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nintendo and blue ocean strategy
1.
2. Blue Ocean Strategy
(Source: Founded by W. Chan Kim & Renee Mauborgne)
Definition
Metaphor of Red Ocean
Difference
Superiority
3. Red Ocean vs. Blue Ocean
Red ocean strategy Blue ocean strategy
Head-to-head competition Creation of new markets
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off Break the value-cost trade-off
Align the whole system of a firm’s Align the whole system of a
activities with its strategic choice firm’s activities in pursuit of
of differentiation OR low cost differentiation AND low cost
Source: (W. Chan Kim, 2010)
4. Put into A Simple Way
The market that’s
not being
pursued!
7. Implementation of BOS
Launched Nintendo Wii in 2006
Reposition/ Alternative market
Brand association
Sales growth
Industrial revolution
Source: (Gruener, TG Daily, 2009)
8. “While some people put their money on the screen,
we decided to put ours into the game experience”, in an attempt to
“not just improve the market, but disrupt it.”
Nintendo CEO, Satoru Iwata
9. $200 million campaign
AIDA MODEL
• Brand partnerships Catch
• As seen on TV attention Cognitive stage
Stimulate
• Hands-on sampling interests Affective stage
• Feeding the buzz Create desires
Behavioral stage
21. SWOTAnalysis
Nintendo 2011
Strengths
1. Innovative and simple game-play.
2. Target Market = people ages 3-112 !!
3. Affordable, Wii = $250 (PS3 = $599)
22. SWOTAnalysis
Nintendo 2011
Weaknesses
1. Limitation of game on Wii
Violence
3 party companies = Unhappy
90% of Wii games are developed by the 3rd party companies.
2. Nintendo GameCube and Nintendo 64 were not successful.
Hard to predict on Wii’s direction
Too few Wii's
3. Wii VS PS3
Hardcore gamers complain on graphic.
Cut cost is a double-edged sword.
23. SWOTAnalysis
Nintendo 2011
Opportunities
1. PS3 = Sale decreases
Wii = Sale increases
2. Wii VS PS3
- On the same shelves to compete
- Same promotion period
24. SWOTAnalysis
Nintendo 2011
Opportunities
3. Partnership
4. Higher rate cost of living Growth in Total Health Expenditure Per Capita, U.S.
and Selected Countries, 1970-2008
5. Health concern
Source: (Organisation for Economic Co-operation and Development , 2011)
27. Conclusion
Think as a Marketer
Don’t play no game that I can’t win
Gabor George Burt
28. References
• Bold, B. (2011, June 8). Marketing Magazine. Retrieved from
http://www.marketingmagazine.co.uk/news/1073885/Nintendo-deploy-Wii-U-fight-gaming-
share/
• Davies, C. (2010, March 24). Slash Gear. Retrieved from http://www.slashgear.com/iphone-
os-grabs-us-game-market-share-from-psp-ds-2478947/
• Gruener, W. (2009, July 17). TG Daily. Retrieved from http://www.tgdaily.com/trendwatch-
features/43289-nintendo-wii-surrenders-market-share-in-weak-game-console-market
• Gruener, W. (2009, July 17). TG Daily. Retrieved from http://www.tgdaily.com/trendwatch-
features/43289-nintendo-wii-surrenders-market-share-in-weak-game-console-market
• Layton, D. S. (2009, July 6). /blueoceanstrategicplanning. Retrieved from
http://blueoceanstrategicplanning.blogspot.com/2009/07/after-you-define-three-tiers-of-
non.html
29. References
• Moats, B. (2008). Nintendo Wii. Marketing Plan for Marketing Management, 4-12.
• Nintendo Co., Ltd. (2006). Annual Report 2006. Tokyo: Nintendo Co., Ltd.
• Nintendo Co., Ltd. (2011). Annual Report 2011. Tokyo: Nintendo Co., Ltd.
• O’Gorman1, P. (2008). Parmelo Business Review 2008. Wii: Creating a Blue Ocean, The
Nintendo Way, 97-107.
