A Strategic Management Report On Microsoft Corporation
Dhanilal Nepali
Symbol No: 1611040
KUK. Registration No: 2017-1-02-1040
A Strategic Management Report
Submitted to:
Samalkha Group of Institutions, Samalkha-132115, Delhi NCR
Submitted for the degree of
Bachelor of Business Administration (B.B.A)
Samalkha-132115, Delhi NCR
10thMarch, 2017
Ph: 8901687840
Email: dhanilalnepali8@gmail.com
TABLE OF CONTENTS
Contents
CHAPTER 1: INTRODUCTION
1.1 Abstract
1.2 Overview of Software industry
1.3 List of Largest Software Companies in the world
1.4 Introduction of Microsoft Corporation
1.4.1 Products and Services
1.5 Objectives of the study
CHAPTER 2: PROFILE OF THE ORGANIZATION
2.1 Current Strategies of the Microsoft Corporation
2.2 Mission and Vision of Microsoft Corporation
2.3 SWOT Analysis
2.4 External Environment (PESTLE) Analysis
2.5 Michael Porter’s Five Force Analysis
CHAPTER 3: ASSESSING THE STRATEGIES
3.1 Short term and Long term Objectives of Microsoft
3.2 Value Chain Analysis
3.3 Strategic Group Map of Software Industries
3.4 Multi-business Strategy/ BCG Matrix
CHAPTER 4: SUMMARY AND CONCLUSION
4.1 Summary
4.2 Conclusion
4.3 Recommendation to the College
4.4 Recommendation to the Microsoft Corporation
References
CHAPTER -1
INTRODUCTION
1.1 Background of the study:
Microsoft's miraculous Success in business has become a topic to many business experts around the world. What makes Microsoft so successful? This report reveal, analyze and explore the business strategy of Microsoft which make them the world leader in the industry with no close competitors. In fact this report expects to discover the competitive position of Microsoft discovering numerous strategic factors including, Macro environment, industry dynamics, resource and capabilities, culture, entrepreneurship style etc. This report also will explain how Microsoft have been effectively articulated it business strategies to create a sustainable strategic lock-in to remain sustainable in their competitive position continuously over several decades. A PESTEL analysis is carried out to identify the key macro environmental drivers to change in order to review the strategy against the challenges from them. Industry forces will be analyzed to identify the nature of competition. To diagnose the strategic capabilities the value chain model is used. The strategic group map is also included to show the competitive market position of, the world leading software industry, Microsoft Corporation. And finally, some of the valuable suggestions for the Microsoft Corporation are also included in this report.
1.2 Overview of Software industry:
The software industry is comprised of programmers, designers, marketers, sellers, and others who create the programs users need and then market them and sell them. Some programs are designed for general use and mass consumption, while other programs are custom-designed for a company’s needs. Computer software companies typically provide software for a specific niche or function. For example, some companies develop software for engineers, while others develop software for traffic control.
The field of computer software can be divided into three primary segments: corporate information services (IS) departments, software vendors, and consultants. Corporate IS departments usually implement and support software and hardware products for companies that produce nontechnical items or services. They work with the individual departments or lines of businesses within the company and their software needs. They then fill gaps by creating software the company needs to make it operate more efficiently, or they reprogram and improve existing software.
People who work for software vendor companies focus on creating products for sale. These products could be mass marketed for consumers, such as tax programs, home accounting programs, or home budgeting programs. Or, they could provide enterprise software to business niches, such as the restaurant industry, medical industry, or specific departments within those industries. Consultants are independent contractors who are hired by corporations to help implement new software packages. Consultants may be individuals, or they may be a company with several consultants for hire.
While there was a need for computer software in the early days of computer use, it was not until the personal computer hit the market and exploded in the 1980s that the demand for computer software led to the development of the industry. For the first few decades of the software industry, most software was designed to run on a desktop personal computer or a laptop. By the 2000s, there were more devices that contained computer chips and therefore needed software and applications, or apps, for their use or to expand their capabilities. These devices include cell phones, global positioning devices (GPS), personal digital assistants (PDAs), smartphones, and tablet PCs and readers.
