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Microsoft's Dramatic Xbox 180 Strategy Reversal

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Microsoft's Dramatic Xbox 180 Strategy Reversal

Question one: Emergent strategy used by Microsoft
In the year 2000, Microsoft Company introduced the Xbox into the games console. The Xbox
360 edged out Sony and Nintendo to be part of the emerging strategy. The Play Station has a
more substantial presence in the market as compared to Xbox Series. The company has
continued to strengthen its marketing strategies to keep the market. The most anticipated feature
of Xbox 360 is the high-definition screen display. Microsoft timed the announcement before the
Electronic Entertainment Expo that could showcase the significant developments in the gaming
industry. The comp may incorporate the emergent strategy to tap into the emerging gaming
industry and central competitiveness. The emergent approach is the most effective owing to the
changes in the socio-cultural environment. In this case, societies consider a healthy lifestyle to
maintain the status quo (Angert, 2019). The strategy to implement Xbox360 required a lead time
from the design stage to introduction to ensure that the competitors do not acknowledge the
designs before being introduced into the market.
Question Two: The Mistakes in the past, Licensing, pricing, Kinect
The most indicators of Microsoft's success were its products' prices compared with competitor's
products. The $299 Xbox console was successfully solder at a cheaper rate than Play station
three consoles. The company wanted Xbox to control everything and introduced Kinect Camera
and mic. Thus, the digital device was one of its kind by controlling multiple devices through a
simple phrase. The users were not happy with the invention of programmed sound to control
everything, which the company abandoned in Xbox One.
The perceived Microsoft strategic success was based on its innovation capacity on its products.
The game console industry is good for the incumbent due to its perceived growth (Marshall,
2019). The new entrants are likely to face struggles with their desire to capture value within the
industry. Therefore, the perceived success of Microsoft is attributed to the expansion of the game
console market. Microsoft considered elements abandoned by Microsoft in Xbox one include
failing to check at least once in 24 hours. There are other features that the company believed in
the new Xbox. Some of the specifications are that others could not use the game disc after the
original owner had signed in.
Question Three: Group Think and changes of Microsoft Policy
The product development strategy could be risky if first introduced in the market. Anonymity
and popularity in the age of the internet facilitate groupthink and the change of Microsoft. For
instance, if the Kinetic camera sensor and array are removed, the Xbox could not work. Also, the
inability to share the Xbox among many users without disc made the users storm social media,
which led to the change of the company's strategy. Microsoft failed to share the family sharing
program with the users and how the Digital Right Management (DRM) could facilitate cheaper
ways of sharing the game features (McIntyre, 2014). Thus, the company was worried about
losing brand loyalty with the widespread concerns in social media.
Question four: Why Microsoft Altered Xbox Strategy
Microsoft altered the strategy on Xbox as a mass customization strategy. The company wanted to
make the Xbox series devices easier and pleasant to use. The product had been targeted with
rumors and speculations due to its connection to the internet (Cooper, 2013). There were
intense complaints from the customers about the new feature of the game console, which made
the company fix the past mistake and topple the thriving Play Station with the next game
console. The president and his team noted customers' aggressive and intense reactions leading to
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a bad image (Statt, 2017). The significant factors that made the company change strategy for
Xbox One included price, graphical performance, and brand loyalty.
Question Five: Circumstances for Strategic Pivot
A company can consider a strategic pivot if it progresses too slowly despite the team's input.
The company may need to pivot the revenue into the product and market. Also, the company can
employ a pivot strategy if the competition is intense. The intense competition reduces sales in
the same market share. The other circumstance for strategic Pivot is the limited response from
the marketplace. The strategic pivot is necessary when the current brand is not appealing to the
market and thus a necessary to introduce a more current and customer friendly product.
An example of an honest world company that employed a strategic pivot for turnaround is
Starbucks, which initially sold espresso makers and coffee beans. The company started selling
coffee roasters to mimic Italian Espresso bar café. The company's location favors many
customers with the primary goal of inspiring the human spirit. The company's key activities that
enable them to function well is not to keep the customer waiting. Thus, the company invested in
various activities that could place the coffee in the hands of customers. The company surveyed
the market and noted the need to change the ways of handling coffee due to the increased market
share for the Italian flavor (Sholihah et al., 2016). Starbucks abandoned the initial products for
Italian Espresso.
Question Six: Impact of Microsoft's policy reversals on the Xbox One's market
performance
The Microsoft reversal for the policy in Xbox one was the right decision due to the uncertainties
the firm was projecting. However, the Xbox series could not outdo the market for Play station
consoles. Sony had successfully captured the need for the better part of the decade. Customers
valued PlayStation due to the low policy on subscriptions and sharing among the family. The
policy assisted the company by increasing their sales immediately after the relining into the
market.
The Xbox one could not be considered a failure as it had come at the right time when society was
paving the way for other innovations in the gaming industry. However, it was estimated that the
company sold only 50 million units to the X box one compared to the 106 million play station
four consoles sold by their competitor (Angert, 2019). The third-generation Xbox was one of its
kind as it was more advanced than consoles in the market. Microsoft's mistake with the
introduction of Xbox one was the game licenses, the price tag, and Kinect, which incorporated
artificial intelligence. The game licensing system could allow users to purchase games without
the need to switch disks. At the same time, users could not trade o share the fun with their
friends, which saw the users lost the coveted freedom they wanted from playing.
