Strengths and Weakness of the Organization of Microsoft Corporation - Report Example

Marketing Plan SWOT analysis In order to analyze the strengths and weakness of the organization of Microsoft Corporation,SWOT analysis is used. It is known as one of the most reputed analytical technique as compared to many others. Strength: High Brand name- the organization of Microsoft Corporation includes high brand image in the market as compared to many other competitors such as Oracle, Apple. This is mainly due to the introduction of numerous inventive products such as windows, office, XBOX 360, Skype and many others. Skilled Manpower- the employees or the staffs present within the organization of Microsoft Corporation is extremely skilled and talented. Due to which, the organization of Microsoft Corporation became successful in introducing varied types of high-valued products. Invention of products with advanced technologies helped the organization to satisfy the changing demands and requirements of its target customers. As a result, the profitability and sustainability of the organization of Microsoft Corporation increased by 50 percent as compared to other rival players. Furthermore, invention of advanced products by skilled workers also attracted a wide range of new customers of varying age-groups that improved its productivity and brand image in the market. Strong financial muscle- the financial position of the organization of Microsoft Corporation is quite high. This acts as one of the vital strengths of the organization that amplifies its position and market value. Along with this, due to high financial capability, the organization might become successful in spending a huge amount over research and development department so as to introduce high-ended products (Porter, 2008, pp. 345-356). Competitive pricing- it is also recognized as one of the important strength of the organization of Microsoft Corporation as compared to other existing contenders. Due to which, the inventive products developed by the organization might attract a wide range of customers of varying age-groups that may increase its net income and total equity. Apart from this, due to the implementation of this type of pricing strategy, the level of sustainability and competitive advantage of the organization of Microsoft Corporation increased to a significant extent as compared to many other existing contenders. Moreover, due to such type of pricing policies, the market share and market value of the organization increased as presented in the below graph. (Source: Microsoft, 2014) Operational efficiency- it is also recognized as one of the greatest strengths of the organization of Microsoft Corporation. This amplified its brand value and profit margin in this competitive market among numerous other rival players. Number 1 operating system in the world- Microsoft Corporation is recognized as number one operating software in the world that improved its image and profitability in the market. Moreover, it also increased its customer base that enhanced its net income and productivity among others. Weaknesses- Expensive software- the software used by the organization of Microsoft Corporation is extremely expensive. As a result, it may be used by the customers of all income groups and so its profitability reduced significantly. Moreover, due to the presence of this expensive software’s, the brand image and reputation of the organization of Microsoft Corporation declined significantly. High dependency over retail outlets- high dependency over retail outlets is considered as one of the vital weaknesses of the organization of Microsoft Corporation. This reduced its image and demand of the products in the market Declining brand equity and valuations- due to the presence of expensive software’s, the brand equity and valuation of the organization of Microsoft Corporation is decreasing significantly among other rival players. This is not at all worthy for the organization in this age of aggressiveness as the rate of business challenges and market risks are increasing rapidly. Opportunities- Expansion to new segments- in order to increase its customer bases and brand value in the market, the organization of Microsoft Corporation is diversifying into new segments such as windows Phone 7, games and others. Due to which, the organization might attain the opportunity to improve its market share and productivity (Microsoft, 2014). Increasing awareness- due to the introduction of varied types inventive products and services, the level of awareness of the customers enhanced that proved extremely effective for the organization. Increased range of customers- introduction of new product lines and expansion into new market might help the organization to increase its customer bases. By doing so, the profitability of the organization of Microsoft might get enhanced to a significant extent. Threats- High rate of competition- due to the presence of numerous competitors, the level of competition is quite high. This is one of the vital reasons, for which, the organization tries to offer high level of attention over research and development in order to offer inventive products. Only then the level of sustainability and competitive position of the organization of Microsoft Corporation might get enhanced as compared to Apple Inc. Fast changing technology- in this age, technology is changing at a rapid pace that reduced the market share and growth of the organization of Microsoft Corporation in the market. Therefore, in order to cope up with such type of business threat, the organization desired to introduced windows phone 7 and XBOX 360 that improved