88%(40)35 out of 40 people found this document helpful
This preview shows page 10 - 12 out of 14 pages.
4.What innovations and entrepreneurial strategies did Nintendo utilize to craft a competitive advantage?
Pursuing differentiation and low cost simultaneously.A firm creates an uncontested market space by seeking opportunities where there is no threat from existing competitors. A blue ocean firm can therefore focus on the customer and not the competition. A firm can also make the competition irrelevant by crossing industry boundaries to offer new innovative products and services, instead of using the competition as a benchmark. Rather than fighting over existing demand, a blue ocean strategy seeks to create and capture new demand in uncharted territory. Blue ocean firms break the value/cost trade-off. By rejecting the idea that a trade off between value and cost is inevitable, they seek opportunities in areas that benefit both their cost structure and their value proposition to customers. Finally, blue ocean firms pursue both differentiation and low cost simultaneously in an effort to align their entire system to create sustainable strategies. Nintendo created an uncontested market space by creating a product that was truly innovative, ensuring that no other game console could replicate its experience. By including a motion sensor controller, the Wii made the competition (other systems) irrelevant. The Xbox and Play Station did not have the ability to produce the same action packed experience that the Wii offered. Nintendo also captured new demand by creating the system for “everyone.” It successfully targeted women and older demographics that were not actively in the gaming market, and the Wii was priced at almost half the price ofthe other two systems, making it more affordable to a wider audience. Nintendo may have succeeded in pursuing differentiation and low cost simultaneously by developing the motion sensor controller and delivering it at a comparatively low price. Referencing Chapter 12: Managing Innovation & Fostering Corporate Entrepreneurship –See the concept of innovation,the ability to use new knowledge to transform organizational processes or create commercially viable products and services using the latest technology, experimentation, creative insights, and information from competitors. Sustaining innovationsextend sales in an existing market, usually by enabling new products or services to be sold at higher margins. Disruptive innovationsoverturn markets by providing an altogether new approach to meeting customer needs. It could be argued that Nintento brought a disruptive innovation to the market.