Saunders College of Business - Managing Technology
Student id – 592000977
Innovation is a key to success for businesses. It is a reason for almost everything what we see today and that’s why it is also a driving force leading towards a better tomorrow. Technological innovation is responsible for value creation and enhancement for customers and subsequent increased profit margins for the producers in today’s business world. It is learnt as a new idea or a combination of older, known ideas to make entirely new product or develop new process. It is rightly said by Roger Ascham, "Necessitie, the inuentour of all goodnesse."(“Toxophilus”) or ‘Necessity is the mother of Invention’ in its English version. On the one hand, greed of the people or unsatisfied desires for better living standard every next day creates the necessity of newer, better products in the market. On the other hand, competition, better profit margins, saturating product curve and decreasing product demand due to increasing customer requirements are the needs for innovation for producers. In this paper of technological innovation I will discuss Video gamming consoles manufacturing Japanese company Nintendo’s approach towards innovation for its gaming console products line and subsequent factors that have forced the company to continuously innovate with correct understanding of its customers’ requirements. I will also discuss the company’s innovation strategy, its impact on the gaming market and factors that are again forcing the company to rethink its innovation strategy and to come up with newer and better products. Japanese gaming console manufacturing company Nintendo launched its first gaming product Nintendo Entertainment System in 1985. From 1985 to 2001 Nintendo has launched many successful gaming products in the market and did good business. From television compatible gaming console to portable gaming device, Nintendo has invented products that clearly deals with the fun and entertainment requirements of its customers and gained popularity for its products till the end of century. In 2001 Nintendo introduced its new gaming console GameCube that uses optical disc instead of cartridges to read and play games. But increasing popularity of other competitive gaming products launched by Microsoft and Sony forced Nintendo’s market share of video gamming market towards a steep decline. Nintendo had launched new video gaming console GameCube with new innovation of optical discs but due to insufficient number of available compatible games, comparatively poor hardware and strong competitions were forcing early exit of its product. This was the time for the company to come up with a value enhancing product that offers strong customer value enhancing features and characteristics enough to differentiate self from other competitive products in the market. For Nintendo this was the demand pull for better product to survive. During the times in gaming industry when it was believed that the product with faster graphic performance, stronger hardware configurations and latest software can only provide better gaming experience the Nintendo thought differently. Nintendo identified that the most important ‘fun’ factor associated with any gaming product was not dependant only on above said characteristics. This idea was the key to innovation for the company to develop entirely new kind of gaming experience using motion sensitive controls. This was the tipping point for Nintendo when it selected to introduce a new technology instead of investing in improvement of current technologies. This clearly suggests that the right selection of type and degree of change can make significant impact on innovation strategy and subsequent success of the product. With Nintendo’s almost two decade’s gained experience Nintendo took a smart move in its customer centric innovation strategy. In the year 2006 company come up...
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