6 1 short paper

The Integration-Responsiveness Framework
The Integration-Responsiveness Framework in Product Innovation Policy
Lacey Bailey
Southern New Hampshire University
6-1 Short Paper
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The Integration-Responsiveness Framework
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Introduction
Vietnam is a vibrant, emerging economy of over 90 million people, 50% of whom are
aged under 30 years, a significant number of whom engage in digital games (CIA, 2018). For my
target country I chose Vietnam which has transformed from one of the world’s poorest nations to
a lower middle-income country with GDP growth per capita among the fastest in the world
(Worldbank, 2017). Vietnam continues to develop digitally with forty percent of the country
regularly accessing social media, ranking seventh among the countries with the most Facebook
users (Statista, 2018). More than one third of the country’s population can be considered gamers
and its video game revenue is ranked 28th in the world (Newzoo, 2017), with a reported seventy
percent of the population now having access to the internet (InternetWorldStats, 2019). To date
little is known about gaming as a leisure activity in the country (McCauley, Nguyen, &
McDonald, 2016), yet like other countries around the world, it has become a pervasive leisure
activity engaged in by people from all strata of society (Silk et al., 2016).
For our product we chose The Xbox One gaming console which is priced around $150$300 depending on the storage of the console. Some of the major features and benefits of the
Xbox one is cloud storage, a digital library, and the ability to pre-install games and play the
moment they launch. The device also includes 4k streaming, 4k blu ray, and different apps you
can download. A new feature for Xbox called the Game Pass, allows you to purchase an
upgraded subscription and enjoy a library with hundreds of games at a monthly price making it
easy to afford games, and try them before you actually purchase.
Xbox is a video gaming brand owned by Microsoft and is believed to be a part of
Microsoft’s strategy to “steer the digital environmental revolution” in an effort to promote their
authority in the video gaming market in terms of technology. The company promoted specific
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product implementations in order to create competitive advantages in the field of the gaming
industry but was also priced higher than their competitor PS4. According to Jacobsson (2009),
the consumers preferred Xbox 360 because of the Xbox Live feature that enabled the gamers to
connect online and hence proved to be a rival to the market leadership of Sony PlayStation.
Globalization versus Responsiveness
With respect to Xbox’s design and positioning, the industry and target market factors in
favor of responsiveness. Being an Xbox fan living outside of North America is not easy and they
are just now taking considerations of globalization. Even Netflix has struggled globally because
in many countries potential customers cannot afford the high-speed broadband needed to use the
service. Since 2015 with their Xbox 360 though, they have come along way integrating
backwards integration, adding more products specifications, and adding more games to their
online libraries. The launch of Xbox 360 and Xbox Live proved to be the game changers in the
video game industry. With Vietnam being such a young culture with over 50% under 30 and our
position in the US now, I believe the target market is favorable to responsiveness with a system
gaming system like this.
Target Market Challenges and Adaptations
Privacy concerns have been a challenge ever since they came out with the Xbox 360
Kinect. It is a required component of the Xbox One system, and you need to have it on and
connected at all times—always watching, and always listening, to its users. This certainly raises
privacy concerns for a lot of the target market. “Microsoft has very, very good policies around
privacy,” Microsoft (MSFT) vice president Phil Harrison said. “We’re a leader in the world of
privacy, I think you’ll find. We take it very seriously. We aren’t using Kinect to snoop on
anybody at all. We listen for the word ‘Xbox on’ and then switch on the machine, but we don’t
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transmit personal data in any way, shape or form that could be personally identifiable to you,
unless you explicitly opt into that.” (Kain, E., 2013). Microsoft notes in its privacy statement that
users can choose to unplug their Kinect or switch off its functions by saying “Kinect off.” Users
can also delete cached data stored by Kinect. An adaptation to this could also be having settings
that allowed you to turn on and off access. Another thing that has been a challenge to consumers
has been the switch of using actual games vs the cloud. Sharing used games with friends like
they used has been a challenge to them. The age of digital distribution and all of its drawbacks
and benefits has not arrived for console gamers yet. One way Microsoft could adapt would be to
allow for free transfers of game codes, or for a lending system similar to Amazon’s Kindle
lending (whereby one book at a time can be loaned out to another device.) Another adaption
related to games is a way to sign into a profile from another account to access all the games from
your account. The last thing that I think has been the biggest reason for such gaps is that with
Xbox 360, you mainly have to have an internet connection to play online or with friends. If you
don’t buy the online pass, you can’t play certain games and some of the lower class hasn’t had
money to get internet or a subscription. With this though, consumers stand to gain all sorts of
convenience from cloud-based computing, whether that’s a steady stream of updates and new
content or saving games across devices. Xbox can start to find more offline games that can be
played to adapt with this challenge.
Summary of Recommendations to the company’s CEO
Before it considers adapting or creating a product for this market Microsoft needs to
look at the trade offs within the I-R framework. Capturing and keeping online gamers’ attention
is paramount in the gaming industry. If a system or game doesn’t meet gamers’ expectations,
they’ll quickly move on to the next. Creating new products are a fundamental competitive
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advantage this industry has no matter what the costs. The tradeoffs of adapting the Xbox to
Vietnam is you never know how well the system will do other than to look at their competition
that is already over there. A lot of research will be needed which will cost a lot and be the
tradeoff of getting into a successful market. Looking at competition and trying to gain strategic
advantage will help Xbox know what marketing and product development to do.
The product can be mass produced and sold in Vietnam with no issues and still cater to
the target market with enough research done on our part on marketing and manufacturing. Strong
collaboration between product development and product marketing ensures that our product is
uniquely positioned in the market, buyers understand and get value out of what they are buying,
and marketing department is enabled to sell more effectively with the research down before we
enter and knowing the positions of our competitors.
Since we know that our competitors have made it successfully over in Vietnam, I believe
the responsiveness of our product will impact our product’s time to launch, take-off, penetration,
and diffusion by making it easier to enter. Our biggest way to be responsive will be through our
marketing efforts. Since ps4 and other competitors are over there and already in the market I
believe response time and take off will be very quick. Penetration and diffusion will not be a
problem once we have a solid marketing plan in place and can reach all areas with gaming
capabilities.
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References
CIA. (2018). Vietnam. Retrieved from https://www.cia.gov/library/publications/the-worldfactbook/geos/vm.html
Worldbank. (2017). Vietnam. Retrieved
from http://www.worldbank.org/en/country/vietnam/overview
Statista. (2018). Number of Facebook users in Vietnam from 2015 to 2022. Retrieved
from https://www.statista.com/statistics/490478/number-of-vietnam-facebook-users/
Newzoo. (2017). The Vietnamese gamer | 2017. Retrieved
from https://newzoo.com/insights/infographics/vietnamese-gamer-2017/
InternetWorldStats. (2019). Asia internet use, population data and Facebook statistics June 30,
2019 – Vietnam. Retrieved from https://www.internetworldstats.com/stats3.htm
McCauley, B., Nguyen, N., & McDonald, M. (2016, October 15–16). Understanding the motivations of
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Kain, E. (2013, May 28). The five biggest problems with the Xbox one. Forbes. Retrieved April 27,
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