The Corporate and Competitive Strategy of Microsoft - Assignment Example

Company Analysis: Microsoft Started by Bill Gates and Paul Allen in 1975, Microsoft has grown into a leading multinational software company. The company develops and provides software for consumers and businesses. The operations of Microsoft are categorized into 5 divisions, namely, Windows, Server and Tools, Online Services, Microsoft Business and Entertainment and Devices Division. Along with organic growth, the company nurtured on acquisitions, such as those of Skype and Nokia mobile unit. During the financial year that ended in June 2013, Microsoft recorded a revenue of 77.8 billion USD. Headquartered in Redmund, USA, the operations of Microsoft are spread over 100 countries and the company has a work force of 100,518 around the world. It stood 35th among the Fortune 500 companies of the world declared in 2013 (Microsoft, 2014). Coming to the products and offerings of Microsoft, its operating system, Windows and the Microsoft Office suite are among the popular products. It also develops software applications that find use in mobile phones, enterprise management, storage and server maintenance. Microsoft also has digital music player, Zune; tablets and PCs and video game console, Xbox in its kitty. Microsoft also provides cloud-based services to businesses and consumers, such as Bing, Windows Live Essentials suite, Microsoft Dynamics CRM Online and Azure database services. The company accrues revenues through usage fees and advertising. Additionally, it extends consulting and support services. The company is also into training and certifying the professionals involved in integration and developers (Microsoft, 2014). Standing among the leaders, Microsoft faces competition from Apple, Google and Yahoo for its Windows and online services divisions; HP, IBM and Oracle for its Tools and Server Division; Adobe and SAP for its Business Division and Nintendo, Sony and Apple for its Entertainment and Devices Division. Thus, on the whole, Apple, Google and Oracle are its competitors. Company Analysis The company enjoys huge brand image and loyalty. It is among the well-known brands in the software industry. The products of Microsoft are devised to be user-friendly, and thus easy to use with minimum knowledge in the aspect. Microsoft Word and Excel and Windows operating system have become a part and parcel of every household with a PC in the 1990s and 2000s. Thus, the penetration rate of Microsoft products during this period has been relatively high. Periodic release of updates to existing products and new product development has played a vital role in the growth and development of Microsoft. The other companies developing Windows-based software and gaming fueled the growth fo the company. Having a worldwide network and an industry experience of over 39 years, the widespread distribution channels form its backbone. Financially, the company has shown extraordinary performance consistently through the years. The profits have stood above 30 percent in the last five years, but the recessive markets. This secures the interests of the stakeholders. Acquisitions that targeted popular brands such as Skype and Nokia furthered the brand image and established its position in the markets. Microsoft is also rated among Fortune’s Best Companies to Work At and also made it to the list of Most Admired Companies. Thus, working for the company is more a matter of pride and achievement to the employees. While the diversity and inclusion policy ensures that the employees are from diverse backgrounds who understand the respective requirements and expectations; the compensation practices of Microsoft keep the employees satisfied and motivated. The company operates through regional subsidiaries. This strategy helps in crossing the cultural barriers that might go against the interests of the company, if Microsoft went about with expansion. The employee mix practiced by the company, which is based on the nature of projects, gives a financial and competitive advantage to the company (Microsoft, 2014). Liberalization, increased usage of broadband internet, mobile and wireless technology, social networking, affordability of computer-related products and phone-tabs open up umpteen opportunities for software and device development companies such as Microsoft. The company has quickly adjusted to market demands and started cloud-based services. This presents further scope for the growth of Microsoft, by diversifying its offerings. Mobile applications, technologies and advertising form a large chunk of the industry and Microsoft can work on collaborations with leaders in this regard in furthering its products and services. Acquisitions also promise growth to the company. But for all the positive aspects, Microsoft also has few aspects to concentrate on. The company’s primary focus is on software development. This makes the progress of Microsoft dependent on the hardware industry. The PC market has reached maturity. This narrows the scope of the company and leaves Mobile and Tablet markets as the only options left to explore and exploit. Bill Gates, the founder and architect to date, is the only popular name from the company and the mettle of the other leaders in the top management, is yet to be highlighted and proved (Brodkin, 2011). Apple and Linux are quickly pinching into the market share of Microsoft in operating systems. Further, the new PC developers are also promoting their own operating systems, thus taking advantage of Microsoft’s absence in hardware industry. The life of technology products, software in particular is short. The situation is further worsened by piracy, imitation and availability of cheaper substitute products. This demands Microsoft to be on heels in being cost effective, software development and releasing new products. However, the company has been shelling out millions to find and correct the bugs in existing software. Microsoft is yet to plug in to the success of internet and release more of relevant and current products (Team, 2014). Corporate and Competitive Strategy The strategy of Microsoft concentrates on taking advantage of its strengths, acting on its weaknesses while grabbing the market opportunities to counter the competition. Microsoft aspires to make the technology accessible. It aims to further this same commitment and leadership in this respect. The company also seeks to make the computers and related devices easy to see, hear and use. Creativity and innovation at Microsoft also focus on promoting this accessibility aspect. It has been collaborating with many organizations to make the computers accessible and satisfy the technology needs of the differently abled and challenged population (Gates, 2013). To counter the saturation of PC markets and undue reliance on hardware, Microsoft is engaged in pushing its device sales and focusing increasingly on promoting its services. The release of Surface Tablets and Xbox-One are the first steps in this regard. The company extended its interest in cloud services too, as it is the happening and current trend in the software and technology markets. The changes it has made to Office and Azure platforms depict the strategy. Tapping in on the popularity of Office suite, Microsoft has come up with Office 365, which promises improved productivity, easy access, communication, sharing and collaboration; along with security and single sign-on options (Team, 2014). This opens up its usage to more business customers. It has further modified the pricing based on the usage and size of business and offers free Office 365 to students. This step is a huge advantage which enables the future employees to equip themselves with the skills and promote the same at the organization where they take up employment (Microsoft, 2014). Conclusion In conclusion, the success story of Microsoft is sketched by its focus on developing accessible technology. This has further gained momentum by the company’s unique and diverse products, updates and new releases in software and gaming. Microsoft also adapted to changing demands by introducing cloud-based services, thus making it maintain its leadership position. Works Cited Brodkin, J. "Microsofts 5 Biggest Weaknesses" Techworld.Computerworld UK.com, 04 Sep 2011. Web. 03 Mar 2014. Gates, B.. "Microsoft Accessibility" Microsoft. Microsoft Inc, 2013. Web. 03 March 2014. Hoovers. "Microsoft Corporation Competition" Hoovers.Hoovers Inc, n.d. Web. 03 Mar 2014. Microsoft. "Overview and Strategy" Microsoft. Microsoft Inc, Jan 2014. Web. 03 Mar 2014. Team, T. "Microsoft Earnings Preview: Device Sales And Business Strategy In Focus" Forbes. Forbes.com LLC, 21 Jan 2014. Web. 03 Mar 2014. Read More