Strategic Management for Nintendo Co Ltd

This study provides an external and internal analysis of Nintendo Co Ltd, including Porter's five force analysis and SWOT analysis. It also discusses the current and future business strategies of the company.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author’s Note

1STRATEGIC MANAGEMENT
Table of Contents
Introduction:....................................................................................................................................2
Section A: External analysis:...........................................................................................................3
1. Industry type:...............................................................................................................................3
2. Environmental analysis:...............................................................................................................3
3. Industry environmental analysis:.................................................................................................5
4. Competitive environment:...........................................................................................................6
5. Opportunities and threats of external analysis:............................................................................7
Section B: Internal analysis.............................................................................................................8
6. Business resources:......................................................................................................................8
7. Business capabilities:...................................................................................................................8
8. Core competencies:......................................................................................................................9
9. Value chain analysis:...................................................................................................................9
10. Weakness...................................................................................................................................9
11. SWOT analysis:.......................................................................................................................10
12. Current business strategy:........................................................................................................10
13. Future strategy:........................................................................................................................10
Conclusion:....................................................................................................................................11
Reference List:...............................................................................................................................13

2STRATEGIC MANAGEMENT
Introduction:
Nintendo Co Ltd occupies prestigious place in the market of Japan for their extraordinary
supply of electronic goods. In 1970, the organization has decided to render more product
diversity in the market of Japan so that the business experts can give major threats to its
competitors. This specific study is based on the case study of Nintendo Co Ltd. By making an
effective competitive analysis the business experts of Nintendo have realized that electronic
goods are not sufficient enough in drawing the attention of large number of customers (Zur
2002). However, it is highly important to bring product diversification and market penetration.
After making this decision the organization has decided to launch video games, software, 3D
games and so on in order to grab the attention of international customers.
Section A: External analysis:
1. Industry type:
Nintendo belongs to IT industry which is which provides innovative software to its
clients. Their service is available in the global market with the help of which the business experts
can create a demand of their products and services. Gambling, 8-bit home video game, Nintendo
3Ds and Wii U is the core products based on which the organization has created their brand
image and reputation (Zur 2002). Belonging to IT industry the organization is very much
advanced in technology. As a result, the business experts have implemented innovation within
services based on which people belonging to the remote areas can access the services by using
advanced technology.

3STRATEGIC MANAGEMENT
2. Environmental analysis:
Political, economic, socio-cultural, technological, environmental and legal factors of
Japan are critically evaluated in this part for making external environmental analysis of Japan.
Political Political instability is the key factor due to which Japan has to
face immense challenges in maintaining peaceful political
environment (Modarres 2016). Frequent amendment in
government acts and regulations hamper the rhythmic flow of
business.
Economic Japan is known as fifth largest economically developed country
all over the World. The unemployment rate of this country is low
as well. Therefore, Nintendo would not have to face challenges in
establishing their entire business process in JAPAN IT industry.
Socio-cultural Among 127 million people the country is possessed with various
cultures, religions and psychological backgrounds. Therefore, the
products made by Nintendo are manufactured for the customers
of various cultural values, beliefs and psychology.
Technological Japan is out an out advanced in technology with the help of which
people belonging to different cultural backgrounds and attitudes
can access the services of Nintendo by using advanced
technology.
Environmental After the emergence of numerous industries in the market of
Japan the country has to face immense challenges due to over
pollution of environment (Oliver 2014). In this kind of situation,
the business experts have to follow environmental laws and

4STRATEGIC MANAGEMENT
regulations while transporting the services.
Legal In order to run an entire business process Nintendo has to follow
government regulations and acts strictly. The acts and regulations
include employment act, right to information act, data protection
act, anti-discrimination act and so on.
Table: Political, economic, socio-cultural, technological, environmental and legal factors of
Japan
(Source: Russo et al. 2014)
3. Industry environmental analysis:
While making an effective industry analysis for identifying the overall market position of
Nintendo the study has conducted Porter’s five force analysis.
Supplier power LOW
Buyer’s power HIGH
New market threat HIGH
Competitors’ rivalry Sony Entertainment, Microsoft
Threat from the substitute MODERATE
Analysis:
IT raw material supplier in the market of Japan is immense in number. In this kind of
situation, the power of the supplier is low (Dustin, Bharat and Jitendra 2014). Due to the
existence of immense IT organizations the purchasers can get innumerable opportunity for
bargaining before purchasing a product (Saebi and Foss 2015). Therefore, power of the buyers in

