Nintendo Wii: Blue Ocean Strategy

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Table of Contents

Introduction
Main body
Conclusion
Bibliography

Introduction

Blue ocean strategy proposes great opportunities for organizations to tract new target markets and attracts wider target audiences. An opportunity involves feasible change, in a favorable direction, to reach a desired future state. Feasible refers to technical and economic factors, whereas desirable involves more subjective preferences. Nintendo Wii is a home video game console. Nintendo developed this product in order to attract new customers and appeal with new value proposition. In contrast to similar products manufactured by other companies, Wii has a wireless controller (Blue Ocean Strategy 2007). Also, this product can be used as a printing device and can detect physical movements. Nintendo followed a blue ocean strategy creating a new industry for its [products. The approach selected by Nintendo can be characterized as: ”the set of managerial actions and decisions involved in making a major market-creating business offering” (Kim and Mauborgne, 2007).

Main body

The case of Nintendo Wii shows that opportunity is clearly a relativistic concept: what is desirable or feasible for one person or company may not be desirable or feasible for other persons or companies. First of all, from a marketing and entrepreneurship perspective, the blue ocean strategy must be defined as having sustainable profit potential, beyond pure windfall profits, and “one-shot” deals. Second, the blue ocean strategy must be defined as a market position, that is, a field of activity in which a company is competitive beyond the short run, and able to reap a profit. A market position can be viewed both from its value context and from the perspective of competition. The marketing problem is to find the shortest way from natural resources to finished products, that is, the optimal combination of sorts and transformations. The transvection is a useful concept in this respect, because it encompasses what is needed in the total marketing process disregarding ownership factors (Nintendo Wii. Home Page, 2008). Often exogenous technological progress or changes in market structures create opportunities that can be exploited through entrepreneurial behavior. For Nintendo Wii “strategy is essentially a choice between differentiation and low cost. But when it comes to creating blue oceans, the evidence shows that successful companies pursue differentiation and low cost simultaneously. To see how this is done, let us go back to Cirque” (Kim and Mauborgne, 2007).

The video game console industry is a dynamic one influenced by rapid technological developments and changes. Processors, memory, storage and video play a determining role in product price and market image. This basic technological change (beyond the firm’s control) was very important in making opportunities available. Similarly, this firm now believes that the internal market will change the structure of many markets, resulting in opportunities for entrepreneurial firms. Everyone in the firm has been placed on an alert to possible openings for the firm’s capabilities to exploit. The importance of environmental change in making opportunities available has also been noted by other researchers. The availability of opportunities depend on the level of activity, and as activity expands opportunities proliferate (Blue Ocean Strategy, 2007). The presence of profound technological or market knowledge is in many cases a prerequisite for the ability to identify specific opportunities. The abovementioned manufacturer of video game console already had a strong market presence in technological systems when the opportunity to enter the business was identified. The knowledge accumulated through the other two businesses was an important factor behind the identification of the video game business (Nintendo Wii. Home Page, 2008).

One of the direct competitors which follow a red ocean strategy is the Xbox 360. This company does not create a new market for its products but follows the same product design and market strategy developed by PlayStation. Apparently, the resource requirements in a start-up phase can be limited by using external resources in this way. The ability to use external resources also tends to expand the opportunity space by making more opportunities feasible. Personal networks often play an important role in making external resources available. In contrast to the Xbox 360, Nintendo Wii creates a new market and new niche for its product. Xbox 360 has lower profit potential than Nintendo Wii. In its turn, Nintendo Wii’s profit potential leads to a potential for more successful ventures. These same barriers to entry take on another role when considering the initiation of a new venture in an existing market. It takes time, money, and energy, or a novel idea or concept, to surmount high barriers without a large expenditure of funds. A final consideration under the category of competitive dynamics is the product line growth path for the venture (Blue Ocean Strategy, 2007).

Conclusion

In sum, the blue ocean strategy follows by Nintendo Wii allows the company to sell more products than the Xbox 360. and PlayStation 3. This strategy allows the company to become a market leader and occupy a new market niche in video game console market. The importance of strategic thinking can lead one to expect that strategic planning is found to be extremely important in the opportunity identification process. The blue ocean behavior in itself will not be enough, that is, behaving entrepreneurially in the way we have described is not a universal formula for identifying opportunities. It is only when an environmental change is combined with the presence of profound knowledge, entrepreneurial behavior, and strategic thinking, that opportunities become identified.

Bibliography

Blue Ocean Strategy. 2008. Web.
Kim, W. Ch., Mauborgne, R. 2007. Blue Ocean Strategy. Harvard Business Review. Nintendo Wii. Home Page. Web.

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Nintendo Wii: Blue Ocean Strategy

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