External Analysis
In external analysis we use four different theories which are PESTEL, Porter’s 5 forces, SWOT and Task environment.
But according to me if we use only Porters 5 forces to analyse the Nintendo Wii situation we will get better results because Porter’s 5 forces help to provide the clear picture of where power lies in Nintendo wii business situation.
In our 1 and 2 assessment we didn’t give much importance to porters five forces. But because of the reasons given below tell us that competitive rivalry, bargaining power of customers and threat of new entrants is the important areas for Nintendo wii.
Why??
• The threat of new entrants in the console video games industry is medium. If new game company comes into the market with
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Nintendo wii’s two major competitors, Microsoft and Sony, offer close direct substitutes to Nintendo 's console products. Indirect substitutes to Nintendo video games also exist on the PC and Mac platforms. The console video games industry is currently an oligopoly, with multiple major players all producing effective substitutes. Nintendo is positioned as a price and innovation leader, but other companies are quick to mimic Nintendo innovations (such as with the Xbox Kinect and PlayStation Move motion-control products) and slash prices to encourage substitution in their …show more content…
We did principle concentrate on Business level procedure which is best for Nintendo 's wii in light of the fact that in business-level technique, the client is the establishment. To effectively execute any technique, the business must comprehend the client, including data about sex, age, values, utilization examples and topography. Envisioning the requirements of the client and noting these necessities can give a business favourable position over the opposition. Organizations can progress in the direction of creating so as to fulfil clients methodologies that have worth to the association and the client. An effective technique gives the business cosy information about clients and contenders. This learning can prompt more noteworthy income for the
According to article call “Porter’s Five Forces Model/Strategy Framework” it stated, “The Five Forces Model was developed by Michael E. Porter to help companies assess the nature of an industry’s competitiveness and develop corporate strategies accordingly. “ (Martin, 2014). According to article call “Porter’s Five Forces Model/Strategy Framework” it also stated “The framework allows a business to identify and analyze the important forces that determine the profitability of an industry.” (Martin, 2014). According to article call “Porter’s Five Forces: Analyzing the Competition”. It stated that “
Michael Porter's Five Forces analyze the external and internal environment of a company to increase the awareness of threats and structure of the industry that company competes within. Thus, the Five Forces is an ideal tool which can help companies to maintain their competitiveness with a higher profitability.
The structure of the Video Gaming Industry is comprised of several stages. The first stage is the Development Stage. (3) Currently there are three giants in the gaming world. Microsoft’s Xbox 360, Sony’s PlayStation 3 and, Nintendo’s Wii. For these consoles, there are companies that make agreements to release exclusive games. For example, one company can make games solely for Xbox 360. Another company can make games for a particular series offered by the Platform, such as Mario for the Wii. The most common companies are the ones that create games for all consoles, and have no agreement with any particular console.
Just contrary to Porter’s five forces model, the SWOT analysis deals with both internal and external variables and forces of the company. The main quality of this analysis is that it is helpful in tracing out the real position of the company along with its strengths, weaknesses, opportunities and threats or the self-assessment. Consequently, it offers the company a proper framework to formulate, vision plans, strategies and goals. Here, it should also be assumed that the SWOT analysis includes both internal and external factors, whereas Porter’s five forces model only deal with external factors ignoring the internal factors.
In 1985, the Nintendo of America Company released a revolutionary video game system called the Nintendo Entertainment System or NES. The Nintendo Company who has already been in the video game industry such as laser gaming, electronic video
In the console-gaming world people know Sony and Nintendo. Microsoft may be the largest and richest software company in the world, but it’s unknown when it comes to console gaming. Microsoft is counting on the Xbox to change that perception. Gamers may not be willing to take a chance with the Microsoft Xbox, even if it is far superior to any console ever made. Nintendo Gamecube is nothing if charismatic. Nintendo’s new machine is half the size of any other console and looks like a toy with its brightly colored plastic shell and handle. It’s destined to be home of such popular games as Mario, Donkey Kong, Pikachu, and Kirby. Nintendo Gamecube seems mismatched as it goes up against the Microsoft Xbox and the Sony Playstation 2 (a multimedia mayhem that Sony says it’s supposed to be “The Future Of Entertainment”). All this makes you think; what makes Nintendo believe it can possibly go up against the ultra-sophisticated Xbox.
Nintendo is an entertainment company; not an electronics company. Console sales are inextricably intertwined with games sales. Hardware sales account for a large portion of Nintendo's total sales; however, hardware sales don't drive a large portion of Nintendo's total sales. At Nintendo, the games sell the consoles. Of course, the console itself can affect the game play experience in its role as a
In this study we analyses the company using a S.W.O.T analysis, P.E.S.T analysis and Porter¡¦s Five Forces.
Porter’s competitive forces model includes five forces that need to be analysed. These forces include the intensity of rivalry from traditional competitors, threat of new market entrants, threat of substitute products and services, bargaining power of customers and bargaining power of suppliers (Laudon & Laudon, 2007). See diagram below;
As a result of the increasing demand on Wii, Nintendo’s management decided to make W...
Until the introduction of a “sixth force” in the mid-nineties, the “Porter’s Five Forces Model” as it was originally developed by Michael E. Porter in 1979 explained how “five competitive forces” determine industry attractiveness. Porter opined that in the fight to sustain long-term profitability, a firm must be strategic towards competition, and beyond competition, keep tabs on a broader set of competitive forces; customers who can drive prices down, suppliers who exercise some level of power, new entrants who might come in to compete for profits and substitute products and services that essentially place constraints on the profitability and growth on any industry. With the extension of this model, the sixth force (as shown in exhibit 1) included showed the impact of complimentary products and services on the attractiveness and overall profitability of an industry. In general, the Six Forces model proposes that the underlying structural drivers of any industry determine the performance of the players.
The case study highlighted that the new game Wii introduced by the company had the ability to attract individuals considered non-gamers or casual gamers. The Wii was not as powerful or technologically advanced as the Xbox 360 and the PS3, but its success lies in its ability to provide a new means of playing video games. The innovative design of the Wii’s controller, which had built in motion sensors, created a whole new gaming experience for users - on...
Porter 5 forces analysis is a framework for business management developed by Michael Porter in 1979. It uses concepts developed in Industrial Organization economics to derive 5 forces that determine the attractiveness of a market. It is also known as FFF, Fullerton's Five Forces. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace. The first force is called bargaining power of customers, the second is the bargaining power of suppliers, the third on is the threat of new entrants, the fourth one is the threat of substitute products, all in which influence the fifth force, the level of competition in an industry.
Porter’s five forces is a framework for analyzing an industry and business strategy development. It looks at forces that determine the competitive intensity of an industry and hence the overall attractiveness of that industry. The configuration of the five forces differs by industry. Understanding the competitive forces and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition over time.
The Porter five forces model (see Appendix 1) as an external analysis tool was established by Michael E. Porter and firstly announced in his book “Competitive Strategy: Techniques for Analyzing Industries and Competitors” in 1980 . The main idea of the Porter five forces concept is that the attractiveness of a market depends on the characteristic of the five competitive forces that have an impact on a company (see Appendix 2).