Microsoft Xbox: Targeting Strategy and Influence to Consumers

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Microsoft Xbox Case Analysis
Answer 1: Porter’s Five Forces
The gaming industry is growing over the years, with several new entrants entering the market. Before Microsoft entered into the gaming industry, the attractiveness of the industry as per Porter’s Five Forces is overall supporting the company as depicted in the analysis below:
Power of Buyer

The power of buyers is lower as the number of competitors is low (Hall et al., 2001). PlayStation holds a significant influence.

Power of Supplier

Suppliers' power is moderate as the industry is less influenced by developers and software provider (Hall et al., 2001).

Threat of Substitute

The threat of substitutes is higher due to the unmatched gaming graphic quality of PlayStation.

Threat of New Entrant

New entrants' threat is lower due to high capital, high skill, and supply chain requirement (Hall et al., 2001).

Competitive Rivalry

However, competitive rivalry is intermediate due to fewer market players, but the intensity is moderate (Hall et al., 2001).

The analysis shows that the industry is attractive for Microsoft, and with the right given resources, the company can look forward to attracting a higher market share.
Answer 2: Internal Environment Analysis
The internal environment analysis is carried out using the VRIN analysis and highlighting the strengths and weaknesses. The focus of the analysis is focused on Microsoft’s Gaming Console’s activities.
* VRIN
Resources

Value

Rare

Imitation

Non-Substitutable

Competitive Advantage

Aligning the activities of Xbox with Play’s Station Commercial Strategy

Yes, in order for the company to be competitive, aligning activities with competitors is vital.

No, several competitors have different effective commercial strategies.

Yes, every gaming industry’s competitor has its commercial strategy.

No, each commercial strategy is based on its objectives.

Temporary

Customer Base

Yes, the company's customer base is built over the year (Hall et al., 2001). Customers are co-creator of the company’s products.

Yes, with its customer relationship management strategy, the company creates an integrated user experience (Hall et al., 2001).

No, Microsoft’s customer community building is based on building a team culture that is tough to imitate.

Yes, other competitors within the industry do not have access to widespread customer-based communities comparatively.

Temporary

Flexibility in Supply Chain Network

Yes, Microsoft’s agile supply chain network provides the company with leverage to adapt as per the market requirement (Hall et al., 2001).

Yes, only a few competitors can match Microsoft’s flexibility in supply chain management, i.e., Play’s Station.

Yes, however, large market shareholding competitors have the right resources to match with that of Microsoft

Yes, Microsoft's widespread supply chain network is perfected over the years and requires significant investment and consistent performance (Hall e...