5STRATEGIC MANAGEMENT
IT industry is high. As already mentioned, Japan is constituted with innumerable IT
organizations occupying recognizable place. Therefore, Nintendo has to face immense market
threats for gaining customer loyalty. As per competitors’ rivalry Sony Entertainment and
Microsoft are the two major competitors of Nintendo. Their use of business innovation model
and different designable products highly attracts customers’ attention (Clauss 2017). From that
perspective Nintendo has to face immense competitors’ threat.
4. Competitive environment:
Due to the existence of Sony entertainment Japan market is surrounded with extremely
competitive environment due to which the business experts of Nintendo have to face immense
difficulties in maintaining business sustainability.
Identify strengths and weakness of the competitors:
In order to analyze strengths a weakness of Sony entertainment some of the major aspects
are identified:
 Product diversification is the primary USP and the customer service providers are flexible
with multi-lingual approaches.
 Marketing and promotional technique is very much innovative that can easily grab the
attention of young generation
Weakness:
 The game plans are not very innovative that can easily drag the attention of young people and
from that perspective Nintendo has lagged behind.

6STRATEGIC MANAGEMENT
 The finance department of Sony is not that much systematic and efficient to deal with
chronological database of business profit margin. As a result, the business authority
sometimes faces difficulties in maintaining coherence in database.
Based on the competitive environmental analysis Nintendo has changed their current
objectives to make it wider.
 To stretch the business in international market by rendering innovative product designs and
more video game plans
 To target customers of diverse cultural backgrounds for creating brand image and reputation
in the global market
5. Opportunities and threats of external analysis:
After analyzing political, economic, socio-cultural, technological, environmental and
legal factors and Porter’s five force evaluation the identified opportunities and threats for
Nintendo are as follows:
Opportunity:
 Laws and regulations followed by Japan government is very much strong based on which the
employees do not have to face challenges in providing their services within business industry
 Due to the advancement of technology the organization can maintain good rapport with their
stakeholders. The entire business process follow a systematic flow of work
Threats:

7STRATEGIC MANAGEMENT
 Due to instable political set up Nintendo may have to face difficulties in collecting
government sponsorship. In addition, the customers of remote areas may show their
reluctance in using the services of Nintendo
 The competitors’ market threat in IT industry is high. As a result, it is challenging for the
service providers to maintain their sustainability in business.
Section B: Internal analysis
6. Business resources:
Tangible and intangible are the two major parts of resources based on which the success
of Nintendo is highly dependent. Financial business capability is high on Nintendo with the help
of which the business experts do not face difficulties in implementing innovative product designs
(Mahdi and Almsafir 2014). Technological resources at the workplace of Nintendo are
sufficient. As a result, the company does not have to communicate with the customers through
social media or online media platform (Pechlaner et al. 2014). As per infrastructure, human
resources and other physical equipments Nintendo is very strong to attract the attention of
customers. Among the intangible resources the skills and competency of the employees, the
goodwill of organization and patent of organization leaves major positive impact in maintaining
reputation.
7. Business capabilities:
The entire organizational hierarchy of Nintendo is very well structured and organized
based on which customers show their satisfaction level after interacting with the service
providers (Yang, Zhang and Ding 2015). The entire department of operations are highly

8STRATEGIC MANAGEMENT
competent to deal with the issues of customers as well as employees. Marketing department with
the help of social media promotion has already grabbed international fame (Li and Liu 2014). On
the other hand, human resource department is very much transparent in their recruitment and
selection process.
8. Core competencies:
Financial strength as well as technological strength is the valuable capability of
Nintendo. The company is successfully producing innovative video games to grab the attention
of young customers. That particular capability is considered as rare capability (Evans 2016). In
addition, as a non-substitutable capability the organization has launched refurbishment
department for resolving issues of customers immediately (Kabue and Kilika 2016).
9. Value chain analysis:
Inbound, operations, outbound and marketing and sales are the four major sectors based
on which value chain is conducted. After manufacturing products Nintendo has delivered the
material in inbound process for its maintenance (Kiragu 2014). The logistic department after
realising the product to estimated destination follows advanced technology so that operation cost
can be reduced (Stead and Stead 2014). In order to outbound the material the business experts
have appointed employees in logistic department so that product can be reached proper
destination.
10. Weakness
 Customer service department is not efficient enough in dealing with the international
customers due to the lack of language competency

9STRATEGIC MANAGEMENT
 The organization would have to raise more funds for expanding widespread wings in EURO
zones.
11. SWOT analysis:
Strengths
Innovative product designs along with advanced
technological services
Capital strength of the organization
Weakness
Promotional strategy of Nintendo is not very
effective for grabbing international customers
Customer service providers do not have multi-
lingual flexibility
Opportunities
To expand business in multinational boundaries
To increase the number of target customers
Threats
Competitors’ market threat and high promotional
strategy
Market fame of Sony entertainment
12. Current business strategy:
Providing innovative products, advanced software and 3D video games are the current
business strategy based on which the organization has grabbed attention in global market
(Hakkak and Ghodsi 2015). In order to spread business in global market Nintendo has adopted
product diversification and market penetration strategy so that segmental policy can be
effectively implemented.

