Impact of E-Marketing on Microsoft Corporation - Case Study Example

? A Sustainable business in our changing Landscape: Impact of E-Marketing on Microsoft Corporation AFFILIATION: OF SUBMISSION: Table of Contents Executive Summary 3 A Sustainable Business in a Changing Landscape 5 Introduction 5 Profile of Microsoft Corporation 5 Snapshot of Computer Industry 6 Aftereffects of September 11, 2001 – Challenges the Existing Businesses Faced 7 Situation Analysis 9 PESTEL Analysis 9 SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis 10 Conclusion 11 Recommendations 12 Implementation and Control 12 14 References 15 Executive Summary Microsoft Corporation is a market leader in the technological world and it has been in the market for many years. Since 1975, it is considered as the most innovative and technologically advanced company that has the purpose of providing easy access to home computers so that exchange of information and crucial work elements become smoother. The organization has introduced various products up till now and is always on the frontline for taking advantage of all the latest technological breakthroughs that happen globally. The strategy of diversification has proven to be successful for the company, and it is evident from its continuously increasing performance. The challenging phase of the organization was when it was sued for doing unethical marketing activities – it was believed that the corporation forced its suppliers to supply the raw materials only to it. Other challenge encountered was the violation of anti-competitive strategy, and it was evident from the company’s tactics of getting monopolistic position in the market. Afterwards, the environment was becoming tougher and more competitive, and, presently, all businesses are facing rapid changes happening in the business environment. Some of the major changes, as highlighted by Witiw (2007), that are happening in the volatile environment of today are the following: global economic recession is happening at a faster pace; the economy of a country is severely impacted by the failures of the organizations, by natural disasters and terrorist attacks; top management needs the employees’ supports to enhance the performance; behaviors of the consumers are changing, and children are observed using computers and other technological gadgets at a very early stage; suppliers of the country are impacted by the production facilities transfer to China and India; natural disasters have been occurring at an increasing rate across the world; and violence is spilling from society to various schools, colleges and workplaces. Therefore, the best way of conducting business activities these days is to use the online tools so that the companies are able to respond to consumers’ demands proactively. The trend of shifting from traditional ways of running the business enterprises to online direct selling to the customers is evident – the strategies adopted by Dell, Nokia, Apple, HP and many other companies are the examples. Therefore, the best tool for Microsoft Corporation is to do e-marketing and develop good and an effective e-marketing plan. A Sustainable Business in a Changing Landscape Introduction Internet has revolutionized the way organizations do business these days and it has eased ample activities for the business. Now, businesses can do every activity with few clicks, and they just need to remain well-informed about the technological advancements that are happening these days. The organizations must design their business objectives and strategies in a way that they take advantage of amenities provided by the internet (Smith & Chaffey, 2005). Likewise, internet has opened diverse range of avenues for businesses to conduct their activities and the best opportunity given to companies is that of e-marketing (Rossi et al., 2007). In order to ensure that businesses are able to survive in such a tough and competitive environment, they will have to develop strategies that will help them earn the customers’ loyalty (Cummings et al., 2005). Profile of Microsoft Corporation Microsoft Corporation is a multinational company, which has been in the market since 1975. It entered the market with the aim of providing home computers so that people could easily exchange the information and work process could become smoother. A pioneer in the computer industry, the company has introduced numerous products, taking advantage of the technological breakthroughs happening in the world. The company is well-known for the quality and popularity of the products that it introduces in the market, and it has diversified itself strategically into various other industries. As of 2012, as reported by Lennihan (2012), the company is dominating in both the market of operating systems for the PCs and the market of office suites with Microsoft Office. It has its strong presence in other areas such as internet search engines (Bing), market of digital services (MSN), mobile phones, especially smart phones (Windows Phone OS), and also launched Xbox and Xbox 360 to enter the video game consoles industry. It is expected that company will enter the PC market of vendors this year by launching Microsoft Surface tablet computer. Some of the challenges that the corporation faced were due to its unethical marketing tactics – the company forced its suppliers not to supply raw materials to any other organizations; violated the anti-competitive strategies by taking advantage of monopolistic position and putting restrictions on the use of its software. The environment has become too tough after the event of September 11, 2001; most of the businesses were significantly impacted by the incident. Snapshot of Computer Industry The computer industry was booming in the early years of the 21st century but the computer sales began to decline in the early 1990s; as the economy was weakening, the competition was becoming tougher and prices were deflating. The industry recovered a little bit in 2003 but it had to be restructured; as a result of restructuring in mid-2000, the market share of sellers of computers and computer equipment was increasing, though only for those who were doing business online. The computer stores still have tough competition from online stores and companies such as Dell that have transformed from manufacturers to retailers. Since 2000, the number of computer stores has declined, and they have shifted to online businesses as the sales from this avenue were brighter. The companies are now shifting their attention to online marketing tools so that they can attract more customers and increase their profit margin