Strategic Management, class F, 2009

Analysis of Nintendos Strategy in 2009: The Ongoing Battle with Microsoft and Sony
By: 1. Andinda Viryadena 2. Hafidz Mulyansyah Putra 3. Philipus Gita Prana Ginting 4. Raden Gami Dramakti 5. Triska Wahyudi 6. Wima Pratama Putra (109 400 252) (109 400 269) (108 400 307) (109 400 282) (109 400 291) (109 400 293)

Manajemen Bisnis Telekomunikasi dan Informatika Institut Manajemen Telkom 2012

Daftar Isi

1. Executive Summary .............................................................................................. 2. Historical Continuum Line of Nintendo .............................................................. 3. Existing Vision, Mission ..................................................................................... 4. External Factors Evaluation (EFE) .......................................................................

3 4 5 5

5. Internal Factors Evaluation (IFE) ......................................................................... 8 6. Longterm Objectives ............................................................................................ 7. Strategist .............................................................................................................. 9 9

8. Strategies Implementation ................................................................................... 16 9. Evaluation ........................................................................................................... 16 10. Lampiran ............................................................................................................ 25

1.

Executive Summary Pada saat ini, persaingan dalam industri video game telah memasuki generasi ke tujuh, dimana pemainnya antara lain Nintendo, Sony dan Microsoft. Dalam industri video game, persaingan terbagi dalam dua segmen yaitu video game console dan video game handheld.

Generation

Handheld Nintendo DS PSP

Console Sony Playstation 3 Nintendo Wii Microsoft Xbox 360

Video game console adalah perangkat elektronik yang didesain untuk digunakan dengan perangkat display eksternal (televisi atau monitor) yang memungkinkan orang untuk bermain segala jenis permainan yang diinputkan pada media eksternal (catridge atau disc). Video game handheld adalah video game portable, perangkat electronic yang ringan, dilengkapi dengan speaker dan memiliki layar yang cukup besar untuk memainkan video game. Persaingan keunggulan pasar dalam segmen video game console dimulai pada tahun 2006 ketika Sony dan Nintendo meluncurkan generasi console terakhir mereka (Palystation 3 dan Wii) untuk bersaing dengan Microsoft Xbox 360 yang lebih awal memasuki pasar pada tahun 2005. Sedangkan pada segmen video game handheld, dua pemain utamanya adalah Nintendo Dual Screen (DS) dan Sony Playstation Portable (PSP).

Nintendo Company Ltd merupakan salah satu pemain utama dalam industri video game. Sejarah Nintendo dimulai sebagai perusahaan playing card pada tahun 1889. Pada tahun 1970, Nintendo mulai memproduksi mainan elektronik seperti video game Donkey Kong yang dapat dimainkan dengan memasukkan koinke dalam mesin. Saat ini Nintendo telah memasuki pasar video game handheld dan console. Pada segmen video game handheld, Nintendo telah menjual 107 juta unit di seluruh dunia hingga Juli 2009. Tapi produk utama Nintendo adalah Wii yang mulai diperkenalkan tahun 2006 dengan remote control yang sangat inovatif menggunakan wireless. Penjualan mencapai 51 juta unit hingga Juli 2009.

2. Historical Continuum Line of Nintendo

1889

1983

1990

1996

2001

2006

2009

Description: 1889: The playing card manufacturer founded in 1889 in Kyoto, Japan, known as the Nintendo Company Ltd 1983: Nintendo launched the Nintendo Entertainment System (NES) 1990: Nintendo launched the Super Nintendo Entertainment System (SNES) 1996: Nintendo launched Nintendo 64 (N-64) 2001: Nintendo launched Nintendo Game Cube (GCN) 2006: Nintendo launched Nintendo Wii 2009: Nintendo Wii wass expected to report a loss performance in sales * red line: discussion in this paper

3.

Existing Vision, Mission : to be an evolutionary improvement video game in the world. (C-95) : Change the way people play video games by providing an entirely different

Visi Misi

video game playing experience that would be less intimidating to casual gamers and to people who had not previously video games. (C-95)

4.

