Save it to your desktop, read it on your tablet, or email to your colleagues. Only 8 years removed from the peak of its biggest-ever hardware hit product, Nintendo is contemplating a future in which its core business model: In this context, Nintendo carries a balance sheet with half its market cap in net cash and investments, and owns the most valuable intellectual property in the video game business. Why then is Nintendo valued as if it has no future?
Preventing product shortages would also eliminate an opportunity for competitors to increase market share in a highly competitive electronic entertainment industry. To develop a product planning strategy to effectively deal with the holiday season and demand going forward to reduce product shortages.
To develop a strategy that sees Nintendo maintain its market leader status once it is in the market maturity stage Background: Nintendo is a well known and established brand with an excellent reputation Had phenomenal success with recent product launches DS and Wii Product priced lower than the competition Nintendo games are easy to learn, but hard to master Nintendo has the first motion-sensing controller in the video game industry Nintendo Wii, with its motion-sensing controller can help improve fitness Weaknesses: Currently Nintendo has several opportunities and strengths it can take advantage of.
It is going to need all these and more to stay competitive in this fast moving and highly competitive market.
Its biggest problem is the product shortage which it needs to be rectified to stay competitive otherwise consumers may tire of waiting to purchase a Wii console and will purchase from the competition.
Video game consoles would be part of the specialty product class. These are items that a consumer really wants and makes a special effort to find. Typically these items are in high demand around the holidays and then demand will subside with small peaks throughout the year.
This enables businesses to stockpile product for the next holiday season. Unfortunately this has not happened for Nintendo and demand has stayed high throughout the year which means they have not been able to stockpile for the upcoming holiday season.
The product life cycle2 of video games can be pretty unpredictable but in general tends to be shorter due to ever changing technology. The latest evidence of this is the release of its handheld console called DS and motion-sensing controller for the Wii console, because of this Nintendo has become a leader in the market once again.
But, Nintendo was caught off guard during the first life cycle, market introduction for its Wii. This is because traditionally sales are low during market introduction4 stage but in the case of Wii, Nintendo saw acceleration in demand after the first holiday season instead of a decline.
Nintendo is now in the market growth stage making big profits but its competitors are responding by lowering the cost of their consoles and developing new software to directly compete. In Appendix A you will find the Segment Analysis chart. When Nintendo introduced the Wii they had obviously analysed their competitors to find a competitive advantage.
They took advantage of this by developing a new easier to use motion controller that encourages people to be physically active while playing and their games appeal to everyone not just the hardcore gamers. Appendix B shows a competitive analysis for Nintendo and its main competition.
It is important for a firm to have some competitive advantage as it moves into market maturity. Even a small advantage can make a big difference and some firms do very well by carefully managing their maturing products1.
Nintendo will have to keep this in mind if they want to stay the industry leader in game console sales as Microsoft and Sony continue to adapt their products to more directly compete against the Wii.
If Nintendo is able to keep up with the demand their total profit based on projected sales could be approximately million. Nintendo can further increase its profits by bundling accessories and games with its console.
Nintendo could also make additional revenue from the advertising that it allows on its Wii channel. All of this indicates that Nintendo is financially sound and its latest offering Wii console is raking in big revenues and making decent profits.
Nintendo Wii Case Study Essay. Wii – Nintendo’s Video Game Revolution Problem Statement: Nintendo’s George Harrison needs a solution to deal with chronic product shortages when unexpected demand exceeds supply despite the increase in manufacturing capacity. Preventing product shortages would also eliminate an opportunity for competitors. (Noonan, ) Problem Statement With the gaming industry increasing rapidly in response to all of the technological advances, Nintendo is finding it harder to maintain a steady spot ahead of its competition. (Corporate, n.d.) Case Analysis Statement of Problem A problem statement identifies the key problem in the case which is at times evident while at times it has to be found between the lines. (Steiss, ) Nintendo responded to its competitors by creating a new category for the non-game lovers by providing them easy games.
If Nintendo is able to keep up with the demand they could have another record breaking year in terms of sales and revenues.
The Wii channel also included an art program to create an avatar and could use them in multiplayer games. Developed and introduced a product that was different than the competition Lowest priced game console in the market Still the only motion sensor controlled game console on the market More games available for the Wii than the competition Key Uncertainties: Nintendo could do nothing and continue to have possible shortages until the current component manufacturer increase production or provide enough components to fulfil demand.
When demand levels off there will be no overstock issues Cons Customers could get tired of waiting and buy from the competition 2 Encourage stores to do advance online ordering: This would allow Nintendo to keep intact with the demand and allow customers to track their order and know the approximate shipment time.
Nintendo will have an idea of demand in advance Customers will know when to expect their product Customers will not end of paying extra on grey market Customers will not have to wait in long lines Cons May not be able to deliver product when customer was told May not help with product shortage issues 3 Find manufacturers to make additional component parts: Finding additional component supplier would allow Nintendo to meet its demand as the required components for the console would be available sooner and faster.
An increase in component supplies should allow Nintendo to meet consumer demand Another reliable supplier is a good source for comparing prices and quality Another reliable supplier is a good backup system, when one supplier cannot meet deadline Dependable supplier can work as partner with Nintendo in helping in the development of its hardware and software with faster turnaround Cons May not be able to find another supplier Quality may not be as good as with existing supplier Suppliers can steal the formula and try to manufacture its own device May be more expensive than current supplier 4 Increase price: Increase the current price of the Wii to be the same as the Xbox or slightly higher.
This would allow them to keep their revenues and profits at same level as before when they were selling their console at cheaper price. If done right profits will grow as increase is pure profit High price is an image of premium product and differentiated features Some users do not mind paying higher for what they want Cons Demand may lower too much Competitors may drop their price leaving Nintendo with too high price in the market Customer may question about price increase for the same product with no upgrade Customers may critique that electronic market prices usually decline and not the other way round Recommendation:Case Analysis Of Nintendo.
Introduction Case Analysis Statement of Problem Nintendo Case Study 1. Imagine that you are charged with designing a successor to the Wii. Briefly describe the new-product strategy you might use. Nintendo Case Analysis Essay; Nintendo Case Analysis Essay.
Problem Statement As stated above, Nintendo succeeded in getting back into the video game market thanks to an inventive product, which no one had previously seen. Case Study #1 Subway Sandwich Shop Analysis Case Study One Subway Sandwich Shop Situation Analysis A situation.
View Homework Help - Nintendo Case Study from MGMT at University of Illinois, Chicago. Nintendo Case - Andrews TEAM Case Study Outline DONE Introduction (1/2) Page - MAXX DONE Problem. (Corporate, n.d.) Case Analysis Statement of Problem A problem statement identifies the key problem in the case which is at times evident while at times it has to be found between the lines.
(Steiss, ) Nintendo responded to its competitors by creating a new category for the non-game lovers by providing them easy games. Nintendo Wii Case Study Essay.
Wii – Nintendo’s Video Game Revolution Problem Statement: Nintendo’s George Harrison needs a solution to deal with chronic product shortages when unexpected demand exceeds supply despite the increase in manufacturing capacity.
Preventing product shortages would also eliminate an opportunity for competitors. The Nintendo Wii case analysis illustrates that a better solution to an existing problem is not good enough. To capture new demand companies need to focus on the demand side of the equation and redefine the problem itself.