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X Box and Toyota

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1. What supply chain changes did Microsoft make between the Xbox and the Xbox 360?

What was the motivation for these changes?.............................................................................

Between the launch of the Xbox 360, the environment had changed drastically. Technology improved, Consumer trends were changing the industry (increasing presence of broadband internet in US households), and Microsoft's critical objectives for the Xbox 360 had changed from what they were with the original Xbox. Microsoft's brand was no longer a new to the market and they had successfully made a name for themselves. It also already had a large portion of their partnerships and supply chain infrastructure in place.

It shifted all manufacturing to china instead of more local regions. For the first Xbox, where demand was an unknown factor, they wanted manufacturing close to the market regions, so they could have more control over supply. For the Xbox 360, they were more focused on cutting costs. They also added another EMS so they could have more control over the supply flow, which was particularly important since manufacturing was much further away from its markets.

The company also contracted with chip manufacturers so It owned the chip designs. This would give it more cost control over the products life cycle because it would be able to go to any contract chip manufacturer in order to continually reduce costs.

Still needed improvements

Toyota ensures that both the upstream and downstream supply chains are highly efficient networks. For its upstream supply chain, Toyota not only engages in activities that ensure that information flows across its suppliers, but also engages in various activities geared toward promoting a shared network identity among its suppliers. More specifically, Toyota created network-level processes to ensure that they share a social community, network norms and knowledge (Dyer & Nobeoka, 2000, p. 352). To implement this, Toyota has established various supplier associations (kyohokai) since 1943 so that they can have "(1) information exchange between member companies and Toyota, (2) mutual development and training among member companies, and (3) socializing events"(Dyer & Nobeoka, 2000)."

For its downstream supply chain, Toyota is dependent on its dealers to distribute new and used vehicles, as well as servicing for its profitability. Toyota manages its dealers with three principles: (1) Independence of dealers as outside investors; (2) Winning jointly; (3) Encouraging competition among channels. This approach encourages their dealers to make independent decisions and be proactive in making improvements. Toyota help the dealers make decisions toward investing in areas necessary to improve



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