Unit 5 Individual Project 1 - Essay Example

Harris Kamran Business and Management 6 February 2008 Individual Project In 1975, the foundations for the world’s leading software and systems manufacturing company, Microsoft, were laid, and from then on, it has grown to be a multi-billion dollar company with worldwide coverage and subsidies all over the globe. It has developed partnerships and associations with multiple other companies, and together with all its offshoots, it depends upon the revenue generated by its branches all over the world.

According to a survey conducted by the Far Eastern Economic Review, Microsoft is the most admired company in the world, both due to its development and vision, and because of its financial stability and economic strength. It has been on the top of the list for nine straight years. Much of the credit for this goes to the increasing financial growth of the company over the years, and its expanding revenue and costing horizons, thanks to its ever-developing subsidies all around the world.

According to the Review, there was a 13% growth in its revenue in the fiscal year ending in June 2003, to an outstanding $32 billion, with an 11% increase in the operating income, to $13 billion (Review 2008). The importance of the growth of its subsidies and global presence can be inferred from the fact that Microsoft decided to spend around $750 million to build up on its position in China by 2005 (Review 2008), a strong market and a booming economic strength that is sure to provide Microsoft with an increased influx of revenue, resulting in an increased growth rate and financial stability post-2005 investment.

In fact, the financial growth is already apparent. Owing to the increased markets and customers liking for the launch of new features of Windows Vista and Microsoft Office 2007, there has already been a 6% increase in the revenue for the fiscal quarter ending on 31st December, 2006, which reached $12.54 billion, a deferral of $1.64 billion of revenue and operating income, as compared to the figures of the same quarter for the previous year, that is the quarter ending on 31st December, 2005 (Microsoft 2007).

All the facts and figures revealing the company’s financial standing and growth are a proof of the economic stability and expansion of the company, for reasons ranging from the introduction of new or updated versions of software and programs, to market strengthening and expansion of the various subsidies and branches of Microsoft all around the world. Microsoft is the leading company in its field, and for many burgeoning companies, a role model that they try to follow, and its set standards a height they try to achieve.

With such a standing and influence not only on the world market but also on the world economy and social development, it is impertinent that any fluctuations in the world economy and any variations in international trading and world stock market rates and shares would not only directly effect the company, but through it, would also indirectly effect thousands of associations, partnerships, subsidies, businesses, jobs and families on an international scale.

For instance, Pakistan, a subsidy of the Microsoft company, provides millions of rupees worth of revenue to the company every year, which when converted to the company’s default currency, the dollar, has makes a significant share. Any changes in this currency exchange rates would, hence, significantly effect the company’s market value in Pakistan, and therefore, its overall revenue. ReferencesBen Dolvin, B.D. (January/February 2008).

Far Eastern Economic Review. Retrieved February 6, 2008, from http://www.feer.com/articles/2003/0312_25/free/p050.html(2007). Microsoft: MSFT Investor Relations. Retrieved February 6, 2008, from http://www.microsoft.com/msft/earnings/FY07/earn_rel_q2_07.mspx(2007). Microsoft: PressPass-Information for Journalists. Retrieved February 6, 2008, from http://www.microsoft.com/presspass/inside_ms.mspx