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.
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.
Political, economic, socio-cultural, technological, environmental and legal factors of Japan are critically evaluated in this part for making external environmental analysis of Japan.
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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. |
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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. |
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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. |
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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. |
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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 regulations while transporting the services. |
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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. |
(Source: Russo et al. 2014)
While making an effective industry analysis for identifying the overall market position of Nintendo the study has conducted Porter’s five force analysis.
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LOW |
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HIGH |
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HIGH |
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Sony Entertainment, Microsoft |
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MODERATE |
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 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.
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.
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 evaluation the identified opportunities and threats for Nintendo are as follows:
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.
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 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.
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).
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.
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Innovative product designs along with advanced technological services Capital strength of the organization |
Promotional strategy of Nintendo is not very effective for grabbing international customers Customer service providers do not have multi-lingual flexibility |
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To expand business in multinational boundaries To increase the number of target customers |
Competitors’ market threat and high promotional strategy Market fame of Sony entertainment |
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.
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 customers. Financial strength as well as technological strength is the valuable capability of Nintendo.
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.
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.
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