Sega-Nintendo-SM-Report - Subject: Strategic Management...

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Subject: Strategic Management Submitted to: Mr. Ahsan Durrani Submitted By: Amnah Fawad (6465) Shafaq Naveed (6462) Shakuntala Ashok (6719) Gauhar ( Zia ( Case : Nintendo versus Sega (The video Game industry) Date : 10 th February, 2009
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Q1. What are the industry’s dominant traits? Some of the industry’s dominant traits are as follows Market Size and Growth Rate In 1992 the total share of the video games industry was $4619 however at the end of 1996 it reached up to $5872, Nintendo is the only company which has lost its market share because in 1992 the total Nintendo shares were $3223 and in 1996 the shares declined down to $2162.In 1993, 1994 and 1995 Nintendo lost its grip on the videogame market due to complacency and slow reaction to SEGA’s competitive moves. SEGA’s market share has increased from $1313 in 1992 to $1591 in 1996.SEGA has given a tough competition to Nintendo in the early nineties. Sony’s play station hardware and software launched in 1995 also saw a rise in the market share by 1996. Atari and 3DO’s market share have also increased by the end of the year 1996, however less as compared to other key players of the video game industry. If we analyze the market share trend of the industry, after years of steady growth, videogame industry’s revenue declined in 1995.This mature market was attributed to decline, however some new games systems offset its decline. Number of Rivals and Scope of Rivalry
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Initially the video game industry was dominated by Nintendo and Sega however at the end of 1996 several companies (Nintendo, SEGA, Atari, 3DO, Sony CD-1) were in the market. Participants of the video game industry are all competing against each other globally. Presence across the global market is essential for a company’s competitive success in the video game industry. Product Innovation Rivalry is strong in the video game industry as each participant is active in launching fresh actions to boost their performance. Companies are trying to continuously improve the innovation capabilities of their products. For example, to claim a stake in the videogame business, in 1994, Sony Corporation of America developed and markets a next generation home videogame, called the Sony playstation.The play station had been under developed for more than four years and represented an important strategy to dominate the entertainment markets for hardware and software. Product Differentiation Industry members are racing to differentiate their products from rivals by offering better performance features and a wider product selection. Members are also active to build good dealer networks, establish positions in foreign markets and expand distribution capabilities. Pace of Technological Change
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This note was uploaded on 07/21/2011 for the course BUS 10001 taught by Professor All during the Spring '11 term at Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology.

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Sega-Nintendo-SM-Report - Subject: Strategic Management...

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