External Factors Evaluation (EFE) 4. 1 Organizations External Opportunities and Threats a. Opportunities 1) Retail price of PS 3 about $ 499 to $ 599 (C-95) and Xbox about $ 299 to $ 399 (C-103). PS3 was generating $ 250 loss with each unit sold when the systems were first launched Economic of scales still low 2) The concept, design, and functionality of rival video games console had become increasingly similar and offered similar game playing experience. (C-101) The competition is price oriented and the market had become more saturated 3) Gaming systems had become extremely technologically complex (C-101) large quantity of consumer who were either enable to learn or uninterested in learning such advances systems for recreational entertainment. 4) Another society (families, mom, grandpa) can not figure out an interactive game with awesome graphic in a few minutes (C-102) video game industries cant reach all market segments 5) Gaming console industry in sixth generation only has 4 dominant player include Sega Dreamcast, Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104). Barriers market to entry is high. b. Threats 1) Nintendo declining sales and market share against the wildly popular PS2 and the modesty popular Xbox (C-95) increasing in competitor performance 2) International recession in 2007 decreasing in consumer ability to buy 3) High graphic capabilities of Sony PS 3, because the only game console including 108p HD resolution and HD Bluray optical drive (C-95). Sony

developed PSP with great multimedia capabilities, connectivity with PS3 and other PSP console through internet connectivity (C-103) competitor is an hitech company 4) Sega Dreamcast introduced internet gaming as a standard feature through its built-in modem and a corresponding web browser competitor is an hitech company 5) The increase in the number of competitor, consolidation, and the continuous development of new product (C-102) increasing in competition among the rivalry 6) Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game with near in cost and provide small switching costs (C-99) threat of subtitute is high (C-103)

4. 2 External Factors Evaluation (EFE) No Opportunity 1 Retail price of PS 3 about $ 499 to $ 599 (C-95) and Xbox about $ 299 to $ 399 (C-103). PS3 was generating $ 250 loss with each unit sold when the systems were first launched 2 The concept, design, and functionality of rival video games console had become increasingly similar and offered similar game playing experience. (C-101) 3 Gaming systems had become extremely technologically complex (C-101) 4 Another society (families, mom, grandpa) can not figure out an interactive game with awesome graphic in a few minutes (C-102) 5 Gaming console industry in sixth generation only has 4 dominant player include Sega Dreamcast, Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104). Threat 1 Nintendo declining sales and market share against the 0.11 4 0.44 0.06 1 0.06 0.13 3 0.39 0.06 2 0.12 0.15 4 0.6 0.08 4 0.32 Key External Factor W R WS

wildly popular PS2 and the modesty popular Xbox (C-95) 2 3 International recession in 2007 High graphic capabilities of Sony PS 3, because the only game console including 108p HD resolution and HD Bluray optical drive (C-95). Sony developed PSP with great multimedia capabilities, connectivity with PS3 and other PSP console through internet connectivity (C-103) 4 Sega Dreamcast introduced internet gaming as a standard feature through its built-in modem and a corresponding web browser (C-103) 5 The increase in the number of competitor, consolidation, and the continuous development of new product (C-102) 6 Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game with near in cost and provide small switching costs (C-99) 1.00 3.01 0.06 1 0.06 0.10 4 0.40 0.06 2 0.12 0.12 0.07 3 2 0.36 0.14

4. 3 Competitive Profile Matrix

no Critical Succes Factor 1 Advancement in Technology 2 3 Price and Strategy Research and Development 4 Quality and Innovation of Gaming Accessories (ex. Games, remotes, etc) Total

Weight 0.20

Nintendo Rating 1 Score 0.20

Sony Rating 4 Score 0.80

Microsoft Rating 4 Score 0.80

0.26 0.24

4 2

1.04 0.48

1 4

0.26 0.96

2 4

0.52 0.96

0.30

0.60

0.60

0.30

1.00

2.32

2.62

2.58

5.

