SWOT Analysis of Nintendo Co., Ltd.

Cite this

Introduction

SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is an analytical instrument used to evaluate the strategic position of the company. SWOT analysis underlines that the strategy should as best as possible combine the internal possibilities of the company, i.e. the strong and weak aspects of the company, with the external environment, which is partially reflected through the opportunities and threats. In that regard, this paper provides a SWOT analysis of Nintendo Co., Ltd, a multinational corporation with its main headquarters located in Japan, which is specialized in home entertainment, specifically video gaming industry, for the last thirty years (Nintendo “Company History”).

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

Background

The Nintendo Company has been experiencing a large success, which was started with the sales of their latest portable and home consoles, Nintendo DS and Nintendo Wii respectively. Being a specialized in software as well as hardware, the company’s sales reached high numbers outselling their nearest competitors, Sony and Microsoft, where as of 2008, Nintendo sold 24.5 million hardware units of Wii, with corresponding 148.4 software units, and 70 million hardware units of Nintendo DS, with corresponding 369.6 software units (Nintendo “Annual Report 2008”). The need for assessment and evaluation of the company’s position can b caused by the recent decline in sales, where as of July 2009, the net profit of the company fell by 60%, a high percentage, considering the company released several strong titles for both consoles in 2009 (Lugmayr).

SWOT Analysis

Strengths Weaknesses
  1. Revolutionary controlling mechanics, which innovation expanded the home entertainment to non gaming audience, and covering all ages
  2. The largest experience in hardware and software entertainment among the existent strongest competitors
  3. Strong game brands, which guarantees high sales (e.g. Zelda, Mario, Metroid, and others)
  4. High profit maintained through the portable market, and held for the home console market for the past three years since launch
  5. The return from consoles sales started since launching the product (competitors launched their products with losses, since the value of their products was higher than the selling price at launch)
  6. The introduction of Motion Plus, an add-on expanding the motion sensing capabilities of the original hardware.
  7. Strong first-party titles (developed by Nintendo’s own development studios)
  1. Limited technical characteristics of their product compared to competitors
  2. The lack of strong titles as a percentage of the overall games produced
  3. Limited online capabilities (a strong aspect in similar products from competitors)
  4. Small percentage of software taking full advantage for the additional accessory
  5. High percentage of casual titles, priced the same as the highest A titles of the competitors
  6. Weak titles from third-party developers
Opportunities Threats
  1. There is still a large part of non-gamer category of people, to which the product can be appealing
  2. Geographical markets with high potential still unexplored (e.g. China, India)
  3. Expanding online presence
  1. Similar although more advanced technology is being prepared for release by competitors. (motion sensing technologies)
  2. Price drop by competitors
  3. Competitors taking advantage by releasing the next generation of hardware first
  4. Third party developers switching away from Nintendo, due to low profits and decrease in potential audience

Recommendations for Strategies

The recommendations for business strategy can be seen through using the company’s existent strengths to take advantage of the possible opportunities of the company. The first and the logical strategy can be seen through entering the Chinese market. The company is present there through a joint venture with a Chinese company; however, the presence is weak considering the capabilities of the market and the fact that only a portion of the company’s product is available for sale, e.g. Nintendo Wii is not officially distributed in China. The same can be stated regarding the Indian market. In that regard, considering the investment capabilities of Nintendo, and the fact that their latest products are present in the global market for a period over 3 years, entering the market seems logical.

Another logical approach can be seen through taking advantage of the existent high end brands of the company, releasing such products more frequently. In that regard, the company should develop their brands in a way that takes full capabilities of their innovative technology, so that new audience will attracted, as well as keeping the usual appeal of the brand and introducing online capabilities, so that hardcore audience will not switch to other products that have such elements.

Recommendations for Changes

The recommendations for change can be seen through the way weaknesses are minimized and threats are avoided. The main recommendation can be seen through establishing new relations with third party developers, where convincing the developers to develop specific products for their consoles will be an appropriate solution, taking advantage of the specifics of the hardware, rather than providing versions with limited capabilities, considering the capabilities of the hardware. In that regard, providing cuts in licensing fees for development can encourage developers to devote additional efforts to develop for Nintendo.

With the next generation of consoles to be released the company should take advantage of the position of the competition, while focusing to end the lifecycle of their current product on a high note by taking advantage of the recently released accessories, while cutting price at the same time. It can be assumed that the innovations of the competitors will be offered at a higher price at the time of the launch, which with Nintendo cutting price can be seen as an advantage, considering that Nintendo is offering their product for three years.

Conclusion

It can be seen that the decline in the company’s sales is an opportunity for the company to reconsider its strategy, considering that competition is getting stronger and offers stronger products. In that regard, it can b stated that the main approaches can summarized as entering new markets, increasing first-party titles, new relations with third-party developers, expanding online capabilities and reducing the price.

Yes, we can!
Our experts can deliver a custom SWOT Analysis of Nintendo Co., Ltd. paper for only $13.00 $11/page
Learn More
322 specialists online

Works Cited

“Identifying Strengths, Weaknesses, Opportunities and Threats – SWOT”. 2009. Value Based Management.

Lugmayr, Luigi. “Nintendo’s Net Profit Falls by 60% as Wii Sales Decline”. 2009. I4U. Web.

Nintendo. “Annual Report 2008”. 2009. Nintendo.

—. “Company History”. 2009. Nintendo.

Cite this paper

Select style

Reference

BusinessEssay. (2022, August 5). SWOT Analysis of Nintendo Co., Ltd. Retrieved from https://business-essay.com/swot-analysis-of-nintendo-co-ltd/

Reference

BusinessEssay. (2022, August 5). SWOT Analysis of Nintendo Co., Ltd. https://business-essay.com/swot-analysis-of-nintendo-co-ltd/

Work Cited

"SWOT Analysis of Nintendo Co., Ltd." BusinessEssay, 5 Aug. 2022, business-essay.com/swot-analysis-of-nintendo-co-ltd/.

References

BusinessEssay. (2022) 'SWOT Analysis of Nintendo Co., Ltd'. 5 August.

References

BusinessEssay. 2022. "SWOT Analysis of Nintendo Co., Ltd." August 5, 2022. https://business-essay.com/swot-analysis-of-nintendo-co-ltd/.

1. BusinessEssay. "SWOT Analysis of Nintendo Co., Ltd." August 5, 2022. https://business-essay.com/swot-analysis-of-nintendo-co-ltd/.


Bibliography


BusinessEssay. "SWOT Analysis of Nintendo Co., Ltd." August 5, 2022. https://business-essay.com/swot-analysis-of-nintendo-co-ltd/.