4c's Stakeholder Analysis of Nintendo in 2006

1. 4c's 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 Sony's 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 software's designers at the helm of hardware design" coupled with it console simplicity making it easy for the software's 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 it's assumed that a research has been done to arrive at those data.

o Microsoft Xbox

o Sony Play station

 Young Male{18 above} dominant

+High(Complexity) +High(Price)

- Low(Complexity)

 50 Above

 <18

 Female Population

o 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.

Nintendo's 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