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

Definition Metaphor of Red Ocean Difference Superiority

Blue Ocean Strategy

Red Ocean vs. Blue Ocean

Red ocean strategy Blue ocean strategy

Source: (W. Chan Kim, 2010)

Head-to-head competition Creation of new markets

Compete in existing market space

Beat the competition

Exploit existing demand

Make the value-cost trade-off

Align the whole system of a firm’s activities with its strategic choice of differentiation OR low cost

Create uncontested market space

Make the competition irrelevant

Create and capture new demand

Break the value-cost trade-off

Align the whole system of a firm’s activities in pursuit of differentiation AND low cost

The market that’s

not being pursued!

Put into A Simple Way

NES GameBoy Cube N64 NDS Wii 3DS Wii

U

1985 1989 1996 2001 2004 2006 2011 2011

Nintendo’s History

DILEMMA in 2004Dropped sales

Competitors pressure

Technology threshold

Nintendo’s Bottleneck

Launched Nintendo Wii in 2006

Reposition/ Alternative market

Brand association

Sales growth

Industrial revolution

Implementation of BOS

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

• Feeding the buzz

Cognitive stage

Affective stage

Behavioral stage

AIDA MODEL

Catch attention

Stimulate interests

Create desires

$200 million campaign• Brand partnerships• As seen on TV

• Hands-on sampling

Wii Commercial 2006

We, everyone Innovative, Interactive

Corporate Image

Branding

CONTACT POINT

Make your Mii and play it on Wii

Wii CompetitorsMain 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 Cycle2008

2011

2006

Wii in 2011

New Competitor

SWOTAnalysis

1. Innovative and simple game-play.2. Target Market = people ages 3-112 !!3. Affordable, Wii = $250 (PS3 = $599)

Nintendo 2011Strengths

1. Limitation of game on WiiViolence3 party companies = Unhappy90% of Wii games are developed by the 3rd party companies.

SWOTAnalysis

Nintendo 2011Weaknesses

2. Nintendo GameCube and Nintendo 64 were not successful.Hard to predict on Wii’s directionToo few Wii's

3. Wii VS PS3 Hardcore gamers complain on graphic. Cut cost is a double-edged sword.

1. PS3 = Sale decreases Wii = Sale increases

SWOTAnalysis

Nintendo 2011Opportunities

2. Wii VS PS3 - On the same shelves to compete- Same promotion period

SWOTAnalysis

Nintendo 2011Opportunities

3. Partnership

4. Higher rate cost of living

5. Health concern

Growth in Total Health Expenditure Per Capita, U.S. and Selected Countries, 1970-2008

Source: (Organisation for Economic Co-operation and Development , 2011)

1. Unbalance economy- Oil price rise = Higher Logistic cost

2. IT companiesApple - iPad iPhoneBB - PlaybookSamsung - Galaxy TabHTC - Window 7 (Xbox)

SWOTAnalysis

Nintendo 2011Threats

Source: (Nintendo Co., Ltd., 2011)

RecommendationsPartnership with other IT companiesImprove in Customer Relationship Management

(CRM) - NinClub60+- Free Wii to almshouse/nursing home

Think as a Don’t play no game that I can’t win

Gabor George Burt

Conclusion

Marketer

• 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

References