Ikea Case Study

In November 2005, Microsoft prepared for a global launch of its next-generation game console, the Xbox 360. Microsoft's original Xbox had been introduced a year behind Sony's Playstation. The Xbox 360 would beat Sony's next-generation system to market by a substantial amount. It would also play an important part in Microsoft's future strategy, where the home entertainment system was seen a major growth opportunity. The case describes the evolution of the video game console business, and the evolution of the Xbox, both from a design and manufacturing perspective. Microsoft's decisions for the original Xbox supply chain are described, together with the changes in the supply chain that were made for the Xbox 360. The case asks questions about the motivations for changes to the supply chain, the risks and benefits of global rather than regional launch, and the use of contract manufacturers. The case prepares students for discussion of how supply chains must evolve to support changing business strategy.

Differences between Original Xbox and Xbox 360 and Supply Chain Changes

Situation.When Microsoft launched Xbox 360, gaming had already become a big part of the home entertainment and broadband access was substantially higher.Microsoft alsohad a better understanding of what games were needed in each country because they had already established a presence in the market.

Objective. Microsoft's decisions on developing the Xbox 360 was no longer based on their desire to get into selling hardware and simply offering a gaming console, but more on their goal of increasing software sales. So, Microsoft developed the new system in such a way that can be a central part of home entertainment thereby incorporating other features such as internet access.

Strategy. In launching Xbox 360, Microsoft planned a global launch, which no other company had done before, so