Management Theory

Management Theory - Management Theory"Mintendo Versus SEGA...

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Management Theory "Mintendo Versus SEGA: The video game Industry" Mid term case questions Introduction: The video-game Industry has been a fast growing business since 1985, reaching on over all size of 15$ billion for the year 1994 alone. This industry has been characterized by ups and downs along with few new entries such as Nintendo in 1985 and Sega in 1986. As the size of the industry was growing, rivalry among existing companies grew fast, combining new technologies with more and more sophisticated soft wares and designs. Ans 1. The video game Industry started in the mid-seventies with Magnavox and Atari as a new emerging industry. The success of these brands were highly related to the "hits" or in other words the new releases of games. As we can notice that this industry consists of 2 main parts. 1- Soft ware 2- hard ware Which in turn was directly related to the technology available in the market. The manufacturers of platforms for video games did not anticipate the software side of the industry, leading to a sharp decrease in sales in the Mid 80’s and a rapid death of the whole industry. 2. 3. Two companies – Nintendo and Sega decided to enter the American crashing market of video – games in 1985, learning
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valuable lession from the failure of previous companies by 1) Controlling supply of game cartridges to insure quality and prevent fierce price competition. 2) Establishing one of the strongest brand names in the industry and maintaining customer loyalty. 3) Developing an extensive library of games which was successfully used as core competency for the market leader. Later growth in the industry was subject to technological advancement by introducing the 8-bits plat forms followed by the 18 bits, 32 bits, 64 bits and finally the CD – Rom. In addition, sega focused on adults as well as teenagers, by providing violent game. Ans. 2 The video- game industry was highly competitive business that was characterized by high rivalry among existing companies, as well as many new entries due to the fact of attractiveness of this Industry (high profit margins). The five – competitive forces that influenced the video-game industry
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Management Theory - Management Theory"Mintendo Versus SEGA...

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