The most common jobs in the computer software industry are software engineers, software developers, programmers, testers or quality control personnel, software marketers, sales people, and technical writers.
1.3 List of largest Software Companies in the world:
With reference to the Forbes Global 2000, an annual ranking of the top 2000 public companies in the world by Forbes magazine, the largest top 10 software companies are given in table below:
Software Companies
|
Revenue
|
Fiscal Year
|
Market Capital
|
Headquarters
| |
$86.83
|
2014
|
$385.4
|
Redmond, Washington, USA
| ||
$38.27
|
2014
|
$194.7
|
Redwood City, CA, USA
| ||
$23.3
|
2014
|
$85.9
|
Walldorf, Germany
| ||
$6.7
|
2014
|
$17.7
|
Mountain View, CA, USA
| ||
$6.0
|
2014
|
$35.3
|
Palo Alto, CA, USA
| ||
$4.8
|
2013
|
$17.2
|
Brookfield, WI, USA
| ||
$4.5
|
2014
|
$13.7
|
Islandia, NY, USA
| ||
$4.2
|
2013
|
$26.0
|
Mountain View, CA, USA
| ||
$4.1
|
2014
|
$37.4
|
San Francisco, CA, USA
| ||
$4.1
|
2013
|
$17.7
|
Madrid, Spain
| ||
1.4 Introduction of Microsoft Corporation:
Microsoft Corporation (Microsoft) is one of the leading providers of software, and hardware products and services. The mission of Microsoft Corporation is to enable people and organizations throughout the world to do more and achieve more by creating technology that transforms the way people learn, work, play, and communicate. It develop and market software, services, and devices that deliver new opportunities, greater convenience, and enhanced value to people’s lives. Microsoft do business worldwide and have offices in more than 100 countries.
Microsoft Corporation generate revenue by developing, licensing, and supporting a wide range of software products and services, by designing, manufacturing, and selling devices, and by delivering relevant online advertising to a global customer audience. In addition to selling individual products and services, it offer suites of products and services.
Microsoft Corporation’s products include operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games; and online advertising. It also design and sell hardware including PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories.
Microsoft offer cloud-based solutions that provide customers with software, services, and content over the Internet by way of shared computing resources located in centralized data centers. Examples of cloud-based computing services it offer include Bing, Microsoft Azure, Microsoft Dynamics CRM Online, Microsoft Office 365, One Drive, Skype, Xbox Live, and Yammer. Cloud revenue is earned primarily from usage fees, advertising, and subscriptions. It also provide consulting and product and solution support services, and it train and certify computer system integrators and developers.
Microsoft conduct research and develop advanced technologies for future software, devices, and services. It believe that it will continue to grow and meet its customers’ needs as the productivity and Platform Company for the mobile-first and cloud-first world. It will continue to create new opportunities for partners, increase customer satisfaction, and improve its service excellence, business efficacy, and internal processes.
1.4.1 Product & Services
A. Windows & Windows Live Division:
This division develops and markets PC operating systems, related software and online services, and PC hardware products. This collection of software, hardware, and services is designed to empower individuals, companies, and organizations and simplify everyday tasks
B. Server and Tools:
This division develops and markets server software, software developer tools, services, and solutions that are designed to make information technology professionals and developers and their systems more productive and efficient
C. Online Services Division:
This division develops and markets information and content designed to help people simplify tasks and make more informed decisions online, and help advertisers connect with audiences. OSD offerings include Bing, MSN, adCenter, and advertiser tools.
D. Entertainment and Devices Division:
This division develops and markets products and services designed to entertain and connect people. The Xbox 360 entertainment platform, including Kinect, is designed to provide a unique variety of entertainment choices through the use of our devices, peripherals, content, and online services. Skype and Windows phone are also developed under this segment.
E. Microsoft Business Division:
This division offerings consist of the Microsoft Office system (comprising mainly Office, Office 365, SharePoint, Exchange, and Lync) and Microsoft Dynamics business solutions, which may be delivered either on premise or as a cloud-based service.