as well. The number of employees working in the computer industry is around 89,000 according to the data of the US Census Bureau of the year 2009. According to D & B Sales and Marketing Solutions Industry Reports, in 2009 there were more than 40,000 establishments that were doing retail sales of various computers, computer accessories such as equipments, printers, etc., and computer software that had total value of $17.4 billion (“Computer and Computer Software Stores”, 2011). The report also revealed that the strongest sellers used business and system utilities software along with security suite software. Therefore, the current trend of computer sellers is shifting to online retail sells with customized buying options for customers. Aftereffects of September 11, 2001 – Challenges the Existing Businesses Faced According to Farrell et al. (2005) and Pryor et al. (2008), the leaders of the organizations are facing numerous challenges in order to sustain a changing and dynamic environment. The following are some of the major challenges encountered by the businesses: the span of reaching the customers (as internet has shortened the gaps), increasing supply of products and services in the market, efficiency in production because of technological advancements, proactive approach of the companies, and availability of time to respond to changes in the environment. In order to survive in today’s environment, the organizations need to work for both the present and the future to handle all the issues properly and sustain the challenges as they come (Wischnevsky, 2004). Witiw (2007) stated that the organizations need to think at least 20 years ahead to understand the future environment and devise contingency plans to respond to future changes. Some of the major changes as highlighted by Witiw (2007) that are happening in the volatile environment are: 1. The economic conditions are changing as the global economic recession is happening at a faster pace. The economy of a country is severely impacted by the failures of the organizations, natural disasters, and terrorist attacks. 2. The top management needs the employees’ support to enhance their performance and motivate them by designing the organizational policies in accordance with their demands. The employees are mostly looking for the jobs in organizations that have good compensation package and job security. 3. The behaviors of the consumers are changing, and children are observed using computers and other technological gadgets at a very early age. 4. Suppliers of the country are impacted by the production facilities being shifted to China and India. 5. The number of union strikes has increased significantly, and they are demanding an increase in their pay structures. 6. The natural disasters have been occurring at an increasing rate across the world and violence is spilling from society to various schools, colleges and workplaces. Hence, the best way of conducting the business activities these days is to develop a company strategy that considers all the important issues the organizations in today’s dynamic environment face. It has become important for the companies to make changes in their business operations so that they can attract their target consumers and also sustain the tough environment. Microsoft Corporation has to deal with changing technological, political and customer trends and to develop plans to survive in the market. Situation Analysis The situation analysis of Microsoft Corporation will consist of both external and internal analysis, as the company needs to analyze the environment so that it can sustain in the changing market trends. PESTEL Analysis PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal. Hence, the company will have to do PESTEL analysis to evaluate the factors that can hamper and support the launch of new products and services in the market. In the US, the political condition is stable and it will be easy to follow the rules and regulations for launching new products. Microsoft Corporation has a strong presence virtually as well but it allows limited access to the customers. Therefore, the company’s management team needs to ease the policies for online marketing activities so that they can take advantage of online marketing services simultaneously. The latest trend these days is that of e-marketing, and the company’s strategy lacks this aspect; it is important that the key personnel work on the e-marketing activities to enhance the company’s performance. It is difficult for the companies to sustain if they do not have strong virtual presence. Since the transactions are mainly done online via credit cards and other payment systems, the company will have to ensure that the contents of the website are secured and no one can access the private information except for the authorized personnel. The technological advancements happen on a continuous basis, so it will be vital for the company to ensure that effective mechanisms are in place to be assured that computers are up to date and have all the latest features demanded by the customers. The economy is getting out of recession and the rise in people’s incomes and earning power ensures that people will buy computers for their personal uses. However, Microsoft Corporation will have to do a lot of efforts to attract the customers to its website. The computers and laptops are now a necessary part of everyone’s life, and the image of this technological gadget is changing from a luxury item to a basic necessity. The social environment is also conducive as the people are now shifting to online shopping for all their purchases, and they are even now using computers and smartphones as a basic necessity. Since the people of the US are technologically savvy, the company will not have so much difficulty in launching the computers. The main competitors of Microsoft Corporation are Dell, Sony, Toshiba, HP, Apple, Acer and Vaio. However, the direct competition is from Apple as both brands have almost the same range of products, and getting the market share in so tough competitive environment will be difficult. SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis Strengths Weaknesses Strong market presence Loyal customer base Corporate website Effective marketing campaigns Highly skilled and trained management and workforce Limited resources for the market Limited options for e-marketing Opportunities Threats Diversify in international markets where it is present Transform from online seller to online retailer Start manufacturing other technologically advanced computer accessories Offer online games download option to the