The paper provides the analysis of Wii as an innovative product that was launched by Nintendo in 2006. The paper aims at analyzing the case and answering the questions regarding the nature of the innovation, aspects of the value proposition, and details of the used business model. The analysis is concluded with noting that Wii was promoted as the radical innovation in the broadened market that created conditions for the market competition at a new level.
Nintendo Wii: Case Study Analysis
In spite of the fact that Nintendo experienced difficulties with developing the business, proposing new products, and winning the market position during the 1990s, the focus on the development of an innovative device in 2006 changed the situation. Nintendo launched Wii, a new console for video gaming, and this event changed the market development for the next years. From this point, it is important to focus on analyzing Wiis place in the innovation matrix in terms of its typology, discussing the value proposition, and evaluating the business model.
Wiis Place in the Innovation Matrix
Innovation is regarded as the proposition of a new approach, object, or product, and it can be incremental or radical, depending on its nature (Herzog & Leker 2010). The incremental innovation is observed when designers work to improve the existing product or approach (Verganti 2013). The radical innovation usually means the change in a meaning of the product, as well as its form, and the addition of a new product to the existing market, as well as the formation of a new market (Battistella, Biotto & De Toni 2012).
While discussing the location of Nintendos Wii in the innovation matrix that has two opposites, it is possible to state that Wii has features of the radical innovation because Nintendo proposed not only a new console for games. Thus, the company changed the approach to video gaming while targeting the new group of customers, altering the meaning and nature of games, broadening the environment, and applying a new technology (Smith 2015). As a result, Nintendos competitors focused on proposing alternative products with the similar qualities, and the implementation of the radical innovation led to creating a new market segment.
Value Proposition
While implementing Wii, Nintendo focused on the value proposition for the target customers who were not discussed as potential consumers of products for video gaming previously. Nintendo chose to focus not on skilled gamers, but on female users, families, first-time gamers, and older persons (Smith 2015). The reason was in the fact that skilled gamers traditionally chose the PlayStation and the Xbox that were characterized by the application of the high-level technology and by the high reputation among the target population.
Nintendo could have difficulties with reaching this population while proposing the similar product. However, Nintendo chose to focus on the unique value proposition for the audience in a new niche (Smith 2015). Wii was developed for the wide group of users, and, instead of playing with the help of traditional joysticks and consoles, individuals received the opportunity to simulate different games in three dimensions, and the experience was similar to playing a real game.
The use of the wireless technology to control motions was innovative and attractive for the wide public, including non-gamers. The proposed value was unique for the targeted market, but the demand was high (Abbing 2010). The PlayStation and the Xbox were based on the use of buttons and joysticks to simulate the game, but the use of wireless sensors and controllers in Wii allowed for concentrating on the high-quality simulation.
Business Model and Revenue Generation
The effectiveness of the used business model determines the companys profitability and the customers loyalty (Verganti 2013). The business model used by Nintendo depends on methods that were used for creating and capturing the value. In order to make the audience recognize the advantages of Wii, Nintendo concentrated on accentuating the products closeness to the world of real games, the products availability to families and non-skilled gamers, and the simplicity of using the product.
In order to guarantee the value capture, it was necessary to demonstrate how the comparably inexpensive device could be more advantageous than the PlayStation and the Xbox because it could be used by the whole family (Smith 2015). From this point, the main revenue generation mechanism used by Nintendo was based on the idea of utilizing innovative but simple sensor technologies in order to provide users with an opportunity to receive the unique experience that was available at a price similar to prices offered by competitors (Smith 2015). However, during a long period of time, the competitors could not propose adequate alternatives for the broadened group of customers, and Wii remained to be a leader in the market.
Conclusion
The focus of Nintendo on using simple technologies for simulating games that are oriented to the wide population of users led to creating a new tendency in the market of video games. The functions that were proposed by the PlayStation and the Xbox did not address the publics demand anymore. This approach to winning the market position, addressing competitors, and gaining the audiences recognition resulted in significant revenues. Thus, Nintendo can be regarded as a company that chose a path of completing the radical change and proposing the unique innovation.
Reference List
Abbing, E 2010, Brand driven innovation: strategies for development and design, Ava Publishing, New York.
Battistella, C, Biotto, G & De Toni, A 2012, From design driven innovation to meaning strategy, Management Decision, vol. 50, no. 4, pp. 718-743.
Herzog, P & Leker, J 2010, Open and closed innovation-different innovation cultures for different strategies, International Journal of Technology Management, vol. 52, no. 4, pp. 322-343.
Smith, D 2015, Exploring innovation, McGraw-Hill Education, Maidenhead.
Verganti, R 2013, Design driven innovation, Harvard Business Press, New York.
The paper provides the analysis of Wii as an innovative product that was launched by Nintendo in 2006. The paper aims at analyzing the case and answering the questions regarding the nature of the innovation, aspects of the value proposition, and details of the used business model. The analysis is concluded with noting that Wii was promoted as the radical innovation in the broadened market that created conditions for the market competition at a new level.
Nintendo Wii: Case Study Analysis
In spite of the fact that Nintendo experienced difficulties with developing the business, proposing new products, and winning the market position during the 1990s, the focus on the development of an innovative device in 2006 changed the situation. Nintendo launched Wii, a new console for video gaming, and this event changed the market development for the next years. From this point, it is important to focus on analyzing Wiis place in the innovation matrix in terms of its typology, discussing the value proposition, and evaluating the business model.
Wiis Place in the Innovation Matrix
Innovation is regarded as the proposition of a new approach, object, or product, and it can be incremental or radical, depending on its nature (Herzog & Leker 2010). The incremental innovation is observed when designers work to improve the existing product or approach (Verganti 2013). The radical innovation usually means the change in a meaning of the product, as well as its form, and the addition of a new product to the existing market, as well as the formation of a new market (Battistella, Biotto & De Toni 2012).
While discussing the location of Nintendos Wii in the innovation matrix that has two opposites, it is possible to state that Wii has features of the radical innovation because Nintendo proposed not only a new console for games. Thus, the company changed the approach to video gaming while targeting the new group of customers, altering the meaning and nature of games, broadening the environment, and applying a new technology (Smith 2015). As a result, Nintendos competitors focused on proposing alternative products with the similar qualities, and the implementation of the radical innovation led to creating a new market segment.
Value Proposition
While implementing Wii, Nintendo focused on the value proposition for the target customers who were not discussed as potential consumers of products for video gaming previously. Nintendo chose to focus not on skilled gamers, but on female users, families, first-time gamers, and older persons (Smith 2015). The reason was in the fact that skilled gamers traditionally chose the PlayStation and the Xbox that were characterized by the application of the high-level technology and by the high reputation among the target population.
Nintendo could have difficulties with reaching this population while proposing the similar product. However, Nintendo chose to focus on the unique value proposition for the audience in a new niche (Smith 2015). Wii was developed for the wide group of users, and, instead of playing with the help of traditional joysticks and consoles, individuals received the opportunity to simulate different games in three dimensions, and the experience was similar to playing a real game.
The use of the wireless technology to control motions was innovative and attractive for the wide public, including non-gamers. The proposed value was unique for the targeted market, but the demand was high (Abbing 2010). The PlayStation and the Xbox were based on the use of buttons and joysticks to simulate the game, but the use of wireless sensors and controllers in Wii allowed for concentrating on the high-quality simulation.
Business Model and Revenue Generation
The effectiveness of the used business model determines the companys profitability and the customers loyalty (Verganti 2013). The business model used by Nintendo depends on methods that were used for creating and capturing the value. In order to make the audience recognize the advantages of Wii, Nintendo concentrated on accentuating the products closeness to the world of real games, the products availability to families and non-skilled gamers, and the simplicity of using the product.
In order to guarantee the value capture, it was necessary to demonstrate how the comparably inexpensive device could be more advantageous than the PlayStation and the Xbox because it could be used by the whole family (Smith 2015). From this point, the main revenue generation mechanism used by Nintendo was based on the idea of utilizing innovative but simple sensor technologies in order to provide users with an opportunity to receive the unique experience that was available at a price similar to prices offered by competitors (Smith 2015). However, during a long period of time, the competitors could not propose adequate alternatives for the broadened group of customers, and Wii remained to be a leader in the market.
