Prospects of a Challenger - A case study of Microsoft and the Console Industry

Purpose: The purpose of this thesis is to give a contribution to the studies of what strategies those are of importance for challengers in consumer technological markets aiming for the market leader position. To be able to investigate this phenomenon we have chosen to study Microsoft’s second position in the video game console industry. In addition, we want to illuminate Microsoft’s competitive advantages, how Microsoft can take advantage from Sony’s setbacks and what strategies those are of importance for Microsoft in the battle of becoming the market leader. Method: A case study of Microsoft has been conducted. Several of interviews with the board of directors of Microsoft and also a business analyst and a retailer have built the base of the empirical findings together with secondary data which has been gathered mainly from news articles, business magazines and official websites. The theories have been linked together by constructing a theoretical framework that been as guidance in the collection of empirical data and also in the analysis procedure. Conclusions: For challenger companies in consumer technological industries aiming for the top leader position there are several strategies to be developed in order to become successful. First of all, it is important to actually recognize a window of opportunity when it arises and the challenger must act quickly in order to attract the consumers. Furthermore, it is crucial to identify potential unsatisfied segments within the competitors segment if the market leader would overshoot market demand or embark on a strategy profile that is not in agreement with the market. When targeting the same market segment as the market leader using similar strategy it is important to find a unique selling point in. Furthermore, in consumer technology industries, adaptability and flexibility is crucial. Also, offering the consumers several price and technology levels is a way to attract as many as possible. Finally, promoting new and innovative ways to use a product is a superior strategy in order to achieve a dominant position