Strategic Management Case Study: Nintendo's Competitive Analysis

This case study provides a comprehensive analysis of Nintendo's strategic position within the gaming industry. It begins with an external analysis, examining the industry's growth, customer needs, and the impact of demographic, economic, natural, global, technological, political, and cultural forces. The industry environment is assessed through the lens of the five forces model, evaluating threats of new entrants, rivalry among competitors, substitute products, and the bargaining power of buyers and suppliers. A competitive analysis follows, highlighting key competitors and their strategies. An internal analysis explores Nintendo's tangible and intangible resources, identifies its capabilities, and analyzes its core competencies, value chain, and weaknesses. A SWOT analysis synthesizes the external and internal findings. The study concludes by examining Nintendo's current and future strategies, offering insights into how the company can leverage its strengths and address its weaknesses to maintain its competitive advantage in a dynamic market.

CASE ANALYSIS 1
CASE ANALYSIS
Student’s Name
Professor’s Name
Institution
Course
Date

CASE ANALYSIS 2
INTRODUCTION
Nintendo is an organization in the gaming industry that has transformed over the years it
has been operational. The company has been recording huge sales and profits except for its
recent product; Wii U. the external and internal environmental factors have affected the company
both positively and negatively. However, the company has identified areas of change, and it has
drafted strategies that will make it successful. The case analysis will look at the environmental
factors that affect the company as well as the possible strategies that can help the company to
overcome the factors.
EXTERNAL ANALYSIS
Industry
Nintendo has been in many industries from its establishments, but currently, it has
heavily invested in the gaming industry. The gaming industry has been growing at a high rate,
and this has seen the organizations that are in the industry increase their profits. The industry has
become diverse, and in the modern day, one does not need to buy the gaming devices, and this is
because of the availability of games on mobile phones (Avlonitis, and Lionakis, 2015). The
industry targets the young consumers in the market, and it has a potential for continued growth.
The needs of the customers in the industry are associated with advanced technology and
enhanced innovations. The most advanced games in the industry act as attractions to the
customers in the industry. Continued innovations in the industry have helped to increase the
variety of products that customers can choose from.
General environment analysis

CASE ANALYSIS 3
Demographic Forces
The age and gender of the customers have an effect on the company. The products of the
company target the young members of the society. Therefore, it is apparent that the availability
of many young persons in the society will add to the success of the company. However, a
decreased number of the young persons would go a long way in affecting the company
negatively.
Economic Forces
A deteriorated economy where the cash flow is limited and the members of the society
are financially stable will have an adverse effect on the company. Games are not basic needs, and
this means that they are purchased after meeting the basic needs are met (Savino, Manzini, and
Mazza, 2015. Therefore, limited purchasing power would mean that the customers would not
prioritize the products of the company.
Natural Forces
Natural forces come to affect the organization’s business from an environmental
perspective. Adverse natural forces affect the environment thus affecting the behaviors of the
consumers (Ahuja, Sawhney, and Arif, 2018). Therefore, the concentration of the consumers
might divert leading to adverse effects on the products of the company.
Global Forces
The availability of other organizations at the global level that manufactures the same or
better products is likely to affect the company negatively (Barney, 2017). At the same time, the

CASE ANALYSIS 4
level of demand in the global gaming industry would have an effect on the company, and this is
because the company also sells its products to the global customers.
Technological Forces
Advanced innovations have an effect the products in the market. The gaming industry is
growing at a very high rate, and that means that advanced technology comes to help in
innovating better games. Advanced technology would affect the company's products because the
products introduced to the market by the competitors might be more advanced than those offered
by the company. As a result, the customers might opt to buy from the competitors as opposed to
the company.
Political Forces
Political decisions made in the countries of operations have an effect on the company.
For example, restricted markets and increased taxes are likely to slow down the growth of the
company.
Cultural Forces
The adoption of a culture that promotes games would affect the company’s products
positively. However, the restriction of games in some cultures would affect the company
adversely.
The industry environment
Threats of new entrants

CASE ANALYSIS 5
The threat level of new entrants in the gaming industry is low. The gaming industry is
demanding, and it needs a huge capital, and at the same time, the professionals need to possess
exceptional skills. Therefore, it is a challenge for organizations to venture into the industry.
Rivalry among competing firms
The rivalry level of the competing firms is high. Other gaming companies like Microsoft
and Sony have been working around the clock to come up with more advanced products to beat
the products of Nintendo.
Threats of substitute products
Advanced technology has increased the threat levels where it comes to the availability of
substitute products. Smartphones are installed with games, and this has led to some gamers
opting to use the games rather than purchase the games from Nintendo.
Bargaining power of buyers
The bargaining power of the buyers is high, and this is because of the types of customers
that consume the products of Nintendo. Considering that games are a luxury in the community,
the customers have the power to affect the prices of the products by demonstrating against the
prices that they might feel are unfair.
Bargaining power of suppliers
The bargaining power of suppliers is low, and this is because the company can directly
reach its customers. Technology has helped the gaming companies to sell their products using
online platforms, and that eliminates the involvement of the suppliers. Therefore, the suppliers
might not play a significant role when it comes to determining the prices of the products.

