Sony’s 2013 debut of the PS4
Nintendo competes in a fiercely competitive market from a business perspective. Therefore, differentiating its goods from its rivals is essential to its success. Nintendo faced intense competition after Sony’s 2013 debut of the PS4, which negatively impacted the company’s sales. This issue emphasizes Nintendo’s difficulty in implementing its business-level strategy, which calls for distinguishing its goods and services to gain a competitive edge in the marketplace. Nevertheless, regarding worldwide strategy, the decline in sales following Sony’s debut of the PS4 in 2013 again emphasizes Nintendo’s difficulty in growing its operations globally. The video game market is multinational, and Nintendo operates in numerous foreign countries. In order to flourish in these areas, the corporation must be aware of the various cultural, social, and economic variables that each nation’s game industry is influenced by (Nan, 2021). The decline in sales following the launch of the PS4 by Sony demonstrates that Nintendo may have difficulties tailoring its strategy to the distinctive features of every international market, which could impact its sales and profitability.
Adopting many strategies to expand the scale of the enterprise
A further issue Nintendo faces in executing business-level and international strategies is the adoption of many strategies to increase the firm’s scale, as this can result in a lack of concentration and consistency in the company’s overall strategy. Nintendo needs to concentrate on a particular strategy that will set its goods and services apart from its rivals on a scale of business-level strategy. If a business adopts too many strategies at once, it might be unable to successfully implement any of them, resulting in a loss of competitive advantage. Conversely, a lack of concentration in the company’s expansion efforts may result from adopting too many foreign plans. Since each worldwide market has distinctive qualities, Nintendo must create effective market-specific tactics (CHEN, 2023). However, let us say the business implements too many tactics at once. If that is the case, it may be unable to properly adjust its operations to each market’s distinctive features, which could influence its sales and profitability.
Impact of Implementing Business Level Strategies and International Strategy
Business-level strategies can assist a company in standing out from rivals, gaining a competitive edge, and adding value for clients. For instance, if a business implements a cost leadership strategy, it can cut expenses and sell items at a cheaper cost than its rivals, luring clients who are price sensitive. On the other hand, if a business chooses to differentiate itself, it can offer exceptional and distinctive goods and services that can command a premium and draw clients who are prepared to pay for added value (Butcher, 2020). Thus, implementing successful business-level tactics can aid a company in growing its market share, profitability, and clientele.
On the other side, international strategy can assist a business in growing its revenue sources and extending its operations to other areas. For instance, a business can expand into new global markets by exporting goods or establishing local subsidiaries or joint ventures. The business can expand its consumer base, boost sales, and diversify its sources of income (Hsiao, 2021). Also, the business can acquire a competitive edge and forge a significant presence in the worldwide market by tailoring its goods and services to the unique features of each foreign market.
How to Solve these Problems
In this report, Strategic Alliance is the best cooperative strategy in which Nintendo combines its resources and capabilities to create a competitive advantage which can help it solve the issues of a Fall in sales by 6.6% after the release of PS4 by Sony in 2013 and the adoption of many strategies to expand the scale of the enterprise. The best types of strategic alliances the company would use include:
Joint Venture
Nintendo can enter into several joint ventures and partnerships with major gaming industry players, such as Sony and Microsoft. These joint ventures will enable Nintendo to leverage the strengths and expertise of its partners to create innovative products and enter new markets (Nan, 2021). Also, Nintendo has a strong brand and reputation in the gaming industry, which gives it an upper hand in using this joint venture strategy. This will enable it to attract potential partners whom it collaborates with.
Equity Strategic Alliance
Another type of strategic alliance that Nintendo can use is an equity strategic alliance. A relationship between several companies in which each owns shares in the other is referred to as a strategic equity alliance (Firdaus, 2021). While each partner has a financial interest in the success of the other, this sort of alliance frequently entails greater integration and cooperation than other types of partnerships. The company can form several equity strategic relationships.
Non-equity Strategic Alliance
Cooperation between two or more companies in which the partners do not own equity in one another is known as a non-equity strategic alliance. Instead, they work together in particular business sectors like marketing, distribution, and research & development. With other businesses, Nintendo can create non-equity strategic relationships (Franklin, 2021). The early 2000s relationship between Nintendo and IBM serves as one such.
Strategic Implementation Issues
Some strategic implementation issues that Nintendo goes through include Resource allocation, Resistance to change in which employees, partners, or stakeholders, Technology integration, Competitive pressure, and Consumer preferences (Chylinski, 2020). The McKinsey 7S Plus model is a strategic management tool developed by McKinsey & Company, a global management consulting firm. It expands the original McKinsey 7S model and incorporates three additional elements – sustainability, agility, and digitalization – to reflect the changing business landscape (Sah, 2021). Furthermore, it helps organizations to identify areas where there may be misalignment or gaps and to develop strategies to address these issues. It is a valuable tool for organizations to use in developing and implementing their strategic plans.
Conclusion
It can be concluded that the gaming industry is highly competitive and constantly evolving, requiring companies to innovate and improve to stay relevant. Nintendo, a famous game company, faces challenges in this dynamic industry. This report has analyzed Nintendo’s strategic position and future through various theories and models. Nintendo’s external and internal environment and major SWOTs were discussed in the strategic analysis. The McKinsey 7S Plus model is a valuable tool for analyzing the internal environment of an organization and understanding how different elements are interconnected. By looking at the seven elements of the model – structure, systems, style, staff, skills, strategy, and shared values – an organization can identify areas of strength and weakness and develop a plan for improving its overall performance. This paper has met the thesis statement by analyzing Nintendo’s current strategic position and future through various theories and models. Also, the implementation of strategies and the significant issues that affect the implementation have been handled in strategic implementation with their evaluation in strategic evaluation.
References
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Sah, Y. J., Rheu, M., & Ratan, R. (2021). Avatar-User Bond as Meta-Cognitive Experience: Explicating Identification and Embodiment as Cognitive Fluency. Frontiers in Psychology, 12, 695358.
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