1.

4cs Stakeholder Analysis of Nintendo in 2006

Consumers Nintendo found a separate market segment out of the present market segment and devising a radically new strategy, the objective is to get to the non-gamers and create a bigger market, before Satoru Iwata came in, the existing video game market were very complex and difficult to learn or operate and mostly targeted to the younger adults who were mostly male between late 20s and early 30s with disposable income. Like Apple behind HP and Dell who serve a unique segment that includes the graphic design segment. Nintendo also took advantage of a difference in how it sees the market compare with how Microsoft and Sony see the market from which it could be able to draw near a Monopoly Rents. Nintendo finding the under-served segment and catering for its needs making the game very simple and to look like a real life scenarios with comparatively low processor speed, innovative motion control and detector all these feature get the attention of both pre-teens and senior citizen thereby capture the untapped non-gamers.

Company Nintendo as a company unlike other key player (Microsoft & Sony) has been known to specialize in the industry right from beginning in 1889 manufacturing and selling cards.

Considering the industry it operates in Nintendo has been a solid performer and it has recorded a tremendous success since the introduction of WII into the market in November 2006. The company net sales from 2006-2008 recorded 35,596 worldwide, more than Xbox 360 and PS3 added together for the worldwide sale and net income by 2008 also triple what was recorded in 2006 (Exhibit 3 & 11 of case study material). The cash dividends per share also increase from 140 Japanese Yen in 2002 to 390 Japanese Yen in 2006 (2006 Annual report).

Competitors The main two rival to Nintendo Wii is Sonys play station 3 and Microsoft Xbox 360, while the two competitors are producing consoles of stunning power and complexity at relatively high price, Nintendo is keeping the consoles simple and at a very low price a competitive advantage, they (Sony and Microsoft) are following a core gamer audience whereas Nintendo are working for both young and old especially the newcomers to gaming. Therefore, Nintendo strength are in the innovative and simple game play using motion sensitivity devices, available for all age group at affordable ($250) price, for people of variety of economic classes keeping the price of game lowers by cutting cost, could also be double edge sword, Nintedo was unable to do accurate forecast for the demand of wii producing few compare with current demand are some Nintendo weakness. The continue increase in oil price and subsequently shipping price can pose a threats.

Community In all places where the consoles and games were sold, there was no restriction from the government thereby allowing the company to take full advantage to sell their products and have a good market share. Nintendo focused on first party titles and place it top softwares designers at the helm of hardware design coupled with it console simplicity making it easy for the softwares designers to design much variety of games. Therefore, sales of hardware consoles such as wii is directly correlated to the sales of the video game that wii play on them. For instance in March 2008 Nintendo sold 2.7 million copies of super smash Bros Browl game and the video game consoles was sold along with it in the US over Sony and Microsoft combined.

(2) Positioning Map. Perpetual or positioning mapping is a strategic management tool, that is used to plot the inter relationship of customer products, industrial goods, institutions, as well as population. I will be positioning Nintendo wii, Sony Play station, and Microsoft Xbox as products in term of their complexity and price. The complexity parameters for the major three consoles players and their prices have been taken from the case study material, therefore its assumed that a research has been done to arrive at those data.

+High(Price)

o o

Microsoft Xbox Sony Play station

Young Male{18
above} dominant

Low(Complexity) +High(Complexity)

50 Above <18 Female Population

Nintendo Wii

-Low(Price)

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The target consumer segments for the perpetual or positioning map were based on gamers Age ranging from:

Under 20 Between 21 30. Between 31 49. 50 and above.

The existing consumers segment as describe in question one are mainly late teens and young adults population who preferred complex or more sophisticated and violent games therefore, they decided to put their tent at that side with Microsoft (Xbox) and Sony (Ps3) serving this category of people. Nintendos president Satoru Iwata observed that the complexity of video game has been a treats to some potential consumer segment that comprises of Age below 18 years and above 50 years, also female population, Nintendo having these various market trends and data, decided to manufacture a simple, easy to operate and install consoles with different features that cater for all sets of population more of a family friendly. Having said that, looking at the perception or position map above there is an opportunity in low price/high complexity sector and also high price/low complexity sector although definitely there will be more people that will like the complex or sophisticated consoles that can be purchase at a low price this market segment is free for new entrant.