1.5 Objectives of the study:
The objectives of this report are as follows:
To know about the Microsoft Corporation and its current strategies. To know how much competition is in the software industry. To know about the competitive market position of the Microsoft Corporation. To determine what strategic capabilities Microsoft has in order to sustain competitive advantages. To identify the key drivers for change in business.
CHAPTER -2
PROFILE OF THE ORGANIZATION
2.1 Current strategies of the Microsoft Corporation:
The current strategies of the Microsoft Corporation are as follows:
Continuing our long standing commitment and leadership in accessibility research, awareness and innovation. Making the computer easier to see, hear and use by building accessibility into Microsoft product. Facilitating the next generation of accessible technology and moving the industry forward with ground breaking technologies. Building strong, collaborative relationships with a wide range of technology partners and organizations to raise awareness of the importance of accessibility in meeting the technology needs of people with dishabilles.
2.2 Mission and vision of the Microsoft Corporation:
A. Mission statement of Microsoft Corporation:
The mission of Microsoft Corporation is to enable people and organizations throughout the world to do more and achieve more by creating technology that transforms the way people learn, work, play, and communicate.
B. Vision statement of Microsoft Corporation:
The vision of Microsoft Corporation is to create innovative technology that is accessible to everyone and that adapts to each person's needs. Accessible technology eliminates barriers for people with disabilities and it enables individuals to take full advantage of their capabilities.
2.3 SWOT Analysis of the Microsoft Corporation:
A SWOT analysis is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a projector in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The strengths, weakness, opportunities and threats of Microsoft are presented below:
2.3.1 Strength:
Some of the strengths of the Microsoft Corporation are briefly described below.
i. Brand loyalty & reputation:
Over the years, Microsoft has been the leading OS and software provider, which resulted in more than 90% market share for PC OS. Few other brands are capable to compete with Microsoft for this reason. Even open source OS, which are completely free and well suited to use for common user, find it hard to attract users. Microsoft’s brand is the 5th most valuable brand in the world, valued at $ 57.8 billion. Brand reputation leads to higher sales and greater market share.
ii. Tie ups with Hardware manufacturers:
The company works with all the major computer hardware producers like Dell and Samsung and major computer retailers to make sure computers would be sold with already pre-installed Windows software. The company also invested in Dell and Nokia to tighten its relationships with these companies.
iii. Easy to use software:
Microsoft products including its flagship Windows operating system are popular among the masses because of great quality and many decades of experience that Microsoft has put into its development.
iv. Strong Financial surplus:
Microsoft grew its revenues by 20% from 2008 to 2012 and holds more than $63 billion of cash and cash equivalents that can be used for acquisitions and substantial investments into R&D.
v. Acquisition of Skype:
With nearly 300 million users, Skype is a significant boost to Microsoft’s online presence and have a lot of potential in generating income from online advertising.
2.3.2 Weaknesses
i. Bad Investment Decisions:
Many of Microsoft’s acquisitions were not successful. Massive, Link Exchange, WebTV, Danger are just few examples of multimillion acquisitions made by Microsoft but soon shut down or divested.
ii. Dependence on hardware manufacturers:
Microsoft is a giant software corporation but it does not produce its own hardware and depends on computer hardware manufacturers to develop products that run Windows OS. If cheap and popular alternative OS would appear, hardware manufacturers may simple choose the alternative and Microsoft could do little to change the situation.
iii. PC market has matured:
Only recently has Microsoft entered the mobile technology sector and still heavily depends on its OS and software sales for standalone and laptop computers. The market for these products has matured and Microsoft will find it harder to grow revenues in these sectors.
iv. Slow in Innovation:
Microsoft has huge R&D resources and great position to enter new markets with innovative products but constantly failed to do so. It had an opportunity to be the first player in online advertising but missed the opportunity. Its entrance to mobile OS was also too late, while Google and Apple captured the market share.
v. Acquisition of Nokia:
With nearly 18,000 layoffs planned in FY 2014, 12,500 of which will be from Nokia division, there are speculations that Acquisition of Nokia has been a bad move for Microsoft in the short term leading to a drop in share prices. The company is expected to recover the costs by 2016. However, Microsoft is playing a long strategy in this case seeing growth potential of the Smartphone market.