Internal Factors Evaluation 5. 1 Organizations Strengths and Weaknesses a. Strengths 1) Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted segmented of population (C-101). Nintendo has experienced market analyst 2) Gross profit margin 0.42 in 2005 (C-98) every single sale, resulting net profit 0.42 times of the gross profit efficiency in production 3) Current ratio 4.83 in 2005 (C-99) high ability to pay off the loan b. Weaknesses 1) Value of total debt to total assets 0.18 in 2005 (C-99) the financial business area was hard to get the loan 2) Nintendo gamecube was lacked many of the graphics capabilities than Microsoft Xbox and Sony PS2 (C-100) weak technology research and development 3) Loss in other non operating income -17.8 millions in 2005(C-98) marketing division couldnt sell more non-main product 4) Selling expense to gross profit ratio 0.48 in 2005 (C-98) marketing expense was high

5. 2 Internal Factors Evaluation (IFE) No Strength 1 Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted segmented of population (C-101). 2 3 Gross profit margin 0.42 in 2005 (C-98) Current ratio 4.83 in 2005 (C-99) 0.14 0.12 2 2 0.28 0.24 0.15 4 0.60 Key Internal Factor W R WS

Weaknesses 1 2 Value of total debt to total assets 0.18 in 2005 (C-99) Nintendo gamecube was lacked many of the graphics capabilities than Microsoft Xbox and Sony PS2 (C-100) 3 Loss in other non operating income -17.8 millions in 2005 0.08 1 0.08 0.17 0.18 3 2 0.51 0.36

(C-98) 4 Total Selling expense to gross profit ratio 0.48 in 2005 (C-98) 0.16 0.10 4 0.64 2.71

6.

Longterm Objectives 6. 1 Change the way people play video games (C-98) 6. 2 Come up with a unique games interface (C-101) 6. 3 Attract people who generally did not playing video games (C-101)

7. Strategist 7. 1 IE Matrix a. Profile Revenue in 2005 Profit in 2005 EFE IFE : $ 5,098.4 : $ 865.4 : 3.01 : 2.71

The EFE total weighted scores The IFE total weighted scores 4.0 4.0 3.0 2.0 1.0

3.0

2.0

1.0

b. The strategies possibility

no 1

Concervative Strategies Market penetration

product Equal

market Equal

consideration

possibility

Market Development

Equal

Vary

Product Development

vary

Vary

Gaming systems had Low become extremely technologically complex and weak technology research and development video game industries High cant reach all market segments The competition is High price oriented and the market had become more saturated

7. 2 SPACE Matrix a. Matrix Ratings +3 +2 +4 +5 +3 total Industry Strength 1 Another society (families, mom, grandpa) can not figure out an interactive game with awesome graphic in a few minutes (C-102) 2 Nintendo declining sales and market share against the wildly popular PS2 and the modesty popular Xbox (C-95) 3 The increase in the number of competitor, consolidation, and the continuous development of new product (C-102) 4 Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game +3 +3 +1 +2 +17

Financial Strength 1 2 3 4 5 Return on invesment (ROI) 8% in 2005 (C-99) Total debt to total asseets ratio 18 % in 2005 (C-99) Current ratio 4.83 in 2005 (C-99) Gross profit 42% in 2005 (C-99) Total assets turn over 0.45 in 2005 (C-99)

with near in cost and provide small switching costs (C-99) total Environmental Stability 1 Gaming systems had become extremely technologically complex (C-101) 2 Retail price of PS 3 about $ 499 to $ 599 (C-95) and Xbox about $ 299 to $ 399 (C-103). PS3 was generating $ 250 loss with each unit sold when the systems were first launched 3 Gaming console industry in sixth generation only has 4 dominant player include Sega Dreamcast, Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104). 4 The concept, design, and functionality of rival video games console had become increasingly similar and offered similar game playing experience. total Competitive Advantage 1 Declining sales and market share against the wildly popular PS2 and the modesty popular Xbox (C-95) 2 Nintendo gamecube was lacked many of the graphics capabilities than Microsoft Xbox and Sony PS2 (C-100) 3 Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted segmented of population (C-101). 4 Nintendos product was less expensive (C-100) total ES = -12 : 4 : -3.00 : -3.50 : +2.25 : +3.40 X axis : Y axis : CA + ES + IS : -3.50 + 2.25 FS : -3.00 + 3.40 -2 -14 : -1.25 : + 0.40 -2 -5 -5 -12 -4 -3 -1 -4 +9