Question seven: If the company opted for the initial plan
If Microsoft opted for the initial plan, it could have established itself by developing superior
products that may perform well in the market. The initial plan is effective as it offers what the
customers want. In this case, the company has determined the customers' expectations and
designed their product according to needs. The emergent strategy is new to the company and
cannot work according to the main expectations of the customers. Gaming is not all about the
console. Sometimes the controllers of the game and accessories are essential. The capability of
incorporating voice and gesture control was the thing of the future. The intended strategy of the
company was the introduction of the Xbox Kinect. The Kinect offered a more substitute to the
convectional play station. The products allowed the Xbox to be more competitive due to the
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incorporation of various innovative features. Therefore, the company needs to assess the
efficacy of the new plan.
Question 8: Revisiting the Approach
The company should revisit the approach. According to the case, Microsoft was still undergoing
a good move as its position in the market was good. The introduction of Xbox consoles in the
gaming industry was an important initiative that enhanced growth in the long run. The drifting of
the initial strategy was unplanned and thus created numerous expectations. The response from
the customers suggested the deficits in the feature of the new products. Therefore, incorporating
the previous strategy could see an improvement in sales. The company should have implemented
the earlier intended design for the market at an earlier date. The plan could be feasible since the
company's features in the new Xbox series did not respond well to the video gaming industry
book (Angert, 2019). However, the company could reconsider reducing the product's price to
make them available for casual players. According to the case, the current strategy for the
company was expensive but yielded fewer returns.
Question 9. Lesson Learned by Students
The key takeaway from the Microsoft Xbox case study is that yesterday's mistake is tomorrow's
advantage. After falling back, Microsoft has considered a typical gaming product with a different
narrative from Xbox one. The company ventured into the gaming market earlier, with the Xbox
360. On the other hand, Sony placed their PlayStation 4 console at $399, slightly cheaper than
their previous brand but $100 less than Microsoft's Xbox 360. The Xbox 360 was successful
thanks to streaming via Netflix (Angert, 2019).
The target market for Xbox is casual and hardcore gamers and the market seems to go on a good
trend. The company's debut with Kinect 360 made it the most successful consumer electronic
launch in the history of technology. The Xbox series was considered the most successful launch
in history due to its perceived high sales immediately after its launch. Despite having stiff
competition from PS3, the Xbox 360 increased sales for Microsoft after the company made 80+
million in console sales. Faster the launch of the Xbox, the company continued to launch more
products with different features, including the Gears of war. The primary lessons that the
Microsoft executive needs to learn are to learn from the mistakes.
Question Ten: Applied Learned Principles
The learned principle from the case study is creating a strategic value location for the particular
product. The other tenets create a fit by aligning the company's activities together to support the
chosen strategy. The first strategy is the pricing system. According to the case, microdot's
products were expensive as compared to their competitor. The company seems to sell its
products at a higher price than its competitors, such as Sony. In this case, Microsoft can earn
back customers by making the pricing affordable and relative to its competitors.
Secondly, increasing the product and services features is a sure way of increasing sales for the
company. The third strategy the company can do to increase sales is to highlight its competitive
advantage. In this case, the company can ensure that they understand their customers' needs,
tastes, and preferences. In this case, the company could not risk its competitors acknowledging
and grasping the market share (European Business Review,2020). The introduction of Xbox was
an alternative for the abandoned Xbox, and consider giving it away for free. The other strategy is
to consider testimonies from satisfied customers. Lastly, the company should not stop
prospecting. Prospecting can help Microsoft company to position itself as trusted partners.
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References
10 Strategies To Increase Your Companies Sales. European Business Review, 2020.
https://www.europeanbusinessreview.com/10-strategies-to-increase-your-companies-
sales/
Angert, C. (2019). X-treme Makeover: A Case Study of Microsoft's Dramatic Xbox 180 Strategy
Reversal. Business Education Innovation Journal, 11(2).
Cooper, D. (2013). Xbox Chief: We Have a Product for People Who Can't Get Online, It's Called
Xbox 360. Engadget. Retrieved from: https://www.engadget.com/2013/06/12/don-
mattrick-xbox-360-offline/
Marshall, R. (2019). The History of the Xbox. Digital Trends. Retrospective documenting major
historical Xbox milestones. (https://www.digitaltrends.com/gaming/the-history-of-the-
xbox/)
McIntyre, S. (2014). Game Over for the First Sale. Berkeley Technology Law Journal. V. 29,
No. 1, pp 1-60
Sholihah, P. I., Ali, M., Ahmed, K., & Prabandari, S. P. (2016). The Strategy of Starbucks and its
Effectiveness on its Operations in China, a SWOT Analysis. Asian Journal of Business
and Management, 4(5).
Statt, N. (2017). Why Microsoft thinks customization is the secret to a better Xbox One
dashboard design. https://www.theverge.com/2017/10/5/16426122/microsoft-xbox-one-
dashboard-design-ui-refresh-interview-customization