Microsoft Strategic Management Essay

BackgroundIts the 1970s. At work, we rely on typewriters. If we need to copy a document, we alike(p)ly use a mimeograph or degree centigrade paper. Few guide heard of micro reckoners, unless two young computer enthusiasts, a nineteen year r are kid and his twenty-two year old business ally (Bill supply and Paul Allen) sold their starting signal program to a little computer friendship in Albuquerque, New Mexico. The program was called BASIC, and it was the arise of this community we call Microsoft. We see that personal computing is a path to the future.In 1975, render and Allen form a alliance called Microsoft. Like most start-ups, Microsoft begins small, but has a huge visiona computer on every desktop and in every home. During the next years, Microsoft begins to change the ways we work.Starting in 1980, Microsoft formed an important partnership with IBM that al mortifieded them to bundle Microsofts operating placement with computers that they sold, paying Microsoft a ro yalty for every sale. In 1985, IBM requested that Microsoft write a pertly operating formation for their computers called OS/2 Microsoft wrote the operating arrangement, but also continued to sell their consume alternative, which proved to be in post competition with OS/2. Microsoft Windows eventually overshadowed OS/2 in terms of sales. When Microsoft launched several versions of Microsoft Windows in the 1990s, they had captured over 90% market share of the worlds personal computers.We fuck take a look of the road map of Microsoft harvest-tides, how it becomes a giant in the personal computer market.In 1982 1985 (Windows 1.0) Microsoft launched a starting signal version of smart routine system Interface Manager is the code name and is considered as the final name, but Windows prevails because it best describes the boxes or computing windows that are fundamental to the new system.In 1987 1992 (Windows 2.0) Microsoft anaesthetises Windows 2.0 with desktop icons and ex panded memory. With improved graphics support, you ordure immediately overlap windows, control the screen layout, and use keyboard shortcuts to speed up your work. Some bundle developers write their first Windowsbased programs for this release.In 1990 1994 (Windows 3.0 & Windows 3.1) Microsoft announces Windows 3.0, followed shortly by Windows 3.1 in 1992. Taken together, they sell 10 million copies in their first 2 years, making this the most widely used Windows operating system.In 1995 2001 (Windows 95) Microsoft releases Windows 95, selling a record-setting 7 million copies in the first five weeks. Its the most publicized launch Microsoft has ever taken on. Television commercials feature the Rolling Stones singing Start Me Up over images of the new Start button. The rouse release simply begins Its here.In 1998 2000 (Windows 98, Windows 2000, Windows Me) Windows 98 is the first version of Windows programed specifically for consumers. PCs are common at work and home, and network cafes where you can get online are popping up. Windows 98 is described as an operating system that Works Better, Plays Better.In 2001 2005 (Windows XP) Windows XP is released with a redesigned look and feel thats come to on usability and a unified Help and Support wait ons center. Its available in 25 languages. From the mid-1970s until the release of Windows XP, about 1 billion PCs run done been shipped worldwide.In 2006 2008 (Windows Vista) Windows Vista is released in 2006 with the gruellingest security system yet. User Account Control helps prevent potentially harmful software from making changes to your computer.In 2009 immediately (Windows 7) By the late 2000s, the wireless world has arrived. When Windows 7 is released in October 2009, laptops are outselling desktop PCs and its common to get online at public wireless hotspots like coffee shops. Wireless networks can be created at the office or at home.External EnvironmentMicrosoft gained a good result dur ing the past xxx years. However, they still need to face the market change, which we called External Environment. Let us to take a look what External Environment that Microsoft is facing.Political factors Microsoft is highly unnatural by the political scenario there in USA. Microsoft is becoming one of the giant companies planetaryly. It has created huge monopoly across the globe. US government is now trying to break up Microsoft into several different companies so that to maintain equal competition byout the market. One of the other reasons in splitting up Microsoft Corporation that it is becoming so a lot stronger that it could be a terror for even US government in near future. Economic factors Being much(prenominal) a versatile company and the market share they have, Microsoft plays major role in bringing up the country economies they have set-upped their businesses. According to an independent studies that the economies of the country shoots up three time when Microsof t starts businesses in that country.Social factors Microsoft has an edge on all of its competitors that socially more deal are inclined towards Pentium platforms so naturally it helped a lot to have more market share rather than others. Market segment of Pentium exploiters is considerably very huge but it would be threat for Microsoft that they are losing its share with an honest pace, due to their unsatisfied customers.Technological factors It was a decade earlier that Microsoft was the leader in producing high tech software and gadgets, but now they are get tough competition from global phenomenon brand orchard apple tree. No doubt Microsoft adopts and market new engine room.Environmental factors Microsoft follows very strict policies to make sure that the company