The story of the Nintendo business strategy and brand is nothing short of astounding and competitive analysis played an important part. BrandJapan, an annual survey of the strength of over 1,000 Japanese brands, saw a remarkable stability bridging nine years in the cast of personalities inhabiting the top two dozen situations. Then Nintendo came to the market. In the 2005 ? ndings, Nintendo was positioned 135 in the survey. Since that point it climbed to 66 in 2006, to 5 in 2007, and ? ally to number one in 2008, a position it held with a worth of over 93 while the next seven products were bunched at 82 to 84, and a position it retained in 2009. During the 2004 to 2008 period, its stock price went up more than ? ve fold and at one point its market cap was behind only Toyota in Japan. The competitive advantage Nintendo had over its competitors was the product and clearly the strength of Nintendo. Nintendo DS, released in December 2004, was a compact portable game console distinguished by an innovatively intuitive touch-pen technique.
It was supported by the Touch! Generations series, which included game titles such as Nintendogs, Animal Crossing, and Brain Age targeted at a wide direct market including young females and even seniors. Then the Nintendo Wii was presented, a new form of game that incorporated user movement into gaming. With a wireless controller and the Wii remote that detects movement in three dimensions, the user can dance, sing, golf, box, bowl, work-out, play a guitar, and on and on.
Opponents can be sourced in other locations and even other countries. In fact the DS and Wii with their supporting games created a new market categorized as “casual games”. Video games that require less aptitudes, experience characterized by ingenuous, intuitive rules. The new casual game category went from 1 percent of the market to over 20 percent by 2005. One principle innovative reason was the acceptance of a realistic and astute analysis of the two competitors: Sony (PlayStation) and Microsoft (P3 players).
Nintendo recognized that Sony and Microsoft had and will have equipment that had better technology, higher performance, higher resolution, and higher quality graphics that appeal to the heavy users, which were young males. They were focused on that objective and invested in chips, software, manufacturing, and hardware to keep delivering. As a result, Sony and Microsoft had a de? nitive edge with respect to the male teen and early 20s user, the hard core heavy user group. Given this reality, Nintendo took a different course, low tech route, even though that meant that the heavy user segment might have to be ceded to the two competitors. Nintendo decided to refocus away from the hard core young males who were into action games and high quality graphics toward a broader audience, less concerned with better and better graphics. The key for this group would be a wide array of easy-to-use games that would move beyond the action genre and include some learning vehicles. One goal is to have the mother a participant and an advocate rather than a cynic and opponent.
Another is to involve the whole family so the games are not simply related to male retreats. The strategy went against the conventional one of focusing on the heavy user and trying to better competitor’s offerings. A strategy, no matter how good, requires implementation and that means people. Nintendo was blessed with a talented group that was extremely good at creating games. The new strategy liberated this group to be creative and ful? ll its potential. Further, a new CEO, a key ingredient, was brought in, a young, energetic, entrepreneurial person.
With exceptional people and organizational skills, he was able to gain acceptance, build excitement around the new strategy, and marshal the talent needed to implement it. (Iwata, 2009) The basic strategy that Nintendo has been deploying is the expansion of the worldwide gaming population. To this end, Nintendo is striving to encourage people from all over the world, regardless of age, gender, language, culture background or technological gaming experience, to embrace and enjoy the video games as a mode of entertainment.
Nintendo has been expanding consumers who enjoy video games by increasing the base of Nintendo DS by positioning it as a handheld game system that enriches the owners’ daily lives, and Wii, a home console game system that put smiles on surrounding people’s faces. Nintendo can sustain competitive advantages by lifestyle, culture, focusing on one product type, highly educated employees, and being innovative. Consumer lifestyle in the US is rapidly changing even a person aged 45 has taken an interest into casual gaming.
With the launch of Wii Nintendo has captured this opportunity and will continue to serve this need. Nintendo has advantage over price, as they do not incur heavy costs as compared to Sony and Microsoft. Their objective is to encourage gaming, and a low pricing structure will initiate easier adoption by new segments, growing a bigger market share for the company. The employees at Nintendo are highly skilled and have an advantage of technical know-how; this will save the company on higher investment into development of consoles thus gaining differentiation over product and perceived quality.
Nintendo has been in the Gaming business since 1983, and is the only focused business giving them a better exposure and market awareness. This wins the company a Good Brand image and greater customer loyalty. Being innovative they have captured a small part of the online gaming through the Wi-Fi feature in the DSI. This can also help broaden the focus of the company. Hitt, I. a. (2010). Case Study Nintendo. In I. a. Hitt, Stategic Management: Competitive & Globalization 9e (pp. 276-289). South Western Educational Publishing. Iwata, S. P. (2009). Nintendo Annual Report. Kyoto, Japan: Nintendo.