Conclusion
The focus of Nintendo on using simple technologies for simulating games that are oriented to the wide population of users led to creating a new tendency in the market of video games. The functions that were proposed by the PlayStation and the Xbox did not address the publics demand anymore. This approach to winning the market position, addressing competitors, and gaining the audiences recognition resulted in significant revenues. Thus, Nintendo can be regarded as a company that chose a path of completing the radical change and proposing the unique innovation.
Reference List
Abbing, E 2010, Brand driven innovation: strategies for development and design, Ava Publishing, New York.
Battistella, C, Biotto, G & De Toni, A 2012, From design driven innovation to meaning strategy, Management Decision, vol. 50, no. 4, pp. 718-743.
Herzog, P & Leker, J 2010, Open and closed innovation-different innovation cultures for different strategies, International Journal of Technology Management, vol. 52, no. 4, pp. 322-343.
Smith, D 2015, Exploring innovation, McGraw-Hill Education, Maidenhead.
Verganti, R 2013, Design driven innovation, Harvard Business Press, New York.
Establishing appropriate organizational strategic management is vital. Strategic management helps in attaining viable competitive advantages for any organization. With reference to the Nintendo Wii-Internationals case study, this paper aims at identifying how the company grew to success. Nintendo was established in 1889 with the intent of manufacturing playing cards.
In 1979, it developed a first game system. Subsequently, the company developed the first LCD video game of its kind. It was unique as it had a microprocessor. Five years after, The Nintendo Entertainment System that had 8 bits
was developed. The video console performed well in terms of sales as it was one of its kind and none of those in the market by then could measure up to its features.Further, through a critical analysis, the paper will also seek to determine the strategies and reccoimendations that company should adopt so as to remain relevant in the market (Drezner, 2007).
Analytically, success of the Nintendo Company can be attributed to having a clear vision. The founder of this group intended to reach a wide range of people in an effective manner employing the use of appealing, in addition to, high quality products while observing the most viable ways to generate profits.
The Problem
There are several challenges faced by the company according to the case study. Foremost, the company had to cope up with the growing demands for their products. Additionally, competition has be a considerable problem for Nintendo. Currently, the company is only limited to some regions of the world. It ought to access other international markets, as well (Michael, Hitt, Ireland & Hoskisson, 2012).
The second challenge faced by the company includes making a decision as to succeed items that are of higher margin. The company has to establish the manner in which it will ensure expanded programming such that it will include reality television shows, which are based on themes, as well as, the designer fashions.
In the same context, the company gas to decide how to be successful considering the actively searched out products, which are proprietary in nature, either from the suppliers or even from the entrepreneurs, who have gained a new entry into the United States Market.
The third challenge that the case study depicts are the continued competition and expansion through the internet, applications of mobile devices, video streaming, in addition to, interactive television shows (Haberberg &Rieple, 2008). Further challenge concerns the growth of the company.
According to the case study, it is evident that Nintendo has continued difficulties in establishing growth trends. However, according to the case, there are moves that the company engaged itself in and as such, it is a clear indication that the company is aware of these challenges and, therefore, it is in the process of establishing the most effective measures in order to confront them.
Analysis
The success of the Nintendo Company and its products can be attributed to having a clear vision. The founder of this group intended to reach a wide range of people in an effective manner employing the use of appealing, in addition to, high quality products while observing the most viable ways to generate profits.
Indeed, the title of the company in itself is an aspect of strategic management. As such, the founder established an initiative, which was not only massively inspiring but also overarching. Further, the vision was a long-term one, and as such, it focused the future. The founder was also passionate in his journey towards accomplishing this vision. On route to success, the founder established the guiding values, goals, in addition to aspirations (Drezner, 2007).
Another success factor is the companys mission. According to the case analysis, the founder wanted to establish a company that would be cost effective in its operation while still ensuring that it responds to its customers. However, vision and mission cannot be used singly to obtain success. This implies that they have to be linked up using objectives. The founder of this company did establish remarkably clear objectives.
Some of these objectives include expansion of the client reach with the help of technology. Another objective is ensuring that both the existing client service and the standards of product quality have been maintained regardless of the channel of distribution utilized. This indicates that the founder indeed recognized the trade-offs between the two in an extraordinarily efficient manner. He also intended to focus unique, quality, in addition to, high margin products.
Further, he intended to involve a number of stakeholders in decision-making. As such, he involved both the small as well as the large vendors in the search towards efficiently finding the products that would be more entertaining. This implies that he acknowledged the aspect of strategic management through the action of hiring a number of seasoned television executives.
For the objectives of the company to be attained effectively, several actions have to be considered. Foremost, the company must ensure that it keeps the current offerings with the advent of technology. Another thing that the company ought to ensure is that it not only scans but also monitors the external environment.
Through this, the company will be able to identify trends in the consumer market, trends in vendor product advancements, as well as, each move initiated by a competing business. Further, the company should ensure that it provides a working environment, which is exciting in nature. The company should ensure that the working environment guarantees that the employees will be committed to the notion of delivering quality at the first instance.
In general, the successful spell of Nintendo Company can be materially attributed to the strategic management approach adopted by the founding father. Through strategic management, an organization is usually in the right direction and in a good position to achieve a greater market share and, therefore, competitive advantage over the other firms.
According to the case study, the company incorporated the use of several strategies in ensuring that it endures a successful performance. In strategic management, there are several strategies adopted. However, many organizations focus on three principal ones, which include, analysis, formulation, in addition to implementation.
Strategic analysis concerns the strategic goal, which is the vision, the mission, as well as, the strategic objectives. On its part, strategic formulation involves making decisions of which industry it should engage in as well as making decisions on how the organization should compete in the identified industry.
The third strategic concept is implementation. This strategic management approach concerns the allocation of the essential as well as the necessary resources in order to operate. Further, this approach involves designation of the organization. Here, the management is required to deliver the operations by bringing the intended strategy into operational reality.
Alternatives 3 possible ways to solve the problem
There are various ways through which Nintendo can solve its problems. Firstly, the company should expand its production capacity so as to serve more cutomers and bar them from resorting to the products of other competitors. The company will be able to anticipate, not only competition, but also other forces existing in the external environment of the company.
The activities depicted from the case study to support that this strategy was adopted include such actions as acquisitions, vertical integration, development of a vendor network, in addition to, understanding the companys customers.
The second possible way to solve the problem encompass strategic formulation. This will diminish the problems of competition by increasing other aspects of competitive advantages. It is also evident in the case study that the company also adopted the strategic formulation strategy (Carrol, 2009). According to strategic management analysts, this strategy concerns making a choice in the manner in which a company will compete.
The reasons why this paper notes that the company adopted the strategic formulation is because of the offering of a shopping experience, which is attributed to as posing a low level of risk, while providing products of high quality to the customers. Moreover, the company did this in a way that no other shopping venue did and as such, Nintendo s operations were differentiated.
Ways in which the company differentiated itself from the competitors include the creation of a shopping mall that would run twenty-four hours a day for a period of seven days. It also ensured that it was running programs that were based on themes with celebrities. Apart from these, the company ensured that it ran shipment for forty-eight hours.
Moreover, Nintendo provided a one-month money back guarantee. Another action that signified differentiated service included institution of a quality control system, which was rigorous in nature, in addition to, linking up with national brands and thus forming a partnership aimed at attracting customers.
The third solution is the implementation of strategic measures in management within Nintendo Wii-International. According to the findings of the research conducted by Haberberg & Rieple (2008), it is indicated that strategic implementation concerns marshalling the company resources in a manner in which coordination, as well as, the integration of activities will be done easily and effectively in an effort towards the achievement of the chosen strategy.
Recommendation
All of the above alternatives are viable and can lead to the establishment of the most ideal solution to the existing problems on competitiveness, product viability, and production expansion. To support this assertion, the company will be able to anticipate, not only competition but also other forces, as well, existing in the external environment of the company.
The alternative of expanding the companys production capacity is more weighty. Expansion can occur through mergers and acquisition of other international organization so as to reach the global market easily.