CA = -14 : 4 IS FS = +9 : 4 = +17 : 5

b. Strategy Profile

FS

(-1.25, 0.4)

CA S

IS

c. The strategies possibility

ES

no 1

Concervative Strategies Market penetration

product Equal

market Equal

consideration Gaming systems had become extremely technologically complex and weak technology research and development video game industries cant reach all market segments The competition is price oriented and the market had become more saturated Nintendo declining sales and market share against the wildly popular PS2 and the modesty popular Xbox (C-95)

possibility Low

Market Development

Equal

Vary

High

Product Development

vary

Vary

High

Related Diversification

Valuable crossbusiness strategic fit

high

7. 3 SWOT Matrix

Strength 1. Nintendo marketers carefully analyzed rival product, trends in the video game marketplace, and their targeted segmented of population (C101). 2. Gross profit margin 0.42 (C-98) 3. Current ratio 4.83 (C-99)

Weaknesses
1. Value of total debt to total assets 0.18

(C-99)
2. Nintendo gamecube was lacked many

of the graphics capabilities than Microsoft Xbox and Sony PS2 (C-100) 3. Loss in other non operating income 17.8 millions (C-98) 4. Selling expense to gross profit ratio 0.48 (C-98)

o p p o r t u n i

1. Retail price of PS 3 about $ 499 to $ 599 (C95) and Xbox about $ 299 to $ 399 (C-103). PS3 was generating $ 250 loss with each unit sold when the systems were first launched 2. The concept, design, and functionality of rival video games console had become increasingly similar and offered similar game playing experience. (C-101) 3. Gaming systems had become extremely

a. Do market research to identify the demand of another society or market (S1, O4) b. Retain or decrease production costs to get economic of scale (S2, O1) c. Increase liabilities to developing new product (S3, O2, O4)

a. Develop new console game with simple way to play but interesting (W2, O4, O3) b. Do integral or horizontal integration or related diversification (W3, O5) c. Decrease selling expense to get lower price (W4, O2)

t y

technologically complex (C-101) 4. Another society (families, mom, grandpa) can not figure out an interactive game with awesome graphic in a few minutes (C-102) 5. Gaming console industry in sixth generation only has 4 dominant player include Sega Dreamcast, Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104).

T h r e a t

1. Nintendo declining sales and market share against the wildly popular PS2 and the modesty popular Xbox (C-95) 2. International recession in 2007 3. High graphic capabilities of Sony PS 3, because the only game console including 108p HD resolution and HD Bluray optical drive (C-95). Sony developed PSP with great multimedia capabilities, connectivity with PS3 and other PSP console through internet connectivity (C-103) 4. Sega Dreamcast introduced internet gaming as a standard feature through its built-in

a. Do market research to forecast the impact of internet gaming for future (S1, T4) b. Decrease the product price (S2, T1, T2, T6)

a. Sell the company or liquidation (W2, T1, T2) b. Increase technology research and development performance by delegating the competence employee, adding budget allocation, or someways else (W2, T3, T4) c. Change the focus and find another business opportunity that will be Nintendo core product (W2, T1) d. Move some portion in selling budget to research and development budget (W4, T3, T4)

modem and a corresponding web browser (C-103) 5. The increase in the number of competitor, consolidation, and the continuous development of new product (C-102) 6. Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game with near in cost and provide small switching costs (C99)

8.