• Organisation for Economic Co-operation and Development. (April 2011). Growth in Total
Health Expenditure Per Capita, U.S. and Selected Countries, Kaiser Family Foundation:
http://facts.kff.org/chart.aspx?ch=1964
• Pethkar, M. (2011, April 13). Strategy Development. Retrieved from
http://strategyatheinz.blogspot.com/2011/04/nintendos-wii-swimming-in-blue-ocean.html
• W. Chan Kim, R. M. (2010). Blue Ocean Strategy. Retrieved from
http://www.blueoceanstrategy.com/abo/4_action.html
Clip Discourse analysisWii = We would like to playWii sounds like 'we', which emphasizes that the console is for everyone. Wii can easily be remembered by people around the world, no matter what language they speak. No confusion.Powerful > We = Everyone…togetherness, family-oriented> ii = Innovative, Interactive, IntelligenceNintendo CEO, Satoru Iwata, hassaid that “While some people put their money on the screen, we decided to put ours into thegame experience”, in an attempt to “not just improve the market, but disrupt it.”13Brand Image
Customer Engagement– when customer bonded with the brand it will create deep brand association
http://www.tgdaily.com/trendwatch-features/43289-nintendo-wii-surrenders-market-share-in-weak-game-console-marketThere was somerecovery in June. Shipments were estimated at 767,000 (down from 1.292 million in June 2008). The Nintendo Wii sold about 361,700 units, theMicrosoft Xbox 360 about 240,600 and the Sony PS3 about 164,700. Nintendo and Sony are well below their year-ago results (Nintendo: 666,700; Sony: 405,500), while Microsoft is actually more consoles than it did a year ago (219,800). Surprisingly, it is Nintendo that is losing market share in these times: It currently holds 47.2%, down from 48.6% in May, down from 51.6% one year ago and down from its all-time high of 65.6% in April 2008.
Both Sony and Microsoft have been able to gain ground on Nintendo. Microsoft broke the 30% barrier in June (31.4%) and is up from its 27-28%, which the company held pretty consistently for the past nine months (the exception was December 2008, when the Xbox 360 hit 33.4%). Sony has crossed the 20% mark in May and held it in June (21.5%), a market share level the PS3 has not seen in almost one year, according to the data released by NPD.Lifetime console shipment numbers for the U.S. are 20.7 million for the Wii, 15.5 million for the Xbox 360 and 7.9 million for the PS3. Respective market shares are 47.0%, 35.1% and 17.9%.
The new tools that will create value innovation are extremely effective and will help you make four strategic moves that will make an enormous difference in your business. Those four strategic moves are:1. Eliminate those competitive factors your customers really don't care about. They waste your resources and don't get you any more or better business. You are probably just trying to keep up with the competition by providing them.2. Reduce your investment in the competitive factors you need to offer but not at the level you are currently offering them.3. Raise your investment in those factors that the market values but isn't getting enough of4. Create new value the industry has never before seen.Raise· Hardware Accessories· Wireless Controller· Social Gaming· Fitness & Sports· Backward Compatibility· Web Downloads & Online play
The Eliminate-Raise-Reduce-Create grid above is the key to breaking the trade-offbetween differentiation and low cost – therefore creating a value curve which will catapultthe product to success. In this case, the most expensive elements (processor and DVD/HD playback components) were eliminated or reduced, thus allowing a lower price and aprofit on the console sale14.The raise strategies mostly point towards the customer buying more peripherals andtherefore increasing overall system revenues. The motion-sense controller makes hardwaremuch more necessary t the Wii platform than any of its competitors; and the accessories(driving wheel, sword, blaster, fishing rod) become the ways to unlock a more participativeplaying experience. This differentiation factor is actually adding revenue potential to the Wii.The Fitness & Sports trend, added to the general Social/Family gaming the Wii hasenjoyed are also revenue generators. The ancillary product is the Wii Sports, bundled withthe basic hardware offering. More than a year after the Wii launch, Wii Fit came out. WiiFit is a balancing board (additional hardware) that comes with a full exercise program,equipped for fun (soccer headers, slalom), Fitness (jogging), Balance activities (Yoga),among others. Some games are specially designed to interact with the board, thus alsodriving game revenue.Finally, the Web Downloads and online play is a central feature to the Wii. Besides thenews and weather forecast the Wi-Fi equipped Wii offers, users can download traditionalgames from the Wii Channel and invite friends to share their customized characters andbe in constant contact.
Nintendo has reported a 66% slump in profits after it was hit by a poor performance in its biggest market, the US, and has announced plans to launch a successor to the Wii.The company launched the Wii back in 2006 and in five years Nintendo said it has sold over 86 million units.Nintendo will be hoping that long-term Wii fans will want to upgrade to the new model, along with luring in new customers from its rivals.Nintendo has faced competition from smartphones in the market, along with rise of numerous tablet devices.
Nintendo has reported a 66% slump in profits after it was hit by a poor performance in its biggest market, the US, and has announced plans to launch a successor to the Wii.The company launched the Wii back in 2006 and in five years Nintendo said it has sold over 86 million units.Nintendo will be hoping that long-term Wii fans will want to upgrade to the new model, along with luring in new customers from its rivals.Nintendo has faced competition from smartphones in the market, along with rise of numerous tablet devices.
When is a games console not a games console? When it’s an iPhone or iPod touch, of course, and while Apple may only list gaming as a partial purpose of their devices, that hasn’t stopped iPhone OS from picking up a growing chunk of the market. Software analysts Flurry have stepped up with some new figures that suggest Apple’s iPhone OS has seen its US video game software market share increase five-fold between 2008 and 2009.
