SWOT Nintendo PDF

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INDUSTRY PROFILE

KELSEY PETTIT MDA 20001 BUSINESS OF MEDIA [Company address]

Table of Contents Introduction ......................................................................................................................... 2 Strengths .............................................................................................................................. 3 Distribution:.................................................................................................................................. 3 Pricing model: ............................................................................................................................... 3 Disney Partnership: ...................................................................................................................... 3

Weaknesses.......................................................................................................................... 4 Console failures: ........................................................................................................................... 4 Loss of goodwill: ........................................................................................................................... 4 High costs: .................................................................................................................................... 4

Threats ................................................................................................................................. 5 Counterfeit consoles: .................................................................................................................... 5 Competition:................................................................................................................................. 5 Lack of diversity: ........................................................................................................................... 5

Opportunities ....................................................................................................................... 6 Expanding audience: ..................................................................................................................... 6 Expanding technology:.................................................................................................................. 6

Strategic recommendations ................................................................................................. 7 Reference: ............................................................................................................................ 8

Intr Introduct oduct oduction ion The Nintendo Playing Card Company, founded in 1889 by Fusajiro Yamauchi in Kyoto, Japan was originally a small business with a big plan to transform the gaming world. Yamauchi had planned his success off his handmade hanafuda playing cards. In 1949 Yamauchi’s great-grandson (Hiroshi Yamauchi) planned to take the company further and Yamauchi decided to step down and let Hiroshi take over the leadership for the next 53 years, until he passed away at the age of 85 in 2003 (Referenceforbusiness.com, 2019).

In the sixties the company saw a decline in sales of their Japanese playing cards and decided to move their business into the toy and gaming industry. Hiroshi turned to engineer and product developer, Gunpei Yokoi, to lead the venture into toys and gaming; it is thanks to Gunpeis’ inventions that Nintendo was so successful. In order to dominate the industry, Hiroshi then hired Shigeru Miyamoto to create exclusives games for the Wii brand. Miyamoto went on to develop some of the most iconic games such as; Donkey Kong, Super Mario Bros and The Legend of Zelda (Businessmodelnavigator.com, 2019).

Stren Strengths gths Strengths are defined as the specific strategies that businesses employ in order to gain the upper hand on their competition. The following are the strengths of Nintendo:

Distribution: Nintendo has cultivated distribution avenues that allows delivery of their products through multiple wholesalers and retailers. Not only does Nintendo outsource their products, but they also have their own store fronts for vending. Mass marketing means consumers will be exposed to their products through multiple platforms, which has been proven to create an increased desire to possess the products (Michelle Yan, 2019).

Pricing model: Nintendo uses a variety of pricing strategies over the life span of a gaming console or product. In the early stages of the company announcing a new product, pre orders will be released at a premium price. This will invite consumers to gain access to exclusives products before they have been released to the general public, however in turn Nintendo is able to gain acceptance on their newly released product. From the initial release Nintendo will then use skim pricing strategies and lower the prices in conjunction with the decline in popularity (Michelle Yan, 2019).

Disney Partnership: This ingenious partnership was formed in 1959, when the two companies come together in attempts to further their reach to the most profitable audience; children. The partnership was initially started with combining the Japanese playing cards with the lovable Disney characters. This enabled the collaboration to gain a high level of success in the household market (Nordmark, 2019).

Weaknesses Weaknesses are the areas in which a company can look to improve on to promote greater success. The following are the weaknesses of Nintendo:

Console failures: In 2012 Nintendo released what would become their greatest failure in the Wii U console. This console was unable to gain the acceptance it needed to be successful, as the designed and function was not as originally hoped. The consumers were disappointed by the product that their trusted brand had released and had no reservation about voicing their opinions. When the company’s most successful console, the Nintendo Wii, started to show flaws it caused a negative effect to the businesses profits (Thier, 2019).

Loss of goodwill: With the products failing consumers have had a huge decrease in their faith and trust in the Nintendo brand. The loss of goodwill has seen loyal customers turning to other well know gaming console brands and abandoning their Nintendo consoles. It is also limiting the potential for new consumers to purchase their consoles (Thier, 2019).

High costs: With the company releasing new products and consoles on a frequent basis, the cost of promotion is proving to be too high with not a great enough rate of return. The promotions are often found to be quite impressive, however they are very luxurious and extravagant. With a common practise at the events being to hand out free products, which are contributing a large unmanageable cost to their promotional budget (Thier, 2019).

Threats Threats are the influences and factors that prove to have negative impacts on the businesses success. The threats to Nintendo’s business are:

Counterfeit consoles: In today’s technological society there are lots of counterfeit products based on the Nintendo merchandise. Whilst the counterfeits do not have the quality of the Nintendo brand, they are still becoming more and more evident in the gaming world. These counterfeits are often cheaper to manufacture and therefore their sale value is much lower than the real products. This mean that Nintendo customers are turning to buy these forged products, resulting in a downturn in Nintendo’s sales and therefore profits (Watson, 2019).

