Nintendo Case Study: Competitive Advantage and Market Analysis

This case study analyzes Nintendo's competitive strategies within the gaming console industry, contrasting it with rivals like Xbox 360 and Sony PlayStation. It examines Nintendo's rise and fall, focusing on the Wii's impact and its focus on a broader demographic through innovative, user-friendly technology. The study explores how external factors like political, demographic, and technological changes influence Nintendo's strategy. It applies Porter's Five Forces to assess competitive dynamics and delves into Nintendo's value chain, highlighting primary and support activities, and how value is created for customers. The analysis identifies tangible and intangible resources, organizational capabilities, and applies the VRIN framework to assess competitive advantage. The study concludes by examining Nintendo's competitive tactics and its ability to sustain a competitive edge in the market. The paper also includes a comprehensive reference list of related articles and case studies.

NINTENDO CASE STUDY
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Nintendo case study
Summarize the case in 300 to max 400 words (5marks)
The case study shows the competitive ability of Nintendo against its main rivals in the gaming
console industry which are the Xbox 360 and Sony PlayStation. Nintendo Wii is largely
considered to have influenced the gaming console industry approach. From the mid-1980s
Nintendo was the primary controller of the game console business through their cartridge-based
console gaming framework however that dominances ceased in the mid of 90s as Sony
PlayStation beat up Nintendo. Be that as it may, Nintendo returned to gaming field on 19
November 2006 by propelling its fifth home computer game support: Nintendo Wii the
immediate successor of Nintendo GameCube to rival the Microsoft Xbox 360, Sony PlayStation
3 and whatever remains of the seventh-generation video gaming frameworks1. Nintendo Wii
expects to center around more extensive demographic than its rivals with a specific end goal to
make key contrasts from its rivals by building up advancement that joins both invigorating
gaming knowledge and easy to understand for pulling in the already undiscovered segment of the
demographic2. Nintendo deployed a crucial strategy that targeted all consumers even females and
the elderly through low priced products. Everybody in all of the ages even the female and elderly
are occupied with to get Nintendo Wii as their technique was additionally to have low-value
units reasonable to the more extensive scope of clients3. This was influenced conceivable by
bringing down generation to cost technique. With such a fruitful strategy, Nintendo made their
own commercial center that offered esteem development for their clients through cutting down
1 E. Gamble, A. Arthur. Thompson, and Margaret Ann Peteraf. Essentials of strategic management: The quest for
competitive advantage. McGraw-Hill/Irwin, 2013.
2 Satterthwaite, Mark, and John . "Nintendo Co., Inc." Kellogg School of Management Cases 2017 pp. 1-19.
3 Teipen, Christina. "The Implications of the Value Chain and Financial Institutions for Work and Employment:
Insights from the Video Game Industry in Poland, Sweden and Germany." British Journal of Industrial Relations 54,
no. 2 2016 pp. 311-333.

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cost. Despite the fact that Nintendo made enormous progress in the game industry, Nintendo Wii
still has room for more upgrades and improvement. This case gives a review about the historical
backdrop of Nintendo including its fall and rise periods, gives a record of the technical
advancement of Nintendo's diverse age of gaming console and gives full highlights investigation
of the Wii Console Remote and Wii U Gamepad Controller. Regardless of the colossal highlights
of Wii Remote and Wii Game cushion, Nintendo requires more human interface by which
powers the game designers to be more inventive and imaginative, in this manner they felt more
secure with Xbox and Sony PlayStation. In the long run, the Wii gamers will develop asking for
a superior all the more mechanically progressed Wii in terms of HD abilities, designs and
unrivaled gaming knowledge yet keeping up the effortlessness and family approach.
How the external environment might affect Nintendo’ strategy?(5marks)
Political or legal
The political or legal environment is crucial to the success of Nintendo’s strategy. Introduction
or a change in policies will positively affect their stability in the market if these policies create a
favourable political environment for the firm to succeed in the market, however, in cases where
such conditions are not met, it could be futile for the firm’s strategy
Demographic
The firm's strategy is all rounded in the sense that it targets a wider range of the demographic as
compared to most of its competitors. However different regions have different definitives of
their demographic characteristics’ demographic that has increased income distribution rate
accompanied by the size of the population growth rate would be essential for the stability of
Nintendo’s strategy
Global

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increased globalization will be essential for the success of the strategy as the firm can showcase
their products all over the world and regions that wouldn’t be accessible in the 90s. Moreover,
this has led to the development of emerging markets such as China which is crucial to the
success of the strategy due to the availability of untapped market potential
Technological
Increase in technological innovations and advancement will come in hand by boosting Nintendo
current strategy, increasing generation of revenue and development and growth of the firm as
well. Moreover, the penetration of internet globally and its constant increase in accessibility and
affordability will allow the firm to constant making upgrades if need and continuously increasing
the gaming experience for its target consumers in the long haul
Porter’s Five Forces of competition4
Buyers-gaming consumer industries have a moderately high buying power due to the availability
of competitors who have similar products and service that vary depending on the consumer
preferences
Supplier-Suppliers have lost their bargain power mainly due to the fact that Nintendo’s was able
to sort several suppliers after the 2007 global recession. providers have lost their haggling power.
Likewise, because of the solid brand and programming advancement, suppliers tend to find it
difficult to forward coordinate into a contender
Competitors- there are several rivals in the gaming industry especially Sony and Microsoft
where both have good technological capabilities and an efficient response e to market changes.
4 T. Rothaermel. Strategic management. McGraw-Hill Education, 2015.