2.3.3 Opportunities:
i. Cloud based services:
Microsoft could expand its range of cloud services and software as the demand for cloud-based services is expanding.
ii. Mobile advertising:
Mobile advertising markets are expected to grow in double digits over the next few years and Microsoft has a great opportunity to tap into these markets with its mobile OS.
iii. Mobile device industry:
Smartphones and tablets markets will grow steadily over the next few years and Microsoft could exploit this opportunity by introducing more of its own tablets and a new company phone.
iv. Growth through acquisitions:
With a huge reserve of cash Microsoft could start acquiring new startups that would bring new technology, skills and competences to the business.
2.3.4 Threats
i. Intense competition in software products:
Microsoft is more than ever on the pressure to introduce successful OS both in PC and mobile markets as such competitors like Google and Apple have already established positions.
ii. Changing consumer habits:
Customers shift from buying laptops and standalone PCs to buying smartphones and tablets, the markets, where Microsoft has only a modest market share and may never establish itself.
iii. Open source projects:
Many new open source projects are coming to the market and some of them became quite successful, such as new Linux OS and Open Source Office. Open source projects are free and so they can become an alternative to expensive Microsoft’s products.
iv. Potential lawsuits:
Microsoft has already been sued for many times and lost quite a few large scale lawsuits. Lawsuits are expensive as they require time and money. And as Microsoft continues to operate more or less the same way, there is high probability for more expensive lawsuits to come.
2.4 External Environment (PESTLE) Analysis:
Macro environmental influences on Microsoft are summarized with in following six categories to identify the key drivers for change.
Political
political intervention in new deals Regulations to education Regulations to the industry Restrictions on foreign recruitment Anti-trust law |
Economic
Fluctuation and Unpredictable behaviour of foreign currency Trade cycles Disposable income level of people Economic Growth Rates (around the world) Tax and Import/Export barriers Demand and supply condition |
Social
Accessibility of technology to different capable people (Disabled people, poor people) Empowering Youth Increasing adultery needs (aging population) Donating software to non-profits worldwide Realizing potential with new skills in students |
Technological
Innovation’s related to IT (especially in SOA (SAAS) and innovation to operating systems) |
Legal
Intellectual Property Rights Employee working hours, and Employment enrichment Laws on business regulation (Against Monopoly and forced competitor acquisitions) |
Environmental
Saving Energy & Green IT Carbon Neutral Cloud Computing Requesting all Customer to recycle their product after using |
Considered above PESTEL analysis this report argue that Technology is the key driver which could influence impulsively to Microsoft business Strategy. Microsoft put 13 – 14% of their revenue in Research & Development. Out of the various PESTEL factors Microsoft's sustainability of business is greatly dependent on the ability of competitors to provide better solutions at competitive low prices. The chance for competitors to challenge Microsoft on price has so far become unrealistic due to the economies of scale Microsoft enjoys. However given the fact that today's cutting edge technology could be obsolete tomorrow due to the dynamic nature of the software industry, If Microsoft fails to acquire or innovate the substitute next level technology for their platforms, the existing strategy have better chances to fail.
2.5 Michael Porter's Five force analysis:
Porter's Five Forces is a framework developed by economist Michael E. Porter to determine the profitability and attractiveness of a market or market segment. Porter's framework maintains that the attractiveness of a market segment is determined by five competitive forces. So far Microsoft is the leading software provider in the world in terms of its market share. It has faced many types of competitors from competitive products, and industry regulation challenges from various governments. It has actually thrived on this competition, often worrying more about the technology or customers’ wants and needs (Smith, 2003) while the constant focus with competition has kept Microsoft remarkably agile. Sometimes it has also contributed to Microsoft's overly aggressive tactics. Eg : ‘bundling’ which was found guilty of illegally maintaining a monopoly, but escaped with permission to bundle products in any way its sees fit, with relatively minor restrictions. Amazingly Microsoft makes the industry favorable to it by tactical control of five forces.