remains in full compliance with international environmental regulations and the specifically environmental requirements of each(prenominal) country/region where they are doing their business. Microsoft visits w aste disposal, where possible done source reduction and recycling at company facilities. All waste safely and responsibly handled and disposed of properly.Legal factors Microsoft is playing vital role in legal aspect of their pirated products like Windows and other software. They are trying their level best to reduce the usage of their pirated software. They are introducing different security features which may reduce the usage of pirated products.Porters Five Forces ModelForce 1 Potential CompetitorsThe submission barriers of Microsofts business divisions are high. In the operating system business, it holds major market share in personal computing. There is over 90% of personal computer are using Microsoft Windows Platform (NETMARKETSHARE, 2012). The second is mack OS by Apple Inc. which is notwithstanding have 7.3% market share. Creating an operating system takes years and requires high skill set and knowledge. Besides the coding, it involves graphic design for better user ex perience, integration between various platform, and design of innovative features. Both Microsoft and Apple have been developed operating system for near xxx years. Microsoft has very strong user base from home users to enterprise and even government all over the world. To create a new operating system is very difficult that not only the financial problem but also experience developer and the market to promote this product.Force 2 Rivalry Among superjacent FirmsThe threat of rivalry is relatively among Microsoft is low. There are just few rivals on operating systems market. The only distinction between operating systems is what software it can run. However, many famous application have release cross platform version.Force 3 Supplier force-outFor supplier power, the threat for Microsoft is relatively low. All major resource are come from corporate internal. Most of them are human resources. For other business like their gamming console, Microsoft has several of suppliers available . The only down side of a supplier could hold is that the items needed by the console is a wide variety of electronicsForce 4 Buyer PowerMost of the PC Company sold their desktop, laptop, workstation with latest Microsoft Windows OS. This is become as expected by buyer. Even the direct competitor like Apple, their Mac PC and Mac Book can also support Windows OS. The apostrophize of the OS is absorbed in the price of PC, and buyers tread it as bundle software. So it leads to low treat from buyers.Force 5 Substitute Products/ServicesThreat of substitute for Microsoft is low, even with the improvements of Mac OS X has made. To substitute by Mac OS, user need to purchase Apple PC. Apple PC usually more expensive compare with other brand in same hardware configuration. some user consider the cost is not justify.SWOTMicrosoft SWOT Analysis is in order to dissect the company situation in the market, consisting of 4 layers such(prenominal) as Strength, Weakness, Opportunities and threats. To date, the global business of Microsoft Corporation (Microsoft) mainly develops, manufactures, licenses, and supports software products for various computing devices. Its performance has been certainly in the science and engineering circle, through its strong operating performance and financial stability to the company. It was expected to seek more growth avenues in the future. However, Microsofts margins and market share were partially hinged on the intensify competition.Strengths* Windows is the dominate operating system in PC desktop of the world 92 percent of the market before Apple with 6 percent * Microsoft Internet Explorer is the second largest web browser bottom of the inning Google Chrome * MSN was one of the favorites instant online chatting platforms * Bing is the second largest search engine behind Google * software program products have high name recognition, broad-based corporate and consumer acceptance, for instance Word, Excel, PowerPoint & Access, and numerou s powerful features that are in use worldwide, thereby promoting standardization and private-enterprise(a) advantage through their ease of integration and cost-effectivenessWeaknesses* Dependency on hardware manufacturers to preinstall Microsofts PC operating system * Falling sales in the operating systems and server software sectors * Little or no significant presence in the wireless market. For example, Windows CE has been hazy and gave up. * Few products were occupying in an Internet applications * Perceived by many as a cutthroat competitor that uses its dominant market position to marginalize competition by stealing/destroying the competitions products, stifling product institution, and decreasing the availability of competitor productsOpportunities* Lower global telecommunication costs create new markets as people connect to the Internet * Mobile echo applications and exploitation of personal digital assistants represent a growth industry so that strategic alliances could p rovide Microsoft with opportunity in a market Popularity among people for Internet access * The needs for personal computers in the global markets still keeps necessary for the aspect of document although the growth and increasing popularity of personal handheld devicesThreats* Apple and Linux threaten Microsofts 88% market share of the desktop operating market * Currency exchange rates affect demand for application/operation software and hardware, and fluctuating currencies can negatively impact revenues in the global marketplace * Hardware manufacturers (Sun Microsystems, Oracle, and IBM) have collaborated on new platform technologies that replicate much of the value of Windows * Hardware manufacturers (Sun Microsystems, Oracle, IBM, AOL, and Apple) are preinstalled in their own prefunded programs with their own hardware * Personal computers, brisk phones, personal digit assistants, entertainment oriented handheld computers, and similar wireless products for Internet access do n ot need Window operating system products * Rapid development of brisk devices that will displace/ switch over personal computers * Software piracy of commercial and consumer applications software would be directly threaten the revenue streams * Cycle of Technology life is shorter* UNIX is believed dominating in high-end bearing as its customers do not believe Windows can handle these operationsCapability and ResourceIn todays information generation, the invisible is the essential. We no longer live in a world where physical assets are more valuable than invisible assets. Top levels of business performance are relying on invisible characteristics. Successful business could be achieved depending on the tangible and intangible issues.IntangibleLeadership and managerial capabilitiesSlogan as follows quoted by Bill Gates of MicrosoftOur basic assets, which are our software and our software development skills, do not show up on the Balance Sheet at all. Bill Gates advocates the company that Ability to innovate, Ability to change, Speed to Market, Develop and Retain the Best People and Create a One to One Customer Relationship.He clearly pointed out the Marketplace that a preference for invisible over visible when it goes to running a company. Therefore, businesses will have to recognize new drivers of value, such as customer led company processes, increased specialization, and an emphasis on knowledge employees.Brand nameAccording to http//brandirectory.com/league_tables/table/global_500_2011Microsoft jumped from fifth to second place in Brand Finances new list of the worlds most valuable brands as at 2011, but its still behind first-place Google.The Microsoft brand is worth $42.8 billion on 2011, up from a value of $33.6 billion in 2010, according to the list released today.PatentThe Microsoft Intellectual Property Licensing aggroup is responsible for licensing Microsoft patents and other forms of intellectual property (IP) such as research technology and know -how. The following items were the examples of patent of products.Several devices, from portable computers and personal digital assistants (PDAs) to mobile phones and video cameras, use liquid crystal display (LCD) technology to render images on a screen.Exchange ActiveSync is a communication protocol that enables mobile, over-the-air access to email messages, schedules, contacts, task lists, and other Exchange Server mailbox dataFile systems patentThe Extended File Allocation Table (exFAT) is the latest file system for personal storage devices. The file allocation table (FAT) File System makes it possible for an operating system to track the location and sequence of each prepare of a file Microsoft also offers a flexible Intellectual Property (IP) licensing program upon increasing in the industrys interest in licensing its ontogenesis hardware technology portfolio.Strategic PartnershipNokia and Microsoft gathered on 2011 to create market-leading mobile goods and services designe d to provide consumers, operators and developers without rival choice and chances. As each company would concentrate on its important competencies, the partnership would create the chances for fast time to market execution. Besides, Nokia and Microsoft joined incorporate important assets and create completely new service provides, while extending built up goods and services to handheld devices market.TangibleResearching Centre and facilitiesMicrosoft Research Cambridge was set up in July 1997 with a few researchers. straight off over 100 researchers, mostly from Europe, are joined in computer science research at the lab. The city of Cambridge, England, was the good choice for the station of the adroitness because of its world-renowned reputation and its rich history as a center of learning. Located in Mountain View, California, Microsoft Research Silicon Valley was founded in August 2001 and now employs about 75 researchers. Its research work concentrate on assigned computing and includes privacy, security, protocols, fault-tolerance, large-scale systems, concurrency, computer architecture, Internet search and services, and related theory.Microsoft Research Asia is founded in Beijing as Microsofts fundamental research facility in the Asia Pacific region and expands rapidly. By attracting the best talent from Asia and across the international, Microsoft Research Asia has pornographic into a world-class research laboratory with more than 240 researchers and developers and more than 260 visiting scientists and pupils. Nowadays, the lab conducts core research in natural user interfaces, next-generation multimedia, data-intensive computing, search and online advertising, and computer science fundamentals.EmployeeWith 90,000 employees in over 190 cities planning and developing many products and services for all customers and partners, Microsoft is concentrate on ensuring a top level of gratification among its customers and partners. It is an important component of its business. Final mission is to provide experiences for the customers and partners, across all of their interactions with Microsoft, that they value and recognize, and enable them to realize their full potential.StrategiesIn order to discuss Microsofts strategies of business level, corporate level, and international