gamers Stricter government regulations Slump in economic growth cycle Increase in interest rates More tighter consumer protection laws Conclusion Since the computer market has been restructured and is now again in the growth stage, the company is projecting growth and is expecting to meet the customers’ demands by making customized products for them. The primary objective of Microsoft Corporation’s strategy is to facilitate the revenue generation so that the market growth is profitable and it is done along with on-line and off-line marketing activities which are consistent and effectively coordinate with the brand image of the corporation. The company’s management team will have to develop a strategy that will incorporate all the highlighted issues; the culture of the organization needs to be changed, which means that the top management support should be present and the communication should be made more open. In most of the companies, it has been found that there is a certain element of strategic drift which hampers the sustainability of the businesses. The strategic drift basically implies that the strategies are not reviewed on constant basis to incorporate the changes that take place in the environment; therefore, the company will have to make sure that adequate control mechanisms are in place to review the performance of the company. Recommendations The basic thing that needs to be changed is the culture of the organization. The major resistance originates from the employees and management, because they do not want to accept the changes. Therefore, CEO needs to do preparation so that such culture can be developed, and the person needs to be strong enough to communicate his points clearly and concisely. If the strategic drift needs to be avoided, then transformational change is mandatory so that the company can react positively to the changing global environment. Therefore, CEO needs to create an innovative, collaborative, proactive, risk management and open communication culture in the organization. Since the changes in the technological world are rapid (which is similar to a video game; the target is always on the move and the opponents attack the target from various angles), being focused on one target will mean losing the game to unexpected enemy who has been overlooked. Therefore, new skills are required for playing the game efficiently, anticipating challenges, and creating fast and rational challenges for the enemies (Dotsid, 2012). Once the culture of the company is changed, it will help respond proactively to the changes happening in the computer world. The implementation and control mechanisms will help the company to ensure that it is following its strategy properly. Implementation and Control The marketing efforts of Microsoft Corporation will be reviewed monthly as the technological advancements take place on an ongoing basis and new products are introduced quickly as well. The initial source of evaluation for the company will be the difference in the estimated and actual sales of the product. On the website, the customers will be allowed to give their feedback about the product features, and the existing customers will be asked to participate in the survey of the computers. However, some of the evaluation tools that will be used to measure the performance are as follows: 1. Keep track of the current and potential customers of Microsoft computers, video game consoles and other products. This can be done by tracking the traffic clicks and exposure to banner ads on the website from cross-linked and redirected links created for promotional purposes of Microsoft on media channels, websites, key browsers or key search engines (all targeted for the marketing tactics). 2. Carry out customer satisfaction surveys, gather information from customer reviews on various blogs, and review the customer feedback by selecting the users from Beta test market, both current and potential ones. 3. The evaluation of direct sales, surveys, and e-mails designed for products recently purchased will give a proper indication about the customer’s satisfaction level and how successful the product is in view of the customers. Therefore, it is expected that Microsoft Corporation will meet the customers’ expectations, and with more advancements in technology, more heavily designed and technologically sophisticated computers will keep on appearing in the market. If Microsoft is able to satisfy its target market, it will definitely be able to receive a sufficient market share with ease. In order to sustain in today’s environment in which changes are happening on a continuous basis, Microsoft management team will have to make sure that they provide the products in ways designed in accordance with customers’ needs and requirements. The strategy should be properly developed and reviewed on a monthly basis to ensure that the changes are being incorporated. References Computer and computer software stores (2011). Retrieved from http://business.highbeam.com/industry-reports/retail/computer-computer-software-stores Cummings, Thomas G., & Worley, Christopher G. (2005). Organization development and change. United States: Thomson/South-Western. Farrell, J.B., Flood, P.C., Mac Curtain, S.M., Hannigan, A., Dawson, J., & West, M. (2005). CEO leadership, top team trust and the combination and exchange of information. The Irish Journal of Management, 26, pp.22-40. Lennihan, Mark (25 June 2012). Microsoft Corporation. New York Times. Retrieved from http://topics.nytimes.com/top/news/business/companies/microsoft_corporation/index.html Pryor, M.G., Taneja, S., Humphreys, J., Anderson, D., & Singleton, L. (2008). Challengers facing change management: Theories and research. Retrieved from http://www.delhibusinessreview.org/V_9n1/v9n1a.pdf Rossi, M., Tuunainen, V. K., & Pesonen, M. (2007). Mobile technology in field customer service: Big improvements with small changes. Business Process Management Journal, 13, 853-865. Smith, P. R., & Chaffey, D. (2005). E-marketing excellence: at the heart of e-business. Oxford, UK: Butterworth Heinemann. Dotsid (2012). Strategic Drift. [web blog comment] Retrieved from http://www.tumblr.com/tagged/strategic-drift Wischnevsky, J.D. (2004). Change as the winds change: The impact of organizational transformation on firm survival in a shifting environment. Organizational Analysis, 12, 361-377. Witiw, M. (2007). Air freight security: Post September 11 security changes and how these changes affect air cargo transportation. Retrieved from http://web.cecs.pdx.edu/~monserec/courses/freight/classprojects/CE453_Winter07_AirportSecurity.pdf Read More