E-Commerce Plan Nintendo's Global Leadership essay

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S. Home Console Hardware Market Figure 4: Home Console Hardware Sales in Europe

Source: Nintendo Investor Relations (2009)

Clearly the Wii was able to gain an exceptionally large market share quickly after being launched. This was accomplished in the midst of a global recession as well

Market Demographics and Needs

For many who believe the computer gaming market is one that is composed of teenagers, their stereotypes of gamers is quite off the mark. Figure 5, Computer Gaming Demographics, 2007, illustrates the demographics of the U.S. computer gaming market which is comparable to other western nations. Nearly 60% of the total market is comprised of men who are 45 years of age or older. Notice also that women, age 18 to 45 are also nearly one out of every three gamers. Nintendo has created cross-over games which have been very successful in addressing these needs of these demographic groups. The development of "build your own game" strategies will also need to take this into account.

Figure 5: Global Computer Gaming Demographics, 2007

Market Segment

Share

Males 18-45

37.0%

Females 18-45

28.0%

Males <18n
20.0%

Females <18n
7.0%

Males >45

6.0%

Females >45

2.0%

Source: Entertainment Software Association, (Hammill, 2007)

Marketing Plan

The primary focus of the marketing plan will be on using Web 2.0 technologies (O'Reilly, 2006) and social networking (Bernoff, Li, 2008). A representative same of Web 2.0 applications is shown in Appendix a. The marketing plan's messaging will focus on giving customers the flexibility of creating any game they choose, and even customizing it so there are unpredictable outcomes over time. The reliance on a highly collaborative development base will also make this successful. The heavy use of Search Engine Optimization (SEO) will also be used to promote the gaming site as well. The initial products sold will be branded from Nintendo and over time the breadth of customizable games will continue to grow on the site. The use of these online methods in addition to events will form the foundation of the marketing plan.

Company Structure and Management

The structure of the company will be more hierarchical, with functional department managers reporting to the president and CEO. Accounting and Finance, Engineering, it, Marketing, Sales and Service will all be direct reports to the CEO. There will also be a focus on smaller, more collaborative teams over extensive organizational structures. This will ensure the organization is more agile, les encumbered by a structure it cannot work in.

Operation Plan

The operation plan is fairly straightforward as the series of applications that will run the proposed e-commerce venture will be hosted on Amazon Web Services (AWS). AWS is exceptional in its reliability and maintainability of systems. This will be the first phase of the operational plan. The second phase is to create a series of game developer's kits and a game development community which will serve to support the development of individual game modules. The operational plan for this will include staffing up specific development engineers and support staff which will be able to quickly guide developers to create individualized modules. The third aspect of the operational plan will be the development and continual refinement of the subscription pricing and annuity revenue model. Fourth is the actual launch of the company online and its promotion. Fifth is the continual monitoring of its progress through the use of analytics.

Product Design and Development Plan

The product design and development plan centers primarily on the development of strong relationships with developers throughout the Nintendo community. There is also the need to create a continual stream of updates to the game development kits so that successively greater features can be included. Lastly the product design and development plan must include the ability to interlink modules and suggest an optimal game design. This approach to mass customization puts the customer at the center of designing their own game, and there will be recommendations on how to best optimize performance by interest area. A guided selling application will be used to assist customers in defining which specific game type they want to produce and download.

Financial Projections

Sources and Uses Financial Analysis

2010

2011

39172

Income before income taxes

2,012

433,775

289,601

Depreciation & amortization

8,102

7,363

5,968

Increase (decrease) in reserve for doubtful accounts

2,149

Increase (decrease) in reserve for retirement benefits

5,960

1,089

Interest & dividend received

-30,430

-44,585

-34,510

Interest expenses

1

0

0

Foreign exchange loss (gain)

