Nintendo

1. The video game console industry is extremely competitive, especially Nintendo lean to the downside as Sony and Microsoft are dominating the high end video console market share. 2. Video game console industry is extremely competitive as there are couples of substitutes and price of the video game consoles are very competitive. Rivalry is the strongest competitive five forces and the weakest would be suppliers. Overall strength of competition in video game consoles is fierce because market edge is very important in this industry. 3. Rivalry is the strongest force that drive the changes in the video game console industry. It has make the industry more competitively intense. Future profit could be less profitable. 4. Nintendo’s exceptional innovation has leaded the company to success. Being a pioneer in the video game console world also helped to position Nintendo’s success. The company’s adaptation to changes of technologies and demand also play a crucial role in the company’s success. Ability to think outside the box to develop new market segments definitely distinct Nintendo from competitors. 5. In my opinion, Nintendo focus more on a broad differentiation strategy. Nintendo seek to differentiate the company’s product from its rivals Microsoft and Sony in ways that appeal to a broad spectrum of buyers. This tactic has been successful for Nintendo as they explored new market segments, which boost their sales and outperforming its rivals. 6. I think the blue ocean strategy applies to Nintendo’s Wii because they really created new market segments and was able to attract customers that are not gamers such as older demographics. In the video game console industry, no one has ever come up with such similar idea until Wii was introduced. 7. Nintendo was making profit of $13 a unit in Japan, $50 a unit in USA and $79 a unit in Europe. Compared to PlayStation that is generating net loss of $1.97 billion in 2007. As for weaknesses of Nintendo’s financial performance, loss of sale of investment is one of the weaknesses. In addition, Nintendo’s software games production are rather low compared to rivals Sony, and Microsoft. Nintendo experienced currency exchange loss on the year 2008. 8. SWOT analysis strength includes unique product, appealing to all ages, lowest price compared to close rivals, high demand. Opportunities include quality third party support, decent online system. Threats include price drop from competition, Rivals is morphing similar joystick remotes, limited software games, weakest graphic compared to close rivals. Nintendo will have to continue to come up new ideas to overcome its lower end graphic quality compared to its competition to be competitive. Rapid price cut from competitions is also a major issue for Nintendo. 9. According to the table 4.2 strength assessment, Nintendo have a competitive advantage over its video game console competition but not for long. 10. To sustain its advantage, Nintendo needs to overcome its lack of games, and price cuts from its rivals. Innovation has been to major advantage that differs Nintendo from its rivals, so they need to come up with new ideas.