(3) Nintendos marketing Mix Strategies for the Wii

Product The success of Nintendo Wii can be attributed to a wide variety of age groups that the product is designed to cater for and as well it simple console, having these groups of people in mind they(Nintendo) redesigned the controller to be easy to use and to create a real life situation rather than fantasies. The wii have a wand like controller that look like a TV remote(called wii-mote)and a motion detectors that translate the movement of the ward into on-screen action, together with a port to allow for a variety of controller add-ons to be used, the product also helped to expand exergaiming which involve a combination of on screen action and physical exercise, wii was also made to be compatible with all previous games i.e. backward compatibility, it could also be connected to the internet for online news and weather updates and download different classic games. Thus, they could be able to recoup back the expense with a lower volume sale.

Price Nintendo lower cost-hardware and it focused on effect that required lesser HD space enable them to develop wii games at a price about half of what was expend on Xbox and Ps. Nintendos focus on in-house titles also have a direct impact on it revenue, while Microsoft and Sony were hoping on a profit from only software sales Nintendo made profits from both software and hardware. In US and Europe alone where the wii retail price was higher, a gross profit margin of US $49 per console was recorded (Exhibit 11 from case study) at the same period Sony Ps3 resulted in a unit loss of about US $306.85 excluding packaging, controller and cables while Microsoft was also estimated to have loss US $125 per console. Nintendo wii sold at $250 compare with Microsoft Xbox which was sold at $399 and Sony Ps3 at $499 and in order for them (the competitors) to increase their sale they continue to cut down their price, Sony Ps3 cut by $100 in August, Microsoft also slash the Xbox360s price by $100 and Nintendo although know to have a stable price also join by reducing it price by $50 in September.

Place Nintendo Wii was first announced in April 2006 although people believe it will be name Revolution but instead Nintendo announce that its new console would be called wii sounds like we, meaning it was specifically designed for everyone to enjoy, November 19, 2006 the console was released many people were anxious to get their hands on Nintendos capable, fun and affordable console, the massive demand create a tension in the market place, as Nintendo could not meet the ever increase population of people looking for wii, Each week, consumer call the major retailer outlet like GameStop, wal-mart stores and target to find out if the wii was available and often the same response was received, this problem could not be trace to lack of enough retailer outlet because Nintendo have enough distribution channel the only thing that could be responsible for that could be shortage of production materials and fair of what happen in DS era, therefore Nintendo could not be able to forecast demand appropriately, Although some people believed that Nintendo could deliberately create the scarcity to make wii more important but there is no evidence to support the claim. The situation remain the same for more than two years despite increase in production and 48 million units almost twice the Xbox 360 was sold after wii was release, At last by the end of 2009 the wii was available for those who want to pick one in the retailer store.

Promotion Moved away from traditional approach ways of advertizing or mass media campaigns used by Sony and Microsoft, Nintendo adopted the word-of-mouth strategy. The company employs or recruited some specially selected housewives to spread the Gospel of wii to friends and family telling them is a game they will all enjoy together, wii was also made to feature in youTube and other social networking sites this approach was very effective for Nintendo wii. Other sales promotion was also employed by Nintendo one of it was the Hungry Jacks promotion where kids can enter into a draw to win a DS lite and New super Mario Bros, special discount on sales, Kiosk was also put at strategic location to showcase wii features.

(4) If you were the VP of marketing for Microsoft how would you respond to the wii?

When Microsoft enter the videos game business in 2001 its determination was to capture the top spot in the market thereby coming up with the Xbox 360 in November 2005 they actually recorded a success to came second behind Sonys Ps2, however when Nintendo enter the market with the wii, people begging to see video game industry in a different perception from what it used to be both young and adult including non-gamer are more interested in entertaining themselves with wii, in a short term measure in addition to the existing Microsoft consoles and games, we would start the development of a simple consoles easy to lean and design it with the intension to capture all age groups and gender for large market shares while, in a long term measure I will add more value to the output from the short term measure above especially in the area the competition (Nintendo wii) is having issue with consumer or customer and improve on it, often people complain about wii controller having problem although Nintendo open a complain site where customer can submit their complain for possible replacement, we would possibly improve on the controller and it detector or make use of an in-built camera to rather capture the movements of players in 3D and 4D ways, therefore, the whole body can now serve as your controller eliminating the joy strike with this a new customer segment that preface something better than the controller and joy stick can be created.

Bibliography

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