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Sony targets the premium market has its products are advanced accompanied by high prices.
Moreover, Microsoft has a similar strategy and target market as Nintendo which could be a
headache5 Substitute: PC game Arcade game and Handheld game (Mobile/Tablets) where
android paved a new whole market through the smartphone industry
New Entrants- it is difficult for new firms to emerge and dominate the gaming industry as it
requires huge investment and strong brand and a reputable market position
What are the primary and support activities in the value chain of Nintendo? How did
Nintendo create value for the customer? (10marks)
Nintendo created value for the customer by focusing on the demographic and responding to
market changes. abolishing of cartridges for the optical disk technology led to reductions of the
products prices and the development of new game frameworks that would influence the gaming
industry. Also, the introduction of gaming pads that were compatible with their rivals gaming
console was a big step towards their value chain6. The introduction or the Wii remote offered its
consumers a unique gaming experience. Numerous enhancement and innovation of its products
such as the Amiibo figurines where consumers would choose their favourable characters and
place them in different games that were compatible .also the game developers were given
platforms and motivation to develop more games for Nintendo through a virtual machine
software where those games could be made compatible with other gaming consoles from
different firms.
5 J. Lee, and W.Yu "The Strategic Analysis of Driving Forces Determining Success for a Console Manufacturer in
the Console Market–the Positioning Strategy of Nintendo." 2017.
6 Lin, Yu-Ling, and Ya-Ting Yang. "Players’ Value Structure in Digital Games." Games and Culture 12, no. 1 2017
pp. 72-99.

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What are the tangible resources, intangible resources, and organizational capabilities of
Nintendo? (5marks)
Tangible resources
• Strong cash flow
• factory
Intangible resources
• Strong company management team
• R&D team
• Marketing team
• Suppliers
• Manufacturing process
Organizational capabilities
• Ability to reach economies of scale and produce products at a lower cost than its
competitors in the gaming industry
• Efficient technology innovation and gaming concepts
• Ability to predict the future of the video gaming industry
• Strong branding
Are the internal resources valuable, rare, difficult to imitate, or difficult to substitute
(VRIN) to help Nintendo sustain a competitive advantage? (5 marks)
The firm had resources that were both valuable and rare. Its approach to dealing with its HR, the
way reliance on its history, the social complexity of its group-based improvement made
Nintendo’s reputational and creative resources in-imitable. In an industry where innovation

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created a competitive advantage, it was no wonder Nintendo was so successful thanks to a
competitive advantage over its rivals which further assisted in sharing the gaming industry7
How did Nintendo compete? Could Nintendo sustain a competitive advantage? (5marks)
Nintendo created gaming consoles that were cheap in production which made their prices more
affordable and profitable to them than its competitors who had to regulate their retail prices.
Development of the games are easier and quite cheaper than its competes which makes the
availability of these games to the publishers much faster which gives them an opportunity of
making profits easily, moreover these games are even compatible with its rivals gaming console
which could capture more consumers form them.it had also a constant trend of being able to
predict and adapt to the future and changes in the market, therefore, showing the ability to
sustain a competitive advantage8
7 Osiyevskyy, and M. Amin. "Business Model Design and Innovation in the Process of the Expansion and Growth of
Global Enterprises." In Global Enterprise Management, pp. 115-133. Palgrave Macmillan, New York, 2015.
8 Yamazaki and Kiyohiro. "Competitive Advantages of a Firm without Fundamental Technology: A Case Study of
Sony, Casio and Nintendo." World Academy of Science, Engineering and Technology, International Journal of
Social, Behavioral, Educational, Economic, Business and Industrial Engineering 10, no. 12 2016 pp. 3980-3990.

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Reference list
Gamble, E., Arthur A. Thompson, and Margaret Ann Peteraf. Essentials of strategic
management: The quest for competitive advantage. McGraw-Hill/Irwin, 2013.
Lee, S. J., Grace TR Lin, and W. H. Yu. "The Strategic Analysis of Driving Forces Determining
Success for a Console Manufacturer in the Console Market–the Positioning Strategy of
Nintendo." (2017).
Lin, Yu-Ling, Hong-Wen Lin, and Ya-Ting Yang. "Players’ Value Structure in Digital
Games." Games and Culture 12, no. 1 2017 pp 72-99.
Osiyevskyy, , and Amin M. "Business Model Design and Innovation in the Process of the
Expansion and Growth of Global Enterprises." In Global Enterprise Management, pp. 115-133.
Palgrave Macmillan, New York, 2015.
Rothaermel, Frank T. Strategic management. McGraw-Hill Education, 2015.
Satterthwaite, Mark, and John-Lindell Pfeffer. "Nintendo Co., Inc." Kellogg School of
Management Cases 2017 pp. 1-19.
Teipen, Christina. "The Implications of the Value Chain and Financial Institutions for Work and
Employment: Insights from the Video Game Industry in Poland, Sweden and Germany." British
Journal of Industrial Relations 54, no. 2 2016 pp.311-333.
Yamazaki and Kiyohiro. "Competitive Advantages of a Firm without Fundamental Technology:
A Case Study of Sony, Casio and Nintendo." World Academy of Science, Engineering and
Technology, International Journal of Social, Behavioral, Educational, Economic, Business and
Industrial Engineering 10, no. 12 2016 pp. 3980-3990