The way in which one firm acts will affect other firms and they may react accordingly. Philips will therefore need to map out competitors initial reactions and their capabilities (As only a prediction cannot be entirely accurate). Philips entering the market will have to proceed with caution, with no such experience in the market. Philips will have to design a product that differentiates itself from competitor's products and one that targets a small niche in the market; a unique selling point will be appropriate for this.
The unique selling point is also very important, as many firms want their product to differentiate from competitor's product and want their product to appeal to everyone. In the console market the unique selling point would be things like memory, graphics e.g. 32mb, 64mb, 128 Mb etc and a diversity of games. Philips will without doubt have to make their product distinguishable from other products in order to compete effectively and also act, as a unique selling point, and also appeal to a variety of ages and sex's.
The chart also shows that there is strong competition between companies that are in the console market so launching a console would require effective promotion in order to attract customers and possibly build customer loyalty. .
The normal trade prices for the two products that have the largest market share are £149.99 for Nintendo Game cube and £199.99 for the Sony playstation2. These prices indicate that Sony achieving market dominance are adding value to their product therefore customers are willing to pay required amount in return great quality and value of the product. These prices could also give Philips an indication of how much to set their price.
Sony launched the Playstation 2a year before its competitors this helped build a lead. Since its launch in March 2000 in Japan, 40 million units have been sold worldwide. Sony used the experience gained originally from the Playstation and a year head start to create the fastest selling games console in history (source: BBC website).
