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Blue Ocean Strategy
(Source: Founded by W. Chan Kim & Renee Mauborgne)




  Definition
   Metaphor of Red Ocean
   Difference
   Superiority
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)
Put into A Simple Way

The market that’s
 not being
 pursued!
Nintendo’s History


NES          Cube               Wii         Wii U
                          NDS
                                      3DS
                    N64
      Game
       Boy
Nintendo’s Bottleneck

DILEMMA in 2004
 Dropped sales

 Competitors pressure

 Technology threshold
Implementation of BOS
Launched Nintendo                   Wii in 2006
    Reposition/ Alternative market

    Brand association

    Sales growth

    Industrial revolution
Source: (Gruener, TG Daily, 2009)
“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
$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
We, everyone          Innovative, Interactive
Corporate Image
Branding
  Wii Commercial 2006
Make your Mii and play it on Wii




        CONTACT POINT
Wii Competitors
Main competitors
Wii Competitors




Source: (Gruener, TG Daily, 2009)
Wii Competitors




Source: (Gruener, TG Daily, 2009)
Why Wii successful?




Source: (W. Chan Kim, 2010)
Why Wii successful?




Source: (O’Gorman1, 2008)
Why Wii successful?




Source: (Layton, 2009)
Product Life Cycle
            2008


                   2011

2006
Wii in 2011
New Competitor
SWOTAnalysis
                                  Nintendo 2011
Strengths
            1. Innovative and simple game-play.
            2. Target Market = people ages 3-112 !!
            3. Affordable, Wii = $250 (PS3 = $599)
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.
SWOTAnalysis
                                      Nintendo 2011
 Opportunities
1. PS3 = Sale decreases
   Wii = Sale increases

2. Wii VS PS3
   - On the same shelves to compete
   - Same promotion period
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)
SWOTAnalysis
                                                  Nintendo 2011
Threats
 1. Unbalance economy
      - Oil price rise = Higher Logistic cost
 2. IT companies
 Apple - iPad iPhone
 BB - Playbook
 Samsung - Galaxy Tab
 HTC - Window 7 (Xbox)
                                 Source: (Nintendo Co., Ltd., 2011)
Recommendations
Partnership with other IT companies
Improve in Customer Relationship Management
 (CRM)
  - NinClub60+
  - Free Wii to almshouse/nursing home
Conclusion
Think as a   Marketer
   Don’t play no game that I can’t win
                           Gabor George Burt
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
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

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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!
  • 5. Nintendo’s History NES Cube Wii Wii U NDS 3DS N64 Game Boy
  • 6. Nintendo’s Bottleneck DILEMMA in 2004 Dropped sales Competitors pressure Technology threshold
  • 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
  • 10. We, everyone Innovative, Interactive Corporate Image Branding Wii Commercial 2006
  • 11. Make your Mii and play it on Wii CONTACT POINT
  • 15. Why Wii successful? Source: (W. Chan Kim, 2010)
  • 16. Why Wii successful? Source: (O’Gorman1, 2008)
  • 17. Why Wii successful? Source: (Layton, 2009)
  • 18. Product Life Cycle 2008 2011 2006
  • 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)
  • 25. SWOTAnalysis Nintendo 2011 Threats 1. Unbalance economy - Oil price rise = Higher Logistic cost 2. IT companies Apple - iPad iPhone BB - Playbook Samsung - Galaxy Tab HTC - Window 7 (Xbox) Source: (Nintendo Co., Ltd., 2011)
  • 26. Recommendations Partnership with other IT companies Improve in Customer Relationship Management (CRM) - NinClub60+ - Free Wii to almshouse/nursing home
  • 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

Notes de l'éditeur

  1. Alternative marketing programs (p.276)
  2. http://www.nintendoworldreport.com/pr/12383http://www.wiichat.com/forum/wii-news/4636-wii-marketing-campaign-hit-200-000-000-a.html
  3. 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
  4. Customer Engagement– when customer bonded with the brand it will create deep brand association
  5. 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.
  6. 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%.
  7. 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
  8. 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.
  9. 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.
  10. 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.
  11. 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.