Lee, Hau; Hoyt David W. and Holloway, Chuck, “Evolution of the Xbox Supply Chain” * Who are the various stakeholders for Xbox that formed the Microsoft ecosystem while developing the supply chain business strategy for Xbox? * What were the challenges faced by Xbox when it first launched Xbox? * How did this compare to the launch of Xbox 360?
* Did they consider any changes in the supply chain?
Microsoft’s Xbox project was started by a group of gamers in 1999 so that they can also develop a gaming console which threatened the performance of the home PC market. The Xbox project consisted of both internal and external stakeholders who had either a direct or indirect “stake” in the project. These stakeholders include the Microsoft employees (i.e., Xbox project team, Microsoft executives), shareholders, suppliers (e.g., Intel, Nvidia), contract manufacturers (i.e., Flextronics, Wistron Corp, Celestica), game developers, designers (i.e, Astro Studios), distributors, broadband providers, retailers and customers. The stakeholders of the Xbox project can be visualized in terms of their position in Microsoft’s extended supply chain, shown in Figure 1.0 below.
Figure 1.0 Microsoft’s Xbox supply chain
Challenges with Original Xbox
Microsoft encountered many challenges when launching the original Xbox in 2001. To better understand the challenges in the original Xbox, we can adopt the SOSTAC (Situation analysis, Objective Setting, Strategy, Tactics, Actions and Control) approach. Situation Analysis. Microsoft did not have a presence in the gaming console market and was up against strong competitors which already had established markets such as Sony (Playstation) and Nintendo (GameCube). This competitive landscape put them in a position wherein they needed to develop a product that offered features that were comparable to existing products in the marketplace which...