SWOT Analysis Nintendo
Nintendo started back in 1889. Would you believe that the business started by making playing cards? Through the years, the company progressed into the manufacture of toys and games and then ultimately to the manufacture and marketing of electronic games. Early popular products included Nintendo 64, and Game Boy which was introduced in Japan in 2001. Popular current products include Wii fit and derivatives of the DS portable video game player. Would you like a lesson on SWOT analysis?
One of the businesses main strengths is the fact that it is truly global has a geographical presence in most corners of the world. Manufacturing is still primarily undertaking in Japan, although distribution networks exist worldwide. A global business means that the company is not over-reliant on specific markets and therefore its business risk is reduced.
The Nintendo brand and logo is adopted worldwide as a major electronic gaming brand. Just think how far the business has progressed from the Nintendo 64 to the GameCube to the Nintendo DS and finally to the Wii. They have worked themselves into new and interesting segments. For example, the Nintendo DS is ideal for travel as well as a handy device to keep children entertained. The Wii is a family entertainment device and also has niches for keep fit and sports. Ultimately, the devices have become well-known household names.
As you might have noticed by reading other SWOT analyses on the marketing teacher website, such a large supplier and manufacturer is largely dependent on its own supply chain. So if suppliers are overseas then it is more difficult to manage the supply chain, and the business is exposed to currency fluctuations and the economic climates in other parts of the world. The lack of a single key component for whatever reason would be a problem for Nintendo.
Margins are very tight in the gaming industry. You might have heard rumours that the Sony PlayStation 3 is manufactured and sold at a loss. Console and games manufacturers need to make sure that it is their device that is in the home of the consumer.
There are many rumours that Nintendo's margin per unit is low and that this may cause them some financial difficulty.
The main opportunity to games manufacturers lies in the opening of many new small and large segments. Players are getting older and younger. For example, the average age of gamers in the United States is now over 35 years old. As already mentioned, the Nintendo Wii gives the business access to many generations of gamers, regardless of class, culture and income. The gaming industry now churns far more cash than the movie industry, and this is set to continue.
Gaming today happens online. Did you know that more than 500 million homes will soon have access to broadband Internet? That's 500 million gamers ready to buy Nintendo products, potentially. So products, which are Wi-Fi and Internet enabled are going to be popular. Nintendo is in this space, and has a competitively positioned offering.
Who knows where the entertainment industry will go next? If there can be a migration from TV and movies to online gaming, there could also be a new and emerging technology in the future. Also who knows whether consumers will swap from Sony PlayStation, to Xbox, to Nintendo and so on? So consumer choices in the future might change. Nothing is ever certain in business.
The cell phone market saw that consumers wanted new products every year. Now some consumers change their mobile phone at very regular intervals. This would be an example of very sharp and short customer life-cycles. The same will be the case for the gaming industry, with consumers changing their preferences and games changing in popularity, more and more quickly. As soon as one product is in the market , its replacement is off the drawing board being prepared for the shops.
As with all of the global businesses discussed on this website, Nintendo will be exposed to changes in currency values and the global economic climate at that time.
Competitors will be Nintendo's biggest threat. Sony and Microsoft have their own particular competitive advantages which Nintendo will need to offset. These three key players will fight it out over the next few years, although there may be new entrants from China or India as their economies become more consumerist.