This assignment is looking at Nintendo's Wii SWOT analysis. Wii arrived as new development and connected the way people look at gaming. Nintendo has been keeping video games alive since 1985 with the release of the initial Nintendo (Famicom in Japan) but still keeps the real spirit of games alive today.
Wii surfaced as a feasible rival for sony's PlayStation and Xbox 360 the key to Wii's success was its inclusion of revolutionary alternative party movement sensing technology by using it Nintendo implemented "more with less" theory. The technology was so ground breaking which it made customers interact with latest game titles and expeience totally new wolrd of fun. The unit was generally accepted by groups of all demographic areas as it offered customization of personas. Along with the new technology customers believed so real that they could play golf by swinging the controller. The Wii was absolutely popular that e sparked Nintendo's revolutionary returning in the gambling industry. Satoru Iwata
The chief executive of Ninetendo happily launched Wii in 2006 and a s expected anticipated to enterprenueral skills of Satoru Iwata and the brand name Wii became a successful reach.
Company Overview
Nintendo is a Japanese founded corporation whose original goal was to create handmade cards was proven in 1989. The business failed often but finally flourish in entertainment and software industry and improved its name to Nintendo Company Ltd. and began creating system along with video gaming that were worldwide famous. The Donkey Kong was one of instant antique which was accompanied by Super Mario Brothers and it proved to be the most profitable game for the company. Both the games are globally acknowledged by major segment of people. Following this Nintendo released an improved version and named it Super Nintendo that was very successful in Japan and America. After 5 years Nintendo 64 premiered that was again a hit and it made company to have significantly more faith and confidence in there creativity so in addition they launched Nintendo Gamecube and NINTENDO WII GAMING CONSOLE both the game consoles were a super hit and liked a glorious success. Today the most profitable is Ninentendo Wii that has increased the sales to a very high extend. Although the business is targeted in gaming industry but additionally it is the major owner of Seattle Marniers in Major Little league Baseball.
NINTENDO WII
The Wii is targeted to a different section of customers. It really is focused on action system so customer can actually get to take part in the game. This has made Wii a wonderful choice for people who desire different things.
Wii arrived in 2006 it experienced several advanced and ground-breaking features and was announced as top selling latest generation gaming console system in the world due to its wireless motion very sensitive remote control and built-in Wi Fi capabilities. Wii understands how to entertain and uses a no frill approach.
MISSION
To encourage people around world tp play video games no matter there get older or gender or ethnic background.
WHY??
Wii in my own opinion is a truly unique console they have always drawn me how Nintendo could combine intuitive action control buttons with backward compatibility. I am highly impressed with the amazing software features like digital gaming system and the best is cool Wii Channels that makes Wii simply brilliant.
( http://www. brighthub. com/video-games/wii/articles/42453. aspx#ixzz1D0hEPnGp)
Wii Strategy
Despite of experiencing large gaming likes Mario for a long time Nintendo had not been able to increase sales information as shown below so NINTENDO WII GAMING CONSOLE centered on being different by using tactical positioning and devoting its resources exclusively to acquire "strong community" of users and "immersive vast range of game titles".
Figure 1: Nintendo Product Sales (except Wii), Games and Consoles, 2003-2008
Source: published in business week Apr 28th 2008.
The greatest tactical blunder done by Nintendo was to target the under 18 market segment which symbolized only 1/3 of the full total market.
Figure 2:NINTENDO WII GAMING CONSOLE Device Sales 2003-2008
Source: Published running a business week April 28th 2008.
The release of Wii helped Nintendo to go into new dimensions of customers by tapping the "usual customers" area establishing new criteria for gaming system. According to analyst Wii strategy can be summarized as Disruptive strategy.
Figure 3: Strategic Dimensions Of Wii
Source:
The strategy canvas of Wii is both diagonistic and an action framework for building the blue sea strategy of Wii.
The BLUE OCEAN strategy
According to the blue ocean strategy there are three group of non customers that the company should have concentrate on:
1. "soon-to-be" noncustomers who are on the advantage of the market.
2. "refusing" who consciously choose against the marketplace.
3. "unexplored" noncustomers who are seated in distant market.
The Wii offers first portion of customers value like motion sensitivity that appeals to them (casual gamers). the second section of customers are unaffected by Wii and the 3rd portion of customers seems to be readily seduced by Wii due to affordable price for market school people.
Nintendo Wii has used blue ocean strategy and aligned the complete system of a company's activities in pursuit of differentiation and low priced.
SWOT
The SWOT evaluation of Nintendo Wii provides information that is effective in complementing the firm's resources and features to the competitive video gaming environment. It is instrumental in Nintendo's successful strategy formulation and creating the new horizon of blue sea.
