Xbox Supply Chain Case Study
2. Case: Evolution of the Xbox supply chain
a. What supply chain changes did Microsoft make between the Xbox and the Xbox 360? What was the motivation for these changes?
First Microsoft restructured its supply chain after learning from its experiences with the Xbox. Microsoft Xbox had already established a huge presence in the videogame market, but by the time Xbox 360 was rolled out, it had lost a substantial amount of money. "One analyst estimated that from the time of Xbox launch to the time the new Xbox360 rolled out Microsoft accounted for $6.1billion is revenues and $4.4 billion in losses"(Evolution of the Xbox Supply Chain).
With the rollout of the New Xbox360 Microsoft intended to use its existing EMS suppliers, Flextronics and Wistron, for production as both the suppliers were capable of producing more than the original expected capacity. Microsoft also brought the third EMS, Celestica on board to provide for additional production from a new facility and to take advantage of low cost in China.
Secondly, Microsoft was criticized for its poor product appearance and in-house design of the Xbox and for this reason Microsoft outsourced the designing of the Xbox360 to Astro Studios in …show more content…
Microsoft learnt from their past mistake they committed five years ago, when they entered the market a year later with a technically superior product than Sony's Playstation2. During that time Sony had maintained its dominance in the videogame sector but Microsoft had already established it’s self in the market. Microsoft had now turned the tables on Sony. Microsoft was launching the next generation Xbox360 a year earlier than Sony's product who had promised its customers that it would come out with a more technically advanced product compared to Microsoft's. "Microsoft was betting that its ambitious global launch would help it beat Sony in the market place"(Evolution of the Xbox Supply
a. What supply chain changes did Microsoft make between the Xbox and the Xbox 360? What was the motivation for these changes?
First Microsoft restructured its supply chain after learning from its experiences with the Xbox. Microsoft Xbox had already established a huge presence in the videogame market, but by the time Xbox 360 was rolled out, it had lost a substantial amount of money. "One analyst estimated that from the time of Xbox launch to the time the new Xbox360 rolled out Microsoft accounted for $6.1billion is revenues and $4.4 billion in losses"(Evolution of the Xbox Supply Chain).
With the rollout of the New Xbox360 Microsoft intended to use its existing EMS suppliers, Flextronics and Wistron, for production as both the suppliers were capable of producing more than the original expected capacity. Microsoft also brought the third EMS, Celestica on board to provide for additional production from a new facility and to take advantage of low cost in China.
Secondly, Microsoft was criticized for its poor product appearance and in-house design of the Xbox and for this reason Microsoft outsourced the designing of the Xbox360 to Astro Studios in …show more content…
Microsoft learnt from their past mistake they committed five years ago, when they entered the market a year later with a technically superior product than Sony's Playstation2. During that time Sony had maintained its dominance in the videogame sector but Microsoft had already established it’s self in the market. Microsoft had now turned the tables on Sony. Microsoft was launching the next generation Xbox360 a year earlier than Sony's product who had promised its customers that it would come out with a more technically advanced product compared to Microsoft's. "Microsoft was betting that its ambitious global launch would help it beat Sony in the market place"(Evolution of the Xbox Supply