Video Game Console and New Video Game Essay

Submitted By Dancingdq1
Words: 497
Pages: 2

Case Xbox

First of all, in my opinion, the demand for a new video game system would be less at start, because customers don’t know about it yet or they are still waiting on comments given by customers who have played the game already. They need to decide if it’s work the money. Then the demand would increase meaning people are aware about the new video game system and are buying it and introducing it to others. After reaching its demand peak, the demand could decrease due to some technical issues, price competition or even some negative critical comments. The demand could also be stable for a while before decreasing.
Secondly, the shape of this demand would show Microsoft’s strategy for a global launch. At the beginning, it is really hard to let consumers all over the world to be aware of the new video game system. Therefore, Microsoft has to spend lots of money on adverting. Later on when the demand increased, Microsoft should have some inventory shortage issues and the shipping issues. When the demand is decreasing, Microsoft would have to reduce the price and prove more benefits with the new video game system in order to attract more consumers.
Third of all, Microsoft used Flextronics as its only supplier with different locations in China, California and Taiwan that produces Xbox. The advantage of this strategy is: it is clearly and organized. Different locations have to take their own responsibilities. However, it could cause many problems. Due to the different locations and long distances, it would spend more time and money to ship the components together. Also, the limitation with distance and single supplier could cause inventory shortage and delivery unpunctuality. However, Microsoft changed and used three different suppliers, Flextronics, Wistron Crop and the Celestica in one location China that manufacture the Xbox360. The pros of this strategy is it reduces the costs. The labor in China is cheaper. Which reduces the time to ship all the components together. Each of the…