This gives Nintendo leverage and a competitive advantage in younger demographic. New products such as Game Boy ADVANCE video have expanded the feature set of the original GameBoy and Nintendo needs to communicate this competitive advantage to its consumers. Since Nintendo has not traditionally contracted with third party software developers as strongly as Sony, Nintendo has a distinct opportunity to market itself as the original first and only in the market. Furthermore, Nintendo has avoided violence in its games which has pleased parents and maintained its image as being a kid-friendly brand. However, in the face of the recent economic recession, the Euro Crisis and the slowing down of the Chinese economy, Nintendo has seen a low response towards its latest products, although the latter are technologically superior.
3.0: Situation Analysis .
3.1: Industry analysis.
3.1.1: Bargaining Power of Suppliers.
The bargaining power of Nintendo's suppliers is low, as Nintendo sources electronic hardware components from a wide variety of manufacturers. In the Wii console, for example, the DRAM comes from Samsung Electronics, the CPU from a joint development effort between Nintendo and IBM, the Sub-LSI from MegaChips, and the image processing LSI from NEC Electronics and AMD (Lytle, 2007). For some parts, like the AC adapter, Nintendo has multiple suppliers of the component.
3.1.2: Bargaining Power of Customers.
The bargaining power of Nintendo's customers is also very low on because Nintendo sells hardware and software products through a range of third party retailers, including Amazon, Best Buy, Toys "R" Us and Walmart inter alia. Furthermore, Nintendo has a wide range of retailers that it uses to distribute products internationally in different countries. Since each buyer is only one piece of Nintendo's complex downstream supply chain, each buyer has relatively little influence over Nintendo's distribution decisions.