Nintendo Company Supply Chain Development

Executive Summary

The long term strategy of this company is to exhaust the global market in the video games. Since the company has been recording high returns over the past, we don’t expect to face serious problems in this expansion as we have adequate funds. We may even realize our strategy in less than the expected duration. We are intending to make slight changes in our chain distribution as an effort to improve our services to our customers. We are going to develop internet marketing and ordering system which will help us to communicate directly with our customers. This will lead to elimination of the middlemen.

Consequently, we will manage to cut down the costs and customers will be able to purchase our products. This will be accompanied by development of distribution centres in order to ensure the availability of our products to our customers. We are going to extend our market in new areas where demand for our products is increasing at a very high rate. We are going to give the areas where our competitors have not reached the first priority. We will conduct an intensive research of the market, which will help us to identify the products that will receive significant sales in the new market. We are also differentiating our products from those of our competitors since a new product can be easily confused by the customers.

In order to satisfy the new market, we are going to establish new distribution centres. This will reduce the costs of transportation from the warehouse to the retailers. It will also help solving the problem of shortages, which has been experienced earlier. The Video games industry has not yet exhausted the global market. There is still some room for improvement. The video games products aim to reach the lower and the middle class people and the global market at large. This is the reason we have committed time and money resources informing our customers about our products so that we can win as many customers as possible.

Strategic Goals and Objectives

  1. We are targeting to reach our customers directly without using middle men in the next two years.
  2. We are targeting to saturate our market with distribution centres where customers will be able to access our products without necessarily going through the middlemen.
  3. We intend to present, in the videogames market, price competitive products.

Company overview

Nintendo Company was founded by Yamauchi in 1889. It was known as Marufuku Company Ltd initially. Since then, this company has been dealing with manufacturing and marketing of entertainment products (Cohen 2009). Nintendo is the longest running company in the industry of video game console market (Anonymous 2008). It has also been the dominant leader in the market.

Initially, our company was started by producing play cards. Nintendo was famous in production of playing cards in the region. The company had achieved a lot in the entertainment industry through its quality products and profitability. The company had been in the front line in innovation in this industry. It has used the designs and innovations as the main weapon against potential and existing competitors. The upper management level has a significant role to play in any company. The success of our company can be attributed to the management personnel (Ireland, Hoskisson & Hitt 2008).

Some of the main products which have brought fame to the company include; Luigi, Zelda, Mario, Pokemon, and Donkey Kong (Fundinguniverse 2010). The company has received a big recognition for its Game Boy handheld gaming systems.

During the twentieth century, the company attempted to develop new businesses. For instance, the company tried to come up with a taxi business and a hotel (Anonymous 2008). The main aim of the company was to diversify its activities in order to reduce the risks.

Our Company has covered a significant market area in the world. It plays a significant role in maintaining economic stability. This is through employment creation and philanthropic activities. Over the past, this company has recorded a recommendable performance in terms of return. For instance, the company recorded a revenue increase of 9.9 % in the year 2009 (Research Markets 2010). This was equivalent to an increase of 8.5% in profits.

Market Analysis

Over the past, this company has been struggling to extend its services as wide as possible. One of the major steps that this company has ever taken in its efforts to diversify its market was in 1980 when it developed new markets for its products in United States. At the United States, we launched subsidiary Nintendo of America Inc. in New York where the company recorded large sales. Meanwhile, the company made another innovation by introducing a portable video game (Ziesak 2009). This boosted the rate of development of its new market in U.S. From this point, Nintendo Company continued to expand in the global market, the fact which encouraged the company to invent more in the entertainment industry.

Overview of the Company’s Current Supply Chain

Supply chain is very important in any organization. Our company has a clear supply chain, which has contributed in the company’s success. The nature of an organization’s supply is a major determinant which influences the success of any organization. Although the company has not exhaustively covered the global market it has several centres in different countries, which act as the centres of distribution in diverse nations. In America, the distribution centre is located in the North Bend (Jeff 2010). This is one of the most successful distributions for the company. The facility has been installed with the modern technology equipments, which has significantly increased its efficiency. Production activities take place at Japan after which the products are passed to various distribution centres. It is from these centres where the products are distributed to various parts to reach the customers.

In the chain distribution, our distribution centres have the responsibility of ensuring that there is no variation between the orders and inventories. In other words, the distribution plays a major role in prediction of demand so that there is no wastage or shortages. Wrong demand prediction can cause a company great losses through stock accumulation. Shortages can also lead to loss of customers.

Due to its modernized distribution centres, the company has been awarded as the best ware house of the year (Jeff 2010). The company was recognized as one of the best performing in terms of customer satisfaction and services. This was characterized by high level of communication which eased the interaction between the customers and the suppliers. This company has been implementing different strategies to improve its services to its customers. For instance, the company made some changes in the distribution process in an attempt to improve its services to the public.

