Nintendo Corporation was established on September 23rd of 1889 by Fusajiro Yamauchi in Kyoto Japan. The company originally sold hand painted Hanafuda playing cards under the name Nintendo Koppai. Their success in the playing card industry led to them to try other ventures such as ramen noodles, taxi services, short-term “love” hotels and lastly video games. In 1940 Fusajiro Yamauchi died and nine years later his great grandson Hiroshi Yamauchi took over the company at the age of 22. For the next 50 years he led Nintendo to become the video game giant it is. In 1985 Nintendo released the Nintendo Entertainment System (NES) their first home console. In 1989 they released the Gameboy their first handheld device. Though neither item was the first of its kind they still were wildly popular and pushed Nintendo to create newer and better games and consoles. (Gebel, 2019)
Nintendo’s Mission and Vision statement today is lacking. The company is known for their creativity and innovation, but their mission statement is void of that.
“Nintendo of America's Corporate Mission and Philosophy: At Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to provide products of the highest quality, but to treat every customer with attention, consideration, and respect. By listening closely to our customers, we constantly improve our products and services. We feel an equal commitment toward our employees. We want to maintain an atmosphere in which talented individuals can work together as a team. Commitment and enthusiasm are crucial to the high quality of our products and support services. We believe in treating our employees with the same consideration and respect that we, as a company, show our customers.” (Nintendo, 2020)
Table of Contents
1. Introduction
2. Environment
2.1 Internal
2.2 External
3. Strategies
4. Conclusion
Objectives and Topics
The primary objective of this strategic analysis is to provide a comprehensive evaluation of Nintendo Corporation's historical development and its evolving business strategies within the competitive global video game industry. The research examines how the company navigates market challenges through innovation and brand loyalty, aiming to answer how Nintendo sustains its relevance amidst intense competition from hardware-focused rivals.
- Evolution of Nintendo from a card manufacturer to a video game giant.
- Internal analysis of corporate mission, intellectual property, and brand loyalty.
- External market evaluation using Michael E. Porter’s Five Forces framework.
- Assessment of strategic positioning, including the application of the Blue Ocean Strategy.
Excerpt from the Book
Environment
Nintendo's marketing strategy is to sell high quality family friendly consoles, games, and accessories at an affordable price. The company continually works on innovative solutions that add value for the customers, while reducing costs of the consoles. The company effectively uses their suppliers, employees, and financing to help reduce costs that they pass on to their customers. Nintendo Corporation prides themselves on listening to their customers and supplying a product that the customer wants. (Nintendo, 2020)
The competitive advantage that Nintendo holds over its rivals is their intellectual property. The make more of a profit creating and selling their own games than if they were to use third party developers. If they used third party developers than Nintendo would make very minimal off of game sales (10 -15%) instead of making 100% of the profits. (Farhoomand, 2008) They have an extreme brand loyalty with their customers because of that intellectual property. Nintendo does not sell off their characters or games to other companies, which means for their customers they must go to Nintendo to play more. Keeping their intellectual property limits the sales they could make on some of their popular games. However, it leads to more sales for Nintendo just so the customer can play a game. An example of this would be that you really want to play the new Smash Brothers game but you do not own a Switch, the only way you will get to play Smash Brothers would be to purchase a Switch. Because of their customers extreme brand
Summary of Chapters
Introduction: Provides a historical overview of Nintendo Corporation since 1889 and discusses the current state of its mission and vision statements.
Environment: Analyzes the company’s internal marketing strategy and intellectual property assets, as well as external market forces using Porter's Five Forces model.
Strategies: Explores various business positioning strategies, with a specific focus on how Nintendo successfully utilized the Blue Ocean Strategy to disrupt the market with the Wii.
Conclusion: Synthesizes the analysis and suggests future improvements, such as enhanced online services and game library expansion, to maintain competitive relevance.
Keywords
Nintendo, Video Game Industry, Strategic Analysis, Blue Ocean Strategy, Intellectual Property, Brand Loyalty, Console War, Competitive Advantage, Innovation, Marketing Strategy, Porter’s Five Forces, Nintendo Switch, Market Position, Gaming Consoles, Business Strategy
Frequently Asked Questions
What is the core subject of this analysis?
The report provides a thorough strategic examination of Nintendo Corporation, focusing on its business trajectory, internal competitive advantages, and the external market factors that influence its success.
What are the primary thematic areas covered?
The main themes include historical evolution, internal resource management, external market threats and opportunities, and the specific strategic frameworks, such as the Blue Ocean Strategy, utilized by the company.
What is the main research objective?
The paper aims to evaluate how Nintendo maintains its market position and brand loyalty despite facing fierce technological competition from rivals like Sony and Microsoft.
Which scientific framework is used to analyze the market?
The analysis employs Michael E. Porter’s "five forces" framework to evaluate the risks and opportunities within the video game industry, including rivalry, buyer power, and substitute products.
What is discussed in the main body of the work?
The main body examines Nintendo’s internal operations, its unique approach to hardware and game development, and the implementation of various business strategies to differentiate itself from competitors.
Which keywords best characterize this work?
The study is characterized by terms such as Nintendo, Video Game Industry, Blue Ocean Strategy, Intellectual Property, Competitive Advantage, and Market Strategy.
How does Nintendo leverage its intellectual property for profit?
By keeping its game development in-house rather than relying on third-party developers, Nintendo retains 100% of profits from its games and forces customers to purchase its specific hardware to access exclusive titles.
Why is the "Blue Ocean Strategy" considered significant for Nintendo?
The strategy allowed Nintendo to move away from head-to-head technological competition with rivals and instead reinvent the market with products like the Wii, which appealed to a broader audience beyond traditional gamers.
- Quote paper
- Jessica Phillips (Author), 2020, Nintendo Strategic Analysis Paper, Munich, GRIN Verlag, https://www.grin.com/document/955573