STRENGTH
According to Datamonitor's company profile on Nintendo, released on Sept 17, 2007, Nintendo has following main strengths-
A strong brand name-
Nintendo's strong brand is due to its 25 glorious years in the gambling industry. They are not only the leaders in handheld unit market buy also in video games industry. First successful hit was the Gameboy in 1989. The Nintendo Wii is the most upgraded console consisting of motion sensors that makes the overall game more interactive. Major market section included in Wii is of school students being a part of that segment I realized that I am going to prefer participating in Mario for a number of hours than using any technically advanced system.
2)High Returns-
Nintendo always feels in progressive ideas as well as for higher profit there is also spent there resources in company like the Seattle Mariners and the Atlanta Hawks.
Which gives Nintendo a high return on the possessions making them more profitable.
3)High employee efficiency-
Acoording to the statistics recorded by Datamonitor company the income made by Nintendo was about $206, 960 per employee which turned out Nintendo's high employee efficiency when compared with other companies of same industry.
4)Debt free status-
The greatest profit to Nintendo was productive use of there money and despite of trading large amount of data Nintendo was able to stay Debts Free. Nintendo always loved financial flexibility as the Debt to equity proportion was zero documented by Datamonitor Company.
5)New games-
Wii numerous games like Wii Fit offers a little more to the clients. The gameplay is different but highly attractive. Game makers are also inventing new things like Guitar Hero while others for Wii. ( Regarding to Edge magazine, in '09 2009)
According to the Strategy Canvas of Wii pursuing advantages have been examined:
6)Unique Sense of Marketing
Nintendo runs on the marketing strategy to make consumers want what they cannot have. That is seen presently because NINTENDO WII GAMING CONSOLE is not producing enough of the product to meet the demand from customers. Last holidays Wii's were difficult to find. NY Times reported that in San Francisco, New York, Boston and Austin, TX, stores resulted in several with PlayStation 3's in stock, as the Wii was sold-out (NY Times). John Weeks, an employee at a Focus on Store in Boston, said "The past time they were here, we'd 40 and they sold out in a quarter-hour" (New York Times).
Interactivity
Another durability that Nintendo has is their unique player connection. The Wi
introduced movement sensing game playing in 2005. It was the first gaming to use the new technology and get people up and moving. This makes them truly prior to the game in family entertainment.
8)Product Innovation
Mario cart, for example, is one of the very most popular Wii video games. The game that gave Nintendo its start was innovated and kept up to date to become, again, one of the most popular games played. This shows the endurance of the business and the constancy of the brand.
WEAKNESS
The Nintendo Wii is a solid rival in the video gaming market, but it does have some
weaknesses. A few of the Nintendo Wii's biggest weaknesses are; the fact that they don't own the movement sensing technology, graphics, and limited online game play. These weaknesses are established mostly by evaluations with the capabilities of Xbox 360 and PS3. ( refer to appendix)
Do not own motion sensing technology
A large weakness of the NINTENDO WII GAMING CONSOLE is that it does not own its movement sensing technology (Zimbio). They were the first to utilize this unique idea, but given that they do not own the technology, problems are probable. There may be room for competitors to utilize the same technology and take away one of Wiis talents; their uniqueness.
More demand less production-
As Nintendo GameCube and Nintendo 64 weren't that much successful therefore Nintendo was mindful while making Wii so it produced too little Wii's but the current demand was quite definitely high.
Graphics
Compared to the Xbox 360 360 and PS3 the Wii does not have the visual quality that others do. This may be seen as a weakness to some of the more extreme gamers, yet a few of the newbie gamers may well not mind the maximum amount of. Many weblogs and interviews say that young people are disappointed with the design such as the article Brain of Factor 5 Telephone calls Early Wii Graphics "Unsatisfactory" by Package News Channel stated. The fact that the Wii doesn't have the images that the Xbox and the PS3 have helps it be cheaper, but many hardcore gamers will be turned off by this truth; so that it is a weakness. Hardcore gamer customers expected the graphics to be always a enchanced one however in order to keep carefully the prices affordable Wii used a 64MB GDDR3 graphics card. It made Wii cheaper as compared to Sony's Playstation with original price of $250 only. This desire to keep the product affordable proved to be a dual edged sword for Wii.
4. Reliance on contract manufactures
Nintendo has tried to determine good relationships with companies to create the main elements of their Wii consoles as well as assembling all the parts until completed products are shaped. The largest problem was the new Nintendo wii console that is at very high demand that the producers were not able to supply parts timely. this scarcity afflicted company's overall earnings as there is lack of done goods to be sold.
