear disadvantages in internalizing. Nintendo follows a fabless production model (derived from “fabrication-less”) which means that all production processes are outsourced to external suppliers and production factories and then sent and assemble in Nintendo-owned factories. By avoiding investing money on expand vertical, the company reduce their transaction cost by outsourcing the manufacturing and still manage to maintain lower retail prices than competitors. This result in a different vertical integration compare to the previously existing model allowing Nintendo to succeed...
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...Market Analysis The market for interactive video entertainment has grown over the last few years. However, all players in the market are facing increased competitive pressures. Substitutes for console gaming are growing rapidly (such as massive multiplayer online games), and as the first generation of console players reach maturity, many players will shift to these substitutes, a problem known as gamer drift. The video game console market is dominated by three major players- Nintendo, Sony, and Microsoft. The consumer market is segmented mainly by age. The casual gamer, consumers who do not treat gaming as their main source of entertainment, represents 36 percent of the market. This group tends to be between the age of 18 and 24. Nintendo is aggressively courting non-traditional gaming groups outside this traditional profile in an attempt to increase the size of the console market. In contrast, Sony and Microsoft court the “hardcore” gamer and expect console sales to trickle down to more casual gamers. These companies focus on serving their existing customer base, a group that views gaming as their primary source of entertainment. This “hardcore” group, which represents 11 percents of the market, is more likely to play competitively and tend to buy more games and spend more time playing games than casual gamers. There's at least a good half-decade left in this console cycle, and the Wii is locked in at its technical specs, which are really last-generation numbers. The...
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...Case study 1 – Nintendo Strategy in 2009 Strategic Management For Bachelor of Business (Hons) 1. What are the defining business and economic characteristics of the video game console industry? What is the industry like? The video games industry in essence has brought arcade video games to the home of the user. Firms involved in the games console industry design, manufacture and bring to the market a host of video games consoles and games software. The introduction of the video game console in the early eighties allowed users to play video games at home by connecting the console to the users TV as opposed to traditional coin operated video games machines found in arcade centers. This innovation allowed the video game console industry to grow as the size of the potential market increased. The industry has seen periods of growth and decline over these past few decades with record sales of $23.1 billion in 2008. External factors are those factors relating to and impacting on business growth over which a firm has no direct influence or control. Such factors affecting growth within the video games console industry include advances in technological factors. These relate to not only how the games console looks and performs (graphics and speed) but also in the processes and operations involved in bringing the console to market (R&D and value chain). Increasing internet availability and trends towards online gaming will also impact...
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...Executive Summary Nintendo Company Ltd. is a strong contender in the home entertainment industry and has faced the challenge of developing and maintaining a competitive advantage over the years. Its mission is to offer the highest quality products and services while treating their customers with attention and respect. Since 1983, Nintendo has focused on video game consoles and with the introduction of the Nintendo Wii console the company gained a strong hold as a leader in this industry. In 2008, Nintendo experienced various production and legal issues. However, their most significant challenge during this time was identifying and investing in innovative products that would allow the firm to continue to expand in the video game industry; while defending itself from rivals (Sony and Microsoft). Our analysis is based on various analytical tools, including SWOT (Appendix A), segment analysis (Appendix B), competitive strength assessment (Appendix C) and financial ratios (Appendix D). Overall, Nintendo has several opportunities and strengths of which they can take advantage to stay competitive in the market. However, their competitive threats and weakness pose significant financial challenges for the firm. Based on our analysis, we considered the following alternatives: 1. Continue to focus on the existing marketing strategy by differentiating itself from the competition; 2. Expand the video game product line to include games with improved graphics and functions for...
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...Nintendo Wii Marketing plan Table of Content 1. Situation analysis 1.1 Macro analysis 1.2 Micro analysis 1.3 SWOT analysis 1.4 Bowman’s strategy clock 1.5 The Product Life Cycle 2. Target Market 2.1 Positioning 2.2 Segmentation 3. Marketing Mix 3.1 Product 3.2 Price 3.3 Promotion 3.4 Place 3.5 People 3.6 Physical 3.7 Process 1. Situation analysis 1.1. Macro environment The PESTEL analysis describes a framework of macro-environmental factors. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. 1.2.1. Political The video game industry is influenced by factors such as taxation policies, foreign trade regulations and social welfare policies (some games have sexual/violent content). Video games tend to play with the emotions of people. Governments have the authority to control the content of the video game frames. 1.2.2. Economic The income of the consumers in the video game industry have an effect on their buying behaviour. If people fall under a low-income range, they might not be able to buy a video game because they are relatively expensive. 1.2.3. Social Factors that can influence the video game industry are: income distribution, lifestyle changes, level of education, population demographics, attributes to work, consumerism, etc. Nintendo’s action to open World of...
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...6/9/2013 6/9/2013 Matthew Hull, Scott Love, Nikole Phillips, Jason Wilcox Predict 450 Matthew Hull, Scott Love, Nikole Phillips, Jason Wilcox Predict 450 Game Console Brand Equity An analysis of forces involved in Xbox, Playstation and Nintendo brand equity Game Console Brand Equity An analysis of forces involved in Xbox, Playstation and Nintendo brand equity Introduction The successful marketing and revenue generation of products is governed by a host of tangible and intangible factors. As marketing analytics research continues to develop theories and models for uncovering these important components of the product sales cycle, certain components differentiate themselves through importance and impact. Brand equity is one such component and can be described as “the added value endowed on products and services…reflected in the way consumers think, feel and act with respect to the brand” (Kotler & Keller, 2012, p. 243). In an effort to better understand brand equity, this paper analyzes the brand equity properties of the three primary gaming consoles in the United States. The analysis of the gaming console platforms from Microsoft (Xbox), Sony (PlayStation) and Nintendo (Wii) is specifically important and revealing because of several factors. First, the initiation of this paper coincides with the unveiling and soon to be released newest additions to the Microsoft and Sony fleet of gaming consoles, specifically the PlayStation 4 and Xbox One. In addition...
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...MKTG2100 Principles of Marketing 08 Fall Nintendo: Situation Analysis Krista Law C3110728 Kimberley Campbell C3194572 Julia Arellano C3206262 Haydon Potter C3207158 Table of Contents Executive Summary 2 Introduction 3 Market/Customer Situation Description 4 Industry & Product Category 4 Segmentation Bases & Variables 4 Demographic 4 Psychographic 5 Target Market Description 5 Marketing Situation Description 6 Product 6 Price 6 Promotion 7 Place 7 Process 7 People 8 Physical Evidence 8 Competitive Situation Description 9 Macro-environment Forces Situation Description 10 Demographic 10 Economic 10 Natural 11 Political 11 Technological 11 Socio-Cultural 11 SWOT Analysis 13 Strengths 13 Weaknesses 13 Opportunities 14 Threats 14 Main Opportunity Description 15 Conclusion 17 Reference List 18 Executive Summary This report comprises an analysis on the current and projected marketing performance of Nintendo. After careful and extensive research, a comprehensive analysis of these situations provides an insight into the anticipated future of the company. This will allow Nintendo to evaluate their current marketing situation and make appropriate changes in order to increase the effectiveness of any future marketing campaigns. The methods of analysis include: * An analysis of the current market/customer situation, this provides...
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