Phase 1 Report: Strategic Position Analysis




НазваниеPhase 1 Report: Strategic Position Analysis
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Phase 1 Report: Strategic Position Analysis



Industry

Nintendo of America

Organisation Name

Organisation Contact Name

www.nintendo.com

Website URL

Email Address

4820 150th Ave. Northeast

Address

Redmond

City

WA

State / Province

98052

Zip / Postal Code

Individual

Organisation Type

Video Gaming Industry

UNITED STATES

Country

Nintendo of America Inc., established in 1980, is a subsidiary of Nintendo Co. of Japan. They have been the worldwide leader in the creation of interactive entertainment; they have sold more than a billion video games to the world (Nintendo 2010). In 2006, Nintendo created the revolutionary video game console “The Wii". The Wii was designed to attract larger demographic users than other gaming systems. It was, and still, very successful; attracted many people from different ages and it resulted in huge profits since it was created.

Unfortunately, recently attitude of consumers and environment has been changing unfavourably for the Nintendo. This analysis is to reveal the key successful factors that made Nintendo a leader in its industry, touch the weak points or mistakes it has done and recommend some strategies to keep Nintendo a leading player.

Organisation Background

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Organisation Profile


1.1. External Analysis

1.1.1. Pest Analysis

In terms of external analysis, it is critical to assess whether the contextual economic, social, technological, ecological, media, political, legal and ethical aspects are conducive to a specific direction. For instance, is the local government receptive to the concept of private sector participation? How are the relationships between the local government with the communities and the private sector? These are important aspects of the macro environment which will have a general impact on industries and companies. For this purpose, we will use a model called PEST analysis. This helps you to analyse the Political, Economic, Socio-cultural and Technological factors that affect the organisation.

Reason

Rank

Factors

1.1.1.1 Political Factors

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 4 

US is a stable democratic country and has a newly formed government that does not seem averse to the business and the business model.

Government Stability

Taxation, employment and safety law

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 3 

The tax rate for corporations is high in US (35 % for income about) (Financial Times 2010)

Social welfare policies

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 4 

There are regulations and special institutions to ensure high social welfare standards. (USA Embassy 2010)

New restrictive trade policies that specifically focus on products manufactured in US.

 2 

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Foreign trade regulations

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Relations between government and the organisation

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US government has legislation that ensures that the console game industry has to follow a pre-defined set of rules before releasing the consoles to the public. (Chinese Embassy 2010)

 3 

Government ownership of industry and attitude to monopolies and competition policy

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 2 

The US government trade policies are anti-monopolistic and they take a dim view of intensively competitive behaviour.

'Green' issues that affect the environment

 2 

International watchdogs have condemned the green policies of video game manufacturers.

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Level and type of energy consumed - renewable energy?

Video games consume lots of energy since gamers do not usually switch the games off which (Cnet News 2008)

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Rubbish, waste and its disposal

International watchdogs have condemned the green policies of video game manufacturers.

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Others

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 0 

US is a politically stable market for the console industry with some restrictions. However organisations that focus on green policies and energy efficiency take a strong view against the gaming console industry.

Conclusion


Reason

Rank

Factors

1.1.1.2 Economic Factors

Total GDP and GDP per head growth rates (trends)

 4 

The GDP is 14.1 Trillion and the growth rate in GDP is positive but has fallen in the last year due to the financial recession (World Bank 2010)

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Inflation

Inflation percent ranges from 1.00 to 2.50 % in the US market (World Bank 2010).

 4 

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The US consumer has a greater percent of disposable income (Euromonitor 2010).

 4 

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Consumer expenditure and disposable income

Interest rates

 4 

Interest rates in the US market are low.

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US currency in the recent years has been a low yielding currency and its value is fluctuating.

 3 

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Currency fluctuations and exchange rates

The console industry receives healthy investments from private investors.

 4 

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Investment, by the state, private enterprise and foreign companies

During 2008, there was an impression that the video game industry was recession proof, having record sales of US$21 billion in 2008, but growth has slumped in 2009 and 2010.

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 2 

Business cycles

 0 

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Unemployment

Efficient distribution and communication networks in US reduce distributing costs and energy is moderately priced as well.

 4 

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Energy costs, transport costs, communications costs

 0 

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Others

Conclusion

Gaming console industry has proven to be recession proof as it falls under the category of packaged entertainment and relies on the launch period, disposable income and the spare time.




Reason

Rank

Factors

1.1.1.3 Socio-Cultural Factors

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Shifts in values and culture

 5 

Shift in perception of video games from being a hobby only for young children, to an activity for all ages and demographics, such as for families and the older generation.

Change in lifestyle

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 5 

The industry has changed from being confined to an individual solitary experience to a large community and lifestyle

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Consumerism

 5 

The United States is a consumer market; the embodiment of capitalism. They emphasize maximizing disposable income, and personal choice of how they spend their money, productive or otherwise.

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Attitudes to work and leisure

 4 

Americans place a high priority on reaping the rewards of their labour. Despite evidence that Americans on average work more hours than the rest of the world, they have a high priority on their leisure time, which most prominently involves using the television (either watching or playing video games)

Green’ environmental issues

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 2 

Console manufacturers are accused of producing CO2 and being anti environment (GamePolitics 2009)

Education and health

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 2 

Video games are partly being blamed for negative educational and health effects. Studies have suggested that video gaming increases aggression and antisocial behaviour, as well as perpetual claims that increased obesity in children are a direct result of the video game culture. Many states have implemented legislation to protect children from potentially damaging video games (Health Central 2004).





Demographic changes

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 4 

Average age of gamers is 34, 25% under 18, 49% is 18-49, and 26% is 50+ (ESA 2010).

Distribution of income

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 4 

Relatively inexpensive. In reach of many people

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Social mobility

 5 

US has very high social mobility. Video game industry benefits greatly from the entire market's population.

Others

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 0 

Conclusion

Video games have become a part of society and culture, and have been growing rapidly. Due to long stressful working hours leisure time is of importance and people usually resort to either watching Television or play video games.

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