Evolution of the Xbox Supply Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Evolution of the Xbox Supply Chain
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 after Sony's Playstation, but 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 as a major growth opportunity. 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. Asks questions about the motivation for changes to the supply chain, the risks and benefits of global rather than regional launch, and the use of contract manufacturers. Prepares students for discussion of how supply chains must evolve to support changing business strategy.
Swot Analysis of "Evolution of the Xbox Supply Chain" written by Hau Lee, David W. Hoyt, Chuck Holloway includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xbox Supply facing as an external strategic factors. Some of the topics covered in Evolution of the Xbox Supply Chain case study are - Strategic Management Strategies, Design, Product development, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Evolution of the Xbox Supply Chain casestudy better are - – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing energy prices,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Evolution of the Xbox Supply Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Evolution of the Xbox Supply Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xbox Supply, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xbox Supply operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Evolution of the Xbox Supply Chain can be done for the following purposes –
1. Strategic planning using facts provided in Evolution of the Xbox Supply Chain case study
2. Improving business portfolio management of Xbox Supply
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xbox Supply
Strengths Evolution of the Xbox Supply Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xbox Supply in Evolution of the Xbox Supply Chain Harvard Business Review case study are -
Analytics focus
– Xbox Supply is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Hau Lee, David W. Hoyt, Chuck Holloway can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Xbox Supply is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Xbox Supply is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Evolution of the Xbox Supply Chain Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Xbox Supply is one of the leading recruiters in the industry. Managers in the Evolution of the Xbox Supply Chain are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Xbox Supply
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Xbox Supply does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Xbox Supply has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Evolution of the Xbox Supply Chain - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Evolution of the Xbox Supply Chain firm has clearly differentiated products in the market place. This has enabled Xbox Supply to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Xbox Supply to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Xbox Supply has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xbox Supply has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Xbox Supply is one of the most innovative firm in sector. Manager in Evolution of the Xbox Supply Chain Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Xbox Supply digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xbox Supply has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Xbox Supply is present in almost all the verticals within the industry. This has provided firm in Evolution of the Xbox Supply Chain case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Xbox Supply has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Xbox Supply are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Evolution of the Xbox Supply Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Evolution of the Xbox Supply Chain are -
High bargaining power of channel partners
– Because of the regulatory requirements, Hau Lee, David W. Hoyt, Chuck Holloway suggests that, Xbox Supply is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Xbox Supply has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Xbox Supply even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Xbox Supply has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Evolution of the Xbox Supply Chain should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Evolution of the Xbox Supply Chain, is just above the industry average. Xbox Supply needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Evolution of the Xbox Supply Chain, it seems that the employees of Xbox Supply don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Evolution of the Xbox Supply Chain, in the dynamic environment Xbox Supply has struggled to respond to the nimble upstart competition. Xbox Supply has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Xbox Supply supply chain. Even after few cautionary changes mentioned in the HBR case study - Evolution of the Xbox Supply Chain, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xbox Supply vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Evolution of the Xbox Supply Chain HBR case study mentions - Xbox Supply takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Xbox Supply, firm in the HBR case study Evolution of the Xbox Supply Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Xbox Supply products
– To increase the profitability and margins on the products, Xbox Supply needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Xbox Supply has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Evolution of the Xbox Supply Chain | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Evolution of the Xbox Supply Chain are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xbox Supply in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Xbox Supply to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Xbox Supply has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Evolution of the Xbox Supply Chain - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xbox Supply to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Xbox Supply has opened avenues for new revenue streams for the organization in the industry. This can help Xbox Supply to build a more holistic ecosystem as suggested in the Evolution of the Xbox Supply Chain case study. Xbox Supply can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Xbox Supply can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Evolution of the Xbox Supply Chain suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Xbox Supply to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Xbox Supply can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Xbox Supply has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Xbox Supply to increase its market reach. Xbox Supply will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Xbox Supply can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Xbox Supply can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xbox Supply can use these opportunities to build new business models that can help the communities that Xbox Supply operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xbox Supply can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Evolution of the Xbox Supply Chain, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Evolution of the Xbox Supply Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Evolution of the Xbox Supply Chain are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Xbox Supply.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Xbox Supply will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xbox Supply can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Xbox Supply is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Xbox Supply high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Xbox Supply can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xbox Supply can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Evolution of the Xbox Supply Chain .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Evolution of the Xbox Supply Chain, Xbox Supply may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Regulatory challenges
– Xbox Supply needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Xbox Supply has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Xbox Supply needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Xbox Supply needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Xbox Supply demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Evolution of the Xbox Supply Chain Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Evolution of the Xbox Supply Chain needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Evolution of the Xbox Supply Chain is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Evolution of the Xbox Supply Chain is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Evolution of the Xbox Supply Chain is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Xbox Supply needs to make to build a sustainable competitive advantage.