About acquisitions, the company should acquire other business so as to enhance its market penetration. Finally, the company should ensure that it focuses on understanding its customers, as well as, their needs and services (Carrol, 2009). This is evident in the case of Nintendo through various activities. The three crucial ways in which the company did this is by innovating while making use of creative merchandising (Dess, Lumpkin & Eisner, 2012).
Conclusion
Nintendo Wii is a successful product despite the looming competition it receives from other products. Nonetheless, the problems that the company encountered previously have hampered its exemplary performance. Competition, huge demands, and limited production capacity have served as the major problems faced by the company as evident from the case.
Analystically, a company that integrates an aspect of strategic management to its operations is in a better position to achieve competitive advantages and increased market divides. The analysis has also established that for the objectives a company to be attained effectively a company has to ensure that it keeps the current offerings with the advent of technology (Dess, Lumpkin & Eisner, 2012). Another thing that the company ought to ensure is that it not only scans but also monitors the external environment.
Through this, the company will be able to identify trends in the consumer market, trends in vendor product advancements, as well as, each move initiated by a competing business (Michael, Hitt, Ireland & Hoskisson, 2012). Viable alternatives can be used to establish the most ideal solution to the existing problems on competitiveness, product viability, and production development.
References
Carrol, W. (2009). Strategic communities for knowledge creation: a Western proposal for the Japanese concept of BA. Journal of Knowledge Management, 7 (5). 23-45.
Dess, G., Lumpkin, G. & Eisner, A. (2012). Strategic management: Creating competitive advantages (6th Ed.). New York, NY: McGraw-Hill/Irwin.
Drezner, D. (2007). Avoiding Trivia: The Role of Strategic Planning in American Foreign Policy. Journal of Knowledge Management, 16 (4). 2003, 3-15.
Haberberg, A. & Rieple, A. (2008). Strategic Management: Theory and Applications. Oxford: Oxford University Press.
Michael, A., Hitt, R., Ireland, D., & Hoskisson, R. (2012). Strategic Management Cases: Competitiveness and Globalization. Belmont, CA: Cengage Learning
The paper provides the analysis of Wii as an innovative product that was launched by Nintendo in 2006. The paper aims at analyzing the case and answering the questions regarding the nature of the innovation, aspects of the value proposition, and details of the used business model. The analysis is concluded with noting that Wii was promoted as the radical innovation in the broadened market that created conditions for the market competition at a new level.
Nintendo Wii: Case Study Analysis
In spite of the fact that Nintendo experienced difficulties with developing the business, proposing new products, and winning the market position during the 1990s, the focus on the development of an innovative device in 2006 changed the situation. Nintendo launched Wii, a new console for video gaming, and this event changed the market development for the next years. From this point, it is important to focus on analyzing Wii’s place in the innovation matrix in terms of its typology, discussing the value proposition, and evaluating the business model.
Wii’s Place in the Innovation Matrix
Innovation is regarded as the proposition of a new approach, object, or product, and it can be incremental or radical, depending on its nature (Herzog & Leker 2010). The incremental innovation is observed when designers work to improve the existing product or approach (Verganti 2013). The radical innovation usually means the change in a meaning of the product, as well as its form, and the addition of a new product to the existing market, as well as the formation of a new market (Battistella, Biotto & De Toni 2012).
While discussing the location of Nintendo’s Wii in the innovation matrix that has two opposites, it is possible to state that Wii has features of the radical innovation because Nintendo proposed not only a new console for games. Thus, the company changed the approach to video gaming while targeting the new group of customers, altering the meaning and nature of games, broadening the environment, and applying a new technology (Smith 2015). As a result, Nintendo’s competitors focused on proposing alternative products with the similar qualities, and the implementation of the radical innovation led to creating a new market segment.
Value Proposition
While implementing Wii, Nintendo focused on the value proposition for the target customers who were not discussed as potential consumers of products for video gaming previously. Nintendo chose to focus not on skilled gamers, but on female users, families, first-time gamers, and older persons (Smith 2015). The reason was in the fact that skilled gamers traditionally chose the PlayStation and the Xbox that were characterized by the application of the high-level technology and by the high reputation among the target population.
Nintendo could have difficulties with reaching this population while proposing the similar product. However, Nintendo chose to focus on the unique value proposition for the audience in a new niche (Smith 2015). Wii was developed for the wide group of users, and, instead of playing with the help of traditional joysticks and consoles, individuals received the opportunity to simulate different games in three dimensions, and the experience was similar to playing a real game.
The use of the wireless technology to control motions was innovative and attractive for the wide public, including non-gamers. The proposed value was unique for the targeted market, but the demand was high (Abbing 2010). The PlayStation and the Xbox were based on the use of buttons and joysticks to simulate the game, but the use of wireless sensors and controllers in Wii allowed for concentrating on the high-quality simulation.
Business Model and Revenue Generation
The effectiveness of the used business model determines the company’s profitability and the customer’s loyalty (Verganti 2013). The business model used by Nintendo depends on methods that were used for creating and capturing the value. In order to make the audience recognize the advantages of Wii, Nintendo concentrated on accentuating the product’s closeness to the world of real games, the product’s availability to families and non-skilled gamers, and the simplicity of using the product.
In order to guarantee the value capture, it was necessary to demonstrate how the comparably inexpensive device could be more advantageous than the PlayStation and the Xbox because it could be used by the whole family (Smith 2015). From this point, the main revenue generation mechanism used by Nintendo was based on the idea of utilizing innovative but simple sensor technologies in order to provide users with an opportunity to receive the unique experience that was available at a price similar to prices offered by competitors (Smith 2015). However, during a long period of time, the competitors could not propose adequate alternatives for the broadened group of customers, and Wii remained to be a leader in the market.
Conclusion
The focus of Nintendo on using simple technologies for simulating games that are oriented to the wide population of users led to creating a new tendency in the market of video games. The functions that were proposed by the PlayStation and the Xbox did not address the public’s demand anymore. This approach to winning the market position, addressing competitors, and gaining the audience’s recognition resulted in significant revenues. Thus, Nintendo can be regarded as a company that chose a path of completing the radical change and proposing the unique innovation.
Reference List
Abbing, E 2010, Brand driven innovation: strategies for development and design, Ava Publishing, New York.
Battistella, C, Biotto, G & De Toni, A 2012, ‘From design driven innovation to meaning strategy’, Management Decision, vol. 50, no. 4, pp. 718-743.
Herzog, P & Leker, J 2010, ‘Open and closed innovation-different innovation cultures for different strategies’, International Journal of Technology Management, vol. 52, no. 4, pp. 322-343.
Smith, D 2015, Exploring innovation, McGraw-Hill Education, Maidenhead.
Verganti, R 2013, Design driven innovation, Harvard Business Press, New York.
As this report consists of an innovation in technology, the invention that has been chosen for this paper is Nintendo Gameboy. The report would include a brief summary of the invention, the concept behind it, the need for that technological advancement, the possible hurdles that came in between the innovation process.
Nintendo is considered among the leaders in the videogame console makers. Generally known as Nintendo entertainment system (NES) it was introduced in the year of 1985 and ever since it has been given a stiff competition to its rivals like SEGA, Sony’s PlayStation and Microsoft’s Xbox. Nintendo has sold up to 1 billion games of various types including Nintendo 64 and Gameboy. Super Mario Bros is considered as Nintendo’s best selling game ever with an estimated 60 million units sold.
After the tremendous success of Nintendo’s handheld game the original game boy was launched in the late 1988. Game boy was the very first product in the market of portable games and it opened a new way for other companies to try their luck in portable games market. The various reasons of game boy’s success included its 160×144 pixel screen, stereo sound and game link feature (Console Information).
Apart from that its lighter weight, long lasting battery and cheap price were also points of success for game boy. Besides that there have been several technological advancements in game boy. Nintendo has made lots of variation in the original game boy this includes the Game boy pocket which is 30% smaller than the original game boy with equal size screen, the Game boy color it was a colored version of the Game boy and the Game boy advance.
