| ishkabibble said: I agree with the original poster. Nintendo really dropped the ball in capitalizing the situation. Even when you outsource production, you make your contracts scalable and extensible. Also, production capacity does not have to stick around forever. You just write options into the contract. They may have lacked foresight in how popular their "Blue Ocean" strategy would be. BUT... it's a year after launch and they still cannot nearly meet demand. Inexcusable. The Wii is not a Cabbage Patch doll or Beanie Baby. Overproduction, if it even happened, would sell through in a short amount of time. For those of you questioning people's credibility, I wonder what your own credentials are. |
To make the outsource production as flexiable as you'd would like ('you make your contracts scalable and extensible. Also, production capacity does not have to stick around forever. You just write options into the contract.') is going to cost Nintendo up front. Nintendo has to find Chinese manufacturers that have high quality, does minimal prirating (ie the 'Viis'), low cost, good assess to getting parts deliveried them. To ask all of Nintendo's parts and assembler manufacturers to give maximum quantity flexiablity as well can be done, but at what cost?
From mid-July to mid-October, Wii sales in Japan fell over 80%. And back up 450% to now. Since it is possible for demand to vary this much, that would have to be written into the contracts. The way to get the cheapest unit cost is to guarantee the manufacture a set amount. Such as the 1.8 million a month. No way will a manufacture give you the same cost per unit if you tell them, this month we want .36 million, but in a few months later, we want 10 times that much.
Torturing the numbers. Hear them scream.
