Case Analysis: Nintendo & the Wii
Case Analysis: Nintendo and the Wii
Every industry and every company operates within a unique internal and external environment. Because of this there is never one specific strategy that dominates others, even within industries. Determining which strategic direction to take in order to meet goals and achieve a company’s vision is not easy or uniform. For this reason, simply reading about business strategy from a textbook doesn’t give the reader a true sense of real life decisions companies face, or the intuition and results of those decisions. By looking at case studies the reader can gain much greater insight into the inner workings of competitive industries and the way companies and managers actually do things, while at the same time, building his or her analytical skills (Raymond, 1999). In this Case Analysis, I will examine Nintendo’s strategy with focus on the introduction of the Nintendo Wii gaming console. Before looking into Nintendo and its strategic direction let’s focus first on the characteristics of the modern gaming industry. There is a gigantic, steadily growing market for video game consoles: in 2008 about 300 million people played video games on a console system (Thompson, Strickland & Gamble, 2010, p C-218). Due to technological advances in the early 2000s and expanded console capabilities, Americans spent twice the amount of time they did playing video games in 2003 than in 1997 (Thompson, Strickland & Gamble, 2010, p C-218). In 2003 anticipation begun for the newest generation of high definition, highly advanced game consoles to arrive. With this anticipation came a certainty that the global market would expand significantly and that the competitive rivalry between Nintendo, Microsoft and Sony would intensify even further. Up until this point, competition in the industry to gain market share focused solely on developing superior technologies and more powerful offerings than rivals. Sony, Microsoft and Nintendo have been engaged in
Every industry and every company operates within a unique internal and external environment. Because of this there is never one specific strategy that dominates others, even within industries. Determining which strategic direction to take in order to meet goals and achieve a company’s vision is not easy or uniform. For this reason, simply reading about business strategy from a textbook doesn’t give the reader a true sense of real life decisions companies face, or the intuition and results of those decisions. By looking at case studies the reader can gain much greater insight into the inner workings of competitive industries and the way companies and managers actually do things, while at the same time, building his or her analytical skills (Raymond, 1999). In this Case Analysis, I will examine Nintendo’s strategy with focus on the introduction of the Nintendo Wii gaming console. Before looking into Nintendo and its strategic direction let’s focus first on the characteristics of the modern gaming industry. There is a gigantic, steadily growing market for video game consoles: in 2008 about 300 million people played video games on a console system (Thompson, Strickland & Gamble, 2010, p C-218). Due to technological advances in the early 2000s and expanded console capabilities, Americans spent twice the amount of time they did playing video games in 2003 than in 1997 (Thompson, Strickland & Gamble, 2010, p C-218). In 2003 anticipation begun for the newest generation of high definition, highly advanced game consoles to arrive. With this anticipation came a certainty that the global market would expand significantly and that the competitive rivalry between Nintendo, Microsoft and Sony would intensify even further. Up until this point, competition in the industry to gain market share focused solely on developing superior technologies and more powerful offerings than rivals. Sony, Microsoft and Nintendo have been engaged in