As per research Nintendo has been the pioneer in the gaming industry with its various products. From the original big screen game boy to the most advance Nintendo DS, they have been settling with the market trends and have successfully adopted the technological changes in the industry (Steinberg, 2005).
If we compare the very first Gameboy with the Nintendo DS, the innovation that Nintendo has made throughout these years could be judged very well. They have made their presence felt in the market with the swift changes to their gaming machinery an example of that could be seen if we compare the original game boy and the Nintendo DS.
If we remember the Original game boy consist of a single screen which was large and without colors but with the passage of time some new features are added in the game boy such as the game boy advance and the game boy color which includes an improved resolution and color display but if compared to Nintendo DS it’s still far behind. The Nintendo DS is skilled to support the 3D graphics with a bottom touch screen which improves the synergy to play the game.
If we see Nintendo has been actively participative in the market by launching its products from time to time. The Recently launched Gameboy Advance SP has been equipped with much brighter screen and wide variety of colors. It’s easy to pocket and while travelling also the buttons are comfortable with the compatibility of linking it with other games. What has been observed from personal experience is that the new brighter screen consumes much more batteries but this was predictable with the improved performance. The older SP could play 10 hours in a regular battery while the new SP gives an 8 hour feedback time.
It has been observed that apart from the physical features technology has also affected the other side of the gaming that is the expenses. The original game boy consumed four AA batteries in a matter of time which proved out to be very expensive. Keeping in mind that after a few days the batteries would be fully consumed and new set of batteries would be required to play the game. The Nintendo DS has a built in rechargeable battery and an adapter which saves a good bit of money which is served in buying batteries (All experts).
The original game boy required a cable wire if one wants to connect it with another game boy. Plus both the players had to sit side by side in order to play with themselves (Piekarski). The Nintendo DS has this built in feature of Wi-Fi. This means that there is no need of cable wires to connect; one can easily connect their Nintendo from far away or even through the internet. This would give a broader path to the gaming where one can connect with their friends and to play games. The downloading option is also included which would result in other players trying you game without the need of the cartridge. Conversation between playing is also made possible by the Nintendo DS with a Pictochat system which is specially designed by Nintendo to enable chatting while playing games.
Another change that has been made in the Nintendo DS is that it has a built in microphone, advance games and improved battery life which makes life very easy for the user (Virtual game boy, 2009 ).
What I believe is that game boy has achieved its target as being trend setters. By this I mean that the main thought behind game boy was design a game that one can play without sitting in front of the TV. GBA SP has achieved this to some extent, as I personally believe that most of the gamers would like to play on the big screen at home.
The impact that the gaming machines have in our society is humongous. Most of the teenagers are indulged into this activity. Research has proved that with the advent of these gaming devices children’s physical activity has been affected very badly. The games provide a tremendous amount of pleasure to them and eventually over a period of time they become addicted to it.
On the other side before the advent of PS and DS the only thing that came into mind when it comes to portable gaming was Nintendo game boy. Ever since its launch the game boy has experienced significant success in the portable gaming industry. Several advancements have been made in its different versions like the game boy advance, game boy advance SP, etc. Nintendo has made significant innovations in the gaming industry but the most revolutionized concept that they have given is that of the handheld game boy (McFerran, 2009).
According to research the introduction of game boy gave the gaming world a new direction with its portability and amazing use of colors and graphics. Another very visible advancement that has been made is the design of the machine. The design of the game boy advance is similar in look as a small laptop; this feature not only makes the game handier but also gives it an extra bit of protection from scratches and damages (Game FAQ’s).
In a nutshell if one can analyze the technological innovations made by the Nintendo game boy it would be as follows:
Smooth and efficient design
Large collection of games
State of an art graphics
Concrete sound
Without a doubt one can say that game boy has become an icon in the gaming industry. Before game boy the video game consoles were only limited to television, game boy inspired the path for a completely different set of game play (Donahue). With its remarkable success it would require a huge catch up for its competitors to match its success.
References
All experts. (2009) Game Boy Advance SP [online] Web.
Console Information. (2008) Nintendo GameBoy/GameBoy Pocket [online] Web.
Donahue, A. (2009) Nintendo Gameboy Information [online] Web.
Game FAQ’s. (2006) Game Boy Advance [online] Web.
McFerran, D. (2009) Nintendo’s Portable History: Part 2, Game Boy [online] Web.
Piekarski, P. (2009) Nintendo DS Vs. Gameboy [online] Web.
Steinberg, S. (2005) Game Boy Micro Review. [online] Web.
Virtual game boy. (2009) Technical Information . [online] Web.
This paper starts with the discussion of the principles of just noticeable difference and just meaningful difference, shows Nintendo 3D as an example of those principles in action, demonstrates how big trends have been used as the frame of reference during Nintendo 3D marketing campaign, views people’s need for Nintendo 3D from the perspective of Maslow’s hierarchy of needs and from the perspective of psychological needs, discusses Nintendo 3D’s product differentiation, shows the basic characteristics of consumer personality and the Five-Factor Model as those are applied to Nintendo 3D marketing campaign, points out the limitations of motivational research, and rounds up its behavioral analysis of the target segment by giving a brief overview of psychographic personality segmentation as this type of research is related to Nintendo 3D marketing.
Nowadays, the market of video games is developing at high speed. The major rivals – Nintendo, Sony and Microsoft – try to create new products and attract as much buyers as possible.
The new product presented by Nintendo this year – Nintendo 3D – has enabled the company to achieve high level of sales. To do this, Nintendo has used the principles of just noticeable difference (JND) and just meaningful difference (JMD).
Those two principles were developed by Karl Weber long time ago. The principle of JND is based on Weber’s assumption that consumers “detect differences between stimulus value”1.
Thus, to attract consumers’ attention, it is necessary to make them see some feature that differentiates given product from its similar competitor-products. That feature should add some difference that would be both noticeable and meaningful, meaning that it is not enough to make some minor change in the product in order to attract consumers.
The change should be meaningful. For instance, it is not enough to start producing goods of different color, though it is important to understand what color attracts the given target market segment of population the most.
Even more importantly, it is crucial to understand that every change should address needs, desires, and self-perceptions of the given target market segment of population.
Yet another important thing to understand about change – as it is related the principles of just noticeable difference and just meaningful difference -, is that the change often comes from bigger trends that might, at first sight, seem unrelated to that particular industry.
One example of that is 3D technology. In recent years it has gained a lot of popularity among consumers. At first it has affected only the movie theaters’ and personal electronics’ markets. But as the time went on, the gaming console giant, Nintendo, understood the bigger trend and decided to apply 3D technology to their gaming consoles.
Video games partaking of that technology followed shortly thereafter. The most important fact here, however, is that Nintendo saw its gamers’ wants as the extension of bigger market.
It is also important to mention that this case demonstrated the principles of just noticeable difference and just meaningful difference: to make gaming more enjoyable, Nintendo has made it possible for the gamers to see 3D images without having to wear the special 3D glasses, which are often regarded as the major drawback of 3D technology.2
Nintendo has also tried to differentiate their product from other gaming consoles by making it easier to use, letting parents control their children’s’ game-buying behavior, and giving gamers the possibility of playing with each other, provided they both have Nintendo 3D.3
The application of above-mentioned principles of JND and JMD attracted the necessary attention to Nintendo 3D. According to the report about the Nintendo 3D managed to sell 400,000 units in the USA.4
All this is just during the first week. It is also important to mention, however, that Nintendo was the first company to present a gaming console that uses 3D technology without requiring its users to wear 3D glasses. It has clearly helped to boost its sales.
It goes without saying that there are still many other things that can be improved – thus, even more consumers can be attracted. For instance, one of the most valuable just meaningful differences for this target market segment would be lower prices.5 Thus, it would be beneficial for Nintendo to work out a way to decrease the costs of producing 3D gaming consoles.
Therefore, Nintendo 3D is the latest piece of evidence that the principles of JND and JMD still work, though they have been introduced long ago. Nintendo combined those principles with the latest marketing research – thus, by capitalizing on the bigger market trend of 3D technology, it has become the first company, and therefore the leader, in the portable 3D gaming console market.
This case illustrates the importance of changing given product according to the bigger technological trends.