CASE ANALYSIS 6
Competitive environment
The competitors in the industry have the same objectives as Nintendo, and that is to
provide products that are advanced in technology and meet the needs of the customers.
Currently, the production of 3D games is adopted by the competitor and Nintendo, and that
means that the competitors and the company seem to be competing on the same level. The future
of the gaming industry is unpredictable, and this is because the industry depends on technology
and technology is advancing at a high rate. However, the company can utilize its strength of
investing in technology and using e-Shop to reach as many customers as possible to beat the
competitors.
Opportunity and threats created by the external environment
The external environment presents an opportunity for the company to grow and increase
its products. The reason behind it is because the external environment has presented the company
with some of the challenges that ought to be addressed (Feijoo, Gómez-Barroso, Aguado, and
Ramos, 2012). By knowing the challenges, the company has an opportunity to work on its
strategies to make sure that it is competitive. The threat of stiff competition cannot be assumed
as far as the external environment is concerned (Bergeron, 2006). The competitors want to
achieve the same goals as the company, and that means that if Nintendo does not outsmart them,
they might outsmart the company which is likely to affect the company adversely.
INTERNAL ANALYSIS
The firm’s resources; tangibles and intangibles

CASE ANALYSIS 7
The tangible resources that are available at Nintendo are numerous, and this is because of
the nature of the products that the company manufactures. The resources include; machinery,
cars, computers, buildings, and land. These are resources that promote the production of goods at
the company, and they are visible and tangible (Helfart, 2017). The intangible resources are the
essential resources in the gaming industry. The resources that the company has at its disposal are
human resource, patents, and software. The three resources are the most significant in the
gaming industry.
Capabilities identification
Nintendo has different capabilities that can make it a fierce competitor in the gaming
industry. The capabilities include presenting innovative products to the market and reaching a
wide range of customers (Feng, Morgan, and Rego, 2016). The innovative capability is evident
in the two most recent products of the company; Nintendo 3DS and Wii U. the two products are
advanced in technology and better than the previous products launched by the company. At the
same time, the products have proved to be competitive in the gaming industry (Fraj, Matute, and
Melero, 2015). Therefore, it is apparent that Nintendo is capable of investing in technology to
present products that are outstanding in the market. Nintendo has the capability of reaching a
wide range of consumers, and this has been seen through its launch of e-Shop. Nintendo has a
platform that allows its products to reach the customers through the internet. E-Shop is a
platform where customers from different parts of the world can buy and download the games of
their interest (Subramanian and Gunasekaran, 2015). The availability of a platform that can reach
many customers shows the capability of the company in reaching many customers.
Core competency analysis

CASE ANALYSIS 8
Rare? Valuable? Cost to imitate Non-substitutable
Enhanced and advanced technology Yes Yes Yes Yes
Extensive marketing Yes Yes No No
Value chain analysis
The aspect of value addition at Nintendo is embraced and made the routine of the
company. Looking at the history of the company, it is evident that it has grown from an
organization that manufactured playing cards to an organization that is dealing with modern
games (Jaligot, Wilson, Cheeseman, Shaker, and Stretz, 2016). The upgrading of Wii to Wii U is
an indication of how value addition at the company is highly embraced. The company has
demonstrated that it has the capability to transform its products from one state to another with the
aid of advanced technology ( Kalkan, Bozkurt, and Arman, 2014). In marketing and distribution,
Nintendo has also proved to be effective and to be capable of giving the competitors a hard time.
The invention of a marketing platform where at the same time the customers can purchase the
products of Nintendo shows that the company is doing well in adding the value of its functions.
Weaknesses
The weakness that is evident at Nintendo is the failure to advance in terms of having
diverse platforms where its products can be accessed. The competitors of Nintendo have
advanced and are using different platforms to market and sell their games (Gereffi and
Fernandez-Stark, 2016). However, Nintendo is still not available for mobile and online gamers.
Considering that the targeted customers are users of smartphones, it is a weakness for a company
to lack games on smartphones.

