In 2015, Nintendo-the iconic Japanese video game company-was faced with the decade-long challenge of responding to an industry that had changed in ways it had not anticipated. Under its new president, Nintendo had to contend with large-scale changes in the global gaming market. By not adapting to changing customer needs, Nintendo had lost the customer loyalty it had once enjoyed, as was evident from the decline in the number of units sold. It faced daunting challenges in the traditional console gaming segment from Sony and Microsoft, as well as more recent threats to its competitive position from the mobile gaming segment, which had become a preferred platform for game developers. Nintendo needed to decide how to revise its business model and strategies to move away from the decline that had been part of the company for years. Could the once-dominant Nintendo connect with its customers as it had done in the past, or was it better off as an acquisition target by a large entertainment company? Andrew Karl Delios is affiliated with National University of Singapore.
Swot Analysis of "Nintendo: Game On!" written by Parul Purwar, Andrew Karl Delios includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nintendo Gaming facing as an external strategic factors. Some of the topics covered in Nintendo: Game On! case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Nintendo: Game On! casestudy better are - – technology disruption, there is increasing trade war between United States & China, increasing energy prices, wage bills are increasing, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Nintendo: Game On!
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nintendo: Game On! case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nintendo Gaming, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nintendo Gaming 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: Game On! can be done for the following purposes –
1. Strategic planning using facts provided in Nintendo: Game On! case study
2. Improving business portfolio management of Nintendo Gaming
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nintendo Gaming
Strengths Nintendo: Game On! | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nintendo Gaming in Nintendo: Game On! Harvard Business Review case study are -
Learning organization
- Nintendo Gaming 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 Gaming is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nintendo: Game On! Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Nintendo Gaming in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Nintendo Gaming is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Nintendo Gaming in the sector have low bargaining power. Nintendo: Game On! has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nintendo Gaming to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Nintendo Gaming 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 Gaming in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Nintendo Gaming is present in almost all the verticals within the industry. This has provided firm in Nintendo: Game On! 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 brand equity
– Nintendo Gaming has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nintendo Gaming to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Nintendo Gaming 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: Game On! HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Nintendo Gaming has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nintendo Gaming 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.
Sustainable margins compare to other players in Global Business industry
– Nintendo: Game On! firm has clearly differentiated products in the market place. This has enabled Nintendo Gaming to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Nintendo Gaming to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Nintendo Gaming 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.
Effective Research and Development (R&D)
– Nintendo Gaming 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: Game On! - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Nintendo: Game On! | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nintendo: Game On! are -
High bargaining power of channel partners
– Because of the regulatory requirements, Parul Purwar, Andrew Karl Delios suggests that, Nintendo Gaming 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.
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 Gaming supply chain. Even after few cautionary changes mentioned in the HBR case study - Nintendo: Game On!, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nintendo Gaming vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Nintendo: Game On! 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: Game On! can leverage the sales team experience to cultivate customer relationships as Nintendo Gaming is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Nintendo Gaming 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.
Low market penetration in new markets
– Outside its home market of Nintendo Gaming, firm in the HBR case study Nintendo: Game On! needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nintendo Gaming is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nintendo: Game On! can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nintendo: Game On! 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 Gaming has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Nintendo: Game On! HBR case study mentions - Nintendo Gaming 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nintendo: Game On!, in the dynamic environment Nintendo Gaming has struggled to respond to the nimble upstart competition. Nintendo Gaming 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: Game On!, it seems that company is thinking about the frontier risks that can impact Global Business 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.
High cash cycle compare to competitors
Nintendo Gaming 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: Game On! | 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: Game On! are -
Using analytics as competitive advantage
– Nintendo Gaming 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: Game On! - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nintendo Gaming to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nintendo Gaming 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, Nintendo: Game On!, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nintendo Gaming can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Nintendo Gaming 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.
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 Gaming in the consumer business. Now Nintendo Gaming can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Nintendo Gaming 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nintendo Gaming in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Nintendo Gaming 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 Global Business segment.
Creating value in data economy
– The success of analytics program of Nintendo Gaming has opened avenues for new revenue streams for the organization in the industry. This can help Nintendo Gaming to build a more holistic ecosystem as suggested in the Nintendo: Game On! case study. Nintendo Gaming can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Nintendo Gaming can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Nintendo Gaming can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nintendo: Game On! 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 Gaming 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nintendo Gaming 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 Gaming 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.
Threats Nintendo: Game On! External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nintendo: Game On! are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nintendo Gaming 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: Game On! .
Shortening product life cycle
– it is one of the major threat that Nintendo Gaming is facing in Global Business 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 Gaming needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Nintendo Gaming has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Nintendo Gaming needs to keep up with the evolution of technology in the Global Business 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.
Stagnating economy with rate increase
– Nintendo Gaming 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nintendo Gaming in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Gaming 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nintendo Gaming can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Consumer confidence and its impact on Nintendo Gaming 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.
High dependence on third party suppliers
– Nintendo Gaming 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.
Increasing wage structure of Nintendo Gaming
– 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 Gaming.
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 Nintendo Gaming business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Nintendo: Game On! 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: Game On! 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: Game On! 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: Game On! 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: Game On! 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 Gaming needs to make to build a sustainable competitive advantage.
