Strategic Management at Microsoft and Google - Case Study Example

Title: Strategic management Student’s Name: Instructor’s Name: Course Name and Code: University: Date of Submission: Strategic management Introduction Google and Microsoft are both multinational American companies that are involved in the production of internet related products, and licenses. Google was founded in 1996 by Larry Page and Sergey Bin, while doing their PhD at Stanford University in 1998. August 2004, its initial public offering was effected when Larry Page, Sergey Bin and Eric Schmidt decided to work together for the next twenty years up to 2024. Microsoft on the other hand was established in 1975 to sell basic enterprise for the Altair 880, and rose to be the market giant in home page operating system. It was established by Bill Gates and Paul Allen. Microsoft is now the biggest company producing operating systems to nearly 90% of all computers in the world. Microsoft Company has been valued at $41 billion and rated AAA. Microsoft has minimal debt. In February 2011, Microsoft released a $2.25 cooperate bond with minimal debt than the government bond. Google received its first funding of $100,000 from the founder of Sun Microsystems, Andy Bechtolsheim. Google now is listed in the stock exchange where some of its funds for investment come from. Google moved to California in 2004 (Galunic, 1998 ), where other technology companies are situated. Microsoft moved its headquarters to Redmond, Washington from Bellevue Washington, this was a move to solidify itself to the market, and increase its market share. Microsoft developed an operating system called the UNIX. After merging with IBM, Microsoft developed the DOS-Disk Operating System that solidified the company’s position in the market, and made it dominate in the operating system market. Microsoft also developed the Microsoft mouse in 1983.Google was granted patent of its PageRank in 2004 and given to Stanford University. The word Google was later placed in the Oxford English Dictionary, denoted as to search for something on the internet (Duane et al., 2003). Google and Microsoft have a big supply chain. Google has a market share of 65% in the United States. Google supply the following products: Google search engine which is the main product, with critics Google still went ahead to invent the Google desktop search engine, to help locate files and folders on the computer. Google has the potential to develop the image search engine, and move away from the keyword search system. Google news search is also a new venture that Google is exploring. There is ongoing research work to improve Google map, and Google video. These are the new markets that Google is looking up, to explore in the coming days. Microsoft on the other hand jointly with IBM, developed an Operating system and Microsoft window in 1984 before going public (Prahalad and Hamel, 1990). The Federal trade commission formed collaboration with Microsoft and it was the beginning of a long battle with United State government. This did not stop Microsoft from inventing new products like the office suite, with improved technology. Microsoft developed Windows 95, and internet explorer to move away from the initial Bill Gates idea, of computer networking to World Wide Web. The development of Window XP caused Microsoft a court fine, and ordered to improve on the product omitting the windows media player (Microsoft Corporation, 2002). Invention that is created with either Microsoft or Google is always under check from rivals. Microsoft is facing a tough competition from Sony, and Nintendo Company that had dominated the game industry, until when Microsoft entered the market with a game console (Pinal and Sarosh). Google invented the controversial Google book that saw Google land in a Paris Court. That saw Google remove the works of LaMartimere from its work (Prahalad and Hamel 79-91). Google is in competition with Amazon.com over the sell of books. The arrangement of books is now in the thumb index for easy access (Hammonds, 2003). Microsoft has the following opportunity to improve on the window XP version to a modern version that is tailored to meet the individual’s needs. For example, Microsoft has developed the windows live family that has the following range of products including vision studio, and silver light, a web application framework (Microsoft Corporation, 2002). Google has developed the Gmail as a product that sends, and receives mails through the internet. Clients can chat with other members across the globe through this product. Google has also come up with Google docs that enable clients to create, edit, and collaborate documents from different sources (Hammonds, 2003). Google has acquired companies with many small capital ventures. In 2004 Google bought keyhole inc. and its product the earth viewer, and later changed the name to Google Earth. This positioned the firm strategically for the market that was in need for navigation serves. The auto mobile industries also needed to fit cars with radar, and navigators. Google played a key role. In 2005 Google bought out video, also in the same year acquired Grand Central for $50 million, and changed its site to Google Voice (Hammonds, 2003). This enabled Google to offer conference calls to its client. Google has also purchased the public video software maker on Technology for $106.5m, and not forgetting the acquisition of Aardvark for $50m. Google has also invested in the renewable energy industry putting up to $338.8m into the firm. Microsoft is in position of green energy connector shuttle that transports employees, and people from different campus. Microsoft is on the fore front rooting for a clean environment. These are all strategies to diversify their products to the market (Duene, 2008). Microsoft has the ability to develop easy features, and permanent to enhance the products. The last product they developed. Microsoft vista was a hard product to use. Microsoft can improve by use of new technology. The new trends like computer clouding is what will stir Microsoft to profit. This will enable high storage, and processing of data faster Pinal and Sarosh). Google have the capability to broadcast news through its network, it has acquired the required equipment through the acquit ion of small venture business, and expansion of its infrastructure. Google can also provide renewable energy in the national grid, by investing towards their renewable energy plant. Music shop can be opened by Google through the acquisition of the YouTube. Music can be stored, and sold through Google (Rimm-Kaufman, 2007). Microsoft has the following weakness; it’s really more on cooperation with other stake holders like IBM. For the firm to be more competitive, it then needs to be more dependent on its creation and invention to avoid the conflict of interest between the participating members. This has been Microsoft main problem for a very long time. Microsoft needs to have a good research and consultation centre, to oversee that all the regulations are observed, before releasing a product to the market. Microsoft has a problem with the exit plan. The firm needs a good exit strategy to let fresh ideas into the firm. The founder Bill Gates retired, and passed the helm to his old college friend. This not a good sign as the vacancy needs to be competitive, and a qualified candidate selected to see new ideas in the firm. New ideas in an organization are achieved by the employment of highly qualified individuals for the benefit and continuity of the firm Google is involved in political spending in different countries an allegation it refutes. The major down fall of Google is the censor of site in different countries, and not others. This leads to the invention of similar sites in the respectful countries, and cut of the profit. This also means, all advertisement on the blocked sites cannot reach the market in such countries like china. Google should try and adhere to the international censorship policy to avoid conflict with the relevant authority or governments in this case. Internet privacy is of importance to every user of the internet. This area, Google is reluctant to address. Google lists contact of its user’s public, unless the client signs out. This weakness as clients, we fill Google should make an adjustment by hiding the clients /user contacts at all times. This enables privacy, and confidentiality to the users which is an international law. Google bite and Google buzz have the capability to store information for up to 32 years. Information stored which are general and state secrets, need to be communicated between different government agents and destroyed. Information through Google is stored, and this form of the weakness. Stored government information is always leaked to different cables. Recently, government information leaked through wikileaks cables. This is of less concern to Google authority. Piracy of information will leak through Google, unless government agency steps in to regulate the number of years information should be stored by the service provider. Google has had a long history along the corridors of justice. Google was drugged to a New York federal court to answer charges of copy, and uploading individual works, during Google book launch. The tussle was solved out of court between Google, and the Authors Guild-representing 800 authors. A Paris court fined Google, and order for the omission of all the works by LaMartiniere. According to a revised agreement in 2009, Google had to only upload work from America, Canada, United Kingdom, and Australia . Google should strategize in all its innovation, and abide to all the laid down rules and regulation to stop, and avert all this legal cases. Microsoft is in a service industry. Their main objective is to produce products that are of high quality to the consumer. These products should meet the minimum standards. In 2004, anti-trust legal action was brought against Microsoft to the European Union, and fined. The new product; windows XP was ordered to make changes. This was a major setback to innovation but the company forged forward. The management strategy is to continue pursuing new technology even if the initial attempts fail (Rimm-Kaufman, 2007). Microsoft current strategy is to innovate products that are accepted by the clients. In line to management plans. Microsoft has formed production divisions to deal with different production. These divisions are; server & tools division, online service division, windows & windows live division, and finally Entertainment & devices division. These divisions were formed to stream line the activities, and make the day today running of the organization be effective. The management emphasizes on the allocation of duties to all staff, and this is done effectively through division level. Growth and development can be easily monitored at division level by determining the number of new innovation and research initiated by different division (PC Magazine, 2009). Google on its part insist network neutrality; free access to contents in the internet without limitation or barriers Google main strategy. Google is against the international censorship policy. The success for internet Google has developed an environment policy, and intends to build the largest solar panel on earth at the campus (Rimm-Kaufman, 2007). This strategy to lower cost endured by the company inform of utility bill. This also promotes clean form of energy. Google has gone an extra mile by forming not-for –profit philanthropy group, with an aim to sensitize the community on global public health, global poverty, and climate change. This project has initiated the designing of an electric car (Hammonds, 2003). Google cooperate strategy is to remain the main search engine in the market. That is why in 2009, Google developed a search program for large organizations, in addition to the Google find meant for students. Google strategy is to outdo the competition by creating tailored products for the market. In the Google strategy, it has also diversified the market by venturing into video market (Morrow, 2011). By venturing into social and ecological issues like global warming and global poverty, Google internet is to gain popularity over its competitors. Microsoft strategy is to embrace, extent and extinguish. The company under its strategy would acknowledge completion on the first instance, by embracing the competitor’s ideas and products but in return produce a product that is compatible with the competitor's product, and finally, produce a product that is more complex and not compatible with the competitor’s products (Barney,1991). This act see government spent dollars to keep up with change of product in the market and do away with completion (Hammonds, 2003). Works Cited Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management 17.(1), 99-120 Morrow Ben. Google’s Strategic direction. (2009). Retrieved June, 4, 2011, from http://www.benmorrow.info/research/googles-strategic-direction/ Duane Ireland , R., Robert ,Hoskisson, E., & Michael Hitt. (2008).TitleUnderstanding Business Strategy: Concepts and CasesAuthors, New York: Cengage Learning. Galunic, D.C. & Rodan S. Resource. (1998) Recombinations in the Firm: Knowledge Structures and the Potential for Schumpeterian Innovation. Strategic Management Journal, 19, 1193–1201. Hammonds, K. H. (2003). How Google Grows...and Grows...and Grows Fast Company. Retrieved 31 March 31, 2003, from http://www.fastcompany.com/magazine/69/google.html PC Magazine. (2009). Windows Market Share Rises Slightly; Mac Drops. Yahoo! Tech. Retrieved March 17, 2009, from http://tech.yahoo.com/news/zd/20090302/tc_zd/237638 Prahalad, C.K. & Hamel G.(1990) . The Core Competence of the Corporation, Harvard WZ Review, 68(3),79–91. Rimm-Kaufman, A. October 2007 PPC Ad Spend: Google Jumps, Yahoo Slumps, Microsoft Stead, Octotober 1, 2007, from http://www.rimmkaufman.com/rkgblog/2007/11/01/october-2007-ppc-engine-share/ Schmidt, E., & Varian, H. (n.d.). GOOGLE: 10 GOLDEN RULES - Getting the Most out of Knowledge Workers. Retrieved March 20, 2009, from http://www.1000advices.com/guru/organization_cs_google_1 Microsoft Corporation. Microsoft Windows Embedded Studio Development Tools for Windows XP Embedded. Retrieved October, 20, 2002, from http://msdn.microsoft.com/en-us/library/ms838630%28v=winembedded.5%29.aspx Pinal, Shah and Joel Sarosh. ThadamallaVertical product integration at Microsoft: Will it succeed?. Retrieved Feb 7. 2006. http://ibscdc.org/Case_Studies/Strategy/Competitive%20Strategies/COM0172A.htm Read More