Internet Marketing Strategy Implementation - Essay Example

Choose any Worldwide Company (Microsoft) using a SWOT INTRODUCTION Microsoft is the leading company specialized in computing devices and software. Innovation and unique entrepreneur ideas is the core of this business. At Microsoft, science and technology can be divided into three levels of hierarchy. First, high and new technologies are used to upgrade the level of traditional technologies; most of the innovation relies on this kind of technology. Second, high-tech is the hope of future prosperity. Hence high-tech does not receive full financial support but adequate funds. Third, basic research, the source of creation and innovation, is supported constantly. A problem that a successful innovation strategy must solve is how to communicate effectively about innovation throughout the organization. It would be helpful if this method of communication broke down stereotypical thinking patterns, if it put innovation into a new context so old methods of thinking could not be used and private issues could not surface (Chaffy et al 2000). INTERNAL ENVIRONMENT ANALYSIS SWOT is a widely used thinking framework for identifying Strengths, Weaknesses, Opportunities and Threats SWOT analysis shows that Microsoft obtains a strong position of the market because of its unique vision and services proposed to customers. SWOT shows that Microsoft successfully identifies the main advantages and threats of correct market position and company’s operations (Chaffy et al 2000). Strengths The strengths are strong brand image and expert system, excellent web-site and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Customers’ loyalty can be achieved through the people who are employed by Microsoft. Creativity becomes the responsibility of R&D, which is staffed by specialists in visualizing and realizing marginal or major product changes. Since senior management is responsible for planning and control throughout the company in nonintrapreneurial firms, it follows that they must adopt a leadership style that is fairly directive. In most of these firms, managers adopt either a benevolent autocratic, consultative, or participative style. Microsoft makes an emphasis on people. To become more intrapreneurial, Microsoft teaches its managers how to promote organizational commitment and motivate employees to achieve the organization's goals while at the same time giving them the freedom to be creative. In a sense, the culture breaks down the barriers between work and play so that employees gain intrinsic reward (in the form of pleasure from actually doing work) rather than just extrinsic rewards (in the form of pay) (Microsoft Home Page 2008). Opportunities The opportunities include high potential to growth and profitability, professional management team and corporate culture, customized order system and free shipping. There is a great opportunities for the company is this field, because specialized shops, throughout the world are interested in goods produced in the environmentally friendly manner. In the context of making organizations more creative and innovative, Microsoft assesses the areas in which the organization can benefit the most from greater emphasis on creativity and innovation. Competitive benchmarking serves both as a way of identifying what creative and innovative things competitors are doing as well as finding out for each of the areas requiring creativity and innovation who is the best. There is no substitute to a thorough market analysis as a guide to understanding the firm's customers and prospects and their distributors, and identifying areas that can benefit from creative solutions and innovative products and services (Chaffy et al 2000). Weaknesses The main weaknesses are low market potential and uniqueness of the product. Competition is the main threat for Microsoft. In spite of weaknesses and threats, Microsoft has an attractive position based on a combination of cost management and customer services (Chaffy et al 2000). Global trends establish challenges for generating creativity and innovation for large companies like Microsoft. They also provide research challenges from a creative and innovative management perspective. Research challenges fall into two major classes of opportunities: one deals with methodologies and the other deals with issues to rethink, realign and restructure large-scale companies (Crawford 2003). Threats The main threat for Microsoft is increased competition and near monopolistic position on the market. Microsoft is often criticized by its monopolistic power and increased market share. This limits its growth and development processes. The main competitor of Microsoft, Apple, launches new products trying to maintain a strong position on the market. It leads to sales decline and low profitability in America and Europe. Developing global infrastructures, exploiting new technologies for the benefit of all people, and providing more space and a better quality of life on a crowded planet place ever-increasing demands on creative and innovative ways to manage the comapny. New methods of accountability will be needed to ensure that creative and innovative activities are truly better than traditional ways (Hollensen, 2007; Microsoft Home Page 2008). EXTERNAL ANALYSIS - PESTEL Today, political situation is stable marked by democratic processes and liberalization reforms. Strong political traditions have a great impact on global IT market. Political interference and corruption are the main risks for a foreign company (Crawford 2003). The main methods by which Microsoft grows are innovativeness and creativity, unique brand image and a first mover position of the market. Legal Factors Legal Environment: Asian countries and Africa introduces laws and regulations in order to support