The Atlas. Microsoft Corporation - Essay Example

? Company Research for Atlas Investments: Microsoft Corporation. Table Of Contents Table Of Contents 2 Executive Summary: 3 A brief history of the company: 3 A brief biography of the current CEO: 4 Market analysis: 4 Markets in which the company competes: 4 Primary Market: 5 The Market Share: 5 Company’s position relative to its competitors: 5 Financial analysis: 6 Revenues and earnings over the past five years [2006-2010]: 6 Recommendation: 7 References………………………………………………………………………………………...8 Executive Summary: Microsoft Corporation has been an iconic company in the field of Information technology. Microsoft is recognized as a company that has revolutionized the computer market world over. The company has been listed in the Forbes 500 companies in various occasions. The company has been steered towards steady growth by its competent management. The CEO of the company Steven Ballmer is considered as a competent chairperson who has been able to help Microsoft grow further in terms of revenue and expansion. The company has been able to hold its market share in operating system market and expand its market in other ventures like Entertainment and devices. The company has substantial potential to grow even further. A brief history of the company: It was the 1975 issue of Popular Electronics that featured the computer product Altair 8800 of MITS (Micro Instrumentation and Telemetry Systems). It was one of the co-founder of Microsoft Paul Allen who observed that they can develop a basic programmer for MITS that can act as an interpreter. Bill gates the other prominent co-founder of Microsoft and Paul Allen developed the basic interpreter for Altair, which was a success. This gave Microsoft a clear direction and on April 04, 1977 Microsoft Inc. was established. The company has ever since a huge growth in the field of software development and internet revolution. The company currently deals with product range Windows operating system, Server and tools, online service division and Entertainment. A brief biography of the current CEO: Steven Ballmer was appointed as CEO of Microsoft in January 2000. He has been with Microsoft since 1980. Ballmer has been heading various divisions in Microsoft ever since. The main divisions that were under Ballmer include Operating Systems Division, Operations and sales and Support. In the year 2011 Ballmer’s total wealth estimate was calculated to be US$ 14.5 billion. He has been ranked 46 on the Forbes list of billionaires in 2010 issue. Ballmer is acknowledged in the business circuit for his over enthusiastic behavior during business meet. His flamboyant way of conducting himself during conferences sets him apart from other CEOs. Market analysis: The main Industrial market that Microsoft deals with is IT industry. The main products offered by Microsoft are software programs and operating system. Microsoft acknowledges the importance of Research and Development in the IT industry and is always developing new operating systems and softwares to gain competitive advantage. Markets in which the company competes: The company mainly deals with software programming. The company has expanded its domain in many sectors in IT market. Windows operating systems, server and tools, online service operations, business division and Entertainment devices section. The client division of the Microsoft deals with designing the flagship product of Microsoft Windows operating system. The server division produces products line like Windows Server 2008 R2, Microsoft Visual studio, Microsoft SQL and Microsoft Silverlight. The company also develops software required for business process management, Microsoft BizTalk software. The online services include search engines Bing and MSN. In business division the company deals with Microsoft office package mainly designed to cater the need of office documentation and communication. The latest package is Microsoft 2010. In entertainment and devices section the company deals with video game market, the latest offer by Microsoft has been Xbox and its sequels. The company also has online TV network, MSN TV. Microsoft also deals with the hardware market mainly mice, game controllers, gaming pads and keyboards. Primary Market: The primary market in which Microsoft operates on is the software market mostly aiming at the operating system market. Their operating system Windows is still their main product and their office software Microsoft Office package which offers many tools like Microsoft Office, Excel, Access, Power point etc. The Market Share: Microsoft currently dominates the 15th rank in the top 500 companies in the world and the operating software system holds 93% of operating system market since the year 1991. The Microsoft Office suite dominates the 90% of the Office software market and earns the revenue of $ 9 billion annually; this is one third of the total revenue of the company. Company’s position relative to its competitors: The company does dominate the office software market but the company has been continuously losing its market share in online search engine to yahoo and Google. The company had estimated a growth of 11% in their online services instead the company is now trying to ensure 3% to 8% growth in the online service at least. The market share of internet explorer also faced a drop in market share with the market share going below 50% in the year 2010. Financial analysis: Though the company has seen some set back in their expansion plan yet the company has been on a steady growth curve financially. Revenues and earnings over the past five years [2006-2010]: The revenue earned by Microsoft over last five years indicates steady growth, though the company did suffer minor dip at the wake of global recession. The revenue generated by the company in the year 2006 was estimated to be $ 44,282 million and in the year 2010 it has been calculated to be $ 62,484 million. The P/E ratio for the year 2010 has been ascertained as 9.49 and the EPS has been reported to be US $ 2.52 Figure 1: Financial Highlight of Microsoft showing revenue over five years (2006-2010) (Source: Annual Report 2010 Microsoft Corporation) Figure 2: Financial Highlight of Microsoft showing the P/E ratio and EPS for the year 2010 (Source: Annual Report 2010 Microsoft Corporation) Recommendation: Microsoft Corporation is already an established company. The company has good infrastructure and rich human resource. The company has well known business figures as its board members. The board members of the company have impeccable credentials and have clarity regarding the company’s future plans. The track record of Microsoft makes it a forerunner to be incorporated in the Franklin mutual fund policy. The company has shown good performance in the stock market and has dependable corporate governance. The company is also transparent in its policy and transactions. Microsoft Corporation is stable and growing company that should be incorporated in the Franklin Fund. References: MSN MONEY, Microsoft Corp, June 6, 2011 < http://investing.money.msn.com/investments/stock-price?symbol=US%3aMSFT > Microsoft Corporation. Annual Report 2010, June 6, 2011 < http://www.microsoft.com/investor/reports/ar10/10k_fh_fin.html > Read More