The paper "Nintendo Companys Disruptive Strategy and External Environment" is a great example of a management case study. Nintendo Company has been a major competitor in the video gaming industry. It has employed certain strategies that have to enable it to maintain its position in the industry. This paper has analyzed the disruptive strategy of the company by focusing on various issues that in one way or the other affect the company. It has started by giving a brief history of the company. These issues include the external environment, industrial environment, competitive rivalry, the capabilities and competencies of the resources, internal environment including value chain, the SWOT analysis as well as the generic strategies.
In addition, the paper gives the recommendations that would help the company maintain its competitive advantage as well as continue succeeding in the future. Nintendo’ s Disruptive Strategy Introduction Nintendo company was founded by Fusajiro Yamauchi back in the year 1889 where he started by manufacturing cards. In 1907, this company started creating Western playing cards and became the Nintendo playing card company in 1951 (Colbert, 200). By 1961 the company had gained popularity across the universe and then it acquired its present name.
Between the period of 1970 and 1985, the company started manufacturing electronic toys and it entered into the video game field. As soon as the company entered the field, it began facing challenges. It faced the challenge of conflict with its competitors such as Sony. However, the leader of Nintendo brought in a new viewpoint for the company’ s future development. Innovative strategies like developing the double screen (DS) which was a handheld gaming device (Colbert, 2007).
Later the company launched the Wi-FI Connection which allowed the DS players to be able to play along with other users via a wireless network. The aim of this was to help the company maintain a competitive advantage over its rivals. This paper seeks to analyze Nintendo's Disruptive Strategy: Implications for the video game industry External Environment By external environment, it means the elements such as the socio-cultural, demographic, political, economic, technological, physical and demographic which affect the market that Nintendo operates in Iwata, 2006. The presence of the company in the globe gives it an opportunity to produce products for, a number of markets (McGregor, 2008).
Technology is of paramount to the success of the company. In addition, it presents a number of opportunities for the company. Technology is ever-changing and since the company deals with the production of a technological product, it needs to continually integrate new technology into its products. Nintendo operates in demography that was neglected in the past (John, 2001). That is the non-gamers of all genders and ages. From the social-cultural point of view, the company is geared towards a family-friendly ideology and this greatly limits the kind of games it produces.
In addition due to the focus on non-gamers to produce simple and easy to use the equipment, it could greatly threaten future game console designs. Furthermore, the economic environment seems to be growing steadily (McGregor, 2008). However, despite the tremendous increase in the number of people who are playing video games, the company still experiences a decline in the sales of the game consoles, for instance, the Wii (John, 2001). Moreover, the company experiences reduced net profits due to the instability of the economy.
Inflation could also have a significant impact on the operation especially the sale of the video games. The company operates under government’ s regulations on video games which prohibit the outright banning of video games as well as the production of morally unacceptable video games (John, 2001). Apparently the company faces few if any legal restrictions as it takes into consideration the laid down regulations. On political, and political instability that faces the country always has a negative effect on the company’ s operations.
Nintendo firm, however, has faced no political restrictions.