10STRATEGIC MANAGEMENT
13. Future strategy:
 To stretch the business in international market by rendering innovative product designs and
more video game plans
 To target customers of diverse cultural backgrounds for creating brand image and reputation
in the global market
Conclusion:
After summarising the entire study it can be evaluated that external and internal analysis
is significant for expanding business. The business experts of Nintendo have realized that
electronic goods are not sufficient enough in drawing the attention of large number of customers.
Belonging to IT industry the organization is very much advanced in technology. Political,
economic, socio-cultural, technological, environmental and legal factors of Japan are critically
evaluated in this part for making external environmental analysis of Japan. After the emergence
of numerous industries in the market of Japan the country has to face immense challenges due to
over pollution of environment. While making an effective industry analysis for identifying the
overall market position of Nintendo the study has conducted Porter’s five force analysis.
As per competitors’ rivalry Sony Entertainment and Microsoft are the two major
competitors of Nintendo. In order to analyze strengths a weakness of Sony entertainment some
of the major aspects are identified. Based on the competitive environmental analysis Nintendo
has changed their current objectives to make it wider. After analyzing political, economic, socio-
cultural, technological, environmental and legal factors and Porter’s five force evaluations the
identified opportunities and threats for Nintendo are conducted. As per infrastructure, human
resources and other physical equipments Nintendo is very strong to attract the attention of

11STRATEGIC MANAGEMENT
customers. Financial strength as well as technological strength is the valuable capability of
Nintendo.

12STRATEGIC MANAGEMENT
Reference List:
Clauss, T., 2017. Measuring business model innovation: conceptualization, scale development,
and proof of performance. R&D Management, 47(3), pp.385-403.
Dustin, G., Bharat, M. and Jitendra, M., 2014. Competitive advantage and motivating
innovation. Advances in Management, 7(1), p.1.
Evans, N.G., 2016. Sustainable competitive advantage in tourism organizations: A strategic
model applying service dominant logic and tourism's defining characteristics. Tourism
Management Perspectives, 18, pp.14-25.
Hakkak, M. and Ghodsi, M., 2015. Development of a sustainable competitive advantage model
based on balanced scorecard. International Journal of Asian Social Science, 5(5), pp.298-308.
Kabue, L.W. and Kilika, J.M., 2016. Firm resources, core competencies and sustainable
competitive advantage: An integrative theoretical framework. Journal of management and
strategy, 7(1), p.98.
Kiragu, S.M., 2014. Assessment of challenges facing insurance companies in building
competitive advantage in Kenya: A survey of insurance firms. International journal of social
sciences and entrepreneurship, 1(11), pp.467-490.
Li, D.Y. and Liu, J., 2014. Dynamic capabilities, environmental dynamism, and competitive
advantage: Evidence from China. Journal of Business Research, 67(1), pp.2793-2799.

13STRATEGIC MANAGEMENT
Mahdi, O.R. and Almsafir, M.K., 2014. The role of strategic leadership in building sustainable
competitive advantage in the academic environment. Procedia-Social and Behavioral
Sciences, 129, pp.289-296.
Modarres, M., 2016. Risk analysis in engineering: techniques, tools, and trends. CRC press.
Oliver, J., 2014. Dynamic capabilities and superior firm performance in the UK media
industry. Journal of Media Business Studies, 11(2), pp.57-78.
Pechlaner, H., Bachinger, M., Volgger, M. and Anzengruber-Fischer, E., 2014. Cooperative core
competencies in tourism: Combining resource-based and relational approaches in destination
governance. European Journal of Tourism Research, 8(1), pp.5-19.
Russo, G., Anifantis, A.S., Verdiani, G. and Mugnozza, G.S., 2014. Environmental analysis of
geothermal heat pump and LPG greenhouse heating systems. Biosystems Engineering, 127,
pp.11-23.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal, 33(3), pp.201-213.
Stead, J.G. and Stead, W.E., 2014. Building spiritual capabilities to sustain sustainability-based
competitive advantages. Journal of Management, Spirituality & Religion, 11(2), pp.143-158.
Yang, C., Zhang, Q. and Ding, S., 2015. An evaluation method for innovation capability based
on uncertain linguistic variables. Applied Mathematics and Computation, 256, pp.160-174.
Zur, A. 2002. PRINTED BY: [e-mail]. Printing is for
personal, private use only. No part of this book may be reproduced or transmitted without

14STRATEGIC MANAGEMENT
publisher's prior permission. Violators will be prosecuted.. Available from
file:///C:/Users/USER/Downloads/2669116_2002011346_Mario-Its-aMeCaseStudy.pdf