Macro environment is said to be the most general layer of the environment. This consists of broad environmental factors that have an impact on the organization. The PESTEL framework helps us to identify the future trends which might impinge on Nintendo and therefore identify the key drivers of change. On the other hand the five forces framework helps to understand how the competitive dynamics within and around the video game industry are changing. PESTEL Framework:
This categorizes environmental influences into six main types: political, economic, social, technological, environmental and legal. Political:
Factors such as taxation policies, foreign trade regulations and social welfare policies influence the video game industry. Video games have a tendency to play with the emotions of people which inturn can threaten peace and law, a country being multicultural. Therefore Government has the authority to control the contents of the video game frames.
Places such as US and Japan are largely dominated by the video game business. Therefore contributing towards the GDP of their countries. Interest rates have not much impact on the video game business as they manufacture their own units. The disposable income of the consumers in the video game industry has an effect on their buying behavior. For example people who fall under a low income range may not afford to buy a video game of a high price. Nintendo’s low manufacturing cost was also one of the reasons for it to sell its games at a nominal price, therefore increasing its sales.
The social factors that influence the video game industry are population demographics, income distribution, lifestyle changes, social mobility, attributes to work, consumerism, level of education and consumer behavior. Nintendo’s action to open the World of Nintendo showrooms was to attract and influence customers and show interest towards fulfilling the customers'...
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