Let's Play Revolution: Over the Years Nintendo has demonstrated to be a strong competitor. When the Japanese company marketed USA with Donkey Kong. Its strategy was to lowered cost. Their first game back in 1980, Radarscape did not sell well. Since Nintendo of America covered their, expenses, they did not incur debts. Their bottom-line competitive advantage was well developed. They optimized manufacturing processes, decrease transportation cost, minimize errors in process. Twenty seven years has passed and Nintendo is one of the big three video game console makers. Its products have a strong demand and their faithful fans expect anxiously for new products. This successful company has a complex market strategy due to the varieties of portable systems and console makers. We can identify that one of the business initiatives for competitive advantage on mind is a combination of grow and transform business initiatives. This company has not stop "growing" by expanding market share, increasing market reach, and improving product and service offering.
Nintendo is competing on completely different terms than Sony and Microsoft.
- A strong value innovation for (many new) customer(motion stick)
- Cost reduction by eliminating features (no HD, no DVD, no Dolby 5.1, low processor speed)
Nintendo has stricken again using the conventional wisdom, "
differentiation" , product innovation, focus on the gaming experience instead of technological obstacles.
PORTER'S FORCES MODEL
Porter's 5 Forces, Rivalry amount competitors, is one of the strongest one.
"The third party companies are complaining that Nintendo is making it impossible to make money on their systems".
The video gaming market is a multi-billion dollar business. Video consoles, is a big chunk of that market. Even though its competitor
Playstation and
Xbox currently dominates the market, Nintendo is raising eyebrows with its recent introduction of the Wii. The Wii is cheap, has no
Hard Disk, no DVD, no Dolby 5.1, weak connectivity, comparatively low processor speed, but its innovative motion control stick attracks no only the attention of pre-teens but also senior citizens. This feature Nintendo opens up the console world to a completely new public of untapped non-gamers, Nintendo strikes again. See chart
"Banzai" which means "Congratulation" in Japanese
The Wii was the top-selling new console for the fourth month in a row, with Nintendo selling 360,000 units of the $240 machine with a unique motion-sensing controller. Nintendo is clearly trying to position the Wii as a low-budget alternative. Nintendo sales rocketed 85%, to $1.1 billion, while operating profit increased almost eightfold.
Competitive Advantages Nintendo’s supplier power is high. Nintendo has the power to choose among many, many suppliers to keep him on track. One of the factor that greatly influenced its competitive advantages is the large software library the company has. Nintendo has strong suppliers. The French video game giant “Ubisoft” and, US video game titan Electronic Arts, and the game division of entertainment icon Disney, devoted to making Wii games, like “Pirates of the Caribbean” and “Star Wars”. Nintendo has shifted using more third-party developers. Each year, hundreds of all-new titles for the best-selling Game Boy(R) Advance, Nintendo DS(TM) and Nintendo Game Cube(TM) systems extend Nintendo's vast game library and continue the tradition of delivering a rich, diverse mix of quality video games for players of all ages. These studios develop or co-develop games using licensed Nintendo characters and/or may create games exclusively for Nintendo hardware. One of the Hardware suppliers in Nintendo's list is the giant IBM shipping million of microprocessors. Another supplier is the well-known memory firm supplying SRAM memory for Nintendo's next-gen platform.
Business Initiatives using IT Support
Customer Relationship management Even though sales of video games and related hardware rose 20 percent for Nintendo, the new Wii console has its own problem. Nintendo is re-calling the motion control stick. The strap received some reports that when consumers swing the Wii Remote with the original version of the wrist-strap using excessive force and accidentally let go, the cord connecting the controller to the wrist strap can break, potentially causing the Wii Remote to strike bystanders or objects. Customer can log in the main web page fill out an address information page, a e-mail will confirm your request, and they promise to replace it within 5 to 9 days. In the same Safety Information page for Playing Wii you would find how to use the control and wear correctly the strap.
Supply Chain Management: In the industry is important a good demand driven process and a good consumer products manufacturers. This is the reason that Nintendo has Supply management System that permit it easy flow of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
A good example is that IBM has begun shipping millions of microprocessors to Nintendo keeping the gaming company on track to launch its Wii. Nintendo has not incurred in supply shortage for the Holiday Season. IBM with a new persuasive computing strategy has won the design for the next-generation WII gaming console to Nintendo.
Marketing Mixes
Nintendo marketing mixes is a winning mix of fun, family, friends and affordability. Nintendo has strong allies. French video game giant “Ubisoft” began working with Nintendo a year before Wii was launched, and US video game titan Electronic Arts and the game division of entertainment icon Disney, devoted to making Wii games, like “Pirates of the Caribbean” and “Star Wars”.
Market pricing: mass-market pricing typically try to stay under $200. Mass-market pricing is most important for launching products. This mass-market pricing is what make Nintendo a fierce competitor.
Expanding beyond culture: Another marketing mixes is to reflect cultural tastes. There is a huge growth in interest in culturally based games in U.S. like “Spider Man” or “Harry Potter”, that is why Nintendo has shifted using more third-party developers.
New Target Market: Nintendo thinks its game consoles – the Wii and the Nintendo DS handheld – will appeal to a mass market of FIRST-TIME game players, women, and older consumers. The Wii “has been designed to appeal even to people who aren’t interested in games”, Nintendo President Satoru Iwata told reporters.
Miyamoto’s creations, Donkey Kong and Legend of Zelda, found his wife playing Wii on Valentine’s Day, “Now, my wife is bragging to me that she can bet me at this game, any time. What’s worse is she is right. If we can convert my wife, we can convert anyone,” Miyamoto said laughing.
Future Market: Not satisfy with his marketing mix, Nintendo future vision is to fully embraced online gaming ONLY when they find a developer who can make a game that says “This is why I like that and why I am willing to get involved and pay for it.” Nintendo market research has not seen online gaming to be a big business, and market test has demonstrated that customer are reluctant to pay for that experience.
What type of marketing mix does Nintendo adopt? The effectiveness of marketing mix factors is based in a good driving of sales of product. Nintendo used B2B e-commerce, B2C and It produces a good market opportunity with tremendous effect on purchasing and selling, decreasing the cost of doing business increasing profits. That permit establishes a continued relationship with other business.
Payment systems
The Wii game is a big winner
As a global company Nintendo uses the traditional payment system: the convenience of using all major credit cards, debit cards, bank accounts. If you purchase Wii System, Nintendo's online store will operate on a payment system called Wii Points(smart card). You'll be able to purchase Wii Points at retail outlets or with a credit cart online. They 'll be available in blocks of 2000 for $20 a block (which means that 1 Wii point is worth a penny, and 100 are worth a dollar). Their payment systems offer many attractive alternatives to proceed with purchase. An acceptable return policy, refund policy, free subscription, free gift exchange, etc.