foreign subsidies and attract FDI (foreign direct investments). In order to support national economy, the governmental prevents price rises, or even to rolls them back in basic industries such as steel. Governmental involvement seems to relate price increases to the impact on inflation and increased productivity. Government has the influence to block or roll back price increases (Hollensen 2007). America and Europe have favorable legal laws and regulations which support market development and growth, thus they limit monopolistic position of every company. Economic situation Economic situation in America and Europe is marked by low inflation rates and high income per capita. Thus, in Asia and Africa liberalization and high level of investments can be considered as opportunities for the company to enter this country. American and Europe have higher standard of living. For IT company, there are also the necessities of making long-run capital commitments, meeting the requirements of joint ventures with nationals, and the imposition of special income taxes and import duties on necessities, as well as differences in social legislation, location considerations, protection of home products, governmental attitudes and control, laws affecting labels and standards, transportation and communications problems, and the risks of inflation, currency devaluation, and expropriation (Hollensen 2007). All these create many additional uncertainties to those encountered in national marketing. Social-demographic factors Social-demographic factors suggest fast population growth and decreased mortality rates. Both in physical appearance and in most aspects of their culture-notably, their language, their traditional form of administration, and their religion. Organizations that are sensible will ensure that they are at the vanguard of this revolution in their industry. Those which will be the winners will ensure not only that they are at the vanguard of their industry, but also that they seek to exploit the learning from developments in R&D for the rest of their organization (Hamel and Prahalad 1996). While the population that can be addressed by conventional physical sales and marketing is constrained by geography, that of the Internet is constrained by the number of people who both have access to it and make active use of it (these not necessarily being the same thing). Estimates of the number of people who use the Internet and PCs vary widely, although a consensus seems to be emerging that currently tens of millions of people do indeed use the Internet. What there is no disagreement about is the type of people who use the Internet. At the moment (and this will change as the user-base of the Internet expands), they are predominantly young, under the age of about 40, male and relatively wealthy. It should come as no surprise, therefore, that the pornography industry is one of the few industries that appears to have developed a successful business model for selling on the Internet. Another key aspect of the demographics of the Internet is that every one single person using it owns, or has access to a computer. Users are likely, therefore, to have an above average interest in technology. Computer companies, both hardware and software, are, therefore, also extremely well represented on the Internet (Paley, 2006). Technological factors Technological factors involve the Internet access and development of telecommunication infrastructure, new methods of doing business and information availability. Such factors as continued economic growth, increased disposable income, vigorous domestic and foreign competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form. The application of computer technology and the use of new analytical techniques has added greatly to the efficacy of planning activities. Such tools as critical paths, input-output analysis, payoff matrices, decision trees, linear programming, and simulations (Kotler & Armstrong 2005). The decision as to whether or not to enter this stage and pursue rapid growth may be influenced by the business leader wanting to make more money, desiring to lead a large business or perhaps for the status. Alternatively it could be driven by the demands of the customers who may want to put more trade with the business and who might take their trade elsewhere if the business cannot respond. As such, the Internet and PCs industry enables Microsoft to pursue a low-price strategy while maintaining profitability. There are industries in which this is already proving possible: indeed, in some sectors we are starting to see wholesale migration from physically based methods of doing business to virtual methods. The reasons for such a rapid increase are obvious: the target market of the affluent young (often men) fits well with the demographics of the Internet; regular surfers on the Internet are highly likely also to hold stocks and shares. Finally, the speed with which the transaction can be completed is far quicker than that using the traditional methods. This creates new unlimited opportunities for Microsoft and its new products. BIBLIOGRAPHY 1. Chaffy, D., Mayer R., Johnson, K., Ellis-Chadwick, F. 2000, Internet Marketing, Strategy Implementation, and Practice. London: Pearson Education. 2. Crawford C. Merle. 2003. New Products Management. Irwin-McGraw Hill. 7th edition, 3. Hollensen, S. 2007, Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition. 4. Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall; 11th edition. 5. Microsoft Home Page. 2008, Retrieved 12 July 2008 from www.microsoft.com 6. Hamel, G., Prahalad, C.K. 1996, Strategy as Stretch. Chapter 6.Competing for the Future. Harvard Business School Press; Reprint edition, pp. 138-161. 7. Paley, N. 2006. The Manager's Guide to Competitive Marketing Strategies. Thorogood. Read More