Nintendo: There’s a Glitch A case report prepared for MG 495 Business Policy Fall I 2017 David Banks October 8, 2017
Executive Summary To improve Nintendo’s economic situation and re-establish them as the top player in the gaming industry, this report will propose a strategic realignment for Nintendo, based on thorough analysis and research. A conducted analysis of the macro- and industry environment of Nintendo shows several significant influences on Nintendo. An increased demand for family friendly games caused by demographic transition of the game playing group can be observed. Further, technological convergence is establishing smartphones and tablets as gaming devices, thus causing a decline in sales of handheld consoles. Technological convergence can also be observed in the form of industry giants entering the living room entertainment market with devices that have increasingly strong technological capabilities. Innovation in Virtual Reality and the development of increasingly sophisticated and cheaply obtainable mobile games is further changing the industry. A VRIO analysis has shown that substantial potential lies in utilizing Nintendo’s uniquely valuable gaming brands, the established and differentiated family-friendly set-up, and the ability to implement a blue ocean strategy. In accordance with this analysis and through playing on Nintendo’s strengths, the report will propose a strategic focus on the utilization of existing products, the integration of smart devices into their product portfolio, and an expansion on the strengths of existing IP. Historical Overview Nintendo is one of three big players in the highly dynamic gaming industry. However, in
recent years Sony and Microsoft have gained a competitive advantage over Nintendo and new trends in the industry have caused setbacks for Nintendo, thus creating the need for strategic realignment. The consultants have conducted a thorough analysis of Nintendo’s position in the macro- and industry-environment, as well as a detailed analysis of Nintendo’s core competences. Based on the desire to build on Nintendo’s previous success, five proposed strategic options have been critically evaluated and recommendations will be made on the implementation of three of those strategies. Finally, further strategic recommendations will be made that focus on leveraging Nintendo’s FSAs in accordance with the identified trends and opportunities. Nintendo was founded by Fusaijiro Yamauchi in 1889 of which eventually grew to become a national well-known brand. Nintendo’s past success have been supported by various key underlying elements. One key element supporting Nintendo’s success is through the ability to incorporate knowledge and expertise from alliances. Nintendo have demonstrated this through partnerships with Magnavox and Sharp, improving their quality of consoles as well as licensing popular characters such as “Mickey Mouse” and “Popeye” both contributing greatly to the success of Nintendo’s Game and Watch device (Kittilaksanawong & Gillet, 2015, p. 2).
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- Wii, Video game console, Nintendo, Nintendo Co.