Strategic Analysis of Nintendo: SWOT, Porter's Five Forces, PESTLE Analysis

Running head: STRATEGIC MANAGEMENT
STRATEGIC ANALYSIS
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STRATEGIC MANAGEMENT
Table of Contents
External analysis:.................................................................................................................3
Industry analysis:.............................................................................................................3
Porter's five forces theory:...............................................................................................3
Competitive rivalry:.........................................................................................................5
Opportunities and threats:................................................................................................6
General environment analysis:............................................................................................6
Internal analysis:..................................................................................................................8
Business resources:..........................................................................................................8
Tangible assets:............................................................................................................8
Intangible assets:..........................................................................................................8
Capabilities of Nintendo:.................................................................................................9
Core competencies and advantage:..................................................................................9
Value chain analysis:.....................................................................................................10
Marketing and Sales......................................................................................................11
SWOT analysis:.............................................................................................................13
Current and future strategy:...........................................................................................15

STRATEGIC MANAGEMENT
External analysis:
Industry analysis:
Nintendo is a Japan based multinational company that deals with the consumer electronics and
video games. The organization was founded on 1889 by Fusajiro Yamauchi. Headquarter of
Nintendo lies in Kyoto, Japan. Nintendo has been a global leader in the video game industry
(Pikachu 2018).
The video game industry has been growing since 2000. Companies like Sony,
PlayStation, Microsoft and recently Xbox 360 have been the tough competition for Nintendo.
The industry is characterised by high penetration power in the developed market nut at the same
time the industry is low emerging (Feijoo et al. 2012). As the customer’s are getting accustomed
with gaming the target audience for the organizations in this industry is getting broader, which
will play a big role in the growth of the organization. The console makers sale their products
with an implicit loss but then the revenue is mainly recovered from the accessories, games etc.
The organizations in this industry are focusing in bringing better technology or games each year
which increases the competition so much. The technology is advancing and so does the change in
the gaming techniques. Earlier people used to play with the wired joystick now people are using
the VR technology for playing games (Madary and Matzinger 2016). The console makers are
bringing new technology each day.
Porter's five forces theory:
Porter’s five forces will analyse the 5 key forces that will have an impact in the
operations of the company (Dobbs 2014).

STRATEGIC MANAGEMENT
Power of Supplier (Medium):
The supplier power in the console industry is considered to be low to medium. Nintendo
along with PlayStation and Microsoft forms the ‘big three’ (Le 2018). These companies
generally earn revenue from the software and hardware sales, this is why the supplier plays and
integral role in their organization. Supplying companies strive to supply to these companies due
to the assured profit that they will earn. This is why the supplier does not possess a huge power
in this industry.
Power of buyers (Medium):
Due to the presence of very few organizations in the market the buyer does not have
much power. There are only three choices- PlayStation, Microsoft and Nintendo and this makes
the choices of the customer limited. These are well known and reputed brands and this makes the
buyers power to go down.
Threat of entry (Low):
Threat of entry in the gaming consoles industry is low due to several factors. Microsoft,
Nintendo and PlayStation have been in the business for quite some time and this has helped them
to build brand reputation in the market. This reduces the chances of the new entrants to come and
grab a huge market share immediately. Entry in the console industry requires a lot of capital and
investment because of the high manufacturing cost and the research and development of