level, it is necessary to define them beforehand. Business level strategy is a comprehensive mechanism a company chooses to gain competitive advantage or superiority in a particular business (Cutcher, 2006). Corporate level strategy refers to the decision a sign of the zodiacs make to explore new strategic opportunities, which range from an extension of current product line to expanding current operations and further moving the firm to completely new lines of business, under such conditions to vendor uninterrupted growth or keep current sales and profits (Cutcher, 2006). International level strategy is a strategy through which the firm sells its goods or services o utside its domestic market by a few entry modes, like exporting, licensing, Joint venture/Alliance, and Sole venture.Microsoft adopts differentiation as one of the business level strategy by* Accessibility options that let user personalize the computer display, mouse, keyboard, sound, and speech options in Windows and other Microsoft products. * Assistive technology products, specialty software and hardware products (such as screen readers and specialty keyboards), that provide essential computer access to individuals with significant vision, hearing, dexterity, language, or learning needs, and, * Interoperability among assistive technology products, the operating system, and software programs, which is critical for assistive technology products to function properly.* Continuing our longstanding commitment and leadership in developing innovative accessibility solutions. * do the computer easier to see, hear, and use by building accessibility into Microsoft products and services. * Promoting innovation of accessibility in the development community and working with industry organizations to encourage innovation.Microsoft also uses cost leadership as one of the business level strategy to be consistent with the aim of Microsofts original goal enabling PCs that run Microsoft software on every desktop making the use of software is possible for everybody (blogspot, 2011). It provides inexpensive upgrade offers for user to upgrade from existing operation system or software to brand new version. Also, OEM version of operation system comes with brand new PC devices are sold at considerable discount. Furthermore, special rendering of operation system and software specified for colleges use are also offered with much discount to penetrate the market of students and teenagers.To maintain growth of business, Microsoft goes for diversification and innovation as corporate level strategy (scribd, 2009). Example would be TV game console, Xbox 360, mobile phone operation syste m, and voice over IP service software, Skype. Such strategy enables Microsoft to benefit in terms of money, market share, and better use of resources by1. Exposure to new products and markets 2. Sustain innovation and use opportunities to integrate knowledge into operations 3. Spread risk by avoiding having all eggs in one basket and provide better risk control through not being reliant on a single market 4. Provide movement away from declining activities (scribd, 2012)As to international level strategy, Microsoft adopts licensing as an entry mode, in which Microsoft, the licensor, authorizes a foreign licensee to use its patented technology for making and marketing products in the licensees home country (Cutcher, 2006). Microsoft sells goods and services through forming partnership with local licensee all around the world. Their partners are often licensed resellers and authorized distributors that are selling Microsofts products to local customers and provide marketing operation ( Microsoft, 2012). Besides, Microsoft adopts global strategy to compete globally. Except suiting the language for each country and region, their products, like OS and office suite, are standardized that they share the same functions and features. passMicrosoft is the worlds largest software maker. It represent the top tier in the industry and playing the role of market leader. Actually theres not much weakness on its dominate market like operating system and office application. On the other hand, due to the changes of user behavior on Internet, more and more user surfing Internet using mobile device. In 2011, only 3.79% using mobile or tablet for browsing Internet. At the end of 2012, it has been increased to 10.42% (NETMARKETSHARE, 2012).We can predict the numbers of mobile device will keep growing in the near future. Microsoft was once dominate the mobile device (or PDA during that era) market by its Windows Mobile / Pocket PC OS. But losing it when Apple release iOS and iPhone. Co nsumer market keep changing in an lively way. A market leader can falling in a blink. Microsoft take two years to release Windows Phone 8 after the release of Windows Phone 7. To regain the market share, Microsoft may speed up its R&D. Provide upgrade path for its product or even produce its own hardware like other direct competitors Apple Inc. and Google did.BibliographyCutcher L., & Wailes N., (2006), Cases in Strategy and Management, North Ryde, McGraw-Hill,p.100.Chakidan, 2011. Microsoft Business Strategy Analysis. online Available at http//chakidan.blogspot.hk/2011/04/strategy-analysis-for-microsoft.html Accessed 26th Dec 2012Microsoft, 2012. Microsoft partner program. online Available atAccessed 26th Dec 2012NETMARKETSHARE, 2012, Browsing by Device Category, exonerate Applications.com, online Available atNETMARKETSHARE, 2012, Desktop Operating System Market Share, Net Application.com, online Available at http//www.netmarketshare.com/operating-system-market-share.aspx?qprid=8 &qpcustomd=0scribd , 2009. Project Report Impact Of Companys International Strategy on