Strategies Implementation

Strategy that Nintendo choose is a Blue Ocean Strategy. Blue Ocean Strategy suggests that an organization should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-to-head with other competitors in an existing industry. To be an evolutionary improvement video game in the world, Nintendo create Nintendo Wii that was made distinctively different controller activated wireless controller that provided a wide range of motion possibilities and allowed game players to control a games characters through comparable movement of their own. (C-100). Nintendo also simplify its design, focusing less on hyperrealistic graphics and more on artistic elements. And the important thing is Nintendos low cost capabilities. (C-103). This change was more compelling to consumers who had never considered buying video game consoles before.This strategy moved Nintendo into a larger and more diverse market while giving them a large increase in sales and in profit margins.

9.

Evaluation 9. 1 Revised EFE Matrix a. Opportunities 1) Gaming console industry in seventh generation only has 3 dominant player include Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104). Barriers market to entry is high. 2) Nintendo diversify its manufacturing base and formed additional partnership for the manufacturing and supply of key components (C-102) bargaining of power of supplier is low 3) Total units sold of Nintendo Wii in other region only 2.75 millions (C-102) big opportunity to enter other region market 4) The nintendo DS system had achieved about a 70% market share of all handheld video game players. By August 2009, Nintendo had sold more than 107 million DS handheld (C-98) Nintendo DS still succes in the market sales and market share b. Threats 1) International recession in early 2009 (C-96) buyers ability to buy get low

2) Video game industry revenue of $ 1.2 billion during the month of June 2009 were 31% less than the revenues of $ 1.7 billion recorded in June 2008. industry growth decrease 3) PS2 cuts its retail price in early 2009 to be $ 130 per unit (C-104). PS2 was sold more than 50 million consoles in North America at 2008 holiday retail season Economic of scales of PS2 is high and competitive advantage of PS2 increase 4) Sony and microsoft follow nintendo controller (C-96) and cut their production costs (C-106) the competition is price oriented 5) The sales of Nintendo Wii units declined 56% from 5.17 million during the quarter ended June 30, 2008, to 2.23 million during the quarter ended june 30, 2009. increasing in competitor performance 6) High graphic capabilities of Sony PS 3, because the only game console including 108p HD resolution and HD Bluray optical drive (C-95). Sony developed PSP with great multimedia capabilities, connectivity with PS3 and other PSP console through internet connectivity (C-103) competitor is an hitech company 7) Sega Dreamcast introduced internet gaming as a standard feature through its built-in modem and a corresponding web browser competitor is an hitech company 8) The increase in the number of competitor, consolidation, and the continuous development of new product (C-102) increasing in competition among the rivalry 9) Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game with near in cost and provide small switching costs (C-99) threat of subtitute is high c. External Factors Evaluation (EFE) No Opportunity 1 Gaming console industry in seventh generation only has 3 dominant player include Sony PS2, Nintendo Game Cube, and Microsoft Xbox (C-104). 2 Nintendo diversify its manufacturing base and formed 0.08 2 0.16 0.07 1 0.07 Key External Factor W R WS (C-103)

additional partnership for the manufacturing and supply of key components (C-102) 3 Total units sold of Nintendo Wii in other region only 2.75 millions (C-102) 4 The nintendo DS system had achieved about a 70% market share of all handheld video game players. By August 2009, Nintendo had sold more than 107 million DS handheld (C98) Threat 1 2 International recession in early 2009 (C-96) Video game industry revenue of $ 1.2 billion during the month of June 2009 were 31% less than the revenues of $ 1.7 billion recorded in June 2008. 3 PS2 cuts its retail price in early 2009 to be $ 130 per unit (C-104). PS2 was sold more than 50 million consoles in North America at 2008 holiday retail season 4 Sony and microsoft follow nintendo controller (C-96) and 0.08 cut their production costs (C-106) 5 The sales of Nintendo Wii units declined 56% from 5.17 0.07 million during the quarter ended June 30, 2008, to 2.23 million during the quarter ended june 30, 2009. 6 High graphic capabilities of Sony PS 3, because the only 0.05 game console including 108p HD resolution and HD Bluray optical drive (C-95). Sony developed PSP with great multimedia capabilities, connectivity with PS3 and other PSP console through internet connectivity (C-103) 7 Sega Dreamcast introduced internet gaming as a standard 0.06 feature through its built-in modem and a corresponding 2 0.12 2 0.10 2 0.14 1 0.08 0.06 2 0.12 0.10 0.04 4 2 0.40 0.08 0.13 3 0.39 0.07 4 0.28

