The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo
Details events in the home video-game industry from the late 1970s until the early 1990s. Tells the story of the rise and fall of Atari Corp., the dominant player in arcade and home video games in the 1970s and early 1980s. During this period, Atari became the fastest growing company in the history of the United States, but the wild ride came to a crashing halt in 1983, when the bottom dropped out of the video-game market, partly as a result of Atari's actions (or inaction). Describes Nintendo's revival of the home video game industry in the mid-1980s and its dominance of the market in the late 1980s and early 1990s. Addresses the creation of value by sparking dormant demand and the capture of value relative to other players in the industry. Part of a case series examining the competitive dynamics in the home video-game industry from 1970 into the new millennium. A rewritten version of two earlier cases.
Swot Analysis of "The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo" written by Peter J. Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Atari Video facing as an external strategic factors. Some of the topics covered in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo case study are - Strategic Management Strategies, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, geopolitical disruptions, etc
Introduction to SWOT Analysis of The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Atari Video, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Atari Video 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo can be done for the following purposes –
1. Strategic planning using facts provided in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo case study
2. Improving business portfolio management of Atari Video
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 Atari Video
Strengths The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Atari Video in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo firm has clearly differentiated products in the market place. This has enabled Atari Video to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Atari Video to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Atari Video in the sector have low bargaining power. The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Atari Video to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Atari Video is one of the most innovative firm in sector. Manager in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Atari Video digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Atari Video has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Atari Video has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Atari Video to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Atari Video has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Atari Video 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 Atari Video in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Atari Video are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Atari Video is one of the leading recruiters in the industry. Managers in the The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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.
High switching costs
– The high switching costs that Atari Video 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.
Superior customer experience
– The customer experience strategy of Atari Video in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo are -
Increasing silos among functional specialists
– The organizational structure of Atari Video is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Atari Video needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Atari Video to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Atari Video needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo, in the dynamic environment Atari Video has struggled to respond to the nimble upstart competition. Atari Video has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo HBR case study mentions - Atari Video 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.
Capital Spending Reduction
– Even during the low interest decade, Atari Video 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 bargaining power of channel partners
– Because of the regulatory requirements, Peter J. Coughlan suggests that, Atari Video is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo can leverage the sales team experience to cultivate customer relationships as Atari Video is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo, is just above the industry average. Atari Video needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo, it seems that the employees of Atari Video don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Atari Video has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Atari Video products
– To increase the profitability and margins on the products, Atari Video needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo are -
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. Atari Video 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. Atari Video 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Atari Video can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Atari Video can use these opportunities to build new business models that can help the communities that Atari Video operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Atari Video to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Atari Video 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.
Developing new processes and practices
– Atari Video 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Atari Video 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.
Building a culture of innovation
– managers at Atari Video 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.
Leveraging digital technologies
– Atari Video 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Atari Video 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 Atari Video to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Atari Video can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Atari Video can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Atari Video has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Atari Video to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo are -
High dependence on third party suppliers
– Atari Video 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.
Stagnating economy with rate increase
– Atari Video 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Atari Video can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Atari Video will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Atari Video needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Atari Video can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Atari Video 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Atari Video business can come under increasing regulations regarding data privacy, data security, etc.
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 Atari Video in the Strategy & Execution sector and impact the bottomline of the organization.
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. Atari Video 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Atari Video can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo, Atari Video 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 .
Weighted SWOT Analysis of The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 The Golden Age of Home Video Games: From the Reign of Atari to the Rise of 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 Atari Video needs to make to build a sustainable competitive advantage.
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