Most of Nintendo's products are produced by others factories with which the company makes a contract for a limited time. Nintendo's analysts carefully study the gamer population that they have, based on previous research. After doing so, they come up with estimates of future purchasers and design a plan in which they decide the appropriate number of factories with which they will sign a production contract.
In 2006, when Nintendo released the Wii console, the company had a relatively small market share for home consoles. That happened because the Game Cube -Nintendo's previous home console- occupied the second place in sales in Japan after Sony's Play Station 2. In the U.S, Nintendo's Game Cube console placed third after the Play Station 2 and the XBox.
Therefore, Nintendo changed their strategy. They decided to come up with the Blue Oceans business model, which consists in expanding their demographics and target market. The company took a risk by making contracts with several factories to produce Wii consoles. After releasing the product, the company's success was so big, that they found themselves short in inventory all over the world.
Nintendo's success continues now; placing first in sales ever since the Nintendo Wii home console's released.
No comments:
Post a Comment