In order to understand the behavior of a person purchasing Nintendo 3D or any other gaming console, it is important to understand his motivation, which is the process that causes people to behave as they do.
But in order to better understand the underlying principles of motivation, it would be beneficial to first understand the process of purchase-making. Thus, it is apparent that a purchase is made only when there is a need for it, and only when a consumer wishes to satisfy it.
The desire to eliminate the need is exactly a desire to buy it. Thus, Maslow’s hierarchy of needs has been highly significant to the development of marketing and can be used to describe the consumer’s motivational behavior.
According to this theory, the basic physiological needs, such as eating, drinking, procreation, and socialization, have to be satisfied before other, less animal-like, needs.
Thus, the need for self-actualization stands at the very top of this hierarchy, requiring a whole host of prerequisite needs to be fulfilled. It seems then that the consumer behavior of purchasing a Nintendo 3D can be explained by the need for self-actualization.
Why people need a Nintendo 3D? It gives some form of entertainment and at the same time escape from the real world. It is also important to mention that for most people video games are not only fun but also some form of reward-motivated behavior, as most modern video games feature complicated missions where you can obtain some form of “higher status” by fulfilling a given mission.
The purchase of Nintendo 3D can also be viewed as the desire to fulfill a psychological need. Psychological needs are the needs that protect and enhance the personality if satisfied.6
Nintendo 3D is the product of high-tech market, which is characterized by constant and swift change. That change seems to cater to ever-changing tastes of the public. Therefore, most of the people in that target market segment are responsive to anything new.
The fact of Nintendo 3D being the first portable 3D gaming console has clearly been something new and thus represented an appeal to the target segment’s most characteristic quality: hunger for anything new. Those people also try to be fashionable.
And if a person sees himself as a fashionable man or woman, he or she will most likely imitate his neighbor or friend who has bought the latest gaming gadget. Therefore, the purchase of Nintendo 3D represents a consumer’s behavior motivated by higher needs that must have been aroused after the satisfaction of lower ones.
Now that we know the motivational foundations of people’s need for Nintendo 3D, we can consider the question of product differentiation. In comparison with other gaming consoles, Nintendo 3D has a lot of advantages, like the possibility to access the web, camera, etc.
The opportunity to show three-dimensional images is present. Notably, there is no need for special glasses. Moreover, Nintendo “is working with studios to bring streaming, 3D movies to its gaming console,” and “to make it easier to play high-end games such as Activision’s Call of Duty: Modern Warfare,” will pack “the 3DS with a more powerful processor and a higher-definition display than its predecessor.”7
Therefore, Nintendo 3D does have a lot of advantages that can motivate a consumer to buy.
Consumer personality is another factor that would affect the behavior of given target market, which is why it would be necessary to understand the consumer personality of given market segment. By learning the personality of the consumer, the company can make its product more attractive to the consumer.
More specifically speaking, the producer can persuade the consumer to buy the product as the result of knowing his personality traits and thus being able to approach him taking those personality traits as frame of reference.
One marketing approach that takes advantage of such technique is the Five-Factor Model (FFM), which is the most famous multiple-trait approach in consumer research. “Extroversion”, “agreeableness”, “openness to experience”, “stability”, and “conscientiousness”8 are the main FFM traits.
FFM is proven to be compatible, applicable, and universal.9 Thus, it can be concluded that the FFM model allows the marketing specialist to determine the prevailing personality of given target market segment and develop a marketing campaign based on that personality, so that the target market segment would be drawn to that product.
However, FFM model is applicable not only to the consumer personality area, but also to branding. Nintendo is a famous brand in the gaming world, which has applied the FFM model to its marketing campaigns and has achieved considerable successes in the sales of its products.
That success has been measured in many millions and has brought Nintendo not only profits but also consumers’ trust. This relationship is especially important in its effect on the target market, because that bond of trust influences people’s perception of certain brand.
Even though it has been mentioned earlier in this paper that motivational research can be helpful, it is important to point out its limitations. The most important of its limitations are the use of few respondents and the requirement of expert analysis.10 Thus, it would be beneficial to consider other kind of marketing research: psychographic personality segmentation.
That type of research “attempts to segment consumers according to three categories of variables: activities, interests, and opinions (AIO) (plus demographics)”.11
When this type of research is being conducted, “the respondents are given lists of statements about the opinions they have, the things that they are interested in and the things that they do and asked how much they agree or disagree with each one”.12
Thus, this type of research can be applied to Nintendo 3D by determining the average age, income, and other statistics of the majority of Nintendo 3D buyers, so that the future marketing campaigns can concentrate on those groups and thus establish a more well-defined target segment.
Bibliography
Alpeyev, P &Eki, Y, ‘Nintendo goes for the hard core with its 3DS’, Businessweek, 2010. Web.
Buckleitner, W, ‘A closer look at the Nintendo 3Ds’, The New York Times, 2011.
McNeal, JU, An introduction to consumer behavior, John Wiley B& Sons, Inc., New York, 1973.
Nintendo is a major player in the video game industry. The company has successfully used a disruptive strategy to conquer the market. Sony’s Play Station (PS) and Microsoft’s Xbox have successfully gained their place in the market niche using improvements in technology. Nintendo has employed a disruptive strategy that involved the design of a gaming console that targeted non-gamers.
This enabled the company to improve its competitiveness. Within 3 years of launching the console, the company became the second most valuable company in Japan (Farhoomand, 2009). This is a clear indication of the success of Nintendo’s disruptive strategy.
The 1970s marked the birth of the video game industry. During this period, teenagers played video games in malls and game arcades. Later, the introduction of home consoles enabled people to play video games at home. The video game industry is a technology intensive industry. The development of the personal computer enabled people to play computer games instead of using proprietary consoles. However, video game consoles retained their popularity.
The last decade of the 20th century saw the introduction of Sony’s Play Station (PS) console. Sony’s advertising strategy enabled the product to become a hype entertainment. It allowed the company to attract the youth. The lucrativeness of the industry prompted Microsoft to join the market through the launch of the Xbox. High-definition (HD) video technologies made it possible for the companies to improve the quality of their games.
In addition, increased speed of broadband connectivity ensured the companies could offer services more efficiently. Since its onset, video game companies focused on gamers. Nintendo developed a strategy that focused non-gamers through the launch of the Wii. The Wii enabled the simulation real life games (Farhoomand, 2009).
Nintendo has utilized a disruptive strategy to gain a competitive advantage over the other players in the industry. Disruptive strategy attempts to discard old business clichés. It strives to remodel the landscape of the market.
Companies that use a disruptive strategy usually target certain situations where the complacency of their competitors has made them overlook or underserve certain customers. Therefore, a disruptive strategy leads to radical changes in the industry. It leads to a permanent change in the industry (Yami, Castaldo & Dagnino, 2010).
Traditionally, the video game industry focused on gamers. Therefore, it developed interactive games that attracted gamers. Technological advancements have increased the sophistication of games. This made it difficult for the gamers to understand some games. Nintendo strived to formulate a strategy that would reduce the complexity of games. In addition, it aimed to reach non-gamers as video game companies usually ignored the non-gamers.
Targeting non-gamers would enable the company to increase the number of its customers significantly. This strategy led to the development of the DS. The DS was a handheld device that increased interaction with gamers. Gamers could tap or write on a touch-screen with a stylus. This reduced the complexity of games. Gamers did not have to use complicated sets of buttons.
The success of the DS paved the way for the development of the Wii. The Wii had a controller that looked like a remote control panel. It had motion detectors that enabled gamers to play games by simply moving the controller. The motion detectors translated the movement of the controller to a screen. This made it possible to simulate real life games. The ease of use of the Wii was one of the major factors that fueled its popularity.
The Wii enabled Nintendo to capture non-gamers. Users could engage in push-ups, yoga, and other exercises. This enabled the product to have a significant impact on the health industry. In fact, various therapists recommend the use of the Wii in performing various activities that improve an individual’s health (Farhoomand, 2009). Nintendo’s disruptive strategy presented company a chance to improve its revenues.
