Nintendo Wii U: Lessons Learned for New Strategic Directions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nintendo Wii U: Lessons Learned for New Strategic Directions
Founded in 1889 in Kyoto, Japan, Nintendo has always operated in the entertainment business, beginning with playing cards and, in the 1970s, entering the electronics and video game industry with a small handheld console. By investing in innovation to ensure continuing delivery of new recreational experiences, Nintendo was dominant until the mid-1990s when the two multinational giants, Sony and Microsoft, entered the market with large investment capital and promotional campaigns. Nintendo competed with these new challengers, but its Wii U and 3DS systems, launched in November 2012, met with little success. In 2014, the company faces many questions as it looks to move forward. Has it lost its innovative edge? Were its strengths in human resources and research and development not being leveraged to their full potential? Can the new strategic directions - to revitalize existing products, take advantage of smart devices, actively utilize existing character IPs and expand into other new markets and other new business areas - successfully revive the traditional dominant position of Nintendo in the game industry? Should it pursue strategic alliances or mergers and acquisitions to acquire required resources and competencies from outside to invest in product and market diversification? Wiboon Kittilaksanawong is affiliated with Nagoya University of Commerce & Business.
Swot Analysis of "Nintendo Wii U: Lessons Learned for New Strategic Directions" written by Wiboon Kittilaksanawong, Gary Gillet includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nintendo Wii facing as an external strategic factors. Some of the topics covered in Nintendo Wii U: Lessons Learned for New Strategic Directions case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nintendo Wii U: Lessons Learned for New Strategic Directions casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, technology disruption, increasing commodity prices, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Nintendo Wii U: Lessons Learned for New Strategic Directions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nintendo Wii U: Lessons Learned for New Strategic Directions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nintendo Wii, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions can be done for the following purposes –
1. Strategic planning using facts provided in Nintendo Wii U: Lessons Learned for New Strategic Directions case study
2. Improving business portfolio management of Nintendo Wii
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 Wii
Strengths Nintendo Wii U: Lessons Learned for New Strategic Directions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nintendo Wii in Nintendo Wii U: Lessons Learned for New Strategic Directions Harvard Business Review case study are -
Training and development
– Nintendo Wii has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nintendo Wii U: Lessons Learned for New Strategic Directions 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.
Operational resilience
– The operational resilience strategy in the Nintendo Wii U: Lessons Learned for New Strategic Directions 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.
Organizational Resilience of Nintendo Wii
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nintendo Wii does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Nintendo Wii U: Lessons Learned for New Strategic Directions firm has clearly differentiated products in the market place. This has enabled Nintendo Wii to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nintendo Wii to invest into research and development (R&D) and innovation.
Learning organization
- Nintendo Wii is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nintendo Wii is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nintendo Wii U: Lessons Learned for New Strategic Directions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Nintendo Wii is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Nintendo Wii is one of the leading recruiters in the industry. Managers in the Nintendo Wii U: Lessons Learned for New Strategic Directions 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 brand equity
– Nintendo Wii has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nintendo Wii to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Nintendo Wii has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nintendo Wii 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.
High switching costs
– The high switching costs that Nintendo Wii 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.
Weaknesses Nintendo Wii U: Lessons Learned for New Strategic Directions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nintendo Wii U: Lessons Learned for New Strategic Directions are -
Workers concerns about automation
– As automation is fast increasing in the segment, Nintendo Wii 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.
Need for greater diversity
– Nintendo Wii has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nintendo Wii U: Lessons Learned for New Strategic Directions, in the dynamic environment Nintendo Wii has struggled to respond to the nimble upstart competition. Nintendo Wii has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Nintendo Wii U: Lessons Learned for New Strategic Directions, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nintendo Wii U: Lessons Learned for New Strategic Directions, it seems that the employees of Nintendo Wii 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 Nintendo Wii 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.
Aligning sales with marketing
– It come across in the case study Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Nintendo Wii U: Lessons Learned for New Strategic Directions can leverage the sales team experience to cultivate customer relationships as Nintendo Wii is planning to shift buying processes online.
Lack of clear differentiation of Nintendo Wii products
– To increase the profitability and margins on the products, Nintendo Wii needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Wii has relatively successful track record of launching new products.
High cash cycle compare to competitors
Nintendo Wii 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.
Opportunities Nintendo Wii U: Lessons Learned for New Strategic Directions | 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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. Nintendo Wii 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 Wii 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nintendo Wii to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Nintendo Wii 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.
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 Wii in the consumer business. Now Nintendo Wii can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Nintendo Wii 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.
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. Nintendo Wii can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nintendo Wii to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Nintendo Wii to increase its market reach. Nintendo Wii 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.
Developing new processes and practices
– Nintendo Wii 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.
Creating value in data economy
– The success of analytics program of Nintendo Wii has opened avenues for new revenue streams for the organization in the industry. This can help Nintendo Wii to build a more holistic ecosystem as suggested in the Nintendo Wii U: Lessons Learned for New Strategic Directions case study. Nintendo Wii can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Nintendo Wii can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nintendo Wii U: Lessons Learned for New Strategic Directions suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nintendo Wii 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.
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 Wii can use these opportunities to build new business models that can help the communities that Nintendo Wii operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Nintendo Wii U: Lessons Learned for New Strategic Directions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nintendo Wii U: Lessons Learned for New Strategic Directions are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nintendo Wii with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Wii has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nintendo Wii 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.
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. Nintendo Wii can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Nintendo Wii
– 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 Wii.
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 Wii needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Nintendo Wii 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nintendo Wii 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 Nintendo Wii U: Lessons Learned for New Strategic Directions .
Regulatory challenges
– Nintendo Wii 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.
Environmental challenges
– Nintendo Wii 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. Nintendo Wii can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Nintendo Wii 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.
Shortening product life cycle
– it is one of the major threat that Nintendo Wii is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Nintendo Wii 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.
Weighted SWOT Analysis of Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Nintendo Wii U: Lessons Learned for New Strategic Directions 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 Wii needs to make to build a sustainable competitive advantage.