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more of an advantage. The Wii U has explored different aspects of the entertainment world; evenembarking upon the mobile gaming industry, but Nintendo must continue to move forward significantly to retain the “new generation” title that it previously claimed.
Strengths· Technology and innovation· Lower unit prices· Higher profit margins than competitors· Broad audience· Usability of devices· Brand identity very strong/credible· Global Presence· Designed a unique ambidextrous controller· Largest selection of games amongst competitors· Specialized Wii editions of gamesWeaknesses· Revenue only from gaming industry· Loss of differentiation· Loss of competitive advantage quickly· Production of games are costly & complex· Graphics not up to par in newer systems· Some games cannot be easily recoded to play on the Nintendo systemsOpportunities· Segmentation· Expansion· Wireless updates· Additional functions on gamepad· Increase Wii U valueThreats· Gaming competitors using Nintendo’s technology to improve their own systems· Loss of gaming programmers to competitors· Mobile gaming presenceStrategic Analysis: Five Forces The Threat of New Entrants:The threat of new entrants for Nintendo is relatively small. It would take a lot of great effort and improvement for a new company to erode the market share of current competitors. First of all, it would be difficult for a new one to enter the market because of the startup costs associated with it such as research and development, plant equipment, and even human capital may be difficult to obtain. Furthermore, it is hard for a new company to gain market share in the gaming industry because people that are interested in video games most likely already have the game set (whether it be Nintendo, Xbox, or the PlayStation) and games for the particular set and the switching costs would be too great for them. The Bargaining Power of Buyers:In the case of Nintendo, the bargaining power of buyers is relatively high. This is mainly due to the fact that the costs of Nintendo gaming is more expensive to produce than it is for their competitors which drives up the price at which they sell their products and this leaves buyers with the power to purchase from competitors instead of from Nintendo at a lower cost. The Bargaining Power of Suppliers:The bargaining power of suppliers is relatively lower for the gaming industry. Nintendo does not really have the power to increase the costs of their products because the buyers can easily purchase an Xbox or PlayStation instead. Furthermore, Nintendo is only in the game industry and therefore has even less bargaining power than their competitors, Sony and
Microsoft. Although, Nintendo did have a competitive edge in the broad audience that was targeted; everyone could play Nintendo using the Nunchuck because it was super easy to use andunique.