Wii Innovate. How Nintendo created a New Market through the Strategic Innovation Wii

Table of Contents

1 Introduction

1.1 Background and current situation

1.2 Formulation of Objectives and Problem Area

1.3 Disposition of the Thesis

2 Designing a Competitive Strategy

2.1 Create Competitive Advantage

2.2 The Structural Analysis of Industries

2.3 Generic Competitive Strategies

2.3.1 Cost Leadership

2.3.2 Differentiation

2.3.3 Focus

2.3.4 Sustainability of the Competitive Advantage

2.4 Blue Ocean Theory

2.4.1 Nature of Blue Oceans

2.4.2 Value Innovation

2.4.3 Analytical Tools and Frameworks

2.4.3.1 The Strategy Canvas

2.4.3.2 The Four Actions Framework

2.4.3.3 The Eliminate-Reduce-Raise-Create-Grid

3 New Product Development

3.1 Innovation

3.2 Opportunity Identification

3.3 Design

3.5 Testing

3.6 Introduction

3.7 Product Life Cycle Management

4 The Video Game Entertainment Industry

4.1 Market Demarcation

4.2 History of Nintendo

4.2.1 The Market that the Wii would face

4.2.2 The Current Generation

4.2.3 Recent Trends in the Industry

4.3 The Need for Change

4.3.1 Structural Analysis of the Home Video Game Console Industry

4.3.2 A New Strategy

4.3.3 Nintendo’s Blue Ocean

4.4 Development of the Wii

4.4.1 Identifying Blue Opportunities

4.4.2 Designing a Blue Ocean

4.4.3 Testing the New Console

4.4.4 Introducing the Wii

4.4.5 Managing the Product Life Cycle of the Wii

4.5 Review on success

5 Conclusion

5.1 Concluding Remarks

5.2 Outlook

Research Objectives and Topics

The thesis aims to investigate how Nintendo successfully recaptured market share in the video game industry by shifting its strategic focus from competing for core gamers to creating a new, uncontested market space using the Blue Ocean Strategy and innovative product development.

• Application of the Blue Ocean Theory to identify new, uncontested market opportunities.
• Evaluation of Porter’s Five Forces in the context of the video game console industry.
• Analysis of the sequential new product development process, specifically focusing on the Wii console.
• Strategic comparison of Nintendo's differentiation and cost-management approach versus competitors like Sony and Microsoft.
• Examination of the product life cycle and market introduction strategies in the gaming sector.

Excerpt from the Book

Summary of Chapters

1 Introduction: Provides an overview of the video game industry's development, highlighting Nintendo's shift in strategy from traditional competition to innovation to recapture market share.

2 Designing a Competitive Strategy: Explains theoretical frameworks for competitive strategy, including Porter’s Five Forces and the Blue Ocean Strategy, to understand how companies create sustainable advantages.

3 New Product Development: Details the sequential stages of the innovation process, from opportunity identification and design to testing and life cycle management.

4 The Video Game Entertainment Industry: Analyzes the history of Nintendo, the industry environment, and the specific application of the Blue Ocean strategy in developing and launching the Wii console.

5 Conclusion: Summarizes the thesis findings, confirming that Nintendo successfully created a new market by aligning innovation with value rather than merely competing on technological specifications.

Keywords

Nintendo, Wii, Blue Ocean Strategy, Value Innovation, Competitive Advantage, Product Development, Video Game Industry, Innovation Management, Market Positioning, Strategic Management, Red Ocean, Noncustomers, Product Life Cycle, Motion Control, Gaming Industry.

Frequently Asked Questions

What is the core focus of this thesis?

The work focuses on how Nintendo transformed its business strategy to recover market share in the video game industry, transitioning from a struggling competitor to a leader by creating a new market through strategic innovation.

What are the central themes discussed in the research?

The central themes include competitive strategy frameworks (Porter’s Five Forces), the Blue Ocean Strategy, new product development processes, and the historical evolution of the video game console market.

What is the primary objective of the study?

The primary objective is to demonstrate how Nintendo utilized the Blue Ocean Strategy to create uncontested market space, effectively moving away from the "red ocean" of intense price-based competition with Sony and Microsoft.

Which scientific methodology is utilized?

The thesis employs a combination of theoretical analysis of strategic management literature and a detailed practical case study of Nintendo's development of the Wii console.

What is covered in the main section of the document?

The main section covers the theoretical foundations of competitive strategies and value innovation, followed by an in-depth analysis of the video game market, Nintendo's historical trajectory, and the specific steps taken to design, test, and launch the Wii.

Which keywords best characterize this work?

Key terms include Nintendo, Wii, Blue Ocean Strategy, Value Innovation, Competitive Advantage, and Product Development.

How does the Wii differ from its competitors, the PS3 and Xbox 360?

The Wii focused on low-cost hardware and intuitive motion-based control (Wiimote) to attract non-gamers and casual users, whereas the PS3 and Xbox 360 focused on high-end processing, multimedia capabilities, and "core" gamer appeal.

Why did Nintendo decide to ignore "high-tech" trends for the Wii?

Nintendo recognized that the pursuit of increasingly complex technology was narrowing the target audience and driving up costs, so they chose to prioritize "fun" and accessibility to expand the total market.