Case_35_NintendoTN_rev - Teaching Note: Case 35 Nintendos...

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Teaching Note: Case 35 – Nintendo’s Wii Case Objectives 1. To examine how external and internal forces affect competitive strategy. 2. To investigate how innovation and entrepreneurial strategies can be assets in a fast-moving industry. See the table below to determine where to use this case: Chapter Use Key Concepts Additional Reading and/or Exercises 2: External Environment Industry competition five forces; general environmental factors See Case DVD. NOTE industry report 3: Internal Analysis Value-chain analysis; resource- based view of the firm; VRIN 4: Intellectual Assets Intellectual and human capital NOTE additional reading, embedded video 5: Business Level Strategy Competitive strategy; generic strategies See Case DVD - also NOTE additional reading, embedded video 8: Entrepreneurial Strategies Opportunity recognition; blue ocean strategy 12: Managing Innovation Innovation; sustaining vs. disruptive innovation; scope of innovation NOTE additional reading Case Synopsis In 2006, Nintendo introduced its next generation video game console – the Wii. This new console introduced an innovative motion sensor game controller that enabled a user to swing it in the air when playing video games, for example to mimic the motions of a batter, bowler, tennis player, or boxer. No other gaming console had ever provided the user this much interaction. The Wii had created a new gaming experience that its rivals the Microsoft Xbox and Sony Play Station had difficulty competing with. Nintendo’s commercial and financial success was puzzling, because not only did Nintendo sit behind Sony and Microsoft in terms of overall sales, but, unlike its rivals, it also derived most of its revenue from the video game business. Sony had more than 180,500 employees, and its 2008 revenues from multiple product categories were over $88 billion. Microsoft had more than 81,000 employees, and its 2008 combined revenues were $60 billion. Nintendo was founded in 1889 but had roughly only 3,000 employees and 2008 revenues of $16.4 billion. Thus, Nintendo sat in the midst of two potentially dominating firms.Yet Nintendo was in the lead in video console sales growth and second, to Microsoft, in overall units sold (Microsoft had shipped its product a year ahead of Nintendo and Sony). Sales continued to soar, and within two years of its release, Nintendo Wii became the market leader of the generation. However, some observers
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questioned whether Nintendo’s CEO Iwata would manage to keep the Wii momentum rolling into the next generation of gaming systems. What made the Wii so popular, and could Nintendo keep finding innovative ways to please its customers? Teaching Plan The Nintendo case is a good way to demonstrate how innovation and entrepreneurial strategies can be essential to sustaining a competitive advantage in a fast-moving industry. Since this case discussion relies on a good understanding of how internal assets and the forces in the external environment drive competitive strategy, the instructor
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This note was uploaded on 10/11/2011 for the course BUSINESS A 474 taught by Professor Thompson during the Spring '11 term at Ill. Chicago.

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Case_35_NintendoTN_rev - Teaching Note: Case 35 Nintendos...

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