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Global Strategies Nintendo
Transcript of Global Strategies Nintendo
Ben The dominant strategy Business units adopting or following? Recommendations Global Strategy
For a strategy to work, it must be first understood by people inside of the organization and the partners fully.
Then, we can work out each tactic after sharing the common strategy.
“If we would take different strategies in each territory, we could not go ahead with the unified path and development resources would be dispersed.”
So, we are globally sharing one strategy. "Expanding the gaming population" is our globally common strategy.
Satoru Iwata (President of Nintendo) Our attitude can be taken as heretical in today's game industry, doing something different from the others means that we have the chance to offer commodities which will not have any immediate competitions, so we would like to take this strategy globally.
If we should need to instruct each different tactic from Japan headquarters, it wouldn't be a desirable corporate situation because each territory has its own culture, circumstance and different level of acceptance of our offers. Global Strategy (continued) Nintendo Strategy Product
Nintendo operates in the manufacturing and distribution of innovative, interactive entertainment products. For example the business markets home entertainment, handheld devices and also provide the hardware and software which is necessary for the use of electrical products. Price
The pricing of games is quite interesting. Nintendo will use a series of pricing strategies throughout the life of the product. Prior to launch the business will take orders for new games and consoles, which will all be premium priced and the business will apply a price skimming strategy.
This allows Nintendo to recover their sunk costs quickly before competition arises and lowers the market price.
As the product becomes adopted they will begin to reduce price to competitive parity, and as they reach the end of their life-cycle games will be priced with promotional until they hit the bargain bucket. Promotion
Nintendo will launch its new products. For example, when the company launched the Nintendo 3DS there were a series of special launch days, and even some midnight launch events.
The launch campaign demonstrates a huge effort on the part of Nintendo.
More than 85% of the UK audience saw the Nintendo 3DS campaign called Believe Your Eyes.
The campaign itself was to emphasise the benefits of the 3D experience.
The campaign was a mash up of consumers experiencing the product and innovative advertising People
Being a manufacturer, Nintendo don't really have public facing employees, certainly not facing the public in the retail environment. This is done by their distributors.
However in 2010 Nintendo rewarded employees with an £11,000 bonus per employee which is very generous for Japanese workers, comparing with a meagre £8000 for Honda workers.
According to Euro gamer.net the average salary for a Nintendo worker aged 35 to 39 years old was about £38,000 per annum including bonuses. Applying Global Strategy Global market participation (building positions in strategic and not only in profitable countries)
3 Major Headquarters in central control locations.
Smaller subsidiaries distributed throughout
Global product standardization
Hardware the same worldwide Retro Studio problems Employees set very challenging targets for completion leading to unfair working practices. (Metroid Prime)
Not satisfied with Nintendo not giving them enough creative freedom
2002:- Nintendo fired Jeff Spangenberg (Retro's Founder) after he skipped too many days of work.
2009:- Number of key employees left, due to concerns over Retro's future direction
2011:- Mike Wikan, senior game designer of 10 years, left and joined ID software Retro Studios is a wholly owned subsidiary of Nintendo founded in 1998.
Based in Austin, Texas however they work closely with partners in Japan to ensure the highest quality of video game development for nintendo platforms such as the gamecube, DS, 3DS as well as the Wii and Wii U.
Similar strategy as they look to operate with passion, creativity and dedication to excellence in order to ‘uphold the industry leading standard of quality.
Retro Studios Nintendo Entertainment Analysis and Development Pokemon Company Responsible for marketing and licensing the Pokémon franchise and is affiliated and owned by Nintendo
Company has separate divisions (much like main Nintendo layout) that handle operations in different parts of the world, with The Pokémon Company International supporting the US and UK as of 2009.
Top down strategy, management implements what needs to be done, however a creative freedom is granted to help continue the strong Pokemon brand image
Follow Nintendo's global standardization: All video games are the same, no matter where in the world R&D Branch and Subsidiary of Nintendo (1983)
One of the largest R&D branches of Nintendo
Develop all unique internal system software for the DS and Wii
Responsible for Wii Channels, DSi software and 3DS software
Develops several innovative retail games (mario, Zelda)
Philosophy to think out of the box Nintendo Entertainment Analysis & Development Currently Nintendo are following global strategy with only minor changes throughout the subsidiaries.
We recommend that Nintendo continues this course as it is creating good synergy between HQ and its various divisions & subsidiaries.
However, we can recommend a few changes;
The implementation of varying reward schemes to motivate employees
Introduction of personalised office layouts to better suit the contrasting cultures of divisions Nintendo outsources most assembling of its products to Asian manufacturers;
Foxconn for the Wii U
They also outsource the development of processors for their consoles;
CPUs developed by IBM
GPU developed by ATI Technologies
Outsourcing these activities allows Nintendo to focus on activities core to it’s business strategy Outsourcing Direct division of Nintendo
Will follow the main HQ Global Strategy
As mentioned, given creative freedoms to develop new and innovative games to help "expand the gaming population" How will Changes affect competitive advantages and Satisfaction of employees and Customers Huge success arisen due to their one common global strategy of 'expanding the gaming population'
Changes should only be slight in order to minimize disrupting the synergy arisen from their current strategy
Changes are however relevant to avoid problems encountered with regard especially to Retro Studios