Microsoft’s Xbox 360 was Wii’s major competitor. Microsoft launched the product in November 2005. This was approximately one year before the launch of the Wii. Microsoft’s head start of one year enabled the company to capture a sizeable percentage of the market. In addition, it provided the company with an opportunity to develop a huge archive of games prior to the launch of the Wii. The variety of games is one of the major factors that affects gamers’ decision to purchase a certain video game console.
Therefore, a huge archive of games improved the competitiveness of Xbox 360. Various parties believed that early entry into a market enabled Sony’s Play Station to capture the market. Therefore, Xbox 360’s early entry may have given it a competitive edge over other companies in the industry. Sony Play Station 3 (PS3) could not compete effectively with Wii since it was very expensive. In addition, it was not profitable. Sony made a loss upon the sale of each PS3 (Farhoomand, 2009).
Competitors should develop a new business model alongside their existing business models to enable them to counter the challenge posed by Nintendo. This strategy will enable the competitors to counter the threat posed by Nintendo while retaining various important aspects of their existing business models.
The competitors should ensure that the business models are in separate entities. This would prevent the entities from competing with each. This would avoid a situation where managers of the parent company may feel that the new business model is growing rapidly at the expense of the parent company. Therefore, they may try to constrain it.
Having a new business model prevents the parent company’s existing culture and practices from being an impediment to the success of the new business model. It is a fact that the current business models of Microsoft and Sony are the major barriers that inhibit the ability of the companies to compete effectively with Nintendo. The business models make it difficult to produce products at a low cost. This reduces the profit margin of the companies. In addition, it necessitates the companies to sell their products at very high prices.
This reduces the competitiveness of their products. The companies should develop a new business model that focuses on the cost effectiveness of their products. This may necessitate the development of new low-priced video game consoles. These consoles may have a lower quality than the initial consoles of the companies. This may require the companies to launch a new line of low-priced products.
This would enable the companies to retain their existing customers and create a new market segment in the industry. The new products would compete with Nintendo’s Wii on price. On the other hand, the old video game consoles would compete with the Wii on quality. Therefore, this strategy will enable the companies to tackle Nintendo from two fronts. This would increase the likelihood of the companies wresting control of the industry from Nintendo.
References
Farhoomand, A. (2009). Nintendo’s disruptive strategy: Implications for the video game industry. Hong Kong: Asia Case Research Center.
Yami, S., Castaldo, S. & Dagnino, B. (2010). Coopetition: Winning strategies for the 21st century. London: Edward Elgar Publishing.
Was the Nintendo lucky or does the Wii’s success have strategic merit?
In the business world today, luck is not treated as a contributing factor towards the success of a business. Businesses need to adopt strategies which would sustain their competitiveness.
The strategies that Nintendo adopted can be said to have had strategic merit. The company was focused on receiving the attention of the masses in order to meet their needs.
The company believed that customers were the ones who made a business to gain new business opportunities. It therefore focused on meeting the various gaming needs that majority of the people were interested in.
Cheap costs are very appealing to customers. Most customers always make sure that the products they use are affordable and capable of meeting their needs adequately.
Since Nintendo was not competitive technologically initially, it mostly focused on the masses and designed its products in a manner that ensured that members of the public had fun while they were playing the games made by the company.
This strategy enabled the company to do more with less. Instead of adopting the expensive state of the art chips and high definition lasers that Microsoft and Sony were using, Nintendo ensured that the devices it manufactured incorporated the motion-sensing wireless technology which was cheap and interesting for the customers to use.
Nintendo ensured that the controllers of the game incorporated the TV remote technology so that the games would be more inviting to people.
The basic software of the Wii was designed in such a manner that it allowed people to design their own avatars thereby making people to feel as if they were part of the game.
This went hand in hand with the motion sensing technology that the company paid emphasis on thereby making the game to be more interesting to the people who were not hardcore gamers.
Since people were capable of playing Wii using characters that resembled them, the game became more popular to people thereby making the demand for the Wii console to go up significantly.
Because of the popularity that Wii had gained since its introduction, competitors such as Sony and Microsoft lost a significant share of the market thereby making Nintendo Company to outsell the two companies.
Has Nintendo put the “fad” question to rest?
Since the introduction of the Wii, many analysts wondered whether it would survive the competitive pressure in the gaming industry. However, it has not been possible for retailers to keep the Wii in stock since it was introduced because of its high demand.
Nintendo has been able to improve the Wii such that it is possible for customers to get weather details and news through wireless internet connectivity.
It is also possible for customer to keep themselves up to date because they can easily download the classic games from Nintendo and other independent developers. Nintendo is also laying emphasis on developing new applications which can cope with the motion sensing technology adopted by the company.
In which stage of the product lifecycle is the Wii?
Once a product is introduced into the market, there are certain stages of product life-cycle that it passes through. The Wii can therefore be said to be in its maturity stage because the sales of the company have gone up significantly, the competitors have begun designing games that are more interesting to the public, the prices of products have reduced because competitors such as Sony have reduced the prices of their PlayStation games to levels that compete with the cheaper games and hardware that Nintendo offers its customers.
Nintendo is also focusing on developing new games which are unique to the customers in order to enable it remain competitive in the industry.
Develop a strategy for the Wii’s next product life-cycle phase
When a product becomes well pronounced in the market, it encounters competition from other manufacturers thereby forcing a company to adopt new strategies what would enable it to remain competitive.
To survive in the market, Nintendo should ensure that the products designed are cheap and affordable to the general public.
In addition, it is important for the company to ensure that it diversifies on the games and services that it offers to its customers such that it is possible for the customers to access a wider variety of games from the company
. It should design hardcore games which would then attract the hardcore gamers to use of the games designed by the company. This would increase the competitiveness of the Nintendo in the gaming industry.
Threats to future success: Can Nintendo overcome threats to sustain Wii’s relevance?
Any business faces serious threats while conducting its operations in the market. In the case of Nintendo Company, it is possible that companies such as Sony and Microsoft would introduce games that are friendly for a majority of people to play and at a cheaper cost.
This would significantly impact on the market share of Nintendo thereby declining the demand for Wii. In order to ensure that the company remains competitive, it should ensure that it makes use of advancing technology to enable it design exciting games at a cheaper cost.
The company should also design hardcore games thereby attracting the hardcore gamers into the company.
Nintendo is a games manufacturing in Japan. It was started a long time ago in the late 1800s (1880) by a man named Yamauch as small company producing playing cards for the Japanese market (Iwata, 2006).It was until 1970 through to 1985 that Nintendo started producing electronic toys and video games.
Nintendo was the dominant player in the video gaming industry for decades soaring in the success of both consoles and hand held games. This lasted until the entry of other players who saw an opportunity in the gaming business.
Sony launched its PS in the mid nineties while Microsoft came in with Xbox in 2001.This completely changed the face of the gaming industry because there was increased competition in terms of quality and innovativeness.
Introduction
Nintendo had been in the gaming industry for many decades without any reasonable competition; they had almost total control of the market and therefore had conventional marketing strategies that perhaps were not as sophisticated as present day marketing strategies with so much competition in the market.
This analysis therefore seeks to critically look at the strategies employed by Nintendo before, upon the entry of competitors and any foreseen strategies that maybe employed. Microsoft and Sony’s strategies and mistakes will also be looked into and the some insight put on the way these strategies have changed the industry.
Stakeholder analysis
Stakeholder analysis is a means or strategy used to identify and closely look at the importance and influence of certain groups and/or individuals that could affect or get affected in some way by a particular project (Nager, 2009).
In Marketing, many groups are considered but the most important can be summarized in four C’s; Customers, Competitors, Company, Community (Nager, 2009). As Nager puts it” This 4C’s Analysis is based in part on the 3C’s Model of Dr.
Kenichi Ohmae, a senior partner at McKinsey & Company, who based his corporate strategies on the corporation, customer, and competitors. Marketers adopted and expanded this model to factor in the growing importance of the community, including the influential roles of regulators, the news media and interest groups”.
These are therefore considered the most important stakeholders and must be carefully assessed in order to come up with a winning strategy. Other factors such as context and collaboration have been used by marketers but these could easily be fitted into the class of community.