The Ordering process

The ordering process in our company has improved drastically over the past. The automation of the ordering process in particular has increased the efficiency of the ordering process which has enormously reduced the ordering costs. Nintendo America is one of our centres which have recorded a recommendable performance in this field. This ware house has been completely automated, a thing that has eliminated the paperwork in the ordering process hence increasing the level of efficiency (Jeff 2010).

Integrating Internet in Supply Chain

We are going to integrate the internet technology in the distribution chain. Although the company has applied technology in its production and supply chains, there is still room for improvement in this field in order to improve the quality of our services to the customers. This will have a significant implication in reducing inventory requirements. Embracing the modern technology and internet in the supply will lead to improvement of the supply chain through various ways. First, we will have an opportunity to build a strong collaboration between the company and the members in the channel. We will also be able to reach our customers directly by eliminating the middlemen

The SWOT Analysis

Strengths: Nintendo Co., Ltd.

One of the main strengths of this company is its innovativeness (Popular Science 2004). Over the past, we have managed to eliminate monotony through frequent introduction of new products in the market. For instance, we recorded tremendous increase in sales after introducing Wii in the market. This high rate of innovations has been facilitated by intensive research.

Our company has enjoyed various things in the video games market over the past. One of the main opportunities of our company is its ability to detecting business opportunities (Derval 2010). For instance, rather than production of video games only, the company once attempted to conduct a taxi business and a hotel. Our company pays much attention on new opportunities. This has contributed significantly to the success of the company.

We as a company has realized the necessity of paying more attention to the part of the population which does not use pour games. This opportunity has helped us to increase the total sales significantly. Many companies have been making the mistake of overemphasizing on the maintenance of existing customers but paying little attention in the efforts to find new customers. In other words, our company has done enormously well in terms of market expansion. This attribute has played a major role in defeating our competitors.

Weaknesses

Although the company has recorded a recommendable performance in terms of innovativeness, it has failed to satisfy its market. For instance, people have been complaining of shortages of Wii in some parts of the world (Anonymous 2008). Although we have recorded several achievements, the company has some areas of weaknesses. These weaknesses have, to some extent, affected the company’s efforts to move forward.

The first weakness of the company is its poor performance in handling online games where the competitors have recorded a better performance (Saint 2010). This has undermined the reputation of the company in this field.

We will try to improve our supply chain efficiency on a continuous basis. We will collaborate with our suppliers to design new products and to reduce the time it takes to get new products into the production.

Threats

One of the main threats of the company is the presence of their competitors. In 1994, Sony’s entry in the market posed a great threat to our company. Soon after its entry into the market, Sony introduced a console which was more advanced than ours. This product posed a threat to the survival of our product in this field.

Findings

From this report, it can be concluded that our company still have a room for expansion. It has indicated that the company’s supply chain needs some revision. The current supply chain involves a number of middlemen, which has led to rising of the level of prices for our products. This has resulted in weakening the competitiveness of our products.

This report has also shown that there is a great gap between the company and the customers. Our company distributes our products through various distribution centres. In some cases, we even engage outsourcers in the distribution process. This has increased the distance between the company and the consumers.

Conclusion

In conclusion, this report shows that there is a need for a quick action in order to save customers from exploitative prices. The company is losing a significant fraction of its customers through exploitative prices resulting from the prevailing supply chain.

Recommendations

There is a need for a quick reaction to the prevailing situation in order to save our company from losing our customers. First, we are going to launch an online ordering and marketing strategy, which will help significantly in reducing the number of middlemen. For instance, customers will be transacting directly with us without necessarily passing through the retailers. This strategy will enable us to under price our competitors. We are also recommending on increasing the number of distribution centres to the markets, which we have not yet exploited. This will enable us to reach new customers expected. By so doing, we will be able to uphold the level of our Company.

Reference List

Anonymous. 2008. Nintendo: Company Profile. Web.

Cohen, D.S. 2009. Classic Video Games Blog Web.

Derval, D. 2010. The Right Sensory Mix: Targeting Consumer Product Development Scientifically. Netherlands, Springer

Fundinguniverse 2010. Nintendo Company Ltd. Web.

Ireland, R., Hoskisson, R. & Hitt, M. 2008. Understanding Business Strategy: Concepts and Cases U.S.A., Cengage Learning.

Jeff, H. 2010. Supply chain update: state-of-the-art direct distribution at Nintendo of America, Web.

Popular Science 2004. Top 100 tech innovations 2004, Vol. 265, No. 6, ISSN 0161-7370, Bonnier Corporation. Web.

Research and Markets 2010. Nintendo co., ltd. -SWOT analysis. Web.

Saint, N. 2010. Nintendo’s Online Weakness Is a Big Turn-Off for Developers. Web.

Ziesak, J. 2009. Wii Innovate – How Nintendo Created a New Market Through the Strategic Innovation Wii. Germany, GRIN Verlag.