web browser (C-103) 8 The increase in the number of competitor, consolidation, 0.09 and the continuous development of new product (C-102) 9 Direct subtitutes for the console video game industry are personal computers, arcade machines, and handheld game with near in cost and provide small switching costs (C-99) 1.00 2.22 0.10 1 0.10 2 0.18

9. 2 Revised IFE Matrix a. Strengths 1) Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted segmented of population (C-101). Nintendo has experienced market analyst 2) Gross profit margin 0.43 in 2009 (C-98) every single sale, resulting net profit 0.42 times of the gross profit efficiency in production 3) Value of total debt to total assets 0.30 in 2009 (C-99) the financial business area was easy to get the loan 4) Selling expense to gross profit ratio 0.30 (C-98) marketing expense get low b. Weaknesses 1) Limitation of Wii is limitation of design and user (C-100) and inability to launch new blocbuster game titles to compete with new games introduced for the Sony PS3 and Microsoft Xbox (C-106) weak technology research and development 2) Current ratio 3.04 and cash ration 1.39 in 2009 (C-99) ability to pay off the loan decrease c. Internal Factors Evaluation (IFE) No Strength 1 Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted segmented of population (C-101). 0.19 4 0.76 Key Internal Factor W R WS

2 3 4

Gross profit margin 0.43 in 2009 (C-98) Value of total debt to total assets 0.30 in 2009 (C-99) Selling expense to gross profit ratio 0.30 (C-98)

0.13 0.16 0.14

2 3 1

0.26 0.48 0.14

Weaknesses 1 Limitation of Wii is limitation of design and user (C-100) and inability to launch new blocbuster game titles to compete with new games introduced for the Sony PS3 and Microsoft Xbox (C-106) 2 Total Current ratio 3.04 and cash ratio 1.39 in 2009 (C-99) 0.17 1.00 1 0.17 2.69 0.22 4 0.88

d. Organizational Performance 1) Planning longterm objectives VS Actual longterm objectives

No 1

Planning longterm objectives Change the way people play video games (C-98) Come up with a unique games interface (C-101) Attract people who generally did not playing video games (C-101)

Actual longterm objectives

Nintendo Wii

2) Recommended Strategies VS Actual Strategies No 1 Recommended Strategies Market Development Actual Strategies Nintendo developed a system to attract people who generally did not play video games. This new market segment included population of people who had been disregarded by gaming efforts: the elderly, woman, and so on. (C-101) 2 Product Development Nintendo Wiiquickly became the benchmark for the nintendo product line, bringing together research, innovation, technology, and functionality to create revolutionary bluetooth-activated wireless controller that provided a wide range of motion possibilities and allowed game players to control a games character through comparable movement of their own (C100) 3 4 Related Diversification Do market research to identify the demand of another society or market (S1, O4) 5 Retain or decrease production costs to get economic of scale (S2, O1) Woman are the most untapped market spans a vast swath of the population (C101) Nintendo diversify its manufacturing base and formed additional partnership for the manufacturing and supply of key components (C-102) 6 Increase liabilities to developing new product (S3, O2, O4) Total liabilities increase 180% from $ 2,089.1 in 2005 to $ 5,847.5 in 2009

Do integral or horizontal integration or related diversification (W3, O5)

Decrease selling expense to get lower price (W4, O2)

Selling expense decrease 26% ( 56% of gross profit in 2005 to 30% of gross profit in 2009)

10

Do market research to forecast the impact of internet gaming for future (S1, T4)