Competition: In the gaming world there are many different brands that consumers can choose to invest their time and money into. Nintendo biggest competitors in the gaming world are Sony PlayStation and Xbox. With all products offering an interchangeable service it is really the branding, marketing, reputation and games available on each console that separates them apart (Lamoreux, 2019).

Lack of diversity: As the world moves to more online based gaming Nintendo is leaving themselves more and more susceptible to eradication. As Nintendo is a console-based company and has not expanded into the online gaming world, if and when consumers move to total online gaming and leave their consoles in the past Nintendo will have no market. Meaning their sales will diminish and the company will no longer be able to compete with their products (the Guardian, 2019).

Opportunities Opportunities refer to areas both internally and externally that businesses can use to their advantage and to increase returns. Some opportunities for Nintendo’s business are:

Expanding audience: A lot of the Nintendo products are aimed at casual gamers and the product is not very competitive in the serious gamer world. In the hard-core gamer world Sony and Xbox are currently dominating. This is a great area of opportunity for Nintendo to expand and grow their business and customer audience. Nintendo has started to penetrate into the serious gamer world, with their most recent release of the Nintendo Switch console. This console is designed to incorporate all their classic games but take it to the next level (Bhasin, 2019).

Expanding technology: the Nintendo devices currently have very limited WIFI/internet capabilities. By expanding into this avenue, the company will open up a whole new revenue stream into their business. Not only would it make Nintendo more competitive in the online gaming domain but will also allow gamers to download add-on content for their games. This great opportunity will allow Nintendo to remain relevant in the future, but also generate greater revenue (Sahdev, 2019).

Strategic recommendations Based on the information that has been collected and analysed throughout this SWOT, it is strongly recommended that Nintendo aims to branch into the hard-core gamer world. With their immediate competitors; Sony and Xbox, dominating in this area owning over 200 game titles directly designed for the serious gamer. A large proportion of Nintendo’s games can be described as repetitive and therefore consumers can lose interest very quickly. By diversifying their game selection Nintendo will be broadening their customer base, inviting higher product sales and therefore increase profits.

Nintendo should look to put great focus on their online gaming capabilities. With the release of the Nintendo Switch in 2017, the company made a small break into the online gaming world. With technology being a significant part of today’s society, the gaming world thrives on being able to connect and play in parties or subscribe to subscriptions for their favourite games. If Nintendo continues to improve their online presence and capabilities they will see profits soar in the future.

Reference: Bhasin, H. (2019). Marketing Strategy of Nintendo - Nintendo Marketing Strategy. [online] Marketing91. Available at: https://www.marketing91.com/marketing-strategy-of-nintendo/ [Accessed 19 Aug. 2019].

Businessmodelnavigator.com. (2019). Nintendo Business Model | Business Model Navigator. [online] Available at: https://businessmodelnavigator.com/case-firm?id=72 [Accessed 15 Aug. 2019].

Michelle Yan, K. (2019). Nintendo Switch is the fastest-selling console of the current generation — here's why Nintendo is dominating video games. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/nintendo-winning-videogames-fastest-selling-console-2019-3?r=US&IR=T [Accessed 15 Aug. 2019].

Nintendo. (2019). History. [online] Available at: https://www.nintendo.com.au/history [Accessed 15 Aug. 2019].

Nordmark, S. (2019). Disney and Nintendo partner up to bring competitive gaming to the Disney Channel | Dot Esports. [online] Dot Esports. Available at: https://dotesports.com/culture/news/disney-channel-nintendo-bring-competitive-gaming24968 [Accessed 17 Aug. 2019].

Referenceforbusiness.com. (2019). Nintendo Company, Ltd. - Company Profile, Information, Business Description, History, Background Information on Nintendo Company, Ltd.. [online] Available at: https://www.referenceforbusiness.com/history2/29/Nintendo-CompanyLtd.html [Accessed 15 Aug. 2019].

Sahdev, I. (2019). Nintendo's greatest strength this generation is self-acceptance | Opinion. [online] GamesIndustry.biz. Available at: https://www.gamesindustry.biz/articles/2019-0214-nintendos-greatest-strength-this-generation-is-self-acceptance-opinion [Accessed 18 Aug. 2019].

the Guardian. (2019). Video games have a diversity problem that runs deeper than race or gender. [online] Available at: https://www.theguardian.com/technology/2015/sep/10/video-games-diversity -problemruns-deeper -than-race-gender [Accessed 17 Aug. 2019].

Watson, P. (2019). Counterfeit Products Hurt The Consumer And The Economy. [online] Forbes.com. Available at: https://www.forbes.com/sites/patrickwwatson/2016/11/13/counterfeit-products -hurt-theconsumer-and-the-economy/#38ea6df63a7c [Accessed 17 Aug. 2019]....