1. Threat of New Entrants -Low
The way and scale now Microsoft operates makes a big entry barrier for new entrants. On the other hand Microsoft over the years created a very successful coherent network, integrating people, partnerships, businesses, etc making everyone directly or indirectly dependent to Microsoft technologies. For existing customers, this makes hard to switch.
2. Industry rivalry -Moderate
Obviously there is competition for Microsoft products. But for the simple reasons the scale Microsoft operates, and the dependability they maintain, they create a successful lock in while keeping the rivalry at a moderate level.
3. Bargaining Power of Suppliers -Low
Microsoft has a well establish diverse customer base which none have. They have enough suppliers and many establish partnerships around the world. As a result Microsoft has a great bargaining power than their suppliers.
4. Bargaining Power of Buyers -Low
Microsoft is so innovative and so unpredictable with their capability to introduce new values and features to their customers at low prices. On the other hand customers find no close substitutes as a result.
5. Threat of Substitutes -Low
There are few substitute products that compete with enterprise software. The old way of maintaining and sharing company information was manual paper archival systems or printed reports from separate databases. The modern way of connecting all of a business’s information requires enterprise software. A business could continue with building multiple disparate systems, however, they would never be able to achieve what an enterprise software business solution could provide. Therefore, enterprise software is more flexible, scalable, and less expensive than the older types of solutions. The near absence of modern substitutes in the industry is a good sign for the companies within the industry.
CHAPTER -3
ASSESSING THE STRATEGIES
3.1 Short term and long term objectives:
A. Short term objectives of Microsoft Corporation:
i. Satisfy customers’ requirements by providing required software.
ii. Build strong relationship with stakeholders.
B. Long term objectives of Microsoft Corporation:
i. Establish and preserve management accountability to Microsoft's owners by appropriately distributing rights and responsibilities among Microsoft Board members, managers, and shareholders.
ii. Provide a structure through which management and the Board set objectives and monitor performance.
iii. Strengthen and safeguard our culture of business integrity and responsible business practices.
iv. Encourage the efficient use of resources, and to require accountability for stewardship of those resources.
3.2 Value chain analysis:
Value-chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Value chain analysis offers management the means to evaluate existing and new strategic opportunities. It provides insights into how opportunities might be pursued while identifying potential problems to be addressed. It helps to identify optimal solutions, i.e., solutions acceptable to customers, suppliers, employees and investors.
Primary Activities
A. Inbound logistics.
Microsoft contracts with multiple suppliers internationally, therefore the company has to maintain highly complicated supply-chain operations without any disruptions. The company sells Microsoft Dynamics AX, sophisticated software to assist with supply-chain management of businesses, and accordingly, Microsoft possesses an in-depth organizational knowledge about supply-chain management and inbound logistics. It is compulsory of all suppliers to adhere to Microsoft Supplier Code of Conduct and The Microsoft Supplier Requirements.
B. Operations.
Microsoft manufacturing plants are located all over the world ensuring proximity to suppliers at the same time reducing transportation costs and negative environmental impact. Some of the manufacturing plants are located poorest areas such as Brazil’s Manas and Mexico’s Reynosa, thus creating jobs for local people. Interestingly, unlike many other corporations of similar size, Microsoft does not provide detailed data about the numbers and other details of its manufacturing plants around the globe.
C. Outbound logistics.
Distribution of products and services are facilitated via three channels: original equipment manufacturers (OEM), distributors and resellers and online sales channels.
OEMs serve as a vital distribution channel for Microsoft via pre-installing Microsoft software on new devices such as PCs, tablets, servers, smartphones, and other intelligent devices. Pre-installation of Windows operating system on computing devices represents the largest component of OEM distribution channel.
Distributors and resellers of Microsoft products and services include retail outlets, such as Wal-Mart, Dixons, and Microsoft retail stores, as well as, license solutions partners (“LSPs”), web agencies, and developers and others.
Online sales channel is also important channel of distribution via official website of the company at www.microsoft.com. Online distribution channel also presents information about sales promotions and seasonal offers.