Nintendo had been a market leader for along time and used most conventional marketing systems until 2006. 2006 saw the introduction of a new and disruptive strategy by Nintendo after careful assessment of all the above stakeholders. Below is a more detailed analysis of how they did this under each of the stakeholders.
Customer analysis
A customer is ordinarily the end user of the company’s products. This group of stakeholders can be categorized as stakeholders of high importance and high influence. The reason for this is because they ultimately determine whether the product succeeds or not because the product affects them directly.
However, this group must be looked at with the proverbial third eye to ensure that the product is marketed to the right target group; students for example buy particular reference textbooks because their lecturers recommend them.
It would therefore be more appropriate to market the books to the lecturers rather than students. This is the strategy that Nintendo employed while marketing their Wii. They used an influential figure of the family, the mother, to spread the news about it.
In fact Nintendo were so strategic that they actually made the influential figure like and want to use the Wii! The mom who in most cases just buys the product after being convinced by the family was targeted to like the product. In this case therefore, she not only buys but also recommends the product to her family and others because she enjoys it.
This was a particular breakthrough point for Nintendo because it managed to capture the mom who in most cases was a non player. This became a family game that was easy to play and had some health benefits thereby capturing a whole new niche of the market.
Nintendo had taken care of not just the needs of its current customers but also a new crop that would increase its sales volume. Nintendo therefore simply identified who they wanted to have as their market and made sure they satisfied their needs relative to their purchasing decisions and budget.
Sony’s target consumer on the other hand was just the teenagers and the young adults with a bit of time and extra money in their hands. This would have normally been a wide market enough to drive sales. However with the introduction of the age limitless Wii, this became a narrow market that could not sustain Sony at the helm of the gaming market.
Xbox had a very similar target to Sony’s focusing to traditional gamers and paying little attention to non gamers or former gamers who had little time to spend learning the new and sophisticated games (Iwata, 2006).
Company analysis
Company analysis is basically an internal assessment of your company. While most companies strive to sell at whatever cost, it is essential for the product to reflect the company’s values and vision.
Marcus in reference to Neiman Marcus states that Neiman Marcus focused on satisfying high end shoppers who had lots of money to spend and therefore always maintained high quality and exquisite fashion. It is upon this standard that Neiman Marcus gained a national and international reputation (Marcus, 2006).
Nintendo put up a strategy to bring into the market a new game that could be enjoyed by people from any age group while adding some health benefits to their health. It is this innovation that saw it get ranked at number 7 in the worlds most innovative companies in 2008 up from 39 (McGregor, 2008).
Competitor analysis
A competitor is basically a company that produces a product that could act as a substitute for your product. In this case, Nintendo’s direct competitors are Sony and Microsoft who produce similar console games.
Despite these direct competitors, there are other indirect competitors in the industry like game boy or companies that produce regular pokers cards, computer games and so on.
Iwata states that “Traditionally, Sony, Microsoft and Nintendo would go into a new cycle or a new battle every five to six years, and in 2000, Sony’s PS2 had emerged as the clear winner.8 Since then, the focus of the industry had turned even more to the technological advancement of the console hardware, particularly in terms of faster processing speed, higher definition of video quality and increasing complexity of the games.
The relentless pursuit of superior technologies became the convention that drove the industry’s dynamics”. This was a description of how traditional competition was among the three game producers.
However Nintendo realized that they were loosing their grip on being the market leaders and came up with a strategy so disruptive that they reclaimed their position as the market leader.
Unlike Sony and Microsoft, Nintendo decided to put together a game that would unite the whole family in play and attract non gamers who had no time to learn the traditionally complex video games produced before.
It also incorporated a remote control that actually required that the user to perform physical functions similar to the real life situation. This not only made gaming easier but also fun and healthy.
Sony and Microsoft on the other hand stuck to the traditional games focusing more on sophistication, impressive graphics and technology.
This bias towards increased technology increased their cost of production, as would be expected, leading to production of very expensive consoles. This would later hurt them in sales because Nintendo’s Wii was a lot cheaper and simpler.
Community analysis
The community as whole has a lot of influence on how well a marketing strategy works. Nintendo in creating the Wii put collective interest in it by incorporating the Wii sport and fitness which was viewed by the market by a good health initiative.
The fact that the Wii was a family rather than an individual game was a good addition because it was a way of enhancing family bonds.
Positioning map
Figure 1
All the target customers share something in common although the new gamers generally appreciate good flexibility and games that are easy to learn and play.
The mature gamers on the contrary mainly focus on additional features and a good price tag. A console that plays cd and dvd movies is very appealing all the target markets because of the convenience it brings along.
Nintendo’s Marketing Mix strategies for the Wii
Nintendo’s Marketing Mix strategies for the Wii played a critical role in ensuring that the Wii remained at the top as the best selling game in its class.
Richtel in a year later reveals just how much demand was in the United States for the elusive Wii. Long queues were still being witnessed as people struggled to get a hold of the game well after its release.
Nintendo’s strategy varied from innovation in the development of simple games that were aimed at ’enriching the lives of the owners’ to the Wii which was a simple game that physically engaged the players and the use of word of mouth in marketing the product.
Nintendo turned away from the obvious way of fighting for the market; increasing sophistication and graphics. Another important thing to be noted is that Nintendo drastically cut down the cost of producing the Wii games thereby allowing them to capture the cost conscious market.
This drove its sales and ensured maximum tapping of the market. Nintendo also allowed a lot of diversity by allowing independent people to develop games independently which were then availed for download on the internet.
President of Nintendo of America Reggis Fils-Aime stated that “Independent developers armed with small budgets and big ideas will be able to get their original games into the marketplace to see if we can find the next smash hit.
WiiWare brings new levels of creativity and value to the ever-growing population of Wii owners” (Mokey, 2007). Nintendo’s Wii supply was also very limited; something considered a strategy by experts so as to keep the buzz about the Wii alive.
On marketing, Nintendo chose a clever and cheap form of marketing; mouth to mouth. This proved successful as the mothers were keen on not just getting the game for their children but also for their own enjoyment and family time. All these combined factors separated the Wii from the competition in terms of cost, innovativeness and flexibility.
The Wii was far more attractive in price, was better suited for both seasoned and new gamers and had some health benefit that was backed by doctors. Nintendo therefore clearly out marketed its competitors on this.
Conclusion
In this particular battle for supremacy, Nintendo clearly out shone all its competitors. However if I was Sony’s Vice president, I would take advantage of our superiority in production of electronics to develop a game that could neither be matched by Nintendo nor Microsoft.
With the emerging development of 3D televisions, I would urge my game developers to create a console that would be compatible with our 3D televisions that are projected to take viewing to the next level.
This would give the gamers the closest experience in gaming to real life than any other game ever produced. I would also borrow the idea of the remote control used by Nintendo to incorporate physical movements in this new game.
List of references
Iwata, S.,2006.GDC Keynote Address. Nintendo World Report. Web.
McGregor, J., 2008. The World’s Most Innovative Companies. Business Week. Web.
Mokey, N., 2007. Nintendo Launches WiiWare Channel, Digital Trends. Web.
Nager , J.2006. Who Cares And Who Matters: The 4c’s Stakeholders Analysis.
Establishing appropriate organizational strategic management is vital. Strategic management helps in attaining viable competitive advantages for any organization. With reference to the Nintendo Wii-International’s case study, this paper aims at identifying how the company grew to success. Nintendo was established in 1889 with the intent of manufacturing playing cards.
In 1979, it developed a first game system. Subsequently, the company developed the first LCD video game of its kind. It was unique as it had a microprocessor. Five years after, The Nintendo Entertainment System that had 8 bits
was developed. The video console performed well in terms of sales as it was one of its kind and none of those in the market by then could measure up to its features.Further, through a critical analysis, the paper will also seek to determine the strategies and reccoimendations that company should adopt so as to remain relevant in the market (Drezner, 2007).
Analytically, success of the Nintendo Company can be attributed to having a clear vision. The founder of this group intended to reach a wide range of people in an effective manner employing the use of appealing, in addition to, high quality products while observing the most viable ways to generate profits.
