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Nintendo Wii - Research Paper Example

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Nintendo Wii Background/History/Company Timeline Founded in 1889, the company was introduced as the Nintendo Entertainment System (NES) in 1985. Two years after, the company sold “over 60 million units, people brought games like Mario and Zelda into their homes for the first time on the NES” (Nintendo, 2011)…
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Nintendo Wii
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Download file to see previous pages For sometime now, Nintendo has been a strong market force, having bigger companies like Sony and Microsoft as closest competitor. This performance is however not global as in parts of the world such as Japan, were “sales were falling below those of Sony's PlayStation 3 during March 2009” (Harding, 2009) SWOT ANALYSIS Strength Rank (2008) observes that Nintendo has four major strengths which have to do with “a strong brand name, high returns, high employee efficiency, and debt free status.” This means that the company the potential of building a very formidable market base in many parts of the world since it is globally known and free from financial constraints. Weakness Nintendo’s greatest weakness has to do with its inability to meet demand of its products, especially the Wii. Rank (2008) laments that “the new Nintendo Wii console is under such high demand that the manufacturers are not able to supply the key components.” Opportunities Nintendo can take opportunity from two major areas, which are “Growing US games software market and increasing demand for online gaming” (You Sigma, 2009). The company is therefore challenged to take up the opportunity to grow its stake in the video game industry. Threat The company is threatened with the general slowdown of the Japanese, American and European markets (You Sigma, 2009) as a result of the global economic crisis. Analysis via Porter’s Five Forces Model Threat of new entrants The technology industry is a fast growing one with new entrance seen every now and then. Because of the seemingly lucrative nature of the industry, Nintendo risks stiffer opposition from new entrants who may not be new to technology but to the video game industry. In such a situation, such entrants are likely to cause a commercial stir with their existing name. Bargaining Power of Buyers Global economic hardships result in increased bargaining power by buyers (Konadu, 2004). Because the world is yet to recover fully from the global economic crisis, Nintendo risks buyer opting for lesser fee of products and services. Bargaining Power of Suppliers Nintendo’s suppliers raised their bargaining power due to offset of stricter opposition and competition in the video game market. Nintendo had to face competition from Microsoft and Sony and so had no other option than to give in to the bargain of suppliers. Substitute Products/Services Currently, Nintendo have shown lesser power to substitute its products as services. This is because for a very long time, the company’s focus has remained video game. Intense Rivalry Microsoft as one of the rivals of Ninendo will continue to offer intense rivalry because Microsoft is faced with stiff competition in other areas of its production such as software and computer production. For this reason, Microsoft is likely to pay more attention to the video game section of its company. Strategy used Nintendo’s strategy can be seen in two major areas. First, taking advatange of technology where by the company’s “innovative approach to videogame technology is evinced through the Wii’s controller system” (Roccols, 2008). Such use of technology was perhaps neglected by competitiors. Secondly and closely linked to the first, the Nintendo Wii is able to target a larger user base as it targets consumers of all ages. With this strategy, “The Wii has allowed Nintendo to not only compete with Sony and Microsoft, but to experience the incredible success it remembers ...Download file to see next pagesRead More
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