Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo
Nintendo must make some important decisions related to the launch and design of the successor to its 16-bit Super NES console. A rewritten version of an earlier case. This is part of a case series examining the competitive dynamics in the home video game industry from 1970 into the new millennium.
Swot Analysis of "Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo" written by Peter J. Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nintendo Nes facing as an external strategic factors. Some of the topics covered in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo case study are - Strategic Management Strategies, Competitive strategy, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nintendo Nes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nintendo Nes operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo can be done for the following purposes –
1. Strategic planning using facts provided in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo case study
2. Improving business portfolio management of Nintendo Nes
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nintendo Nes
Strengths Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nintendo Nes in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo Harvard Business Review case study are -
Analytics focus
– Nintendo Nes is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Peter J. Coughlan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Nintendo Nes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nintendo Nes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Nintendo Nes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Nintendo Nes is present in almost all the verticals within the industry. This has provided firm in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Nintendo Nes has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Nintendo Nes has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Nintendo Nes is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nintendo Nes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Nintendo Nes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Nintendo Nes is one of the leading recruiters in the industry. Managers in the Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Nintendo Nes in the sector have low bargaining power. Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nintendo Nes to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Nintendo Nes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nintendo Nes has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Nintendo Nes is one of the most innovative firm in sector. Manager in Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo are -
Slow decision making process
– As mentioned earlier in the report, Nintendo Nes has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nintendo Nes even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Nintendo Nes is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nintendo Nes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nintendo Nes to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nintendo Nes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Nintendo Nes has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nintendo Nes has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nintendo Nes 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Nintendo Nes, firm in the HBR case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Nintendo Nes has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Nintendo Nes has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo HBR case study mentions - Nintendo Nes takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nintendo Nes supply chain. Even after few cautionary changes mentioned in the HBR case study - Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nintendo Nes vulnerable to further global disruptions in South East Asia.
Opportunities Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo are -
Building a culture of innovation
– managers at Nintendo Nes can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nintendo Nes to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nintendo Nes to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Nintendo Nes to increase its market reach. Nintendo Nes will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nintendo Nes in the consumer business. Now Nintendo Nes can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Nintendo Nes can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Leveraging digital technologies
– Nintendo Nes can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nintendo Nes can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nintendo Nes can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nintendo Nes in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nintendo Nes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Nintendo Nes can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nintendo Nes can use these opportunities to build new business models that can help the communities that Nintendo Nes operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Nintendo Nes has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nintendo Nes is facing challenges because of the dominance of functional experts in the organization. Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nintendo Nes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nintendo Nes in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Nintendo Nes demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nintendo Nes.
Increasing wage structure of Nintendo Nes
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nintendo Nes.
Shortening product life cycle
– it is one of the major threat that Nintendo Nes is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nintendo Nes needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Nintendo Nes has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nintendo Nes needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Nintendo Nes high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Nintendo Nes needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo, Nintendo Nes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Nintendo Nes can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Competitive Dynamics in Home Video Games (J): The Next Generation Nintendo is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nintendo Nes needs to make to build a sustainable competitive advantage.