Microsoft and Xbox360-YasserMohamedAly

Microsoft and Xbox360-YasserMohamedAly - 1 Problem...

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1. Problem Statement: Major design flaw, addressing the console’s serious shortcomings, and restoring consumer confidence in the Xbox 360 to be profitable. 2. Situation analysis: A. Company objectives According to Seamus Blackley, the Microsoft executive who co-wrote the Xbox business plan, “If the Xbox successfully landed Microsoft in the World’s living rooms, it could count not only on the substantial profits from big-time game publishing, but also on one day controlling an empire of movies and TV-on-demand, Internet, and … as-yet-undreamed services” [Ric10]. Company background The current strategy for Microsoft is to restore consumer confidence in the Xbox 360 by providing an extended 3-years warranty on the consoles and pay for the shipping and handling costs that are required for servicing the Xbox 360[Ric10]. The Positioning of Microsoft is simple, “customer satisfaction is our highest priority, and we do everything we can to take care of gamers who may be having problems with their consoles” [Ric10]. The fast pace environment that businesses face today, especially the technology business sector, made Microsoft take actions that had an impact on product quality. These actions if not treated with corrective actions could mean in the near future lost sales, and in the long-term complete product failure. The need for corrective actions is essential to save and restore the consumer confidence, customer loyalty, and brand equity. These corrective actions are necessary because they show the goodwill between the manufacturer, Microsoft, and its customers worldwide. And, with the establishment of goodwill between the two, a mutually beneficial relationship is formed where both will prosper.
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B. SWOT analysis Internal Strength: Global software leader Recognized brand value and High brand equity Strong capital [Bus16] Worldwide reach[Bus16], “Strong distribution channels”[Jur13], and Seniority in Software and technology sector, since April 4, 1975; 41 years ago[Wik162] Internal Weakness: Many competitors [Bus16] Dependence on hardware manufacturers[Jur13] Less innovative than some of its competitors like Sony and Nintendo [Dud15] Less profitable in the gaming console market, and Needs better execution on console designs External Opportunities: “Growth through acquisitions”[Jur13] “Fully harnessing the power of their customer base” [Bus16] Growth of the entertainment and devices division[Ric10] Stronger presence in the smartphone[Dud15], and the “mobile device industry” [Jur13], and Making the most of their current standings with the talent and money available [Bus16] External Threats: “Intense competition”[Jur13] “Changing consumer needs and habits,” and preferences[Jur13] Product failures Warranty costs, and “Potential lawsuits”[Jur13] Competitive Advantage of the Xbox 360: Weakness of the Xbox 360: C. Market analysis “The global games market reached $99.6 billion, in 2016”[new16](Exhibit 3). This number is “ up 8.5% compared to 2015” [new16]. This means that the market size is lucrative and it’s increasing in growth [new16].
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  • Fall '16
  • Ebrahim Mazaheri
  • Marketing, Wii, Video game console, PlayStation 3, Xbox 360, Xbox

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