98,557

66,389

-21,375

Loss (gain) on sale of investment securities

-82

-37

-891

Loss (gain) on devaluation of investments securities

10,914

Investment loss (gain) on equity method

-164

-1,334

-798

Decrease (increase) in accounts receivable

-4,535

-70,031

-42,687

Decrease (increase) in inventories

-57,623

-24,519

-54,669

Increase (decrease) in accounts payable

8,182

34,240

168,070

Increase (decrease) in accrued consumption taxes

-3,003

-1,219

3,416

Directors' retirement benefits paid

-185

Other cash flow from operating activities

-13,381

41,645

24,359

Cash flows from operating activities before undernoted

462,697

453,919

338,037

Interest & dividends received

31,477

43,554

32,921

Interest paid

-1

0

0

Income taxes paid

-206,373

-165,095

-96,324

Cash flows from operating activities

287,800

332,378

274,634

Disbursements of time deposits

-247,431

-162,376

-776,866

Reimbursements of time deposits

147,391

164,878

651,372

Purchase of marketable securities

-496,475

-519,740

-112,957

Proceeds from sale & redemption of marketable securities

455,346

768,407

117,001

Payments to purchase of tangible fixed assets

-22,956

-7,992

-6,144

Proceeds from sale of tangible fixed assets

28

5,134

Purchase of investment securities

-12,742

-25,735

-52,069

Proceeds from sale & redemption of investment securities

11,156

6,173

Other cash flows from investing activities

2,229

-525

-1,485

Cash flows from investing activities

-174,363

233,206

-174,603

Treasury stock repurchased

-364

-802

-282

Cash dividend paid

-227,458

-97,110

-49,857

Other from financing activities

67

2

Cash flows from financing activities

-227,654

-97,844

-50,137

Effect of exchange rate change on cash & cash equivalents

-95,194

-52,935

21,704

Net increase (decrease) in cash & cash equivalents

-209,412

414,804

71,597

Cash & cash equivalents, beginning of year

1,103,542

688,737

617,139

Cash & cash equivalents, end of year

894,129

1,103,542

688,737

Ratio Analysis

Pro Forma Ratio Analysis

Profitability Ratios

3/31/2008

3/31/2007

3/31/2006

3/31/2005

3/31/2004

ROA % (Net)

15.19

12.74

8.58

8.16

3.16

ROE % (Net)

22.01

16.7

10.33

9.72

3.74

ROI % (Operating)

41.68

21.66

9.49

12.39

12.12

EBITDA Margin %

28.78

33.75

37.45

31.15

12.39

Calculated Tax Rate %

40.7

39.83

40.93

39.86

37.18

Liquidity Indicators

Quick Ratio

1.84

2.24

4.69

4.26

7

Current Ratio

2.9

2.98

5.59

4.84

7.87

Net Current Assets % TA

59.9

58.79

72.06

69.62

76.98

Asset Management

Total Asset Turnover

0.99

0.71

0.44

0.48

0.49

Receivables Turnover

14.29

14.86

11.12

13.79

14.86

Inventory Turnover

17.24

16.18

12.64

12.77

7.58

Accounts Payable Turnover

5.24

5.02

5.23

6.1

6.65

Property Plant & Equip Turnover

29.58

17.02

9.23

9.41

8.97

Cash & Equivalents Turnover

1.79

1.09

0.62

0.65

0.68

Appendices

Appendix a: Web 2.0 Applications

Applications

Descriptions

Blogs

Online diary or journal entry on the Internet, which primarily supports text, photo (photoblog), video (vlog), and audio (podcast) formats

• Google, AOL, and Yahoo offer free blogging platforms

Mashup

• Web service that gathers related content from more than one source

• IBM's mashup applications enable project managers to match team resources with a map to identify the geographical locations of the resources

Peer-to-Peer Networking

• a technique for effectively sharing music, audio, and text files

• Napster and Gnutella are popular peer-to-peer networks

Real Simple Syndication (RSS)

• Feed-based technology that, with the aid of an RSS reader, enables users to subscribe to newly released content such as text, Web pages, sound files, photos, and video

• RSS feed may contain the full content, for example a podcast, or simply a link to the content

Social Media

• Encompasses all online tools (blogs, podcasts, Wikis, social networks, vlogs) and Web sites enabling people to share content, such as text, audio, picture s, and videos

• Popular social media sites include YouTube (video) and Flickr (photos)

Social Networking

• Web sites that permit users to create online networks and communicate with friends and colleagues

• Social networking sites…[continue]

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"E-Commerce Plan Nintendo's Global Leadership" (2009, October 27) Retrieved December 10, 2016, from http://www.paperdue.com/essay/e-commerce-plan-nintendo-global-leadership-18186

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