5. Limited Video game play
The Wii also does not compare to the Xbox 360 or PS3 in its level of video game play. Xbox has Xbox Live which allows for online multiplayer gaming as well as communication with opponents through a radio headset. PS3 also has a means for players to connect through the internet and compete in tournaments in various game titles. Unlike the Xbox and PS3 the Wii does not have a constant online network, and there is no verbal communication between online competitors.
Opportunities
The exterior environment evaluation by perceptual map as shown below provides the NINTENDO WII GAMING CONSOLE with opportunities they can take advantage of. Key environmental opportunities will be the determination of consumers to possess multiple video gaming systems, the extensive range of customers they can concentrate on, teenage spending, and the interest of consumers to be fit.
Willingness of consumers to get multiple video games systems
In days gone by, people would chose one gaming system and put it to use solely. Lately, however, individuals are becoming willing to own multiple video gaming systems for different purposes. This is because the gaming industry is now more diverse. Based on the survey of the Games Segmentation 2008 from sales tracking and research company, The NPD Group, Playstation3 gamers are specially likely to see Wii as their next video games interest (shacknews. com). Therefore, Wii doesnt always have to replace other systems to reach your goals.
Wide selection of customers
The extensive range of men and women likely to play Wii can help with sales. Young children affect their parents, while the games are made so that parents and grandparents can enjoy playing as well. People already into games could see the Wii as unique, while those who are not big gamers note that the Wii is very easy, they would like to start. The Wii is growing globally, taking benefit of the chance totarget people around the world who have or have not experienced gaming. Hard-core gamers also can use Wii. As gamers, they may be curious about all of the games on the market and are interested in the new technology. "By the end of your day, Wii is a terrific supplementary system for hard-core gamers, " Mr. Gerstmann of Game- Area said (NY Times).
Teen Purchasing Power
Teens are earning more money now than previously. They spend almost all of their earnings on entertainment and technology, so which means Wii has an opportunity to participate what they spend their money on.
Fitness
Wii calls for full benefit of health mindful people by giving them active game titles that increases there heart rate and oxygen intake (Women's health) it gives people a tranquil fitness opportunity.
Indian Gaming system Market-
Now Nintendo is likely to go into the Indian console market which can verify a good opportunity as the income expected from Indian market are $120 million as a result of good brand image it also helped in expanding the amount of broad music group users as Wii systems are Internet accessible with the updation capacity of
(Refer to appendix )
Threats
Outside factors can threaten any product. The Dangers can be examined using the comparative Swot of Nintendo wii gaming console with its opponents (refer to appendix). The Wii is threatened by the existing economic problems, new challengers, as well as technological problems resulting in a bad reputation.
Economic Problems
Our economy is certainly going through a abrasive time right now. A tough economy is a danger to Wii because people will not be spending the maximum amount of money on luxury, shopping, and/or entertainment items. This recession could very well lower sales not limited to the Wii but also for the entire video gaming industry. Relating to GfK Roper Consultings Holiday Shopping study, consumers will be reducing and looking for functional gifts this Christmas (giftsanddec. com). Video games were positioned 8th this past year on
the gift spending list, but this season they aren't even in the very best ten (giftsanddec. com). The video game market has not had as most of upsurge in sales that they often experience in this season. This shows that the recession is truly intimidating the success of the Wii.
New Competitors
At nowadays the Wii will not compete with any product providing the same type of system. It's very possible that companies such as Sony, Xbox, or other competitors could attempt to create a gambling station like the Wii, but they may have better graphics and even more capacities using the movement sensing technology. The possibility of new competition could also be a danger for the Wii.
Technical Problems=Bad Reputation
The Nintendo Wii products acquired a few problems when first released. They aren't known for toughness, and have had problems as users performed them a great deal (BaBoom). The controllers, for example, could experienced a better design. However the situations are few in numbers, many people found out about the problems of the controllers soaring into the Television, for example. This can lead to recalls and lawsuits (BaBoom). Although these problems are generally from the first stages of Wii, people will remember. Therefore, technical problems can lead to a negative reputation which threatens sales.
. Eliminated Movie Using.
The Wii removed movie playing feature of PS3 and Xbox it takes on nothing. Wii targeted only on game titles as playing movie requies high resolution that provides cost to the product but this additional cost doesnot align with customers perceived value.
Conclusion
In the game playing industry Nintendo has established a good brand name Wii product relished a great success anticipated to financial and other features and with new game titles it was one of the very most demanding console which has unique console with sensors that means it is most enjoyable and energetic. Wii has paved a completely new path to get more detailed interactive future of gambling industry, the ground breaking Wii is one of the initial resources that Nintendo possess by making use of which it could give powerful competition to the others. Nintendo is constantly wanting to do "more with less". The Swot analysis of Nintendo Wii shows its standing in the market along with it also unveils various opportunities that Wii can got advantage of.
