Nintendo Wii: Wii are Family: Gaming for Non-Gamers is the Name of the Game (Essay Sample)

Nintendo Wii: Wii are Family: Gaming for Non- Gamers is the Name of the Game
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Table of Contents
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Introduction  PAGEREF _Toc405810406 \h
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Question 1(a): SWOT Analysis  PAGEREF _Toc405810407 \h
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Strengths  PAGEREF _Toc405810408 \h
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Weaknesses  PAGEREF _Toc405810409 \h
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Threats  PAGEREF _Toc405810410 \h
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Opportunities  PAGEREF _Toc405810411 \h
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Question 1(b): Communication Effects and Communication Objectives  PAGEREF _Toc405810412 \h
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Question: 2(a) Positioning Strategies and Positioning Tools  PAGEREF _Toc405810413 \h
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Question 2(b): Brand Narrative  PAGEREF _Toc405810414 \h
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Question 2(c): Brand Encounters  PAGEREF _Toc405810415 \h
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Question 2(d): Brand Conversations  PAGEREF _Toc405810416 \h
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Conclusion  PAGEREF _Toc405810417 \h
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Bibliography  PAGEREF _Toc405810418 \h
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Table of Figures
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Figure 1: Nintendo Wii Advertisement  PAGEREF _Toc405807626 \h
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Figure 2: Nintendo Wii Advertisement  PAGEREF _Toc405807627 \h
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Figure 3: Nintendo Wii Advertisement  PAGEREF _Toc405807628 \h
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Introduction
In 2006, Nintendo went through a difficult patch as it experienced difficulties in its attempt to stave off competition from products like Play Station and X-box. The interactive nature of new gaming products led to the company losing its market share and its ability to generate above average returns. Many analysts believed that the increased popularity of X-box and Play Station would mark the end of Nintendo. However, the company shocked many when it used its internal capabilities and developed a new strategy that enabled it to weather the storm. The purpose of this report is, therefore, to analyze Nintendo’s state in 2006 and the strategies it implemented to get itself out of the doldrums.
Question 1(a): SWOT Analysis
A strength, weaknesses, and opportunities (SWOT) analysis can be an important tool for auditing a company’s state at a given time. One of the most important aspects of this analytical tool is in the fact that it enables a corporation to identify the unique internal capabilities that can aid it in neutralizing threats and taking advantage of opportunities in the market. A SWOT analysis can be instrumental in highlighting Nintendo’s state in 2006.
Strengths
As at 2006, Nintendo’s strengths were its quality employees, its brand, and absolute cost advantages. Quality employees denote the company’s strong human resource base. This is the human resource base that had developed revolutionary products like Mario and Game Boy and, as such, they gave the company the internal knowledge necessary for it to develop revolutionary products. The human resource base also extended to the company’s management and its ability to respond effectively to challenges in the external environment. In 2006, the company faced stiff competition from Microsoft and Sony. However, the foresight of the management enabled the company to wither that storm and develop products that restored Nintendo’s dominance in the gaming industry.
Another source of strength was the Nintendo brand. The brand had been in the gaming industry for a long time and consumers associated it with revolutionary products and services. The brand was also widely recognized and, as such, it enabled the management to use it as an asset for taking advantage of opportunities in the market.
Perhaps Nintendo’s most important strength was that it had access to absolute cost advantages. In economics, absolute cost advantages are the unique cost or profit advantages that a company has over its competitors. These cost advantages can include things like: a company’s ability to use patents as an avenue for controlling proprietary knowledge; a company’s ability to manufacture products at a lower rate; a company’s ability to purchase raw materials at a fraction of the cost that other companies are paying; a company’s ability to transport its goods and deliver them to the target market at a faction of the cost that other companies are incurring; and a company’s ability to anticipate and changes in the industry and the market because of access to superior knowledge bases. The absolute cost advantages arise especially in situations where a corporation has been in an industry for a long time. In the present scenario, Nintendo enjoyed absolute cost advantages that were not available to other competing firms. These absolute cost advantages were instrumental in enabling Nintendo to withstand competition from Microsoft and Sony and curve out a niche at a time when analysts were arguing that there is saturation in the gaming industry.
Weaknesses
Nintendo’s weaknesses in 2006 were: undifferentiated products and late adoption of new technology. The undifferentiated products relates to the fact that Nintendo had products that were not unique in relation to the products that competing firms like Microsoft and Sony were offering. At a time when Microsoft and Sony were offering gaming products and services that were highly interactive, Nintendo was still sticking to its guns and focusing on the traditional products like the Game Boy and Mario. While these products had been in the market and provided entertainment to consumers, their ability to retain that initial buzz was questionable. They were not as interactive as Sony’s Play Station and Microsoft’s X-Box and, as such, their popularity in the gaming world waned. Further, the company did not go out of its way to develop products that were on high demand in the gaming world. Reliance on the traditional products created an opportunity for companies like Sony and Microsoft to surpass them in terms of their competitive edge.
Another important source of weakness was Nintendo’s late adoption of new technology. Although Nintendo had been in the gaming industry for years, its ability to respond to opportunities in the gaming industry was hampered because of its large size and the management’s indecisiveness. Advancements in ICT meant that the companies had a new opportunity to develop interactive products, but it failed because of its large size and the management’s indecisiveness. Thus, late entrants into the industry like Microsoft took advantage of the opportunities that ICT had afforded and developed products that were more advanced than Nintendo’s Game Boy. This move enabled Microsoft to wrestle Nintendo’s market share away from it. Additionally, Nintendo’s incapacity to integrate new technology into its products made it easier for Sony to wrest its market share away from it through the Play Station. The interactive nature of Sony’s Play Station meant that consumers in the gaming world were not interested in Nintendo’s products and the result was a dip in the company’s market share.
Nintendo’s negative attitude toward innovation is summed up in a statement in a 2006 annual report in which the management decries the risks of the authorization of R&D outlays. The management argues that although it has invested heavily in the development of new computer-based entertainment products, the process of developing the new products was laden with uncertainties. The company argues that these uncertainties relate to the fact that there was no guarantee that the market would accept its products. Thus, it informs its shareholders that it is actively contemplating aborting or suspending the development of some of its new products. Such a statement demonstrates that the development of new products was not Nintendo’s primary concern and it highlights how it was the main factor that led companies like Sony
Indeed, Nintendo acknowledges this fact in its 2006 annual report when it argues that the video game industry is a threat to its long-term survival. In the annual report, Nintendo argues that the development of video games has provided consumers with an alternative to its products and, as such, there was a risk that a shift in consumer preferences would spell doom to Nintendo’s business plan. It argues that most of its competitors are reaping benefits because they took advantage of technological innovations and that their success means that Nintendo’s survival prospects will be in jeopardy. Such statements are an indication that Nintendo’s management was acknowledging that it had not acted fast enough to take advantage of technological advancements and it was paying the price (Nintendo, 2006). The management seems to be at their wits end because they are informing consumers that they lack the means to respond effectively to their competitors’ actions.
Threats
The threats to Nintendo’s long-term prospects mainly emanated from competition. Competing firms like Microsoft and Sony introduced new products that were substitutes to Nintendo’s gaming products. Sony and Microsoft’s video games led to a shift in consumer preference and the result was that Nintendo was losing its grip on the gaming industry. As the company notes in the 2006 annual report, the introduction of alternative gaming products by competing firms has significantly undermined ...