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International Business

Microsoft – Outsourcing Xbox

Background

Microsoft, from its inception, has been known for its software, especially its Windows platform. It has changed the way we operate computers and through its software, has made the computer user-friendly and very efficient. Microsoft, however, does not want to only specialize in the software department. They have thus expanded their excellence in other departments such as gaming, music and hardware.

Problem

When Microsoft entered the video game console market, they were faced with a dilemma: whether to manufacture the Xbox themselves or outsource it to a third company. Microsoft ultimately chose to outsource the production to Flextronics. Flextronics’ “industrial park” strategy is what allowed it to manage its supply chain, making the production of Xbox more efficient and cost effective. They also had factories around the world, which were all under the centralized information system, s they could shift the......


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Approximate Word Count: 788
Approximate Pages: 4 (250 words per double-spaced page)

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