Nintendo Corporation - Research Paper Example

Nintendo is a Japanese multinational conglomerate that Fusajiro Yamauchi founded in September 23, 1889 in Kyoto. Initially, it created hanafuda cards that changed periodically. For example, in the year 1960s, it was operating a taxi company besides running a love hotel. Later on, it turned into a video gaming company that has since been the most formidable force in the industry. Its most famous gaming machines include Nintendo DS, Nintendo 3DS and Wii. It also creates and sales equipments for home leisure (Books, 2010). Internal Company Analysis The internal analysis of Nintendo will involve the scrutiny of its Strengths, Weaknesses, Opportunities and Threats (Books, 2010). This analysis helps the company to view its strategic position in the market place. This is dependent on the supposition that the effectiveness of a strategy emanates from the fitness between the internal resources of the firm and its external environment. Apparently, the internal resources include the strengths and weaknesses while its external resources are the opportunities and threats. Nintendo Corporation should strive to maximize its strengths and opportunities while at the same time minimizing its weaknesses and threats (Böhm, 2009). Strengths Nintendo Corporation boasts of strong, formidable and established brands in the world market. Most of its products are unrivalled putting it in a better position to command and dictate the taste of the market. For instance, the Nintendo 3DS that was initiated in the US in March 27, 2011 enables the users to view contents in 3D without necessarily using the special glasses (Books, 2010). Additionally, the Wii that comes in different advanced revolutionary features has made the product the best selling in the world. The corporation also has a robust and steady escalation in its revenue. Although the company was founded in Tokyo, Japan, it now has branches in all major world markets of the world. As of March 2011, the conclusion of their economic year, the entire proceeds of the corporation was $ 4799.40. This shows that company stands in better grounds in terms of assets and strengths. Besides, Nintendo Co. Ltd. has a strong cash flow system (Books, 2010). The operating cash flow indicates the amount of money in cash that the firm generates when it sells its products or renders the services. It is calculated by subtracting the firm’s taxes from the taxes. As of march, 2011, the cash flow for Nintendo was $ 1.19 billion. Weaknesses The major fault that this corporation faces is the shortages of inventories. This could be attributable to its speedy expansion program that might have led to the oversight. Additionally, the firm lacks a clear legal channel to seek redress concerning patents. Opportunities Nintendo Corporation enjoys an increasing demand for its products and services including the latest software applications. This assures them of wide customer base. There is also an increase in growth in the games and software market across the globe especially in the US. The demand for online gaming has increased. All these provide o0pportunities to produce products to satisfy the market. Threats Nintendo Corporation experiences a threat of a short product circle due to the frequent changes in technology. Products become outdated before they fully penetrate the market. Besides, with the current economic meltdown in Europe, US and Japan, it becomes more difficult to penetrate deeper into the markets of these economies. Value Chain Analysis Value chain analysis helps in the identification of vital activities that occur within Nintendo Corporation and give it a competitive advantage (Schmitz, 2005). Primary activities Inbound/Outbound logistics. These activities are related with the receipt of materials from the suppliers and the subsequent storage of materials that the firm externally sourced. These include metals such as diamond and copper that it buys from supplies. It also includes the handling of materials while in the firm. Outbound logistics involves the distribution of the final products and services to clients. Some of the final products include gaming software. Operations. This entails all the activities that are associated with the creation of products and services. The operations at Nintendo are divisible into different departments within the regions where the firm is located. Marketing and sales. This functional area within Nintendo studies and profiles the customers’ needs and wants to build a responsive product. The firm also uses marketing and sales to sensitize particular audience about its products and services. Communication tools such as sales promotions, road shows and advertising lure customers. In Nintendo’s case, mega promotions favor of its products. Services. Nintendo Corporation always offer such services as pre installations of their equipments, after sales services both before and some period of time after the sale of the product or after rendering a service to a client. This helps to draw and retain many clients besides making their merchandise eye-catching. Support activities Human resource management. Nintendo recruits, trains, motivate and reward of the firm’s employees takes place. Nintendo has cut a niche for its self because of robust and elaborate human resource. It has recruited a vibrant and energetic pool of expertise that has been instrumental in its overseas growth. Technology development. Nintendo develops technology, acquires knowledge and training that enables it to compete. The growth in Nintendo Corporation is attributable to its quest for technological development. This is achievable by engaging in constant learning processes. The staff members together with new employees participate in vigorous training procedures as well. Firm infrastructure. Planning and control of systems such as accounting finance and corporate strategy occurs. It appears that Nintendo has managed an efficient and successful firm infrastructure based on their books of account and constant growth. This is evident in the high revenues, strong cash flows and able members of staff. Procurement activities. Nintendo purchases materials that are required for the operations of the company. There is a need to have a procurement department that is very efficient for the attainment of highest quality of goods at minimum costs. Incidentally, Nintendo has one of the most efficient procurement officers in the industry. Product-Market Growth Product-market growth matrix developed by Ansoff This tool assists business people with the decisions on appropriate strategies on product and market growth. According to Ansoff, the growth of a business is dependent on whether the business markets its new or existing products in fresh or existing markets. There is an option of selling the already existing products into the prevailing markets or developing new products to sell to fresh markets. At Nintendo, the manufacture of new technological products has not only increased their market clientele but also explored new markets. Existing products New products Existing products Market penetration Product development New products Market development Diversification A thorough study of Nintendo shows that it has put out strategies and resources to ensure that it succeeds and maintains an upfront position within the industry through diversification. It also seeks the opinions of the clients before developing products that responds to the opinions. By doing this, instances of customer disappointment are rare. References Böhm, A. (2009). The SWOT Analysis. München : GRIN Verlag. Books, L. C. (2010). Japanese Video Game Companies: Nintendo, Sega, Taito Corporation, Sonic Team, Capcom, Toaplan, Game Freak, Key, Sony Computer Entertainment. New York: General Books LLC. Schmitz, H. (2005). Value Chain Analysis for Policy-makers and Practitioners. Geneva: International Labour Organization. Read More