its net income as presented below. (Source: Microsoft, 2014) Thus, it might be clearly analyzed for the above points, that if the organization of Microsoft desires to retain its market presence and brand identity, then high concentration over research and development is extremely essential. Objectives and Issues First year objectives – Increase of net income- in first year, the organization of Microsoft Corporation might try to increase its net income as compared to Google and Apple Inc. In order to do so, the organization of Microsoft needs to offer high attention over research and development. By doing so, the organization might become successful in developing varied types of inventive products such as XBOX 360 gaming software or windows phone 7. Enhancement of market share- the market share of the organization also needs to be enhanced in this age of aggressiveness by introduction of varied software and hardware’s. Enhancement of brand identity- introduction of I-phone by Apple Inc proved extremely effective for it that faded the identity of Microsoft. So, in the initial days, the organization might try to improve its identity in the market. Enhancement of customer bases- the organization might try to offer its products and services at competitive prices in order to increase its range of customers. Second year objectives- Expansion in new markets- after improvement of the identity and market share, the organization of Microsoft might try to expand into new market. This might increase its profitability and market value. Enhancement of product lines- the organization might also try to increase its products line to increase its range of customers (Guillén & García-Canal, 2006). Attention over research and development- in the second year, the organization might try to offer high attention over research and development. Issues- War may arise with Google- in order to improve its presence in the market, the organization of Microsoft may introduce varied types of inventive software’s. As a result, the customers might be shifted towards the organization of Microsoft that may lead to conflicts or clashes with its biggest competitor, Google. Decreased of identity- due to such type of conflicts, the image of the organization might get reduced in the market. As a result, the level of loyalty and reliability might get reduced significantly. High switchover rates- due to reduction in the identity of the organization of Microsoft, numerous customers might get switched towards Apple Inc or Google. Low market share- due to high rate of switchover costs, the market share of the organization of Microsoft might get reduced that may hinder its portfolio in the market As a result, the brand value and demand of the products of Microsoft might also get reduced that may not prove effective for the organization in long run. Thus, low market share might also increase the risks of new entrants and substitute products that may hinder the dominance of Microsoft in the market. Therefore, in order to reduce these above mentioned issues, its extremely essential to offer inventive products and services so as to retain the customer base and loyalty in the market. Marketing strategy Positioning- in order to position its products, the organization of Microsoft Corporation might try to implement cost-leadership strategy. This means, presentation of the products of high-value at a quite lowest price so as to attract a wide range o customers of all income groups. By doing so, the range of customers of Microsoft Corporation might get enhanced that may improve its market share and profitability. Along with this, the level of awareness of the customers towards the product lines of Microsoft might also get increased (ESOMAR, 2008, pp. 256-267). Product strategy- in order to improve its market share and positive, the organization of Microsoft Corporation might try to merge two distinct product related strategies into one. This means, the organization of Microsoft may try to innovate as well as customize various technologies and then utilizes it within its products. For example: XBOX 360 and Bing, MSN Windows etc are all analyzed vividly and then may be used to chip away the business threats. This strategy may prove extremely useful for the organization of Microsoft that might not only improve its customer bases but also its reliability and dependency in the market. Pricing- the organization of Microsoft might try to implement, competitive pricing strategy. Only then, its products might be used by the customers of all income groups and standards that may improve its brand value and identity. Apart from this, by implanting such type of strategy, the range of customers might get increased that may improve the net income and total profitability of the organization in future era. Other than this, by implementing such type of pricing strategy, the competitive position of the products of Microsoft might also get improved that may fade the image of other competitors. So, implantation of such type of above mentioned pricing strategy is extremely essential for an organization of Microsoft to retain its portfolio and competitiveness in the market. Distribution strategy- the organization of Microsoft might try to distribute its products and services mainly through online sites. Apart from this, the organization of Microsoft might also try to introduce retail outlets just similar to Apple Inc in order to increase its identity and reputation in the market among others. Moreover, such type of distribution channel might help the organization to increase the dependency and reliability of the customers over the brand (Drummond & Ensor, 