D. Marketing and sales.
Microsoft utilizes both, online and offline channels in an integrated manner in marketing and sales with a total marketing budget of $1.4 billion. Brand marketing message is closely associated with the values of effectiveness, efficiency and convenience in dealing with a wide range of professional and personal tasks.
E. Service.
Microsoft attempts to maintain highest level of customer services pre-purchase, during the purchase and after the purchase. Sophisticated online answer desk offers timely customer services in the areas of account and billing, technical support, setup and installation support and buying advice. Additionally, Microsoft offers support for businesses and IT professionals in terms of deriving the maximum benefits from their products and services.
Secondary Activities:
A. Infrastructure
Microsoft has created strong infrastructure because the company has been building on it since inception. Top management is still the same as it was when the company was formed. This means that the company culture has remained intact and become even stronger. Microsoft has successfully managed changes in organizational structure with changes in size of the company.
B. Human Resources Management
A company’s human resources can be measured in terms of its employee’s qualifications, commitment. Microsoft is able to attract and retain the best talent in the information technology business. Their employees are educated, dedicated and committed to their company, and this loyal and intelligent employee base is a very strong resource for Microsoft. Microsoft recruits from campuses of top colleges and universities from around the world and the company has a highly diversified workforce. Microsoft provides high pay and great benefits in addition to a highly competitive work environment and thus is a magnet for high achievers. Thus, this network or ecosystem of more than 88,000 brilliant minds is the most important strength of the company.
C. Technological Development:
Over the years Microsoft has continually created innovative technology products that have transformed the way people work, learn, play, and communicate. In the product development process the company is interested and is considering the feedback of its partners and customer in delivering and building value into every product they make.
D. Procurement:
One key place that technology can really make a difference is in the procurement process. Whether a commercial business or government agency, each must balance the challenges of maintaining efficiency while lowering cost and meeting the requirements of transparency throughout the procurement process.
Microsoft Corporation are practicing e-procurement tools meet all those challenges, and it’s getting better all the time. Electronic purchasing is eliminating handwritten requisition forms and long waits for supplies and services. It’s more efficient, provides a better grip on the procurement process, and altogether easier than paper-based methods. Before payment can be approved, every Microsoft supplier has to be approved by the Microsoft Procurement group, have signed an agreement with Microsoft, and have a purchase order in hand.
3.3 Strategic group map of the Software Industries:
|
Cloud Databases:
|
Companies in the Cloud databases (as known as Database-as-a-Service or DaaS) strategic group provide on-demand relational database software, available on a pay-as-you-go basis, based on an elastic architecture. This enables users to employ a relational database without having to purchase any software or servers, or manage the configuration.
Cloud Platforms:
Companies in the Cloud platforms (as known as Platform-as-a-Service or PaaS) strategic group provide complete on-demand development environments and tools, including an abstracted Cloud infrastructure layer and Cloud database, enabling enterprise IT groups develop, test, and deliver custom on-demand business applications without investing in traditional Systems Software or infrastructure. Cloud platforms, such as Microsoft Azure, also offer a stand-alone relational Cloud database, putting them in direct competition with pure-play DaaS firms.
Traditional Software:
Companies in the traditional Systems Software strategic groups provide programming languages, relational database software, Integrated Development Environments (IDEs), private Cloud environments, middleware, and other tools enabling enterprise IT groups to develop, test, host and manage custom on-premise business applications.
3.4 Multi Business Strategy / BCG Matrix:
Based on the BCG matrix, Microsoft is correctly taking from cows and investing in question marks. They are not following the BCG principles by allowing the dogs to continue to survive. The ownership test provides some insight as to why this may be. If the Server and Tools segment was an independent company, it would not perform near as well because of the synergies with the Windows Division. Additionally, this demonstrates a good example of the better off test for the Server and Tools segment. They are better off under the Microsoft umbrella for the same synergies. Neither test would pass for the Online Services Division. Companywide there is a lot of collaboration. For example, all of the software is designed to work together. The Windows operating system lets clients work with Microsoft servers, but the Windows operating system also lets clients collaborate together through the Office suite. The Xbox is the most independent product because it doesn’t integrate with the Windows operating system for most users, although it can be used to stream media from a Windows operating system. All of these segments use the corporate-level functions described previously. Each segment can use corporate-level resources like legal, human resources, IT, and R&D, but how much they use each function varies. Overall, Microsoft’s diversification strategy is related.
