Implications of the five forces analysis for nintendo

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Implications of the Five Forces Analysis for Nintendo Customers are gaining more bargaining power. Customers have however branded Nintendo, a conservative company. The company is thus finding itself in a frail situation with the 6 Internal rivalry among existing competitors. High Threat of new entrants. High Bargaining power of buyers. Increasingly becoming high Threat of substitutes. Becoming high Bargaining power of suppliers. High
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Name buyer because previously consumers had little bargaining power. Nintendo has also been ignoring the internet connectivity for a long period and most gaming platforms are now depending on online networks. Therefore, new entrants have utilized this weakness to their advantage making Nintendo lose ground with their customers. Nintendo has failed to utilize technology to stay ahead of other companies thus has continued to suffer from threats of more technologically advanced entrants. The breakdown of structural set up of the company depicts that the company is facing hardships in building a sustainable competitive advantage and suffering from external weaknesses. Competitive Strategies Adopted by Nintendo The interactive entertainment industry has experienced rapid growth recently. Three major parties dominate the industry since 2001 which are Sony, Microsoft, and Nintendo (Dess et al., 2016). However, Nintendo has the smallest market share. Historically, Nintendo has stayed on top of the competitors and held a huge market share. Over time, Nintendo was faced with strong competition from technologically well off and wealthier companies comparatively. Nintendo thus had to come up with innovative strategies to ensure it did not plunge into losses. As at then, the most viable strategy was to enter and utilize on a neglected segment of the market. This market was made up of the casual gamers who did not want complicated games. In 2004, a good number of strategies that were thought to be successful if implemented were available to Nintendo (Dess et al., 2016). It was becoming clearer that devoid of strategies, outcompeting Microsoft and Sony was impossible. Vertical integration provided an opportunity to lower expenses incurred during operation and consequently allowing entrance into new markets. Exiting game console business would see Nintendo still make money from software and 7
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Name handheld gaming devices such as the Nintendo Wii. Another strategy was differentiation from competitors which would make it possible for Nintendo to seize other market markets segments which were previously ignored. Ensuring Coherence in Strategic Direction Vertical integration. Sony introduced the play station in the middle of 90s after it had entered into the game console market (Dess et al., 2016). Sony was already manufacturing large quantities of electronics thus had the upper hand. While Nintendo had to buy parts from outside as well as outsourcing manufacturers, Sony could make its parts for play station. This became an issue that needed a quick address by Nintendo if it was to remain in business. Vertical integration was a viable solution. Integration of manufacturing has lots of advantages (Porter, 2014). Despite the fact that it would cost Nintendo a lot of money to expand, it would be able to source parts of the consoles cheaply thus reducing the price of the consoles. Lower cost of production would
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