2006, pp. 223-234). Marketing Communication Strategy – in order to increase the level of awareness of the products, the organization of Microsoft might try to offer high attention over promotion and advertising. It might try to promote its products through social media’s such as face book, LinkedIn, Twitter and many others. Along with this, it might try to promote the features of the inventive products in its online site so as to attract a wide range of customers. By implementing such types of promotional or communication strategies, the brand value and net income of the organization might get increased. Market Research- in order to analyze the effectiveness of the products, the organization of Microsoft might implement secondary research methods or qualitative research methods. This means, it might try to offer high attention over the feedbacks of the customers so as to evaluate its effectiveness in the market. This research might help the organization to analyze the changing demands and needs of the customers, before developing the products. Action Plan Required Objective Resources required Measures or actions taken Target time Comments Enhancement of Net income Vivid planning and scheduling ideas required, Skilled workforces required, advanced techniques required. High concentration over research and development department to introduce new product lines. 1 month- January Might prove effective Enhancement of market share Vivid analysis of the market research data’s and information Expansion to new markets. 1month-February Might be achieved Improvement in level of awareness Introduction of inventive products Promotion of the features of the products through social media 1month –March Might be achieved Enhancement of brand identity Vivid research is required Diversification to new segments 1 month –April Might be achieved Improvement of customer bases Vivid research is required presentation of the products with competitive cost 1 month- May Might be achieved Enhancement of brand identity Vivid research is required Introduction of inventive technologies 1 month- June Might be achieved If the following activities are implemented within the organization, then the market share and brand value might surely be enhanced to a significant extent. Budgets How much revenue need to be spending over each marketing activities? In order to increase the brand image and awareness of the products, the organization needs to offer high attention over its marketing activities. This might prove effective for the organization thereby amplifying its profitability and efficiency in the market. As a result, the organization of Microsoft needs to spend different percentage of its total marketing budget for different marketing activities according to effectiveness in order to improve its customer base and dependency in the market among other rival players. This might improve its rate of sustainability and competitive advantage of the organization in the market that may increase its strengths and opportunities. Along with this, offering high attention over marketing activities might not only reduce the challenges of the business but also decline its threats by a considerable extent (Bradley, 2007, pp. 123-134). How many units do you have to sell in order to break even or earn profit? Price Profit BEP Variable cost Loss Fixed cost Output In order to attain the breakeven point, the organization of Microsoft need to sale approximately 10,000 units. However, to sale it, the sales price need to be $45 and then the total revenue might become $450,000. Then per unit fixed cost might be $18.50 and per unit variable cost per unit might be $12.50. Only then, the organization of Microsoft might attain the breakeven point, i.e. neither profit nor loss. At this time, the brand image and effectiveness of the organization might get enhanced to a significant extent among other rival players. This might prove extremely effective for the organization to improve its reliability and sustainability in the market among many other rival contenders. Breakeven point will be as follows. Breakeven unit = (18.50*10000) / (45-12.50) = 5693 units Breakeven sales = 5693 units * $45 = $256154 Control In order to control the business risks and threats to a significant extent, the organization of Microsoft tries to utilize the best auditing system, named Microsoft SqlServer Management Smo. By using this method, the organization might easily control its internal risks and challenges that may amplify the productivity of the organization. Along with this, implementation of this policy might prove effective for the organization to improve its internal strengths thereby reducing its weaknesses. Other than this, by implementing the above mentioned auditing method, the organization might analyze its sales prices and expenses in an accurate way thereby reducing the pitfalls to a considerable way as compared to many other methods. Due to these above mentioned points, this method is highly preferred by the organization of Microsoft at the time of auditing its internal operations and functions. Works Cited Bradley, Nigel, “Marketing Research: Tools & Techniques”, 2007. New York: McGraw-Hill. Drummond, Graeme. & Ensor, John, “Introduction to Marketing Concepts”, 2006. New York: Cengage Learning. ESOMAR, “Market Research Handbook”, 2008. London: Sage. Guillén, Mauro. F., & García-Canal, Esteban, “Execution as Strategy”, 2006. Harvard Business Review Vol. 90(10). Microsoft. “ Annual Report”, 2014. Web, 8th March, 2014. . Porter, Michel, E, “Competitive Strategy: Techniques for Analyzing Industries and Competitors”, 2008. London: Simon and Schuster. Read More