Porter’s Five Forces 1. Entry of New Competitors a. It is difficult for new competitors to enter the gaming console space because of the high R&D costs. Nintendo will likely be competing with Sony and Microsoft for market penetration for a long time. Nintendo should also be away of strategies giants like Google and Amazon are executing to be sure their massive resources are not being but towards disrupting the gaming industry. 2. Threat of Substitutions a. Though it would be expensive for another enterprise to enter the console space, it is a distinct possibility that another hardware manufacturer could modify a current
hardware to make it a gaming console or streaming device. Options in the marketplace today include Apple (iPhone, Apple TV, etc.) Samsung (phones, etc.) Google (Android), etc. The technology industry moves more quickly than most markets, there is a distinct threat of an innovative disruptor finding a newer, smaller, more nimble way to present a console that is the preference for the Wii customer. 3. Bargaining Power of Buyers a. Customers exert much pressure on the gaming industry. Nintendo, Sony and Microsoft are in constant competition for the same buyer. Often times these three competitors will drop prices to beat the others to win a specific market. The consumer is also willing to upgrade to a higher quality product, making pricing and new product development a constant battle. 4. Bargaining Power of Suppliers a. Nintendo has a horizontal supply chain structure, meaning that suppliers can exert pressure on the businesses by raising prices, lowering quality, or reducing availability of their products.
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- Spring '17
- Case Study, Wii, Video game console, PlayStation 3, Nintendo, Nintendo GameCube