Reference no: EM133258242

"Microsoft decided to get into the business of video games in the mid-1990s. It decided that it would not carry out manufacturing and distribution activities in-house. Microsoft wanted to ensure that the Xbox was on the retailers' shelves in October 2001 and was sold for $400. Microsoft clearly focused only on the software part of the Xbox and left the hardware design and manufacturing to Flextronics, a large electronics and manufacturing service provider. Microsoft asked its contract manufacturers to build additional capacity in anticipation of the huge success of the Xbox 360. Its competitor Sony keeps both design and manufacturing functions in-house, whereas Microsoft decided to outsource these activities." How do firms like Microsoft identify their core processes to keep them in-house & outsource all non-core activities? ii. You supply steering wheels to Mahindra & Mahindra for their existing products. Mahindra approaches you to develop and supply steering wheels for one of its products, the Logan. It wants you to invest in the necessary tools required for the same, which will involve a substantial investment. What kind of additional costs would have been incurred by Mahindra & Mahindra because of your lack of investments in additional capacity? Explain. iii. Denso was the sole supplier for Toyota for all electrical and electronics parts till 1988. Toyota recognized that electronics would play an essential role in the automobile. Toyota opened its own electronics manufacturing facility in 1988. Toyota identified electronics as a core and strategic function and decided to master it so that it could manage its suppliers effectively. They still depended on Denso for supply, but they consciously built design and manufacturing capability within the firm." What type of sourcing strategy is followed by Toyota regarding electrical and electronics parts? What are the benefits and drawbacks of this kind of strategy?