The Problem
There are several challenges faced by the company according to the case study. Foremost, the company had to cope up with the growing demands for their products. Additionally, competition has be a considerable problem for Nintendo. Currently, the company is only limited to some regions of the world. It ought to access other international markets, as well (Michael, Hitt, Ireland & Hoskisson, 2012).
The second challenge faced by the company includes making a decision as to succeed items that are of higher margin. The company has to establish the manner in which it will ensure expanded programming such that it will include reality television shows, which are based on themes, as well as, the designer fashions.
In the same context, the company gas to decide how to be successful considering the actively searched out products, which are proprietary in nature, either from the suppliers or even from the entrepreneurs, who have gained a new entry into the United States Market.
The third challenge that the case study depicts are the continued competition and expansion through the internet, applications of mobile devices, video streaming, in addition to, interactive television shows (Haberberg &Rieple, 2008). Further challenge concerns the growth of the company.
According to the case study, it is evident that Nintendo has continued difficulties in establishing growth trends. However, according to the case, there are moves that the company engaged itself in and as such, it is a clear indication that the company is aware of these challenges and, therefore, it is in the process of establishing the most effective measures in order to confront them.
Analysis
The success of the Nintendo Company and its products can be attributed to having a clear vision. The founder of this group intended to reach a wide range of people in an effective manner employing the use of appealing, in addition to, high quality products while observing the most viable ways to generate profits.
Indeed, the title of the company in itself is an aspect of strategic management. As such, the founder established an initiative, which was not only massively inspiring but also overarching. Further, the vision was a long-term one, and as such, it focused the future. The founder was also passionate in his journey towards accomplishing this vision. On route to success, the founder established the guiding values, goals, in addition to aspirations (Drezner, 2007).
Another success factor is the company’s mission. According to the case analysis, the founder wanted to establish a company that would be cost effective in its operation while still ensuring that it responds to its customers. However, vision and mission cannot be used singly to obtain success. This implies that they have to be linked up using objectives. The founder of this company did establish remarkably clear objectives.
Some of these objectives include expansion of the client reach with the help of technology. Another objective is ensuring that both the existing client service and the standards of product quality have been maintained regardless of the channel of distribution utilized. This indicates that the founder indeed recognized the trade-offs between the two in an extraordinarily efficient manner. He also intended to focus unique, quality, in addition to, high margin products.
Further, he intended to involve a number of stakeholders in decision-making. As such, he involved both the small as well as the large vendors in the search towards efficiently finding the products that would be more entertaining. This implies that he acknowledged the aspect of strategic management through the action of hiring a number of seasoned television executives.
For the objectives of the company to be attained effectively, several actions have to be considered. Foremost, the company must ensure that it keeps the current offerings with the advent of technology. Another thing that the company ought to ensure is that it not only scans but also monitors the external environment.
Through this, the company will be able to identify trends in the consumer market, trends in vendor product advancements, as well as, each move initiated by a competing business. Further, the company should ensure that it provides a working environment, which is exciting in nature. The company should ensure that the working environment guarantees that the employees will be committed to the notion of delivering quality at the first instance.
In general, the successful spell of Nintendo Company can be materially attributed to the strategic management approach adopted by the founding father. Through strategic management, an organization is usually in the right direction and in a good position to achieve a greater market share and, therefore, competitive advantage over the other firms.
According to the case study, the company incorporated the use of several strategies in ensuring that it endures a successful performance. In strategic management, there are several strategies adopted. However, many organizations focus on three principal ones, which include, analysis, formulation, in addition to implementation.
Strategic analysis concerns the strategic goal, which is the vision, the mission, as well as, the strategic objectives. On its part, strategic formulation involves making decisions of which industry it should engage in as well as making decisions on how the organization should compete in the identified industry.
The third strategic concept is implementation. This strategic management approach concerns the allocation of the essential as well as the necessary resources in order to operate. Further, this approach involves designation of the organization. Here, the management is required to deliver the operations by bringing the intended strategy into operational reality.
Alternatives – 3 possible ways to solve the problem
There are various ways through which Nintendo can solve its problems. Firstly, the company should expand its production capacity so as to serve more cutomers and bar them from resorting to the products of other competitors. The company will be able to anticipate, not only competition, but also other forces existing in the external environment of the company.
The activities depicted from the case study to support that this strategy was adopted include such actions as acquisitions, vertical integration, development of a vendor network, in addition to, understanding the company’s customers.
The second possible way to solve the problem encompass strategic formulation. This will diminish the problems of competition by increasing other aspects of competitive advantages. It is also evident in the case study that the company also adopted the strategic formulation strategy (Carrol, 2009). According to strategic management analysts, this strategy concerns making a choice in the manner in which a company will compete.
The reasons why this paper notes that the company adopted the strategic formulation is because of the offering of a shopping experience, which is attributed to as posing a low level of risk, while providing products of high quality to the customers. Moreover, the company did this in a way that no other shopping venue did and as such, Nintendo ’s operations were differentiated.
Ways in which the company differentiated itself from the competitors include the creation of a shopping mall that would run twenty-four hours a day for a period of seven days. It also ensured that it was running programs that were based on themes with celebrities. Apart from these, the company ensured that it ran shipment for forty-eight hours.
Moreover, Nintendo provided a one-month money back guarantee. Another action that signified differentiated service included institution of a quality control system, which was rigorous in nature, in addition to, linking up with national brands and thus forming a partnership aimed at attracting customers.
The third solution is the implementation of strategic measures in management within Nintendo Wii-International. According to the findings of the research conducted by Haberberg & Rieple (2008), it is indicated that strategic implementation concerns marshalling the company resources in a manner in which coordination, as well as, the integration of activities will be done easily and effectively in an effort towards the achievement of the chosen strategy.
Recommendation
All of the above alternatives are viable and can lead to the establishment of the most ideal solution to the existing problems on competitiveness, product viability, and production expansion. To support this assertion, the company will be able to anticipate, not only competition but also other forces, as well, existing in the external environment of the company.
The alternative of expanding the company’s production capacity is more weighty. Expansion can occur through mergers and acquisition of other international organization so as to reach the global market easily.
About acquisitions, the company should acquire other business so as to enhance its market penetration. Finally, the company should ensure that it focuses on understanding its customers, as well as, their needs and services (Carrol, 2009). This is evident in the case of Nintendo through various activities. The three crucial ways in which the company did this is by innovating while making use of creative merchandising (Dess, Lumpkin & Eisner, 2012).
Conclusion
Nintendo Wii is a successful product despite the looming competition it receives from other products. Nonetheless, the problems that the company encountered previously have hampered its exemplary performance. Competition, huge demands, and limited production capacity have served as the major problems faced by the company as evident from the case.
Analystically, a company that integrates an aspect of strategic management to its operations is in a better position to achieve competitive advantages and increased market divides. The analysis has also established that for the objectives a company to be attained effectively a company has to ensure that it keeps the current offerings with the advent of technology (Dess, Lumpkin & Eisner, 2012). Another thing that the company ought to ensure is that it not only scans but also monitors the external environment.
Through this, the company will be able to identify trends in the consumer market, trends in vendor product advancements, as well as, each move initiated by a competing business (Michael, Hitt, Ireland & Hoskisson, 2012). Viable alternatives can be used to establish the most ideal solution to the existing problems on competitiveness, product viability, and production development.
References
Carrol, W. (2009). Strategic communities for knowledge creation: a Western proposal for the Japanese concept of BA. Journal of Knowledge Management, 7 (5). 23-45.
Dess, G., Lumpkin, G. & Eisner, A. (2012). Strategic management: Creating competitive advantages (6th Ed.). New York, NY: McGraw-Hill/Irwin.
Drezner, D. (2007). Avoiding Trivia: The Role of Strategic Planning in American Foreign Policy. Journal of Knowledge Management, 16 (4). 2003, 3-15.
Haberberg, A. & Rieple, A. (2008). Strategic Management: Theory and Applications. Oxford: Oxford University Press.
Michael, A., Hitt, R., Ireland, D., & Hoskisson, R. (2012). Strategic Management Cases: Competitiveness and Globalization. Belmont, CA: Cengage Learning