Nintendo competitive advantage

INF 220

April 24, 2017

Nintendo’s Source of Competitive Advantage

Introduction

Competitive Advantages

Less Expensive Consoles

Games are easier, quicker and cheaper to develop

Didn’t go HD

Addressing non-consumers with simpler solutions

Continue to think about what comes next

Nintendo makes their consoles cheaper to manufacture which equates to being able to sell the base console a to profit and their competitors have to subsidize the retail price

Nintendo decided not to go HD on the Wii to reach more customers who had not transformed to the HD world yet

Simplicity can be a powerful means of disruption when targeting non-consumers. The ability for anyone to pick up a game and play versus the complexity of PS and XBOX has proven to be a major advantage.

It’s crucial to keep thinking about what the source of sustainable competitive advantage is that will allow the disruptor to fend off the inevitable competitive counterattack.

3

Competitive Advantages

User Friendly Computer Interface

Closed System

Competitive advantage in an underperforming industry

Creativity

Nintendo allows young children to play video games interchangeably without any technical skill whatsoever.

This makes them stand out because this protects the product from competition.

So value creation, those three: the supplier, buyers, and substitutes. That’s the places, those are the ideas, factors that inhibit or allow for the creation of value.

4

Hardware Unit Sales

Consoles

Handheld

Software Unit Sales

Games

Applications

Digital Download Sales

Games

Applications

(sold through online store)

Big Data for Nintendo

-Nintendo uses big data by analyzing hardware and software sales trends to understand customer buying habits

_ Hardware Unit Sales includes the WiiU, New 3DS, 2DS, Amiibo and Nintendo Switch.

With the announcement of their new system the Nintendo Switch Nintendo used big data to evaluate the reactions of the consumer base by analyzing the number of views which were over 20 million views and 95% positive reactions to their new system.

- Using Data Nintendo seeing that Pokemon Go brought and increased interest to the brand, saw this as an opportunity to resell back cataloged games and promote the release of a new pokemon game

-Using Data Nintendo saw an increase in digital download sales over packaged games year to year, but took in consideration that WiiU games sales were down across the board, which explained why they saw a decrease in sales.

5

Nobody said that being a disruptor would be easy. Nintendo shows how a disruptive strategy can pay off handsomely, but also illustrates that in highly competitive markets, competitive advantage is transient.

Conclusion

Everiss, Bruce (2008) Nintendo’s Competitive Advantage. Retrieved from https://seekingalpha.com/article/59142-nintendos-competitive-advantage

Huse, Tim (2010) What Can We Learn from Nintendo? Retreived from https://hbr.org/2010/08/what-can-we-learn-from-ninten

https://www.nintendo.co.jp/ir/pdf/2016/161027_2e.pdf

Nerdster, P., (2017) Nintendo Business Strategy Analysis for 2017 and Beyond. Retrieved from http://professornerdster.com/nintendo-business-strategy-analysis-2017-beyond/

References

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