Microsoft is a very vertically integrated software company. It does all of its design in house, because that is its intellectual property–the code. Other services are outsourced like internal IT (Thibodeau, 2010) and commoditized legal services (Mintzer, 2013). These services are not core competencies for Microsoft. Microsoft should stay with the same level of vertical integration. They should only outsource elements of the business that are not a core competency for them, because this will ensure no other company can imitate them.
Ultimately, Microsoft creates value at the corporate-level for most segments. The Online Services Division is the only mystery. Bing only has 33% of the search engine market share (MadWire Media, 2013) and MSN.com is ranked 33rd globally behind Google.com (1st) and Yahoo.com (3rd) (Alexa, 2014). This lack of market share and losses shown in Figure 1 would lead anyone to believe the segment should be sold. With that said, having knowledge of what your customers are doing online through searches and how they configure their personal MSN.com homepage is valuable information that is difficult to acknowledge without inside information. These intangibles seem to be the only business case for the Online Services Division. If there is no insider information that would demonstrate value otherwise, my first recommendation would be to divest the Online Services Division.
Additionally, I think the Surface tablet should be moved under the Entertainment and Devices Division. While the tablets run versions of Windows, I feel these products are questions like the other Windows phones and there would be many synergies of having the mobile phone developers’ work with the Surface developers. The problem trying to be solved by Microsoft is that people want to be productive on the go. The Windows phone and Surface tablet are Microsoft’s answer to that question and therefore should be developed together under the same division. Having the Surface tablet under the Windows Division does not add any apparent synergistic value.
In conclusion, Microsoft is in a difficult situation now without any stars. Fortunately, they have cash cows that look healthy. In order to continue to be the worldwide leader in software, services, and solutions that help people and businesses realize their full potential they should make the four recommendations outlined in this analysis.
CHAPTER 3
SUMMARY AND CONCLUSION
3.1 Summary:
Microsoft Corporation is an American multinational software corporation headquartered in Redmond, Washington that develops, manufactures, licenses, and supports a wide range of products and services related to computing. Microsoft is the world's largest software maker measured by revenues. It is also one of the world's most valuable companies and has controlled an overwhelming share of the personal computer operating system market. Microsoft’s products do not stop at just an operating system; the company supplies the world with a number of other products including their Office Software Suite, their video game console Xbox, CRM Applications, server and storage software, and Zune, their digital music player. The company has had acquisitions to bulk its presence in markets such as online advertising, mobile devices, and enterprise software.
Microsoft Corporation’s goal is to offer its customers and partners the best possible end-to-end experience, and to become a satisfaction leader in the technology industry. The better Microsoft is at building a culture of accountability and trust, listening and responding to customers, simplifying product offerings and services, improving product quality and security, and innovating based on customer feedback, the more it will satisfy its customers and partners. The company values the ways in which input from customers and partners helps it progress as an organization and improve the quality of its products.
3.2 Conclusion:
In the fast changing world keeping on track with competition is a challenge. Microsoft being the global software leader, it is facing many challenges from industry forces. But this analysis find they are so far able to keep ahead against competition, by get in early and big strive to become the industry leader. As the leader they successfully create a lock-in by setting the industry standards.
3.3 Recommendation to the College:
There should be individual presentation rather than group presentation. By evaluating report feedback should be provided to the students.
3.4 Recommendation to the Microsoft Corporation:
Companies need to find its customer and create and provide value, and their main goal is to obtain trust from that customer which in return values that company. The core competencies of an organization are sometime considered to be hard to imitate or substitute; therefore, they are viewed as unique sources of sustained competitive advantage. Companies need to make sure that the quality perceived by the customer does not diminish over time due to increased performance expectations from products.
References: