Strategic Management of Microsoft and Boost Juice Company - Case Study Example

Strategic Management Name Course Name and Code Professor’s Name Date Introduction The paper discusses the external environmental analysis, five forces analysis and five forces analysis. The discussion is applied to Microsoft and Boost Juice Company. Boost Juice Company has licensed numerous franchisees to supply the products while Microsoft develops software and hardware to target technological industry. External Environmental Analysis The external environment analysis discusses the threats and opportunities, which affects an organization. These threats and opportunities are usually independent of the organization. The right question in understanding external factor is asking whether the issue may exist if the company does not exist. If the answer to this question is yes, it means that it is an external to the given organization. In the external analysis, opportunities are the favorable conditions in a company’s environment and the opportunities can be levered to favor a company (Smit 2010). For example, using franchisees approach, Boost Juice Company is able to access funds for expansion easily. On the other hand, Microsoft understood the opportunities that exist in the information world and continued to develop newer applications to fulfill the requirements of the customers. The opportunities should be capitalized to advance the requirements and expectations of the company. On the other hand, threats should be controlled because it contributes to the negating achievement of objectives and goals (Hemmatfar, Salehi & Bayat 2010). Therefore, Microsoft and Boost Juice Company were able to capitalize on the available opportunities and customer requirements in advancing their objectives and goals. In understanding external factors, customer analysis is appropriate for determining the unmet needs, motivations, and segments (Hassan 2010). For example, Boost Juice Company understood the unmet need include the need for fresh drinks and targeting the market ensured it engaged the customers in acquiring the juice. In addition, the continued requirements and developments in information technology industry forced Microsoft to continue innovating. The competitive analysis allows identification of the competitors, designing strategic groups, evaluating the performances, analyzing the image, addressing and understanding the competitors’ strategies, objectives, weaknesses, strengths, cost structure, and culture. Boost Juice Company has to provide optimum services and products to addressing the competitive industry. For example, preserved drinks are available in the market but the demand for fresh drinks was unmet and penetrating the market was easier. Moreover, the use of many resources ensured the company continued to supply the requirements of the customer. In the same case, Microsoft has numerous competitors, and these competitors have continued to invest in research and development; therefore, Microsoft has to continue developing products and services that fulfill the unmet needs. The market analysis allows an organization to review the overall size of the market, cost structure, key success factors, distribution system, entry barriers, profitability, and projected growth (Salehi & Roshandel 2013). Therefore, Boost Juice Company was able to analyze the market and determined the appropriate framework to penetrate the market. It includes numerous factors, which include the environmental analysis. The environmental analysis reviews the integral components, which contributes to the success of an organization (Fritzen 2007). Some of the components include information need areas, scenarios, demographic, economic, governmental, technological and cultural. The purpose is to determine the strategic uncertainties, trends, threats, opportunities, which influences the external success of an organization. Furthermore, Boost Juice Company and Microsoft have to address the forces associated with market analysis and environmental analysis to remain viable. Five Forces Analysis The five forces analysis allows determination of power in an organization. It allows identification of the current competitive position of an organization and determines the strength of choosing another position (Olawale & Garwe 2010). The analysis enables an organization to understand strength position, improvement of weakness position and avoiding taking the wrong steps. Moreover, it enables an organization to enter marketers, which are promising, and profitable. The five-force analysis understands five important forces influence the competitive power of an organization. Supplier power determines the easiness of a supplier to increase the prices (Urbancova 2013). It is driven by the uniqueness of the product, a number of suppliers, switching costs and the strengths of suppliers to an organization. The suppliers of fruit in the case of Boost Juice Company but the quality may be a problem. Microsoft has a major influence because it is a large company and can easily dictate to the suppliers the conditions, which have to be fulfilled. The buyer power determines the easiness in which a buyer can drive down the process (Swallow 2009). It can be understood by determining the number of buyers, the influence of individual buyer, the costs associated with switching of products and services. If an organization deals with few powerful customers, it becomes difficult to control them since the customers continue to dictate (Wu 2013). Microsoft has developed a system, which becomes difficult for customers to dictate its operations. For example, the operating system platform has been embraced by numerous technological backgrounds meaning customers have to continue using the products. Boost Juice Company has to understand the requirements of the customers because the cost of switching is easier. Therefore, the customers can drive easily the cost of the products. Competitive rivalry is the capability and the number of competitors (Goh 2004). If the competitors are many, and the competitors are offering comparable services and products, an organization has minimal power in the situation since the customers and suppliers can switch easily. Alliteratively, the uniqueness of the product and services provides a tremendous strength to an organization. Boost Juice Company was able to attract financial support at a faster rate meaning competitors were not able to compete on resource front. Moreover, Microsoft has continued to enjoy effective operations through acquiring other companies and developing newer products. However, the competition in the technological industry is fierce and continues development is integral to the success of any technological company. The threat of substitution is situations in which customers can find an alternative to the products and services. If a substitution is viable and easy, it becomes a weakness to an organization (Indra 2004). It is difficult to substitute Microsoft products because numerous changes will be required especially when it comes to the association of operating systems with applications. Boost Juice Company operates in a market, which it is easier for substitution. For example, people can consume water and other drinks instead of Boost juice. The threat of new entry determines the power of which another organization can enter the market (Wen-Cheng, Chien-Hung & Ying-Chien 2011). New customers can enter a market easily because of low initial costs, effective competition, and few economies of scale, which weakens the strategic position. However, if the products are unique and resources required are many; an organization has power since it becomes difficult for a competitor to enter the market. The juice industry is easier to enter compared to Microsoft type of business because of the resources required. Sources of Sustainable Competitive Advantage A suitable competitive advantage takes place when a company develops or acquires an attribute or combination of numerous attributes that enables a company to perform better when compared to its competitors. The competitive advantage if employed by a competitor cannot succeed or not sustainable. It is also an advantage, which is difficult to copy. Competitive advantage results in superior performance and ensures a company is strategically placed on the market. The competitive advantage allows a company to have a superior performance and to allow staying ahead in the market or providing potential competition background. Customer loyalty is one of the sustainable competitive advantages (Ahenkora & Adjei 2012). The customers have to be committed to acquiring the services and products from a specific retailer. It can be accomplished through strategies, such as loyalty programs, positioning, and branding. For example, the loyalty card is used to determine the products, which a customer acquires and allows an organization to understand missing products ensuring an organization stocks the products (Kamya, Ntayi & Ahiauzu 2010). Moreover, the repeat purchase and first preference retailer/producer aspect is a foundation of sustainable competitive advantage. Microsoft has a strong customer loyalty because of the numerous products and services. It is like an addiction, but the juice industry does not require extensive loyalty because of availability of numerous products. The location is integral to the success of any organization (Kraus & Kauranen 2009). The business should be strategically located to reap the benefits associated with the location. The easiness of access and marketing strategy allows an organization to engage the customers effectively. Customers require easier to access retailers/products and fulfilling this requirement is a competitive advantage to an organization. Boost Juice Company avails its products through master franchisees and other outlets meaning it is easier for the customers to acquire the product. Microsoft products are easier to acquire because they are available online and other technological or computer shops. The merchandise should be unique in nature. The product should fulfill the requirements of the customers because of unmet needs. It is important to do an extensive market research and institute research and development departments/sectors to understand the unmet requirements of the customers and engineer the products to address the requirement. Boost Juice Company’s products address the requirements of emerging niche, which is fresh juice bars. The Microsoft product is unique in nature because of the accomplishments in which the applications can be used. Customer service is integral to the success of any organization. The customer has to feel appreciated and appropriate access assistances (Agha, Alrubaiee & Jamhour 2011). The customer is seen as the important pillar of the success of an organization and fulfilling effectively the requirements of the customer through effective customer service establishes a long-lasting relationship, which becomes difficult for a competitor to break. In both companies, the customer service is exemplary. 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