3 name nes snes n64 gamecube wii wii u 2 4 6 8 10 12

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Name NES SNES N64 GameCube Wii Wii U 0 2 4 6 8 10 12 14 Nintendo Home Consoles:Sales per Year(In millions, through May 2014) Nintento Home Consoles:Sales per Year(In millions, through May 2014) (Ellis, 2018) External Analysis External analysis of a case utilizes the five forces model by Michael E. Porter (Porter, 2014). Competitors in a business environment interact with various factors which are the “customers, suppliers, new entrants and substitute products” (Hilton & Platt, 2017). It is important to note that the analysis does not cover the entire gaming industry but specifically the work tailored to the console industry. Bargaining power of buyers. There are two categories of buyers who are the retailers and consumers. Gaming consoles are dispersed from manufacturers to retailers. Hence, retailers hold a fair level of bargaining power. They are at liberty to decide which system to buy and sell in their stores. Furthermore, they also buy in large quantities. Since they are well spread across the globe, they have the ability to impose their influence on others. On the other hand, there 4
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Name exist the consumers who do not buy the systems straight from the creators. Owing to the advent of internet and e-shops, they too are knowledgeable in matters regarding pricing. Bargaining power of suppliers. There are two categories of suppliers mainly those that manufacture hardware and the ones who design software. Hardware manufacturers supply parts used to assemble the consoles whereas the software suppliers develop games. Software suppliers have more bargaining power than the hardware suppliers. Console manufacturers can, however, develop their software thus their power is medium. Treatment of new entrants. New entrants can heavily impact a business. To what extent the impact can be depends on barriers to entry. Market barriers to entry, in this case, including economies of scale, capital required, accessibility of distribution channels, the reputation of the brand and switching cost. In some cases, companies like Apple and Google who cannot be affected by such barriers are developing an interest in the gaming industry. These large corporations with super information technology systems will adversely affect the gaming industry and increase competition (Hilton & Platt, 2017). Threat of substitute products . This occurs where companies in a given industry compete with firms producing substitute products. Such products give potential customers an option thus limiting an industry potential regarding profit. Since the inception of an app store, over 30000 games have been released for iPhones reducing the urgency to buy a console. The threat of substitute products is becoming a force to reckon. Internal rivalry . Internal rivalry involves jockeying for positions via various tactics for example price manipulation or advertisement battle. Rivalry in the business is increasingly becoming high. Corporations are in competition with the target customers. Price wars, however, 5
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Name affect the company’s profitability. High fixed costs make competitors engage in large volume manufacturing.
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