CASE ANALYSIS 9
Pulling it together: SWOT Analysis
Strengths
a. The company has been in the industry for a long time, and therefore it has mastered and
understood the industry (Chia, 2016).
b. Nintendo has innovative employees, and they have been involved in developing advanced
games.
Weaknesses
a. The company has failed to avail its products to mobile and online gamers.
b. Branding of Wii U has not been done well leading to decreased sales.
Opportunities
a. Nintendo has the opportunity to reach more customers through partnerships.
b. With e-Shop, Nintendo has an opportunity to sell its products to a wide range of
customers.
Threats
a. The competitors in the industry are a threat. PS4 and Xbox one which was manufactured
by the competitors came to affect the sales of Wii U.
b. Technological advancements and the changing needs of the customers in the gaming
industry are a threat, and if not addressed, they might lead to declined sales.
Current strategies

CASE ANALYSIS 10
Currently, Nintendo has focused on two essential strategies, and they are innovations and
distribution. The company is working around the clock to make sure that it introduces products
that are competitive in the market. As a result, this has seen the company come up with Nintendo
3DS and Wii U. the second strategy is associated with the distribution of its games. The
company has introduced a new platform known as e-Shop (Yip, 2015). At e-Shop, the customers
are given a chance to shop the products of the company from the comfort of their homes.
Future Strategies
Nintendo has the intentions of taking its products to a higher level and exposing them to
more customers. The company has the intentions of taking its games to the online platforms and
also making sure that the games are available on smartphones (Peng, Peng, and Chang, 2018).
The strategy is aimed at making sure that the company continues to reach more customers.
Nintendo has a plan of working together with DeNA; a mobile developer. The partnership comes
in place to make sure that the company is in the best position to increase profits and meet a wide
variety of customers.
CONCLUSION
In the business world, the external and internal environments have effects on the progress
of the company. Nintendo has done well over the past years, but it is facing a challenge with its
recent products. The declined sales of Wii U indicate that an organization can be affected by
other external and internal factors. However, the company has an opportunity to redeem itself
and continue making profits by exploring the markets that it has not and working in partnership
with other organizations.

CASE ANALYSIS 11
References
Ahuja, R., Sawhney, A., and Arif, M., 2018. Developing Organizational Capabilities to Deliver
Lean and Green Project Outcomes using BIM. Engineering Construction and Architectural
Management.
Avlonitis, G.J., and Lionakis, K., 2015. Marketing-sales interface and organizational
competitiveness. Marketing of Scientific and Research Organizations, 15(1), pp.59-76.
Barney, J.B., 2017. Resources, capabilities, core competencies, invisible assets, and knowledge
assets: Label proliferation and theory development in the field of strategic management. The
SMS Blackwell handbook of organizational capabilities, pp.422-426.
Bergeron, B., 2006. Developing serious games (game development series).
Chia, R., 2016. Process, practices, and organizational competitiveness: understanding dynamic
capabilities through a process philosophical worldview.
Feijoo, C., Gómez-Barroso, J.L., Aguado, J.M. and Ramos, S., 2012. Mobile gaming: Industry
challenges and policy implications. Telecommunications Policy, 36(3), pp.212-221.
Feng, H., Morgan, N.A. and Rego, L.L., 2016. Firm Capabilities and Growth: The Moderating
Effect of Market Conditions. In Let’s Get Engaged! Crossing the Threshold of Marketing’s
Engagement Era (pp. 581-582). Springer, Cham.
Fraj, E., Matute, J. and Melero, I., 2015. Environmental strategies and organizational
competitiveness in the hotel industry: The role of learning and innovation as determinants of
environmental success. Tourism Management, 46, pp.30-42.

CASE ANALYSIS 12
Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
Helfat, C.E., 2017. Stylized facts regarding the evolution of organizational resources and
capabilities. The SMS Blackwell handbook of organizational capabilities, pp.1-11.
Jaligot, R., Wilson, D.C., Cheeseman, C.R., Shaker, B. and Stretz, J., 2016. Applying value
chain analysis to informal sector recycling: A case study of the Zabaleen. Resources,
Conservation and Recycling, 114, pp.80-91.
Kalkan, A., Bozkurt, Ö.Ç. and Arman, M., 2014. The impacts of intellectual capital, innovation
and organizational strategy on firm performance. Procedia-Social and Behavioral Sciences, 150,
pp.700-707.
Peng, M.Y.P., Peng, Y.C. and Chang, C.C., 2018, May. The Effect of Organizational Strategy
Orientation on Network Relationships. In Proceedings of the 2018 International Conference on
E-business and Mobile Commerce (pp. 30-33). ACM.
Savino, M.M., Manzini, R. and Mazza, A., 2015. Environmental and economic assessment of
fresh fruit supply chain through value chain analysis. A case study in chestnuts
industry. Production Planning & Control, 26(1), pp.1-18.
Subramanian, N. and Gunasekaran, A., 2015. Cleaner supply-chain management practices for
twenty-first-century organizational competitiveness: Practice-performance framework and
research propositions. International Journal of Production Economics, 164, pp.216-233.
Yip, N.S.M.S., 2015. The Effect of Cyber Supply Chain Security Towards Lean and Agile Supply
Chain Performance in Healthcare Industry: The Mediating Effect of Organizational
Capabilities (Doctoral dissertation, Universiti Sains Malaysia).