100%(21)21 out of 21 people found this document helpful
This preview shows page 1 - 3 out of 6 pages.
What barriers do Microsoft and Sony face in launching an effective competitive response?Microsoft and Sony face several barriers in launching an effective competitive response. Firstly, capital requirements due to high startup costs, buyers, suppliers, and game developers with high bargaining power, will prove to be a barrier when establishing a competitive response.
NINTENDOMoreover, product differentiation will be a barrier; R&D will be a contributing factor as these competitors will have to find a way to lower costs (to improve margins) and establish a new and unique product. Lastly, one barrier is finding game developers to ensure a large selection of game titles and quality; without great games, a console will not succeed.Q2: DISRUPTIVE STRATEGY Nintendo's strategic behavior led to the implementation of a successful disruptive strategy. What were the primary elements of Nintendo’s strategy (i.e., what did Nintendo do differently from their competitors to increase their market share?). Be sure to discuss how each element created a competitive advantage for Nintendo.There were several primary elements of Nintendo's strategy that made them unique from their competitors. Iwata was able to observe that potential threats were emerging; the video game market was shrinking because of the increasing complexity of video games. For novice non-gamers, the time required to learn and play these games was a major deterrent for potential newcomers. Consequently, occasional gamers with busy lives had stopped playing. By being aware of this issue, Nintendo was able to create a competitive advantage over its competitors. Furthermore, Nintendo's strategy changed in that their objective was to reach a broader market, to target all customers despite age, gender, and gaming experience. With the Nintendo DS, the company was able to launch a Wi-Fi connection to allow players to connect with each other. With the Nintendo Wii, the company was able to launch a game console that had motion detectors which would translate the movement of the wand into on-screen action. Lastly, using game scenarios to be largely based on real life situations rather than fantasies set them apart from their competitors. Nintendo implemented these strategies, different from their competitors, to increase their market share. Q3: COMPETITOR STRENGTHS:Nintendo was able to successfully formulate and implement its disruptive strategy because it leveraged its strengths to do things differently than did its competition. However, doing so requires that the firm understand its strengths vis-à-vis those of its competitors. Please identify and (briefly) discuss Nintendo’s primary strengths as well as those of its primary competitors, Microsoft and Sony.Nintendo's strengths include creating consoles and games geared toward non gamers and families. The resources they have create valuable capabilities, such as Iwata’s ability to predict the future of video gaming. The company’s R&D gives it a capability in innovative technology and game concepts, while marketing has allowed the company to create an effective brand.