Business CompetitiveStrategy of Nintendo - Essay Example

Business Strategy Threats of Substitutes NINTENDO is one of the leading video game companies in the world extremely popular among the US consumers.For Nintendo, substitutes do not have a great impact on sales as Nintendo is a leader in its industry so the company foreshadows coming changes and innovation in game industry. For Nintendo, technological factors involve the Internet access and development of telecommunication infrastructure, new methods of doing business and information availability. Such factors as continued economic growth, increased disposable income, dynamic domestic and foreign competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form (NINTENDO Home Page 2009). The application of computer technology and the use of new analytical techniques have added greatly to the efficacy of planning activities suing such tools as critical paths, input-output analysis, payoff matrices, decision trees, linear programming, and simulations. In price category, Nintendo proposes low prices in contrast to competitors so the company attracts millions of users around the world (Bresnahan, 2001). For Nintendo, the decision as to whether or not to enter this stage and pursue rapid growth may be influenced by the business leader wanting to make more money, desiring to lead a large business or perhaps for the status. Alternatively it could be driven by the demands of the customers who may want to put more trade with the business and who might take their trade elsewhere if the business cannot respond (NINTENDO Home Page 2009). As such, the Internet and PCs industry enables Microsoft to pursue a low-price strategy while maintaining profitability. There are industries in which this is already proving possible: indeed, in some sectors we are starting to see wholesale migration from physically based methods of doing business to virtual methods. The reasons for such a rapid increase are obvious: the target market of the affluent young (often men) fits well with the demographics of the Internet; regular surfers on the Internet are highly likely also to hold stocks and shares. Finally, the speed with which the transaction can be completed is far quicker than that using the traditional methods. This creates new unlimited opportunities for Microsoft and its new products (Terdiman, 2009). Barriers to Entry In video game industry, barriers to entry are high because of nearly monopolistic position of such giants as Microsoft and Nintendo. There are some clear forces of change motivating the momentum such as the following. Many enterprises are frequently in some form of downsizing, alliances, transformation-mergers, and rightsizing generating the requirement for constant communication. Some enterprises may change their names as a result and this re-branding needs communication to all stakeholders including employees. Nintendo is one of those companies that are empowering staff to increase focus in the client relationship, so this requirement is based on full involvement of staff, concentration and training in brand values. There is more agreement and less full-time employment. This change force is accentuated with the increasing outsourcing tendency (NINTENDO Home Page 2009). There is less mutual devotion between employer and employee, and the employee’s time becomes a very transactional. The "internal" brand can become method to bind the two parties jointly with shared values and goals while new methods of working require organizations and staff to regularly learn new skills and sometimes these are needed throughout alliances (Bresnahan, 2001). For Nintendo, high entry barriers stress importance of internal marketing. This refers to using marketing techniques inside the organization itself. It is said that many of the usual marketing concepts and basics can be used to find out what the needs of "internal customers" are. Based on this theory, every employee, team, or department in the company is at the same time a provider and a customer of services and products. An employee gets a service at a point in the value chain and then provides a service to another employee further along the value chain. If internal marketing is successful, every employee will both give and receive excellent service from and to other employees. If it is implemented well, it can also encourage every employee to see the progression in terms of the customers observation of value added, and the organizations planned mission. Further, it is claimed that a valuable internal marketing program is a requirement for effective external marketing efforts (NINTENDO Home Page 2009). Competition The strengths are strong brand image and expert system, excellent web-site and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Customers’ loyalty can be achieved through the people who are employed by Microsoft. Creativity becomes the responsibility of R&D, which is staffed by specialists in visualizing and realizing marginal or major product changes. Since senior management is responsible for planning and control throughout the company in nonintrapreneurial firms, it follows that they must adopt a leadership style that is fairly directive. In most of these firms, managers adopt either a benevolent autocratic, consultative, or participative style. Microsoft makes an emphasis on people and innovations in technology (Hall and Hall 2000). To become more intrapreneurial, Microsoft teaches its managers how to promote organizational commitment and motivate employees to achieve the organizations goals while at the same time giving them the freedom to be creative. In a sense, the culture breaks down the barriers between work and play so that employees gain intrinsic reward (in the form of pleasure from actually doing work) rather than just extrinsic rewards (in the form of pay) (Bresnahan, 2001). For Nintendo, competition is a threat but the company has high potential to growth and profitability, professional management team and corporate culture, customized order system and free shipping admired by millions of customers around the world. There is a great opportunities for the company is this field, because specialized shops, throughout the world are interested in goods produced in the environmentally friendly manner. In the context of making organizations more creative and innovative, Microsoft assesses the areas in which the organization can benefit the most from greater emphasis on creativity and innovation (Bresnahan, 2001). Competitive benchmarking serves both as a way of identifying what creative and innovative things competitors are doing as well as finding out for each of the areas requiring creativity and innovation who is the best (Porter, 1980). The analysis suggests that Nintendo is well-positioned on the market and have strategic business opportunities to develop and innovate in near future. There is no substitute to a thorough market analysis as a guide to understanding the firms customers and prospects and their distributors, and identifying areas that can benefit from creative solutions and innovative products and services. Porter’s Five Forces show that Nintendo has developed effective strategies and position itself as a premium, brand. Works Cited Bresnahan, T. A Remedy that Falls Short of Restoring Competition. 2001. Hall, C. and Hall, R. Toward a Quantification of the Effects of Microsofts Conduct, AER,Papers and Proceedings pp. 188-191, 2000-05. 2000. http://links.jstor.org/sici?sici=0002- 8282%28200005%2990%3A2%3C188%3ATAQOTE%3E2.0.CO%3B2-Y> Porter, M. Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press; Reprint. Edition, 1980. NINTENDO. Home Page. 2009. Terdiman, D. How Nintendo will beat the competition. 2009. Read More