11

Decrease the product price (S2, T1, T2, T6)

Wii sold at $ 249

12

Sell the company or liquidation (W2, T1, T2)

13

Increase technology research and development performance by delegating the competence employee, adding budget allocation, or someways else (W2, T3, T4)

14

Change the focus and find another business opportunity that will be Nintendo core product (W2, T1)

15

Move some portion in selling budget to research and development budget (W4, T3, T4)

e. Recommendation no 1 Recommendation Do integral or horizontal integration or related diversification (W3, O5) Consideration Gross profit margin 0.43 in 2009 (C-98) and value of total debt to total assets 0.30 in 2009 (C-99) Nintendo marketers carefully anlayzed rival product, trends Possibility high

Do market research to forecast the impact of internet gaming for future

high

(S1, T4)

in the video game marketplace, and their targeted segmented of population (C101).

Sell the company or liquidation (W2, T1, T2)

Gross profit margin 0.43 in 2009 (C-98) Limitation of Wii is limitation of design and user (C-100) and inability to launch new blocbuster game titles to compete with new games introduced for the Sony PS3 and Microsoft Xbox (C-106)

low

Increase technology research and development performance by delegating the competence employee, adding budget allocation, or someways else (W2, T3, T4)

high

Change the focus and find another business opportunity that will be Nintendo core product (W2, T1)

International recession in early 2009 (C-96)

moderate

Move some portion in selling budget to research and development budget (W4, T3, T4)

weak technology research and moderate development and nintendo has experienced market analyst

Continue to launch innovative product such as the Wii Fit to add the companys already expansive reportoire of gaming possibilities

Nintendo marketers carefully anlayzed rival product, trends in the video game marketplace, and their targeted

high

with console and continue to expand segmented of population (Cthe video game market 101).

Lampiran

Financial Ratio

Formula Liquidation Ratio

3/31/ 09

3/31/ 08

3/31/ 07

3/31/ 06

3/31/ 05

Current Ratio

Current assets -------------------Current liabilities Cash and equivalents

3.04

2.90

2.97

5.58

4.83

Cash Ratio Quick Ratio

1.39 2.78

1.94 2.71

1.47 2.78

3.38 5.41

3.85 4.59

-----------------------Current liabilities Current assets - inventory

------------------------------Current liabilities Current Assets Current liabilities ------------------------------------Total Assets

Working Capital to total assets ration

0.61

0.59

0.58

0.72

0.69

Leverage Ratio Total debt to equity ratio Selling expenses to gross profit ratio Total debt to total assets Times interest earned ratio Pension and other post retirement benefit to total liabilities Activity Ratio Total Assets turn over Fixed assets turnover
sales --------------------Total assets Sales ------------------------------Fixed assets Total debt

0.42

0.46

0.42

0.19

0.22

--------------------------------Total shareholders equity Selling expense

0.30

0.30

0.43

0.58

0.48

--------------------------------Gross profit Total debt -----------------------------Total assets EBIT

0.30

0.31

0.30

0.16

0.18

17.2

11.0

6.65

4.05

8.39

-----------------------Interest Pension

0.01 8

0.00 7

0.00 9

0.01 7

0.022

-----------------------Total Liabilities

1.01

0.92

0.61

0.43

0.45

11.3

10.7

5.34

3.58

3.71

Inventory turn over

Sales --------------------------------inventory

12.7

15.9

10.9

16.5

10.3

Profitability Ratio Gross Profit Margin Operating Income Ratio Net Profit Margin
Gross income ------------------------Sales Operating income ---------------------------------------sales Net income -------------------------------------sales Net income ----------------------------Total assets Net income ----------------------------Total equity

0.43

0.41

0.41

0.42

0.42

0.30

0.29

0.23

0.17

0.22

0.15

0.15

0.18

0.19

0.16

Return on Assets

0.15

0.14

0.11

0.08

0.08

Return on Equity

0.21

0.20

0.16

0.10

0.09