Strategic Management

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Strategic Management of Change BUMGT5926 Scenario Planning

Syafiqa Anneisa Abdullah Navaneeswary Ganesamoorthy Rei Lynn Lim

30089404 30089407 30089392

Presentation Overview (1/2)
•Introduction •Company Profile •Microenvironmental Analysis •PESTLE Analysis •SWOT Analysis •Porter’s 5 Forces Analysis •The Industry Life Cycle •Nintendo’s Key Success Factors

Presentation Overview (1/2)
•Analysis of Key Uncertainties •Analysis of Future Trends •The Scenarios & Implications •Conclusion •References

A Brief History of Video Games Atari to Wii

Introduction (1/2)
• Video games have been around since the 1940s. • Over the decades, game machines continuously evolved to become powerful machines capable of stunning visuals and graphics. • In the mid 2000 to 2007, social media, smartphone and tablet technology entered the gaming scene. • Casual games become the norm attracting previously non-gamers into the market.

Introduction (cont 2/2)
• As the dominant force of the mobile and gaming market, in the next coming 5 years, where does Nintendo see itself competing with threats from smartphones and other gaming platforms taking up its share of the market? • Scenario planning : To make strategic decisions that will be a sound foundation for all plausible and possible future scenarios.

Company Profile (1/3)
• Founded in 1889 in Kyoto, Japan by Fusajiro Yamauchi. • Manufacturer of Hanafuda “flower” cards • Expanded in 1960s by Hiroshi Yamauchi. • Following the crash of the cards business, Nintendo entered the toy industry upon discovering Gunpei Yokoi, a mechanical engineer.

Company Profile (2/3)
• 1970: Yokoi teamed up with Shigeru Miyamoto to create games – The Father of Modern Video Gaming, creator of iconic franchises including Mario, Zelda and Pokemon. • The rest is history.

Evolution of Nintendo Gaming Consoles

Industry Overview (1/2)
• The video game industry is dominated by 3 gaming giants - Microsoft, Sony and Nintendo • Currently at the 8th generation of console production

Industry Overview (2/2)
• U.S. computer and video game software sales grew six percent in 2007 to $9.5 billion – more than tripling industry software sales since 1996. • Halo 3, the best-selling title of 2007, took in more revenue in its first day of sales than the biggest opening weekend ever for a movie ("Spider-Man 3") and the final "Harry Potter" book's first day sales; • On average, nine games were sold every second of every day of 2007 • The average game player is 35 years old and has been playing games for 13 years.

Industry Analysis
• The Microenvironment –C3SPM -Company -Customers -Competitors -Suppliers -Middlemen (Distributors) • The Macroenvironment : PESTLE Analysis

The Microenviroment (1/2)
Suppliers
Nintendo’s suppliers comprised of both hardware manufactuers

and software developers.
Hardware companies supply the various parts, components and provide the technology to manufacture Nintendo’s gaming devices.

Distributors

Online and offline distributors. The retailers: Includes specialised software boutiques, department

stores, electronic stores and hypermarkets.

Customers

Diversified segment of consumers: Students, employees, military troops; seniors and parents.

The Microenviroment (2/2)
Competitors
The main competitors in this industry are Sony, Nintendo and Microsoft, Sony has about 70% share in the market and the latter commands the rest of the market.

Nintendo faces competition from Apple Inc while in the casual gaming market, Facebook is a likely upcoming competitor.

The Macroenvironment PESTLE Analysis (1/2)
Political Factor
Target of political activist concerning controversy about violence in

gamers.
Entertainment Software Rating Board (ESRB) that assigns ratings for gaming content (ERSB, 2012)

Economic Factor

Purchasing behaviour is influenced consumer purchasing power. Console development cycle follows roughly the general computer...
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